Privatization is basically the process of turning public agencies into investments by private individuals or corporations. In recent years, congress has come up with ideas to privatize such things as Social Security, Medicare and the postal service. Many ideas have come up with different agencies, but most attention has been put on Social Security. In the 1930s, Social Security first came about due to the poverty rates rising among the nation’s elderly people. After passed by congress, under FDR’s presidency, the Social Security plans came in effect as a part of the New Deal. By 1939, the laws changed regarding Social Security, allowing benefits to be added that would cover a retiree’s spouse and children. In 1956, disability benefits were added, and also by 1965, Medicare benefits were added as well.

Under the Bush presidency in 2001, he called together a committee to discuss the topic. He spoke of having “individually controlled, voluntary personal retirement accounts”. As a result, the committee came up with three models for privatization. Social Security will begin to receive its Treasury Notes by about 2020. By 2042, Social Security will begin to pay out more than it takes in. In early 2005, President Bush’s State of the Union Address, said that Social Security was headed into bankruptcy and proposed his privatization plan once again. According to research, recent surveys tell that older Americans would like Social Security to be left the way it is. It’s as popular as ever and is the number one source of income to retirees for most.

I personally think that Social Security should be privatized. I’m afraid that by the time I am eligible to collect, there won’t be much of anything to collect from. If more companies offered diverse 401(k) plans, where they match what you contribute, that would be a good plan if you were to take out Social Security. If employees stick to these plans, they should be able to retire without any problem, that is in theory. My only problem with this is with the average person, can they afford to take a certain amount of money out of each paycheck and put it away. Because of the future, I have already got started my Roth IRA plan. It would be nice to work for a company who also has an additional retirement plan, most likely in the form of stock option or a 401(k).

Some other options to privatization are a Lifestyle Fund. It automatically reallocates your money as you age. If your 30 for example, the fund might put two thirds of your money in equities and one third in bonds or other fixed income assets. At age 50, the distribution would be more conservative, putting two thirds in bonds or fixed income and one third in equities. I feel that education in managing money and your retirement is very necessary; a lot of people don’t understand how a 401(k) plan works and people may not have the time or inclination to manage their own account.

I feel that privatization is the best option however retirees would have to be more involved in their accounts and realize whats going on and how to manage their money more effectively so they would have enough to enjoy a nice retirement.