"Would a 46 Year-old Individual Make Big Gains in a Private Account?"

A 46 Year-Old Individual Would Struggle to Achieve Any Real Investment in a Private Account. "Bush has promised that, under his proposal, workers would eventually be able to divert 4 percent of their income subject to payroll taxes to private accounts, which could then be invested in stocks and bonds. A 46-year-old earning the maximum income subject to Social Security taxation -- currently $90,000 -- could theoretically salt away $3,600 a year. But the plan would be phased in slowly, starting in 2009 with an initial annual cap of $1,000 and rising by $100 a year. It would take an additional 26 years for someone at the taxable maximum to save the promised 4 percent. By then, [a 46 year-old individual] would be 76 and long since retired. And in the short time period available to middle-aged workers, investment gains would have to exceed inflation by 3 percent for the accounts to make more money than the traditional Social Security system would provide." [Washington Post, 3/15/05]