this plan could certainly immediately reduce future pension liabilities, but i am unsure that the author's statement:
"Real wages in the U.S. tend to rise over time -- dramatically, lately." is entirely accurate
- would have to do some research to confirm or deny my theory, but to my recollection wage growth has been relatively stagnant for several years (i know my wage growth has been largely negative in real terms).
but regardless of the pace at which wages have grown; removing this from the indexing formula will lower anticipated s.s. liabilities. s.s is still a major problem & as a relatively young individual I am not counting on, nor is anyone I know, having any type of s.s. or government support upon my retirement. the problem with this or any plan, however, is that the segment of the population which would be impacted most (say 40 yrs old +) is most certainly the most vocal & most likely to vote - this is presumably why no candidate has ever made any meaningful attempt at s.s. form as a part of their platform.
another question: when the baby boomers begin to reallocate their retirement funds to less risky securities (e.g. bonds) will that not require a large exodus of moneys from other financial markets (stock market) - what impact will this have on the value of the stock market? seems to me that this change in the flow of funds could cause a significant decline in the equities market. thoughts?
