Reform Social Security with Personal Retirement Accounts
Today’s Federal Social Security system faces serious problems that will only get worse with time. First, the program has promised workers more in benefits than it can afford to pay. Social Security has begun to spend more to pay benefits than it takes in from Social Security taxes. Annual deficits will rapidly exceed $100 billion a year and may continue to grow to well over $300 billion. Second, the current system gives younger and lower-income workers a very poor return on the Social Security taxes that they pay. The only way to avoid the coming financial problems without making Social Security an even worse deal for younger and lower-income workers is to establish a system of voluntary, personal retirement accounts. These accounts would give all workers the flexibility both to improve their retirement income above what Social Security will be able to pay and to leave a nest egg to future generations. This will save Social Security, expand freedom and promote economic growth.
- Create Social Security personal retirement accounts that workers would own and could use to build nest eggs for retirement.
- Improve the information that workers receive about Social Security.