Social Security cannot afford to pay all of the benefits it has promised. Beginning in 2017, it will run cash deficits that get bigger every year.

One of the classic arguments opponents of personal accounts make is that letting younger workers invest in a few broadly diversified bond and stock funds exposes them to too much risk. Most Americans, though, know that stocks are a long-term investment, and that the daily ups and downs of the market don’t matter nearly as much as the superior rate of return stocks give to other kinds of savings. Recently, Vanguard, one of the nation’s most-utilized retirement savings firms, issued a multi-year report on IRA and 401(k) plan participants. They found that even in tough years for stocks, most retirement savers kept a stable 70%/30% stock/bond asset allocation—exactly what they should do in any rational allocation structure that thinks long-term. Most investors do not jump in and out of stocks—they are in it for the long-run.

Social Security has a problem, and we need to fix it. Personal accounts are the solution.

Most Retirement Savings Stay In Stocks, Even During Tough Years
Source: Vanguard Retirement Report