Public economics paper Research Example | Topics and Well Written Essays - 1750 words - 1

Public economics - Research Paper Example Shifting Social Security aids to private accounts is a way of preventing Social Securitys anticipated forthcoming financial shortfall (Myles, 54). Privatization of Social Security would permit workers to control personal retirement money through personal investment accounts. Backers of private accounts argue that retirees would have the freedom to invest their retirement funds in the stock market as they aspire, theoretically gains huge returns than with government-invested money. Privatization programs are based on a modest idea. Instead of contributing to a collective or group, pay-as-you-go retirement plan, employees would be obligatory to build up retirement savings in directed private and individually owned accounts (Matthews and Dorothy 23). Workers can withdraw these funds from the accounts when they reached the retirement age or became disabled, and their beneficiaries could inherit any funds accumulated in the account if the employees died before reaching the retirement age or becoming disabled. At the time a worker chose to begin receiving a pension, all or some of the funds in the workers account would be changed into an annuity that would exist until the worker died. If the worker marries, both spouse, and worker might be needed to allow a j oint survivors annuity, this is to say, an annuity that would extant until both the spouse and worker have died. Under some suggestion, workers could choose to draw some of the finances as a massive distribution when they retire or disabled. Employees would be allowed to choose how their contributions were invested, within broad limits (Matthews and Dorothy 23). In few privatization programs, contributions would be collected by a semi-public or single public agency or group and then invested in one or more of a given number of investment funds. A worker might be provided with the choice of investing in, say, five various funds - a stock market index fund, a corporate bond fund, a money market fund, a real