Low earnings and less time in the labor force would produce low contributions and low retirement benefits. Many of the family benefits currently provided by Social Security would likely be cut back. This risk is compounded by the absence of inflation protection. Proposals that purport to introduce individual accounts and guarantee all benefits under the current system should be viewed skeptically. These proposals are inherently unstable and would undermine Social Security's defined benefit structure.
Women have little to gain from individual accounts.
Shifting payroll taxes to individual accounts will not increase the rate of return on Social Security contributions, defined broadly. Returns on individual accounts may appear higher initially, but not after adjusting for the cost of paying benefits to current Social Security retirees. Despite the protections of Social Security non-married older women have poverty rates around 20 percent. Part of the problem stems from non-Social Security factors. Private pension benefits erode due to inflation, and are either cut in half or terminated when the husband dies.