Dec 13th, 2011 | By | Category: Social Security & Medicare

Controlling One’s Own Investments

One of the issues being bantered around about Social Security privatization is whether or not individuals could invest better on their own or not.  The reality is that some seniors could probably do better, particularly if they had a lot of experience managing their own investments pre-retirement and learned successful investing tools. And the reality is that most of us seniors would likely not do better, and would likely do worse than the Trustees are doing with the Social Security Trust Fund.

Let’s go back to the basics:

  • Social Security is designed to be a guarantee of retirement income. It is designed to last your entire life, once enrolled.  It is designed so that funds cannot be lost on Wall Street.  Pre-retirement, we tried to maximize the return on our investments.  Social Security is not designed to maximize returns.
  • Social Security is a secure based of income during retirement.  Most of us seniors depend heavily on our Social Security benefits.  It keeps us out of poverty.
  • Here are the statistics:  Social Security benefits provide at least 50% of income for 50% of seniors over 65; Social Security benefits provide 90%+ of income for 43% of single seniors and 22% of married seniors;

Privatizing Means Wall Street Control Over Retirement Funds

So the issue is that if Social Security is privatized, it is no longer Social Security, but an opportunity for Wall Street investors to gain access to your retirement funds for their own purposes. And we all know what happens when greed takes over.

It seems to us that Social Security is best left alone; it was designed to guarantee retirement income.  No private investment can make those guarantees; in fact, investment firms are specifically prohibited from making any guarantees about income. If you have a retirement fund or pension or IRA, you have opportunity to ‘play around’ with investments, and you just might make good returns on those funds.  Then again, you might not.

But most of us need Social Security for survival, and that’s not anything to ‘play around’ with. Actually, the status quo we know as Social Security today is working just fine.  Except for possibly lifting the payroll tax limit so wealthy Americans pay their fair share of taxes, nothing needs to be changed.  Let’s encourage our congressmen and women to just leave it alone.

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