Heard enough about Bush's Social Security reform agenda? Wall Street Journal pointed us to some online calculators that show the difference of adding a personal account component to the system. Mind you, not all calculators are based on President Bush's current proposal.
• Social Security Administration: Social Security's calculator will provide the most efficient way to estimate traditional benefits, but not how they might change under an overhaul. What it does that many others don't do is estimate disability and survivor benefits offered. (ssa.gov/planners/calculators.htm)
• The Heritage Foundation: The think tank's calculator assumes individuals will put 10.6 percentage points of their payroll taxes earmarked for Social Security (starting at age 16) into a portfolio evenly split between stocks and bonds. Individuals bear all responsibility and don't split the tax with their employers. The calculator is slightly more flexible than others because you can play with certain assumptions, including a general asset allocation, life expectancy and retirement age. It also calculates monthly fixed annuity payments. Plans are in the works for adding functions to factor in marital status, which can affect benefits. (www.heritage.org)
• Cato Institute: The libertarian think tank's tool is based on its proposal for revisions, and calculates your estimate based on your age and current annual earnings. It assumes 6.2 percentage points of payroll taxes are put into individual accounts, while a bond is issued to reflect past contributions. The remaining 6.2 percentage points are used to pay for transition costs and fund disability and survivors benefits, the institute says. (socialsecurity.org/reformandyou/sscalc/sscalc.php)
• The National Center for Policy Analysis: The organization's calculator assumes you are investing 10.6 percentage points of your payroll taxes into a private account, beginning at age 21. The model portfolio is made up of 60% stocks and 40% bonds, returning 5.4% after fees. It also asks for your occupation and calculates past and future earnings using census data, says Matt Moore, NCPA's Social Security and retirement policy analyst. (teamncpa.org/calculator/calculator_ncpa.htm)
• Institute for Women's Policy Research: This calculator assumes that two percentage points of the payroll tax will flow into private accounts, with 60% invested in stocks, 40% in bonds, for workers from 20 years old to 55 years old. It uses a 5% rate of return, after inflation, but 4% after administrative costs, says the public-policy organization that focuses on women's issues. The calculator factors in phased benefit cuts to pay for the transition from a pay-as-you-go system to a prefunded one as estimated by the Brookings Institution. (www.iwpr.org/sscalc4/calculator.html)