Should Social Security Be Privatized? Many people don't understand how the Social Security system really works. There are no separate Social Security 'accounts' set up for each taxpayer to which he contributes his Social Security 'tax' each year. Many people believe these accounts exist, that the money they pay into their accounts grows each year until retirement, and when they retire they get back what they paid in with interest. This is not true. Most …showed first 75 words of 1968 total…

…showed last 75 words of 1968 total…and pay-as-you-go. The supplementary layer would be private and based on individual contributions. A further question is who bears the risk when investments go sour. There is no such risk under the current system. The stock market looks like a great retirement vehicle in the 1990's, but it wasn't so reliable in the 1970s and 1930s. The program was deliberately designed as a social guarantee of retirement income, not a system of government-mandated private savings.