Start your own 'private account' for future financial security

Question: Do you think President Bush will succeed in his efforts to reform Social Security? Will they be able to save it? Are the private accounts a good idea?

Answer: One person's "reform" is another person's "wrecking ball."

I am on the side of reform myself, viewing the president's attempts to change the Social Security program as positive.

Alas, so far, I am in the minority. Despite the president's best efforts at persuading the American people that "private accounts" would be a good thing, his urgings have so far been met with skepticism and fear.

Everyone can agree that the Social Security system is headed for long-term financial trouble. If trends continue, the number crunchers project the system will be broke in just a few decades.

The differences come when the politicos argue about solutions. The president's forces want to allow a portion of younger workers' Social Security taxes to go into so-called "private accounts." Owners of these accounts would be able to invest in a limited number of stock and bond mutual funds.

The other side thinks this is a horrible idea and accuses the president of trying to dismantle Social Security. Polls show about half the American people believe them.

I got a feel for why so many Americans oppose the idea of personal or private accounts when a friend sent me an article from the May 11 issue of the Los Angeles Times.

Times staff writer Peter G. Gosselin interviewed five of the eleven most recent Nobel Prize winners in the field of economics. He found that some of the smartest economists in the world didn't take care of their own investment back yard. Most failed to regularly manage their retirement savings.

He also found that 50% of Harvard University's 15,000-member faculty and staff don't even specify how they want their retirement savings to be invested, resulting in 100% investment in low-yielding money market accounts.

How about another group of smart folks: the 3.2 million members of the largest college professor retirement plan (TIAA-CREF). Gosselin found that almost three-quarters fail to make a single adjustment in their retirement accounts during the course of their career.

What does this say?

Americans love money.

We just hate to fool with it.

We don't like to manage it, make decisions about it, worry about it or get scared that someone will take it from us.

Despite our John Wayne cowboy self-image, we have become what Business Week magazine recently called a "Safety Net Nation."

Most of us love the idea of Social Security. We want someone to take care of us.

Will Social Security be around for your retirement? I have no doubt it will.

Will private accounts be available for you any time soon? I hope so, but I'm not holding my breath.

But no matter what Washington does, you don't have to be one of the millions of retired Americans dependent on Social Security for over half of their income.

Start your own "private account" by saving regularly, investing wisely and waiting patiently. Given enough time, it works every time.

When it comes to shaping your retirement future, I'd suggesting depending on the performance of the American economy, not the performance of American politicians.