Immense Savings Privatizing Social Security

August 1997
Journal of Financial Planning;Aug1997, Vol. 10 Issue 4, p18
Academic Journal
This article provides information on a paper released by members of the National Bureau of Economic Research on the possible effect of the privatization of Social Security on employer/employee taxes, in August 1997. The authors claim that the 12.4 percent paid in Social Security taxes would plummet to two percent in the long run if the Social Security system were privatized in the U.S. The authors estimate that the transition to a private system could be done with a payroll surcharge of less than 1.5 percent in the early part of a 25-year transition. Their results assume a 9-percent return on the private retirement savings.


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