Fox News host Neil Cavuto slammed AARP for entering the mutual fund marketplace after opposing President George W. Bush's proposal to invest Social Security funds in the stock market, calling the organization "hypocritical."
AARP Vice President of Investment Services Nancy Smith defended the 36 million-member elder American advocacy group.
"I'm not saying that all of the Social Security dough, just part of the dough [should be] invested in the market," said Cavuto, the host of Fox News's "Your World." Cavuto called the current Social Security system "broken," and blamed AARP for opposing a possible solution. "Now, you were dead-set against that. Yet, your organization now is touting these funds. So, methinks that you knew you were planning these funds; you didn't want competition from Uncle Sam," Cavuto said.
Smith chided Cavuto for numerous "misrepresentations," arguing that Social Security would be less secure if the government were allowed to invest in private markets. "It's a bigger risk for people to give up something that is a sure thing," she said. "What AARP stands for is to say, for every American, when you retire, you're going to want to make sure that you have at least some money to cover your bills, and that money is there no matter what happens in the market.
"The other thing that AARP is saying, and AARPFunds.com is saying, is, in addition to your Social Security, you're going to want to invest money for your retirement, so that you have more to spend," Smith said.
Cavuto retorted: "But you're going to make money on these funds, the same opportunity you wouldn't give the government to fix a program that's broken. I think you're being disingenuous and maybe a hypocrite," he said. "It's a disservice to the American people."
AARP collects a $5 fee for each $10,000 invested in its funds, according to Smith. Smith argued that the best solution is for people to both invest their own money in the market, and have the New Deal safety net of Social Security to supplement it.
"Listen, what we want is, we want people to have more money in retirement to spend at the end of the day," said Smith.
"No, no, no. You want more money for people to invest in your funds, not Social Security," Cavuto countered.
"We would be delighted if people invested wisely and prudently in these funds that we have created," said Smith, who then advised viewers to find a good financial planner, and determine what, exactly, the best combination of strategies they should use to ensure they have the money they will need in order to retire comfortably.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.