Representing North Carolina’s Ninth District                                                                        

Securing the Future of Social Security

When Social Security was created in 1935 there were 41 workers paying for every one retiree.  That ratio has dropped over time, and today there are only three workers per retiree.  By 2018, more people will be collecting social security checks than will be paying into the program.    

In the 1930’s, life expectancy for a newborn was 57.  Today it’s close to 80.  More workers than ever before are living long enough to receive their benefits and for a considerable number of years longer than in the past. 

Today, younger workers pay Social Security taxes to support their parents and grandparents, but have no faith that they will receive benefits that will help them during their retirement.  At the rate we are going, it’s hard to argue with them.

The only way to ensure that younger workers will receive Social Security checks large enough to actually help them during their retirement is to create Personal Retirement Accounts (PRAs). 

PRAs allow younger workers to place a portion of their Social Security taxes into their OWN social security account.  Then, they can manage it and build a nest egg for their future.   

Currently, workers pay into an empty Social Security fund.  Washington takes Social Security taxes, pays benefits to current retirees, and spends the excess money on other programs.  PRAs ensure that taxes paid into Social Security are owned by an individual and are only used for Social Security. 

PRAs not only ensure younger workers will receive a Social Security check large enough to help them during retirement, but they also enable workers to get a higher return on their retirement funds.  A recent study done by the Social Security Administration shows that middle-class workers born in the last 30 years may see a return of 1 1/2 to 2 percent from Social Security.  It has been estimated that after inflation, the average return on a 401 (k) is around 4 percent, while stock-indexed mutual funds are even higher.  PRAs can also be passed down to children and grandchildren as inheritance. 

A model for PRAs is in use by the federal government for its employees.  Workers manage their own retirement account and decide where they want to invest their retirement money based upon different investment options.  This system has worked for many years, and many employees enjoy a healthy retirement due to these accounts.

Senior citizens currently receiving Social Security checks should not be alarmed at the creation of PRAs.  Do not listen to the false accusations that your benefits will be taken away.  No one is going to cut the current benefits you receive.  No one. 

The traditional Social Security that seniors enjoy will not change.  This debate is about today’s younger workers creating a nest egg for their retirement.  We must secure the future of Social Security for them.  Yes, this will cost $2 trillion dollars to start now.  However, if we wait it will cost us $11 trillion in the future.

Personal Retirement Accounts empower the individual and ease the dependence on the government.  PRAs give individuals higher rates of return for their retirement, offer more flexibility, and can be passed down to future generations.  More importantly, PRAs ensure that my grandkids, and yours, can retire with peace of mind; knowing that they will receive substantial benefits at retirement rather than the paltry sum they would collect under the current system. 

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