Financial Insolubility
Given the current obligations and aging demographic, privatizing Social Security would do nothing to solve its impending insolvency, and would actually make it worse. The SSA stated in 2016,
“The projected cost of Social Security increases faster than projected income through 2038 primarily because the ratio of workers paying taxes to beneficiaries receiving benefits will decline as the baby-boom generation ages and is replaced at working ages with subsequent lower birthrate generations” (24)
The SSA still has obligations to those that have retired and are collecting benefits and to those that will retire and have paid into the system. Because current retirees no longer pay into the system, a ill planned transition into …show more content…
Social security should mirror those trends by allowing individuals choices and options. However, completely maintaining the status quo or going 100% private proves unrealistic and politically unfeasible. A partial privatization of social security would solve many problems and maintain the basic structure of social security. This would “allow workers to manage their own retirement funds through personal investment accounts (Zogby, Bonacci, Bruce, Daley, & Whittman, 2003, p. 3) chosen from a “large list of funds approved by the government” (Feldstein, 2011). Privatization of social security will allow individuals to transfer the 6.2% social security tax they’re already paying into a government selected fund of their own choosing. Such an approach would increase choice while at the same time ensure that the government oversees the investment funds for accountability …show more content…
The partial privatization of the social security program would bring into the system personal ownership, higher yield investment accounts, greater flexibility in planning for retirement, and retain retirement benefits and a social safety net (Ferrara, 2003,p. 17). In essence it combines all of the benefits that supporters and opponents of privatization want.
The responsibility for retirement rests on both individuals and the government. While individuals ultimately secure their own retirement, government exists to ensure that it happens fairly, equitably, and accountably. Thus, government should also take into consideration that many workers do not have sufficient investment knowledge and will need additional financial literacy. However, in the end, partial privatization offers many benefits that the SSA and few
Given the current obligations and aging demographic, privatizing Social Security would do nothing to solve its impending insolvency, and would actually make it worse. The SSA stated in 2016,
“The projected cost of Social Security increases faster than projected income through 2038 primarily because the ratio of workers paying taxes to beneficiaries receiving benefits will decline as the baby-boom generation ages and is replaced at working ages with subsequent lower birthrate generations” (24)
The SSA still has obligations to those that have retired and are collecting benefits and to those that will retire and have paid into the system. Because current retirees no longer pay into the system, a ill planned transition into …show more content…
Social security should mirror those trends by allowing individuals choices and options. However, completely maintaining the status quo or going 100% private proves unrealistic and politically unfeasible. A partial privatization of social security would solve many problems and maintain the basic structure of social security. This would “allow workers to manage their own retirement funds through personal investment accounts (Zogby, Bonacci, Bruce, Daley, & Whittman, 2003, p. 3) chosen from a “large list of funds approved by the government” (Feldstein, 2011). Privatization of social security will allow individuals to transfer the 6.2% social security tax they’re already paying into a government selected fund of their own choosing. Such an approach would increase choice while at the same time ensure that the government oversees the investment funds for accountability …show more content…
The partial privatization of the social security program would bring into the system personal ownership, higher yield investment accounts, greater flexibility in planning for retirement, and retain retirement benefits and a social safety net (Ferrara, 2003,p. 17). In essence it combines all of the benefits that supporters and opponents of privatization want.
The responsibility for retirement rests on both individuals and the government. While individuals ultimately secure their own retirement, government exists to ensure that it happens fairly, equitably, and accountably. Thus, government should also take into consideration that many workers do not have sufficient investment knowledge and will need additional financial literacy. However, in the end, partial privatization offers many benefits that the SSA and few