by Joost Steffensen

Created on: July 10, 2008

I say no because personal retirement accounts go against the very idea of what social security is. The first part of this is the "social" part. The idea is that this is a form of solidarity, although we would all wish to reach retirement age with a nice pension this is not always the case. For various reasons, including illness, unemployment or just darn rotten luck, we might find our coffers depleted before then. This is why we say,' let's be "social" ,let's help each other out.'You get a fixed amount of money which you have a right to. The term "Personal retirement account" has the feel of everybody out for themselves.

This brings us to the second part, the "security" part. There is no point having social security if you can't be a hundred percent sure that that money is waiting for you when you retire. With the government investing your money you always have the guarantee that if they make a mistake the money will come from somewhere else. But when you have your own personal account and you make a wrongheaded investment the money is gone. No social security for you.
But just to make sure I get my point across here allow me to elaborate.

COST

The government has one social security program. It invests in bulk meaning it pays minimal fees on its investment. In fact the government can get great interest rates, because of the large amounts of money involved. Try getting a great interest rate if you're a small time investor. For you to administer your account you'll have to pay brokerage fees, bank fees, transaction fees, the more you try to play with your account the more expensive it gets.

TIME

The present system asks nothing of your time. But managing your own account can be a time consuming business from finding the right investments, to monitoring your stocks to agonizing in front of your computer over the question: to sell or not.

STRESS

Talking about agonizing, under the current system you don't really have to worry about social security. That's the "security" part again. But when you get your own account every drop in the stock market becomes a reason to wring you hands and pray. Do you really need more things to worry about?

RISK

The fact that the government can spread out its investment over many stocks and bonds severely minimizes risk. But for private investors it is much harder and costlier to spread their investment. Of course there will be those who have a knack for this and they might benefit from private accounts. The vast majority of people though are

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