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.
Maybe opponents of Social Security personal accounts for younger workers have been spending too much time in government. While traditional, collectivist defined benefit pensions are still dominant with public sector bureaucrats, the private sector has embraced personal retirement accounts with gusto. Since 1994, the percentage of private pension retirement assets held in 401(k)-style pension plans has risen from 48% to 59% of all assets. In that same time period, the percentage of private pension retirement savings held in collectivist defined benefit schemes has plummeted from 52% of assets to a low 41%. Younger workers are ready to assume the burden of saving more for their retirement—at least those who work in the real world.
The system has a problem, and we need to fix it. Personal accounts are the solution.
In the Private Sector, Personal Account Retirement Plans Have Become the Norm
Source: Flow of Funds Accounts of the United States, Federal Reserve (via Prudential)