Executive Summary

America’s Social Security system is a ticking time bomb. It is not a stable system and provides young workers with negative returns. Reform is needed now to ensure the future of the system and the financial security of younger generations.

In 2017, Social Security will start to owe more money than it takes in. The support base for the system is shrinking, as Americans live longer and have fewer children. Over the next 75 years alone, Social Security will face a $4 trillion shortfall.

When my generation of workers (current students or recent graduates) gets ready to retire, the system will be able to pay only 74% of our promised benefits. We will pay more money into the system than we will get back.

The solution is to let young workers put some of their Social Security money aside into Personal Retirement Accounts. These accounts will give our generation financial security and ownership of our retirement funds. The yields of a PRA system would be far greater than what Social Security currently promises workers, let alone what the system can actually afford to pay out. PRAs would also start to pre-fund future benefits, bringing the Social Security system closer to financial solvency.

Without Personal Retirement Accounts, Social Security will be forced either to cut benefits or raise taxes. Both are unacceptable responses to an unacceptable situation. Young workers deserve a system that is financially stable and that will provide a reliable safety net for retirement. PRAs allow both the system and the individuals within it to prosper.

The time to act is now. Every year we put off reform, the Social Security system gets closer to bankruptcy.