Word: stocke
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Dates: during 1990-1999
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...pension payouts over the next 30 or so years, and how far any specific proposal would go toward closing that gap, are still anybody's guess. And those guesses depend on such variables as the speed of economic growth, the future pace of inflation and the course of the stock market--all notoriously difficult to predict even a year ahead. Estimates clash so sharply as to invite suspicion that they are shaped more by political bias than by analysis...
...PLAY THE STOCK MARKET. By now there is wide agreement that stock and bond markets could in effect pay much of the nearly 30% of pensions that Social Security taxes will eventually no longer cover. But who should invest how much of the system's money? Clinton's proposal to have the government do the investing is a poor second best--and not only because of the danger of political manipulation of business. More fundamentally, individuals ought to have some say in how to invest money that the government taxes away from them. Redirecting some Social Security money into individual...
...suppose sharpies bamboozle Grandpa into buying stock in Fraudulent Uranium Co. or Flim-Flam.com Not to worry: the law should allow only competent and honest professional managers to bid for Social Security money--and require them to offer a wide choice among funds making highly conservative to more adventurous investments, which is roughly the deal enjoyed today by employees in company 401(k) plans. In any investing, some risk is inevitable, but probably less than the risk that pensions would be slashed to keep a completely tax-financed system sound...
Some colleagues have asked me, "Do we really need to do all that?" Maybe not--if the economy and the stock market continue to boom and inflation stays tame for years to come. But we shouldn't take chances. The system needs to be shored up so it can continue to keep the elderly out of poverty, come what may: recession, a stock-market crash, a flare-up of inflation or even all these things together. In the unlikely event that the economy continues to show its remarkable combination of superfast growth, superlow unemployment and superlow inflation for another decade...
...rates, there's little reason to sweat this issue at the moment. Go for the jumbo if you can afford it. If you're just over the breakpoint, you could make a larger down payment to reduce your loan amount. But that money might be better spent in a stock fund. Another option is a piggyback structure, where you borrow just under the jumbo limit and take a second loan for the rest. That second mortgage comes at a hefty premium--maybe a couple of percentage points more than your first mortgage. But it may make sense if you retire...