Like most of the Social Security reform plans, the Hagel Social Security Plan, also known as the “Saving Social Security Act of 2005”, would offer voluntary personal accounts. These accounts would only be available to workers who were 45 and younger; all older workers would continue using the current system. The retirement age would be raised to 68 if you are 45 or younger. If you are 44 or younger, benefits would be modified to represent increased life expectancy. The later you retire, the larger your benefits would be.
If you chose to participate, 4% of your taxable income would be placed into a personal retirement account, about half of which would probably be invested in equities, and the other half in corporate and treasury bonds. The actual investment options would be modeled off the Thrift Saving Plan, which is currently available to government employees. Estimated administration costs are 0.3% of PRA assets.
