The Little Detail Overlooked by The White House

"Nearly three-quarters of workers who opt for Social Security personal accounts under President Bush's 'default' investment option are likely to earn less in benefits than those who stay with the traditional Social Security system, a prominent finance economist has concluded.

A new paper by Yale University economist Robert J. Shiller found that under Bush's default 'life-cycle accounts,' which shift assets from stocks to bonds over a worker's lifetime, nearly a third of workers would bring in less in benefits than if they remained in the traditional system. That analysis is based on historical rates of return in the United States. Using global rates of return, which Shiller says more closely track future conditions, life-cycle portfolios could be expected to fall short of the traditional system's returns 71 percent of the time."

Retirement Accounts Questioned

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