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A Retirement Fable

In yet another attempt to convince the defenders of Social Security that the trust fund is an accounting gimmick that provides no actual savings I wrote this fable. It was created to be pithy and amusing, simple and direct enough to make the point, personal enough to connect with people in denial, and short enough to fit the space typically allocated for letters in a newspaper. It was submitted to The Boston Globe but not published.

7 April 2005

My wife and I are worried about having enough money for a comfortable retirement. With the states of the economy and the world as they are we have been quite anxious. So I’ve come up with a plan:

We have a little bit of extra money we can set aside every month for the future.  We like to think of it as our “retirement trust fund.”  Rather than risking it in the stock market or making do with the miserly returns at a bank, we invest that money in loans to our children — we call it “buying personal bonds.”

We set our childrens’ personal bonds generally to pay something like 4% per year above the inflation rate (depending on market conditions), so our retirement account will grow at a comfortable rate. And, of course, since at the moment we are managing the bonds and the bond sales for our children, we choose how to spend the money we have loaned them; we usually try to spend it on something that benefits them, like food or rent or family vacations or insurance or a new car — something for the family.

And, best of all, it is a safe investment. We are raising our children with a moral sense, always to fulfill their promises and obligations. We are providing them the best education available so they should have no worries about employment. Those retirement assets are backed by the “full faith and credit” — meaning the future income — of our honorable and talented progeny. When we need the money to retire, we will simply liquidate the bonds — we will ask our children to pay back the money we’ve loaned them. They should have plenty of income to do that. There’s nothing for them to worry about.

All in all, I’m quite content with my plan. I’ve even given it a name. I call it “Social Security”.

Catchy, isn’t it?

© Copyright 2005, Augustus P. Lowell

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