Retirement Rumble

Vice President Al Gore wants to let low- and middle-income earners invest part of their retirement savings in stocks and bonds, just a month after he bashed George W. Bush's idea to invest some Social Security money in the stock market.

"This is Social Security plus, not Social Security minus," said Gore, the Democratic presidential candidate, in Lexington, Ky. on Tuesday.

Gore's plan would work like a 401k. But instead of employer contributions, the federal government would use money from the surplus to match investments in personal retirement accounts.

The new "savings accounts" would be added on top of Social Security and would be particularly generous to low-income earners - matching worker contributions by as much as 3 to 1.

"There is a difference," the vice president added. "You get the freedom to save and invest more, but your Social Security funds are protected."

"My plan for private savings and investment is very different from what others have proposed in this election," Gore said. "It doesn't come at the expense of Social Security. It comes in addition to Social Security."

Bush's plan creates voluntary accounts that would allow all workers to take a portion - about 2 percent - of their Social Security deduction and invest it. The Bush proposal would reduce benefits, but potentially increase the overall value of an individual's retirement.

Gore also took a veiled swipe at Bush's father, former President George Bush, who left the White House in 1993.

Saying the American people are responsible for the current economic boom, the vice president told the crowd, "Let's remember: the American people have always been hard-working. They were certainly working hard in 1991."

"But they were hampered by bad choices at the top and worn down by looking at a burdened future," he added. "I will not be dragged back to the days when people worked just as hard - with far less to show for it."

On Monday, Bush accused Gore of flip-flopping on a key issue yet again: "First the stock market was roulette and risky and now the heat's on and he changes position."

Gore contends his plan offers the prospect of higher returns without the risk to the trust fund.

Polls have shown the majority of Americans like the idea - first proposed by Bush - of investing some portion of Social Security in the stock market. And with he projected budget surplus of as much as $2 trillion burning a hole in the candidates' pockets, it's likely they'll both find some way to put money back in taxpayers hands.

Highlights of Gore's proposal:

• Individuals could deposit as much as $1,500 tax-free per year in accounts, managed by private financial institutions
• Investment choices would be limited to bonds and government securities, to avoid risks of speculation and day trading
• Tax-free deposits and the government match in the form of a tax credit would be capped at $2,000 per year
• For a couple earning up to $30,000 annually, the government match is 3-to-1
• For couples earning $30,000-$60,000 annually, the match is dollar for dollar
• For couples earning $60,000 and $100,000 annually the federal match shrinks to 33 percent of the individual contribution
• Qualifying income brackets would be shaved to roughly 75 percent for single parents, and in half for individuals
• Full participation over 35 years of work would yield someone $202,000 for retirement over and above Social Security
• Money could be withdrawn earlier and without penalty to pay for a child's college education, a first home, or catastrophic medical bills

Gore's plan would cost the government about $200 billion over 10 years, aides said.