Karen Thurman: “as part of my continuing series on Social Security and women, I would like to focus this evening's comments on the…”

“as part of my continuing series on Social Security and women, I would like to focus this evening's comments on the financial risks that I believe are posed by privatizing the Social Security program. Social Security privatization would expose individual workers and their families to financial risks which they do not face under the current system. Under privatization, Social Security benefits would no longer be determined primarily by a worker's earnings and the payroll tax contributions she made over her career. Rather, benefit levels would be determined by the vagaries of the stock market, by a worker's skill, or just plain luck in making investments, and by the timing of his or her decision to retire. Social Security today provides a guaranteed lifelong benefit. No matter what the stock market does the day one retires or in the months leading up to retirement, our benefit will be unaffected. Advocates of individual accounts argue that, since fluctuations in the stock market average out over time, individual investment risk is negligible. Averages are misleading. For every person whose investments perform above average, there is another person counting on Social Security whose investments perform below average. Retirees are not just averages; retirees are individual people. Between March, 2000, and April, 2001, the S&P 500 fell by 424 points, or 28 percent.…”