Public Prefers Social Security Privatization

July 7, 2008 - 8:02 PM

Washington ( - More than half of Americans would prefer to have the ability to invest their own Social Security funds under a privatized plan rather than allow the federal government do it for them, while less than one-third would prefer to keep the current system, according to a survey released Thursday.

A Zogby International survey conducted for the Cato Institute last month polled 1,205 likely voters throughout the country.

Presented with the option of being permitted to invest their Social Security funds on their own "through individual accounts similar to IRA's or 401(k) programs," 54.9 percent of Americans said they would choose the privatized system. Another 31.4 percent said they would prefer the current system while the remaining 13.8 percent remained unsure.

Social Security privatization "is a very important issue" among Americans, said Zogby. He added that Americans having the opportunity to choose for themselves what to do with their own money strikes at the basic American values.

Rep. Mark Sanford (R-SC) said the study echoes what he hears from his constituents, many of whom are seniors living out their retirement along the South Carolina coast. "People are wildly receptive to the idea of choice in choosing a Social Security system," Sanford said. "This is an issue of economics."

"Too often the lines are drawn between Republicans and Democrats," Sanford added. But he insisted privatizing the current system in a way that gives individuals a choice in how they manage their retirement accounts is also a bipartisan issue.

Thirty-nine percent of those surveyed identified themselves as Democrats compared to Republicans who comprised 34 percent of respondents. The remaining 26.9 percent identified themselves as Independent.

Democrats who were polled in the survey were almost split on whether to continue allowing the federal government to administer its Social Security retirement system.

Among the Democrats surveyed, 46.3 percent favor a privatized system for Social Security while 38.1 percent objected to changing the present government-run system. The remainder said they were unsure.

Republicans were more solidly in favor of a system which allows individual employees the opportunity to administer their own retirement accounts. Among GOP voters, 62.6 percent favored the privatized system, 25.6 percent prefer no change and 11.8 percent remain unsure.

Among Independent voters, 57.5 percent said they would opt for personal control of their Social Security retirement accounts, while 28.9 percent prefer the current system and 13.6 percent remain uncertain.

The Zogby study indicates youthful employees as being more likely to opt out of the current Social Security system to invest on their own. But Americans in older age brackets are more inclined to remain with the current system.

Among voters in the 18 to 29 bracket, 78.3 percent said they would abandon the government-run system while 12.6 percent would remain. Seventy-one percent of 30 to 49-year olds would take on the opportunity to invest on their own while 17.7 percent prefer to stay where they are.

Among those aged 50 to 64, 51.4 percent preferred a privatized system. For those 65 and over, 26.5 percent wanted the ability to choose a retirement system for themselves.

Respondents who expressed the desire to have the opportunity to invest their own Social Security funds were also asked to explain why they thought a privatized system is better.

Some of the answers, recorded as having similar messages, indicate lack of trust in the government and lack of trust that the Social Security system will still be around to serve the needs of individuals who have already contributed when they retire.

"I am afraid Social Security won't be around when I retire," was a common response from at least 28 of those surveyed. Another sentiment expressed in the survey was a sense that individuals are more investor savvy than the government. "I could invest the money better than the government," responded 33 of those surveyed.

Another 14 respondents said they would get more money back after investing in funds on their own than they would by waiting on the government to control their retirement.