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.

Most workers know that Social Security benefits will be far smaller than they have been led to believe. Many politicians have chosen to bury their collective head in the sand, but the data shows that most workers are planning for retirement without much Social Security. According to a recent study by the Employee Benefits Research Institute, workers with 401(k) plans contribute at least as much of their payroll to them as they are forced to pay in Social Security taxes. As workers age and the raw deal of Social Security becomes more obvious, their 401(k) contributions increase even more. If younger workers had personal accounts, they could do this saving inside the context of Social Security itself, rather than having to imperfectly-supplement a broken system that simply won’t be there for them.

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

Workers Try to Make Up for Social Security’s False Promises in 401(k) Plans
Source: EBRI for Perspective Magazine, Vol. 11, No. 2—July 2005