Research Paper On Social Security

Social Security | A Great “Idea” | | Chris Barron | 12/7/2010 | Professor John MundyEmbry-Riddle Aeronautical University | |

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Abstract
Should Social security be changed to allow personal retirement accounts? Two arguments have gained traction over the past five years. Argument one being a proposal to allow a portion of all individual’s accounts to be managed by the person as they saw fit, thus eliminating major administrative costs as well as significant benefit liabilities the SS system simply does not have. Argument two is that allowing individuals to manage their own retirement accounts would not fix the system. Rather it undermines the safety net that has provided security to tens of millions for over eight decades.…show more content…
The first answer is to increase income by raising the percentage taken out of workers' paychecks for Social Security. The second answer is to reduce spending by cutting the amount paid out in Social Security benefits. Neither of these solutions are simple in reality, since raising taxes is never a popular political decision, and cutting Social Security benefits will negatively affect retirees.
The raw numbers bring these potential changes into perspective: According to the Trustees' report, an increase of 1.89 percent in the Social Security payroll tax would keep the account full for the next 75 years. To achieve similar results, benefits would have to be cut 13 percent.
President Bush has made a different proposal, one that has resulted in a great deal of controversy. He wants to allow people to put up to four percent of their Social Security payments into privately held accounts that would be invested in the stock market. Supporters of the plan proposed by Bush say that stock market gains will offset future deficiencies in the Social Security system. Secondly, the privatization of the individual plan would give Americans more control over their earnings, as they would own their own retirement accounts instead of simply turning the money over to the government. (Actuaries,…show more content…
The best plan as far as I am concerned throughout the research is to redesign the overall tax and spending system to make it more efficient, and to encourage the individual to invest in personal retirement funds separate from their social security account. The generations of the future (mine included) are unfortunately saddled with this conundrum and we should learn to be wary of our actions and how we as the community can deal with possible sort-falls in benefits. The only true way a person can be prepared for retirement is to not bank on receiving of their social security benefits but to construct an individual retirement plan that is controlled by the individual, while thinking of Social Security benefits as a supplementary income (if there will be any at all).
Bibliography
Actuaries, A. A. (2001). Annuitization of Social Security Individual Accounts. Issue Brief.

Grabianowski, E. (2010). Retrieved November 19, 2010, from howstuffworks.com: http://money.howstuffworks.com/personal-finance/financial-planning/social-security1.htm

US Accounting Office (2003). Social security reform information on using a voluntary approach to individual accounts. In U. S. Office. Darby, PA: DIANE Publishing.

SSA. (2010). Social Security and Medicare Trustee's Report. Social Security Administration.

Steuerle, C. E., & Bakija,