00:00The debate around privatizing Social Security is gaining traction, proposing a radical shift
00:05from its current government-run model to one allowing individuals to invest their contributions
00:10in private accounts. Currently, your FICA taxes 6.2% for Social Security and 1.45% for Medicare.
00:20Matched by your employer fund benefits for today's retirees, people with disabilities,
00:24and survivors, this payo-zugo system has been the foundation since 1935.
00:30With younger workers supporting older generations, however, a perfect storm of demographic changes,
00:36declining fertility rates and increased, life expectancies means fewer workers are supporting
00:41an ever-growing retiree population. By 2080, 23% of the U.S. population is expected to be 65 or older.
00:50Proponents of privatization argue it offers individuals greater control over their retirement
00:55savings and potentially higher returns. They also see it as a way to reduce the
00:59financial burden on the federal government, but critics voiced serious concerns.
01:05Many Americans lack the financial literacy to manage investments, and unforeseen market downturns
01:11could devastate retirement savings, leaving individuals with little or no safety net.
01:16The current system offers fixed, guaranteed benefits, a crucial safeguard. Beyond the philosophical
01:22divide, practical challenges abound. How to protect those with inadequate savings, manage the massive
01:28transition costs, and ensure lower-income workers aren't disadvantaged. While some suggest a hybrid
01:34model investing apportioned privately while retaining a traditional safety net may move to privatize
01:39Social Security would be an enormous uphill battle in Congress, far more complex than simply shoring up
01:45the existing system. Money expenses.
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