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S4 - Ownership. Choice. Personal Accounts.
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SS 230: Social Security and Low-Income Workers

Low-income workers rely on Social Security benefits to provide the bulk of their retirement income, but without reform, future benefits could have to be cut by as much as 30%. While that may not sound like much, it will cause the elderly poverty rate to double and most of the people pushed into povery will be women and minorities.8

Personal Retirement Accounts, on the other hand, help the poor in a variety of ways. For one, PRAs earn a higher rate of return and, therefore, higher retirement incomes. For another, because individuals would own their own retirement account, their retirement savings contribute to and increase their personal wealth. Increasing wealth is important because the difference between the rich and the poor is much greater in terms of wealth (savings and investments) than it is in terms of income (earnings).9 Part of the reason the wealth gap is so large is because households are unable to accumulate financial assets and leave inheritances. Since personal accounts would be owned by the worker and could be passed on to his or her heirs, all families could accumulate wealth. This would help close the rich/poor gap for generations to come. After all, shouldn’t all workers be part-owners of the world in which they work? They could be with personal accounts!

    The Basics
SS 101: An Issue for Young Americans
SS 102: The Financial Crisis
SS 103: The Solution through Personal Retirement Accounts
Core Classes
SS 200: SS and Young People
SS 210: SS and Minorities
SS 220: SS and Women
SS 230: SS and Low-Income Earners
SS 240: Personal Accounts and Disability Insurance
Junior Electives
SS 300: The Theory of Ownership
SS 310: The Theory of Choice
SS 350: The Theory of Social Insurance
Do the Math
The PRA Calculator
Resources and Footnotes
Frequently Asked Questions
Suggested Reading
Recommended Links


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