Why Social Security Privatization is a Bad Idea

The Social Security trust fund, the pool of money used to pay benefits, is facing a funding shortfall. If nothing changes, benefits will be slashed within 10 years. One proposed suggestion is to privatize Social Security, allowing individuals to invest a portion of their payroll taxes in private investment accounts.

An article by USA Today points out a long list of reasons why this is not a good idea, stemming from stock market volatility to the disadvantage this would place on individuals with limited financial literacy.

But the main reason should be that privatization goes against the very reason Social Security was created. According to the article, “From its inception in 1935, Social Security was meant to provide economic security for Americans, particularly retirees. The idea was to ensure all Americans have some source of retirement income. Privatization could undermine that social safety net and leave the most vulnerable populations without the support they need in retirement.”

The Seniors Trust is committed to improving the financial well-being of older Americans through the passage of the Social Security Expansion Act. It will give retirees an immediate benefits increase of about $200 a month, a fair annual cost-of-living adjustment (COLA), increased minimum benefits, and ensure the long-term solvency of the Social Security program.