He said it was conceivable that workers taking advantage of individual accounts would get a lower benefit. In any type of market investing, there are always winners and losers, McEntee said. Luck plays a big part, along with the strength of our economy, global conditions, and individual investment skill and experience. Today, Social Security guarantees lifelong benefits to those who contribute a portion of earnings, he said. McEntee and other opponents of privatization also point out that it s no free lunch.
Current workers pay the benefits of current recipients.
According to the Center for Budget and Policy Priorities, a Washington research group, the cost of keeping two systems going simultaneously will be nearly a trillion dollars over ten years. Well, to start, most privatization plans would raise the retirement age. Full benefits would not be paid until age 70 and some plans would index the age thereafter to increases in life expectancy. COLAs might have to be reduced as well. The alternative would be hefty tax increases.