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Ask Dave

Negative Aspects of Private Social Security?

Dave answers Michael's question about the negative aspects of privatizing Social Security.

QUESTION: Michael wants to know the negative aspects of privatizing Social Security.

ANSWER: The funds that you would be investing in under the privatization policy are common stock index funds, so they’re going to go up and down a bit like a growth stock mutual fund.  You just need to look at the long-term track record, the average over a number of years. 

Pace yourself so that you can live comfortably whether it’s an up year or a down year.  The mountain years fill in the valley years and that’s how you live off of Social Security when you have a down year.