Insurance companies have gone under. The US government has not. (Yet.)
The difference in privatization is that the worker does all of his own investing. Fine, except in a crash or serious downturn. It's a crap shoot.
As it now stands, the government does the investing for the collective workers. Benefits have always been paid, even in downturns.
401K's and IRAs just came in near the end of my working career. They and Roths offer the opportunity for workers to do their own investing.
The money paid by the present work force is not "their money".... it goes to pay SS benefits for me. I paid for my parents. There has been a surplus in the fund, but it has been "raided" to pay for other things, so is not as full as it was.
If individual medical accounts come to pass, that will be another slot for a family to fill.
I am assuming that you are under 65, gainfully employed, have insurance benefits, and an IRA or 401K or Roth.
You should do just fine, if you invest wisely.
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Would you sign a contract that enabled the other party to change the terms of that contract at will, while you could neither stop him nor make any changes of your own? Probably not. Yet that is exactly what happens when you pay money into Social Security.
No matter what you were promised or at what age you were supposed to get it, the government can always pass a new law that changes all of that. But you still have to pay into the system.
A private annuity plan run by an insurance company is legally required to pay you what was promised, when it was promised, and to maintain assets sufficient to redeem its promises.
One of the few issues on which Senator John Kerry has taken a stand and not changed it (yet) is Social Security. He has said: "I will not privatize Social Security." ......................
Nothing is more risky than depending on politicians.