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Should We Privatize Social Security?

A Social Security benefits application.
Article Details
  • Written By: Luke Arthur
  • Edited By: Heather Bailey
  • Last Modified Date: 27 September 2014
  • Copyright Protected:
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    Conjecture Corporation
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The debate about whether to privatize Social Security is heated and has many things to consider on both sides of the issue. Even though it may be complicated, choosing to privatize Social Security could provide a number of benefits for the United States and its citizens. By privatizing Social Security, individuals would know that some money would be waiting on them when they retire. This system would also allow individuals to have some level of control over what happens to their Social Security dollars. Another benefit of privatizing Social Security is that the funds which are generated by a worker could be passed onto his or her heirs.

The current Social Security system is flawed and there is a good chance it may not be around in the near future. Some estimates say the system could run out of money as soon as 2042 if nothing changes. If the country were to privatize Social Security, workers could have some confidence that some of the money will be available when they are ready for retirement. With the current system, individuals who are currently in the workforce do not know whether Social Security will be available for them once they reach retirement.

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One of the most common suggestions when it comes to privatizing Social Security is to give workers individual accounts. This would allow them to deposit money directly from their paychecks into a private account. The individual would then be able to have some control over what happens to the money once it is saved. He or she could choose the individual investments for the money. At the end of the individual's working life, an annuity could be purchased to provide him or her with a regular annuity payment.

Another reason the country should privatize Social Security is so individuals can pass on money to their heirs after they are gone. Under the current system, all of the money earned by an individual stays with the government once he or she passes away. This means the individual is working hard and earning money for someone he or she is never going to know. If the country were to privatize Social Security, this problem could be avoided and the individual could choose to help out a family member when he or she passes away. This would give workers more of an incentive to earn money and contribute to the system.

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