The SMART Way to Save Social Security

Personal accounts have a long and well-traveled history. In some countries they are called “individual” or “private” accounts. An individual account is defined by the International Social Security Association as “an arrangement in which capital belonging to an individual person accumulated from mandatory or voluntary contributions is recorded so that it may be withdrawn in case of certain specified future contingencies[.]” The principle of property rights is central to this. It is noted that money contributed to these accounts belongs to the contributing individuals. It does not belong to the government or to private business. However, the terms of withdrawal of funds are usually established and enforced by government.

The United States does not offer any personal account option, and the U.S. Supreme Court decided in 1960 that no citizen has a property right to Social Security, regardless of the mandatory contributions you have made specifically for the purpose of Social Security benefits.

For over 25 years, an increasing number of countries have established some form of personally held accounts in response to growing social security and pension crises. Personal accounts address many of the problems facing retirement programs: ownership, benefits, debt and solvency. In response to these problems, over 30 countries have made personal account plans available to their citizens. Chile, Sweden, the United Kingdom, Switzerland, Denmark, the Netherlands, Argentina, Colombia, Peru, Bolivia, Mexico, Uruguay, Australia, Poland, Hong Kong and El Salvador are on this list.

Personal account programs have been developed over many years in varying formats, depending on country-specific concerns. In some cases, personal accounts are purely voluntary and parallel existing national savings programs. In other cases, they are mandatory. Most countries guarantee a basic pension income floor, in order to ensure some basic level of income in retirement. Importantly, every program ensures individuals’ property rights to their retirement accounts.

It is clear that the U.S. is facing a crisis. Millions of current contributors will not have any retirement savings when they reach retirement. Arguably, we have been facing a retirement crisis since the 1960 Supreme Court ruling. Without any right to your own contributions to Social Security, what happens? The thousands of dollars in contributions provided most likely will never return to your pocket, particularly when they are most needed. Personal account options are well researched globally and are flexible enough to meet the needs of a diverse population. They have received multi-partisan support around the world. It is imperative for the well-being and security of future generations that personal accounts become part of Social Security reform.

Please take a moment to talk to your legislator about opportunities to support property rights and a secure retirement. Learn more about the issue at, and contact your Congressional representatives about HR 4181. We have an opportunity now to bring personal accounts to the U.S., thereby ensuring retirement security for future generations.

Bina Patel is Director of the Oregon Asset Policy Initiative at Cascade Policy Institute, Oregon’s free market think tank. She has a master’s degree in Social Protection Financing from the University of Maastricht in the Netherlands and over ten years of experience working on public policy and direct service in the areas of poverty alleviation and asset building, both nationally and overseas.