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Social Security Opt Out Essay

1471 words - 6 pages

It gives poor people a better chance to retire wealthy. Americans living at the poverty level must usually spend every cent of their disposal income just to survive. Few in the lower-middle class have the funds available to put into a wealth-generating retirement account. Thus, they must rely on social security income to pay the bills when they reach retirement age. Unfortunately, the current social security payouts are at or below the poverty level. The money you earn in benefits based on what you pay in is less than what you'd earn in a passbook savings account. Talk to any person of wealth in this country. Do they have their money stuffed under a mattress? Is it in a taxable savings ...view middle of the document...

Obviously there are no guarantees, but private accounts give every American a better opportunity to retire wealthy.

It makes up for inevitable benefit cuts that must eventually be made to the system. As many Americans are starting to become aware, the social security "trust fund" is not a diversified portfolio of assets waiting to be distributed to future retirees. It is a bucket of worthless government IOU's. Social security is based on a pay-as-you-go system. Social security taxes collected from current workers are used to pay benefits of current retirees. As the baby boom generation reaches retirement and life spans increase, the number of workers paying in will shrink while the number of retirees collecting benefits will increase. The system is currently not sustainable on its present course. This means taxes will have to rise or benefits will have to be cut. Tax increases are opposed by the Republican-controlled House since it could stifle a fragile economic recovery. Thus, benefits will have to be cut; i.e. the start age of benefits will have to be extended or the monthly check reduced. Private accounts would allow a larger accumulation of wealth that will make up for the inevitable benefit cuts. In other words, new retirees can at least do well as they currently are.

The stock market should get an initial bump in value. Over 40 percent of Americans currently own stock in some form, most notably in 401(k)'s, IRA's, and pension funds. The implementation of private accounts would mean more money would be injected into the stock market. Thus, by the laws of supply & demand, the market should go up in value.

People are given a personal stake in the U.S. economy, providing extra incentive to help their companies and the nation as a whole to do well. Many Americans feel disjointed from the success of their companies or the U.S. economy. In other words, if the stock market goes up or their company turns out record profits, they don't see an additional dime. They don't have a personal stake in the outcome. Thus, they are less likely to be motivated to do their best. After all, if they have no personal stake, it seems like they're just working to make rich people richer. The use of private retirement accounts would ensure that almost every American owned stock in some form. Thus, everyone would have a personal stake in the health of the U.S. economy. However small, this would lead to a greater motivation to give their best effort. More and more people would realize that the success of their company and the U.S. economy is good for everyone.

Personal responsibility and ownership are injected into citizens' plans for retirement. It is unfortunate that the revolution of government programs instituted by FDR to help the less fortunate have led to a cradle-to-grave entitlement mentality. Too many Americans now believe that the government owes them a living. They are less motivated to work and save because the government is always...

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