Majority Open to Privatizing Social Security, Poll Says

A large majority of Americans say they would prefer letting workers shift some Social Security taxes into private accounts they could invest on their own, and the youngest adults are most enthusiastic about the idea, according to an Associated Press poll.

But interest dwindles sharply when Americans are asked if they would want to invest their own Social Security taxes in stocks and mutual funds.

Overall, eight in 10 Americans like the concept of such personal retirement accounts, but given the risks of investing, only 46% would want to try it themselves.

Among those ages 18 to 34, 90% say they like the idea of private accounts. A slight majority, 52%, of younger adults say they’d want to take the investment responsibility themselves.

“Companies have dumped pension plans, and young people--so many of whom are temporary workers and service sector employees--fear they may never see a guaranteed retirement benefit,” said Hans Riemer, director of the 2030 Center of young activists.

The telephone poll of 1,013 adults was taken for AP on March 27-31 by ICR of Media, Pa. The margin of error is plus or minus three percentage points.

Some in Congress have proposed shifting to private accounts to help keep Social Security financially viable as millions of baby boomers retire. The Clinton administration has raised concerns about such privatization.

In Kansas City, Mo., where President Clinton on Tuesday will kick off a series of town hall meetings to discuss possible Social Security changes, people interviewed separately from the poll had many questions about how private accounts would work.

“How much privatization are we talking about?” Rick Yarnell, a 41-year-old auditor, wondered.

Said Katie Neely-Phelan, 42, a video editor: “We’ve had disasters with privatization in other areas.”

Still, most Americans polled--74%--say they would rather see a fundamental redesign of Social Security than tinkering. Just 17% said they would prefer adjustments to payroll taxes and pension benefits that could maintain the current retirement system.

When asked about specifics, just 22% said they would support raising payroll taxes for all workers. Nearly 76% opposed raising taxes.

About the same number, 77%, oppose further increases in the retirement age, already scheduled to rise gradually from 65 to 67 for people born after 1937. About 21% of those surveyed favored a retirement age of 70, with those already over 65 the most supportive.

People were more evenly divided about scaling back cost-of-living raises that are now given yearly to retirees, with 53% in favor and 44% opposed. Those over age 55 were actually the most supportive group, with about 60% willing to sacrifice benefits they get now or will soon.

Although private accounts were the most appealing option in theory, Americans are wary when asked if they’d want to invest their own Social Security contributions in stocks or mutual funds. People not yet of retirement age were about evenly split on whether they would want to try private investment themselves.

Most likely to be interested in taking charge of their retirement savings were people younger than 54, those making more than $50,000 a year and those with at least some college education.

Social Security is in danger of being overwhelmed by the impending retirement of the largest generation in America’s history--the baby boomers. Predictions are that the program will run short on cash by 2029 if nothing is done.