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AARP Has Its Own Private Accounts

Wednesday, 27 April 2005 12:00 AM

AARP President Marie Smith declared in a January speech: "Social Security is the only guaranteed, inflation-proof, lifelong benefit that millions of workers, past and present, can count on. We should not be talking about replacing this rock-solid guarantee with a risky gamble.

But AARP, which collects more than $200 million in dues from its 35 million members each year, manages an investment portfolio of over $910 million!

The largest portion of that portfolio, $737 million, was invested in stocks and mutual funds in 2003, earning returns of $60 million, according to AARP's 2003 consolidated financial statement.

The organization – formerly known as the American Association of Retired Persons – promotes stock and bond investing by selling 38 mutual funds to its members.

And AARP's stock offerings include far riskier options than what proponents of personal retirement accounts propose, including a Latin American stock fund, a junk bond fund and a gold and precious metals fund.

"It seems that as long as AARP gets a cut, investing in the market is fine," states Investor's Business Daily. "But if you do it on your own, you're one step from crushing poverty."

AARP's investments in what it calls the "risky" securities market have brought in a healthy average return of 7.29 percent a year since 2000. Only 8 percent of the organization's portfolio was invested in safe government-backed securities in 2003.

"AARP seems to believe that capitalism is a fine thing as long as they're the only ones practicing it," said Pete Sepp, vice president of communications for the National Taxpayers Union.

"How can an organization so heavily invested in the stock market tell others they can't do it?"

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AARP President Marie Smith declared in a January speech: "Social Security is the only guaranteed, inflation-proof, lifelong benefit that millions of workers, past and present, can count on. We should not be talking about replacing this rock-solid guarantee with a risky...
AARP,Has,Its,Own,Private,Accounts
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2005-00-27
Wednesday, 27 April 2005 12:00 AM
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