Social Security is the bedrock of nearly every American’s retirement plan — the steady, dependable stream of income they can count on to guarantee them a basic standard of living in old age.
That foundation is now in jeopardy. According to the Social Security trustees, the program’s primary trust fund is on track to be depleted before the end of the next president’s term. If no action is taken, beneficiaries face an automatic 22% benefit cut.
This structural shortfall is evidence that the system needs serious reform. But privatization is a false solution that would make retirement less secure for seniors while saddling workers with higher taxes and debt.
Investing in stocks and bonds is a good way for individuals to build wealth for retirement, but it carries some inherent risk. Social Security, on the other hand, is intended to carry no risk — retirees are supposed to get the same monthly check whether the S&P 500 is shooting to the moon or cratering. Tying its benefits to volatile market returns would obviously make them even less reliable than they are under the current system.
Privatization advocates try to address these concerns by proposing that taxpayers continue to fund current benefits until the returns on investment grow large enough to fund them on their own.