One path we should avoid is siphoning Social Security payroll taxes into private investment accounts. This would worsen the solvency outlook rather than improve it and could lead to large benefit cuts. This approach is risky, hugely expensive, and unnecessary. Most people already realize this. Our research shows that almost 70 percent of adults 30 and older believe that Social Security should be protected as a guaranteed benefit and should not be privatized.

Private accounts that drain money out of Social Security would cut guaranteed benefits while passing the bill on to future generations. Diverting a third of the payroll contributions paid into Social Security (the amount usually suggested for private accounts) would cut funding for Social Security and create an estimated shortfall of some $2 trillion. Eventually, this shortfall would have to be covered by raising taxes, cutting benefits, and/or taking on new debt.

Social Security is not in “crisis,” but the status quo cannot continue indefinitely, either

In addition, private accounts introduce risk into essential retirement security. The essence of Social Security is to assure predictable, stable retirement income. Private accounts in Social Security threaten that guarantee. There are places in retirement planning that are appropriate for taking some risks—such as 401(k) plans and IRAs—but Social Security isn’t one of them.

Social Security is not in “crisis,” but the status quo cannot continue indefinitely, either. Shoring up Social Security for the long term does not require a radical overhaul.  It is not necessary to dismantle the program to save it. If we make reasonable changes now, the program will be able to pay full benefits to the boomer generation and those that follow. Here are a couple of examples that, combined, would get us well over halfway toward solvency, and there are other possible options to consider:

Call to Action Social Security should be strengthened so current and future generations may continue to have a guaranteed source of retirement income. We need to stand by this promise. Call AARP’s hotline at 800-846-8610 or use AARP.org’s Contact Congress tool to tell your members of Congress to oppose private accounts that take money out of the Social Security system and start talking about possible solutions to keep Social Security solvent.

•	Restore the total wages taxed by Social Security to 90 percent of nationwide earnings. This would move the cap from $90,000 in 2005 to $140,000—perhaps phased in over a decade. It would lower the projected shortfall by some 43 percent.
•	Diversify Trust Fund investments to get a higher return, which could fix about 15 percent of the problem.

Modest steps such as these are enough to strengthen Social Security for the long term. Once people understand this—and learn of the negative consequences of private accounts created out of Social Security—they overwhelmingly support making less severe changes in the program, and sooner rather than later.

AARP is not against all private accounts. We have long championed improvements in private savings vehicles like 401(k) plans and IRAs. But for a secure retirement, we need these savings in addition to Social Security, and definitely not at the program’s expense.

Please let your members of Congress know that keeping Social Security safe and solvent is critical, but taking private accounts out of Social Security is the wrong way to go. By making sensible changes now, we can honor our obligations to all generations.