Social Security System: Should not be Privatized The Social Security system is a topic that can cause great controversy when it comes to how the pension system should be handled. Many people do not understand what underlines the social security system. Asking a person to choose where to invest their contribution can be a challenging task when they do not have the slides idea of what to do. The current social security system should not be replaced by a mandatory private pension system. Initially for years, the US Social Security administration has taken contribution out peoples checks to be applied to their pension. The reason for the US Social Security program is to help protect American people and their families if something was to happen in the event of disability, death and retirement. Allowing American people to choose their one investments is risky because many individuals can lose their investment if they make wrong decision on where to invest the money. Many American do not know how to invest and allowing the Privatization of Social Security will cause them to lose their retirement or not earn enough investment for the future. Allowing Privatization of Social Security will reduce the benefits …show more content…
The financial contracts that are being sold by the insurance companies are thin and not many are bought. The protection that inflation provides would protect retirees’ pension from a fall when the prices are higher. Many insurance companies would be able to bear the risk in offering inflation protection and will charge a large amount for the coverage. The retirees will have to pay an additional cost to protect them from the inflation. “Post-retirement inflation erodes private pensions. Social security, in welcome contrast, fully protects pensioners against inflation. That is another reason why traditional Social Security must be sustained.”