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.

Younger workers know that they are getting a lousy rate of return on their Social Security taxes. That’s why many of them have saved in IRA and 401(k) plans, despite the pressures of starting families, buying homes, and paying the bills. Millions more would like to save, but cannot afford to do so after they have paid their Social Security taxes. Younger workers need to be able to save their own Social Security money in a personal account. On average, there just isn’t enough saving going on. According to the Fidelity Retirement Index, Generations X and Y workers save only about $92 per month for retirement, and have a nest egg of only $9000. Meanwhile, their half of Social Security taxes is nearly $200 per month. That money should be in their nest eggs.

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

Younger Workers Saving for Retirement, But Social Security Taxes Are a Burden
Source: Fidelity Retirement Index, March 2005