What Is Social Security Privatization

Privatization of Social Security

A feeling of frustration is often felt when people who are not receiving social security get their paychecks and discover a percentage of their money goes to social security. Social security was introduced in the 1930’s when President Roosevelt launched a series of federal programs called the New Deal. The purpose of the New Deal was to help the Nation recover from unemployment, hunger, and poverty caused by the Great Depression. The social security Act of 1935 is the most recognizable program from the New Deal which states if you work, you pay social security and Medicare taxes. The purpose of social security is to give you receive benefits from the government if you become disabled, if your spouse dies, or

Younger workers are currently paying social security taxes to support the retired, and disabled. Younger workers are being cheated because the value of the taxes paid will not exceed the value of the benefits received in the future. Younger workers will never see the money they are contributing, as the Social Security system in its present form will be bankrupt. According to procon.com “The current social security program will become insolvent by 2034, so a better system is urgently required.” To elaborate, social security may result in bankruptcy because of the baby boom in 1946-1964. The baby boom generation is post-World War II and results in a massive increase in birth rate. The baby boom generation is currently retiring and due to a large number of people about to collect social security, it will create a shortage that the program might not be able to recover

Privatization would be a way to retire by putting money in your own individual account. It would differ from social security because your money goes into a separate account, not a budget. Unfortunately, it goes unnoticed that the revenue the federal government collects each tax year from social security is paid out that same year to the beneficiaries. If the number of people contributing when you are retiring is smaller than the years you paid social security taxes, then you wouldn’t be receiving more than the amount you paid when you join the workforce. (Brux 226) Instead of paying a certain percentage of taxes to Social Security, a separate account should be created for your retirement fund. Then, a percent of your paycheck similar to social security taxes would still be taken out, but the amount would be your choice, and no one else could ever touch it. Unlike social security, you can have an option to leave an inheritance for your families in case of your death. You would also be given the opportunity to use this money, and try to double the amount by investing in bonds. Privatization has many benefits and would be a great help for retirement