In 1981 military dictator Pinochet privatized the pension system in Chile. In the old system, workers, employers, and the government all contributed. In the privatized system, workers paid 10% of their earnings into accounts operated by private companies.
The average monthly pension in Chile is now $315. less than the monthly minimum wage of $384. What this means, of course, is that most Chileans must continue to work well past their retirement age.
When the stock market drops, the pension drops as well. As more old people enter the system, the pension drops as well.
George W. Bush once hailed the Chilean system as an example to follow. You may want to remember Chile the next time you hear Paul Ryan or Lou Barletta call for a privatized system to replace Social Security.
Information for this post was taken from Pascale Bonnefoy, “With Pensions Like This ($315 a Month), Chileans Last Out at System,” New York Times, (Sept. 11, 2016), p. 10.
Years ago when the politicians changed the system to where the SS money flows into the general fund and is now paid out to us. This gives he perception that it is an entitlement, which it is not. Its our money. The money should be held in the SS fund and they decide how to invest. Not to have the money taken by the federal government.
ReplyDeletePoliticians need to keep there hands out.