Financial Advice

What Will President Trump Do to Privatize and Gut Social Security? – Debbie

Question:

Dear Steve,

It was so nice to read your comments about how Trump may handle student loan debt. Could you please write something similar about how Trump, and also the Republicans in the House and Senate, will Change social security? Will they privatize social security?

Can you discuss Trump’s/the Republican’s changes and cuts/privatization of social security and how social security will change if privatized? Will those of us nearing age 60 be expected to suddenly take lots of cuts or endure major changes to our social security that we have paid into for decades?

Can you explain how these changes/sacrifices would “make America great again”? Who are the major actors in the upcoming “death of social security as we know it” morality play, if it’s not too much trouble?

Debbie

Answer:

Dear Debbie,

I’ve never been a fan of the effort to privatize Social Security. The expectation people are going to take more care or effort to manage their retirement funds is laughable. If anything it can create an even larger burden as people who didn’t deal with their retirement accounts wind up broke, homeless, and destitute. Those folks will either fall back to some sort of social network and benefit needed to keep them safe and fed or get stacked like firewood waiting for some refuse truck to pick them up.

Privatizing Social Security sounds great when people talk about it but the reality of implementation is a whole different story.

Now apparently people on the Trump advisory team have been in support of gutting or changing Social Security. If these changes actually do come true I think those folks who voted for Trump to “drain the swamp” and believed all the campaign rhetoric will be deeply disappointed.

But it’s too early to even give you a good guess where changes to Social Security may end up. The safe bet would be that those, like you, nearing Social Security eligibility would not see massive changes. Younger people who have more time to plan, may see bigger changes.

As it stands now, president-elect Trump feels most of the drastic changes necessary to preserve Social Security revolve around a robust and growing economy. Time will tell if that’s going to happen.

It’s very possible that Trump may stand up to Congressional efforts to change Social Security.

So the only conclusion I can come to at the moment is neither be hopeful or panic. We just don’t have enough information to even know what a privatized social security system would look like. A recent column in the LA Times might be worth reading. See Chile’s privatized social security system, beloved by U.S. conservatives, is falling apart.

But everyone still has an opportunity to let their voices be heard on this subject when something concrete is suggested in Congress. The most you can do for now is just stay tuned in to the news and be prepared to let your Congressional representatives know how you feel about the eventual suggestions.

Steve Rhode
Get Out of Debt GuyTwitter, G+, Facebook

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This article by Steve Rhode first appeared on Get Out of Debt Guy and was distributed by the Personal Finance Syndication Network.

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