Ex-county judge recalls Social Security debate

In a USA Today op-ed piece, former Galveston County judge Ray Holbrook examines that county's successful privatization of Social Security:

Our plan, put together by financial experts, was a “banking model” rather than an “investment model.” To eliminate the risks of the up-and-down stock market, workers' contributions were put into conservative fixed-rate guaranteed annuities, rather than fluctuating stocks, bonds or mutual funds. Our results have been impressive: We've averaged about 6.5% annual rate of return over 24 years. And we've provided substantially better benefits in all three Social Security categories: retirement, survivorship, disability. Upon retirement after 30 years, and assuming a more conservative 5% rate of return, all workers would do better for the same contribution as Social Security: •Workers making $17,000 a year are expected to receive about 50% more per month on our alternative plan than on Social Security — $1,036 instead of $683. •Workers making $26,000 a year will make almost double Social Security, $1,500 instead of $853. •Workers making $51,000 a year will get $3,103 instead of $1,368. •Workers making $75,000 or more will nearly triple Social Security, $4,540 instead of $1,645. •Our survivorship benefits pay four times a worker's annual salary — a minimum of $75,000 to a maximum $215,000 — rather than Social Security's customary onetime $255 survivorship to a spouse (with no minor children). If the worker dies before retirement, the survivors receive not only the full survivorship but get generous accidental death benefits, too. •Our disability benefit pays 60% of an individual's salary, better than Social Security's.

[Hat-tip: LST reader Russell Rollins]