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the amount of borrowing from the public might be reduced. In this case the difficulty of generating General Revenue for the redemption of Trust Fund investments in the future would likely be diminished.”
Q: Social Security’s future challenges are caused by the aging of our population . Do other countries have similar problems?
A: Yes. Most countries in Europe, as well as Japan, have more serious challenges than the U.S. Even some developing countries are starting to face up to the aging of their populations.
In addition to the helpful answers provided above by the Social Security Administration, the American Association of Retired Persons (AARP) offers the following enlightening answers to other frequently asked questions:
Q: Wouldn’t putting my payroll taxes in an individual account give me control over my own money?
A: Personal control can be appealing and has a definite place in your retirement portfolio-in addition to Social Security. However, privat- ized or carve-out accounts fundamentally change Social Security and undermine the program’s benefits. What proponents of carve-outs don’t tell you is that in reality, you wouldn’t have that much control— your investment choices would likely be very limited. Most carve-out proposals would limit workers to just a few investment choices to try to keep administrative costs down.
Q: Can’t I do better by investing on my own?
A: Maybe, but maybe not. Market averages are just that—averages. If you put one foot in boiling water and the other in ice-water, on aver- age the water is comfortable. The reality, of course, is very different. Personal accounts come with a host of risks. The majority of mutual funds under-perform the market average. The stock market goes down as well as up, and sometimes it stays down for quite awhile. Many retirees who thought they were set financially are having to cut their budgets dramatically or even return to work because the value of their
New Views About Retirement