Beneficiaries who wish to stay in the current system could do so. The partial privatization and personalization of Social Security is the key to its future solvency. Instead of relying on continued confiscation of current workers wages to pay benefits for older generations, private investments would usher in a cohort system, in which an individual s lifetime investments would come back, with dividends, to that same individual at the time of retirement. This would also effectively prevent the government from tapping these funds to finance other government spending. In order to ensure savings, the accounts could be rendered off limits to the account holder until he or she is age 65 or older, as is specified by many IRA plans.
Financial liberty leads to greater personal liberty.
This plan has many positive elements, but one of the least talked about is that these individual retirement accounts would be owned by the individual, unlike the Social Security trust fund monies. The looming crisis in the Social Security system has shaken the confidence of all Americans, particularly seniors. But Social Security s troubles are not insurmountable if officials in Washington resist their natural impulse to make a slap-dash effort at reform. They must act with alacrity to address the system s structural problems, with as little partisan squabbling as possible. However, the recent example of the Bipartisan Commission on the Future of Medicare, an even more complicated and distressed entitlement program, doesn t bode well.