Those numbers are highly suspect. For one thing, they don't take the inflation indexing of SS benefits into account. They look at the amount someone makes on the day they retire; in the Galveston plan, that number is fixed until the retiree dies, so the benefits are continually eroded by inflation, while the SS benefits are adjusted annually for the CPI increase (though Bush would like to stop that and adjust them to the wage increase levels, which over the last 10-15 years have consistently failed to keep up with inflation, for the first time since the Great Depression). After 20 years, the SS benefits are higher even using Holbrook's numbers. Secondly, the numbers cited assume a very long work-life; the SS benefits are based on a certain number of years working (30?), while (as I recall from a discussion in the local paper) the Galveston numbers for low-wage workers are based on someone starting to work right after high school (around age 18) and retiring at 65. Since much of the calculated increased benefit is due to "the miracle of compounding," the number of working years assumed is very important to the final comparison. Someone who worked for Galveston County for 30 years or less would do better on SS -- in fact, calculations show that only the highest-paid county employees are better off for having worked under Galveston County's system than had they stayed in SS, because the system has only been in place for 24 years, which isn't long enough for compounding to make up the difference! I wish I had links for this, but I've been unable to find them.
-- Dave K, Speakeasy Moderator (and Galveston resident)
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