Many are skeptical about the future of Social Security and are worried they will not receive the full pay out of benefits in the future. In the following pages I will state the reasons why Social Security is in need of reform, describe privatization and the pros and cons, and why privatization is the best option for Social Security reform.
Current problems with the Social Security fund exist, and are the reasons why Social Security is in the need of reform. According to Forbes Magazine, the fund is expected to run out by 2033 (Teal 2013). At this point, money will still be coming in, but will not pay out the full benefits to recipients. The worker to retiree ratio is continuously declining, being approximately three workers to every retiree. This ratio is expected to decrease even more, meaning retirees will continue to see a decrease in income from Social Security. Additionally, too many recipients are relying on Social Security as a primary source of income. Baby Boomers are beginning to phase into retirement, but do not have sufficient funds of their own, therefore are relying more on Social Security. Currently, “two-thirds of all recipients depend on it for half their income, and for 16% of beneficiaries it is their only income” (Marron 2001). The problem here is, Social Security was originally designed to be a social insurance program and not as a mean of income. People are not investing their money in savings for the future, and instead are relying on Social Security, which is an unstable source of income. With the expected lack of funds in 2033 there will not be enough money in the fund to support the retired Baby Boomers, along with all the other future retirees.
Different options for reform have been discussed, with pr...
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Gokhale, Jagadeesh. 2012. Social Security Reform: Does Privatization Still Make Sense? http://www3.law.harvard.edu/journals/jol/files/2013/09/Gokhale_Article.pdf (accessed November 23, 2013).
Malpass, David. 2005. Privatizing Social Security Will Benefit the Economy. http://find.galegroup.com/ovrc/infomark.do?&source=gale&srcprod=OVRC&prodId=OVRC&userGroupName=uni_rodit&tabID=T010&docId=EJ3010427222&type=retrieve&contentSet=GSRC&version=1.0 (accessed November 23, 2013).
Mitchell, Dan. 2011. Personal Savings Accounts Would Provide Real Reform for Social Security. http://find.galegroup.com/ovrc/infomark.do?&source=gale&srcprod=OVRC&prodId=OVRC&userGroupName=uni_rodit&tabID=T010&docId=EJ3010878219&type=retrieve&contentSet=GSRC&version=1.0 (accessed November 27, 2013).
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