Born out of the Great Depression in an era of economic uncertainty and ill-preparedness, part of the vision which informed the construction of the Social Security system was a theory of social insurance. Life brings rewards such as a peaceful and happy existence in society, but no reward in life is certain. Everything entails risk. Hence, the theory behind social insurance is that some of the basic comforts that are enjoyed in life ought to be protected against future loss.

The problem with the current system is that it cannot achieve this vision because Social Security is a false promise. Consider another form of insurance: imagine that every month you pay a large percentage of your income for car insurance. Now imagine that you have been paying for your car insurance policy for fifty years, and one day when you turn 65 you are in an accident. If you phone up your insurance company for reimbursement and the agent tells you, “Sorry. We have run out of money and can’t pay you the insurance money you are entitled to,” would you consider that much of an insurance policy? That is exactly what will happen to our generation when it is time for us to collect our Social Security benefits—Social Security is really just a social insurance scandal.

Personal retirement accounts, on the other hand, can better secure and, thereby, insure your future. Since you would own your retirement account, there is no longer a risk that a politician will change your benefits structure or dip into the Social Security funds. Since you would choose how to invest your account, there is no longer a risk that your money will disappear. With a PRA you can be better assured that the comforts you have enjoyed your entire life will be sustainable when you are ready to retire.