To Reform or Not to Reform: What's Best for Middle-Aged Americans?
The Social Security Administration itself has warned America that a crisis is looming. By 2017, Social Security will be paying more in retiree benefits than it receives in taxes. Americans must realize the importance of Social Security reform. The longer we wait, the harder it will be to fix the system - and the more it will cost.
You may have heard about how voluntary personal retirement accounts can change the future of Social Security for young Americans by giving them the opportunity to build a "nest egg" with part of their Social Security taxes. But what will personal retirement accounts do for middle-aged Americans?
Personal retirement accounts can help strengthen Social Security for middle-aged Americans, as well as seniors and young workers. As a working American approaching retirement, you'd have the opportunity to choose whether or not to set money aside in a personal retirement account of your own.
If you choose to begin a personal retirement account, you'd have the opportunity to invest a portion of your Social Security payroll taxes in a diversified mix of conservative bond and stock funds.
Or, if you don't feel that a personal retirement account is right for you, you'd still be able to continue to pay all of your Social Security taxes into the system. The new "nest-egg" accounts would be entirely voluntary. When you retire, you'll draw full Social Security benefits at a level determined by the Social Security system at that time. Many experts believe that because fewer retirees would rely solely on the system for retirement security, personal retirement accounts could help sustain benefits for future retirees who opt not to invest.