Social Security

How long do you plan on living? When you retire, where will you get the money to support yourself? Can you rely on Social Security to be there for you when it’s your turn to retire? In 1935 when Social Security was created there were 40 workers for every beneficiary of Social Security. Today there are about 3.3 workers supporting one beneficiary. When we are ready to retire there will only be two workers supporting each of us. After noting these statistics provided by the Social Security Trustees I believe that it is extremely important that we need to improve Social Security before it is too late or too expensive. In this speech I will reveal the problems with the current Social Security system and show you how Personal Retirement Accounts can fix these problems.

The current Social Security administration keeps track of your earnings record, but it isn’t saving any of that money in an account with your name on it. Most of deductions to your earnings are going straight to someone who is currently on Social Security and the rest goes to the Federal government in order to fund the system. When a retiree dies the government stops issuing them payments and their families are not given any of the left over money that they had worked so hard for. Today there are more people entering retirement than ever before. Life expectancy is continuously rising, and there are fewer workers to support those retirees. The Social Security Trustees, the Congressional Budget Office, and the General Accounting Office have all agreed that Social Security needs to be fixed sooner than later. The current system does not guarantee the younger workers anything. It only provides us with is empty promises.

Social Security System is continually making empty promises concerning benefits to our generation and those younger than us. According to the report provided by the Social Security Trustees as a result of benefits growing faster than the economy, “…today’s 20-year old is promised benefits that are 40% higher, in real terms, than are paid to seniors who retire this year.” Keeping this benefit increase in mind and also noting that the number of workers supporting each retiree is going to decrease significantly by the time we retire, it is clear to see that if we don’t fix the direction that Social Security is going now the problem with continue to escalate. By 2018 Social Security will be bankrupt. Some believe that the way to fix this problem is by either raising taxes, which nobody likes, cutting the benefits given to the retirees, which will cause more controversy than it is worth, cutting other government programs, which will only take away from another group to aid a system that is already failing, or borrow larger amounts of money. All of these so called solutions to maintain this awful system are not attractive and will only prolong the inevitable; the demise of the current Social Security system. We need a plan that will secure Social Security for good.

Even more alarming is the cost of doing nothing about the Social Security system. According to a report provided by the Social Security Trustees, as of 2004 it will cost 10.4 trillion dollars if the current system remains unchanged. 10.4 trillion dollars is almost twice the combined wages and salaries of every working American. As if this amount wasn’t alarming enough, for every year we put off fixing Social Security it will cost 600 billion dollars. The cost of doing nothing is tremendous.

President Bush hasn’t selected a specific reform policy yet, however one of the ideas is for Personal Retirement Accounts. There have been many misconceptions about this new idea. Some people think that this plan will privatize Social Security, others are worried about what will happen to them when they retire, and still others believe that this plan would only benefit the wealthy. First of all the plan is not to privatize Social Security, but to provide individuals with a greater choice and more control over their Social Security. The General Accounting office has done studies to see who will benefit the most from Personal Retirement Accounts and has found that, “those who gain the most from various personal account plans were the lowest-income participants”

Let’s start with a brief overview of how Personal Retirement Accounts work. You the individual will make the decision as to whether or not you would like to participate in setting aside your own money for a “nest egg” when you retire.

Now that you know the decision is entirely voluntary I can show you the