Once the accounts had time to grow, they would be able to more than offset the benefit reductions needed to keep the program solvent. Addressing the Risks There are legitimate concerns about the risks of pursuing higher returns, and a new system needs to be structured accordingly. For instance, partial privatization could present an opportunity for unscrupulous money managers to take advantage of unsophisticated investors, churning their accounts or robbing them of their assets the way many subprime mortgage companies fleece elderly homeowners. Clearly, Social Security must not be turned into a freewheeling laissez-faire system with workers trusting their friend's second cousin to invest in commodity futures or currency swaps. Annual returns have ranged from negative 12 percent to positive 32 percent over the past twenty years.
Market returns over one's working lifetime really count.
They missed the opportunity to build wealth while a booming economy doled out profits to those on the upper half of the income spectrum. Declaring the stock market too risky for the least well off mainly ossifies existing wealth inequities. While regulations will be instrumental in mitigating risk, no one should insist on regulating out all selection in investment choices. Workers will have a long time horizon over which to save, with different investments appropriate at different stages of life. People shouldn't be forced to shoulder more risk than they choose.