Hi, need to submit a 500 words essay on the topic US social security.As opposed to social security contributions, private savings are out of personal will while social security is usually out of a man

Hi, need to submit a 500 words essay on the topic US social security.

As opposed to social security contributions, private savings are out of personal will while social security is usually out of a mandatory requirement prescribed under the law (Brux 214). Therefore, returns on social security contribution would have a constant rate of return as compared to private savings. The rates of return on either perspectives depend on the set rules for the social security contribution and the individual’s own rate of saving (Brux 214).

Social security contribution and private savings have corresponding influence. Traditional savings theory points to the possibility of decline in private saving if compulsory public savings (social security) were increased. On the contrary, studies conducted by private companies show that the existence of pension benefits stimulate an urge to increase personal savings (Mixon, Franklin and Kamal 17).

Most research establishes that the social security benefits discourage private saving among people. This is despite the fact that changing experience of retirement offset any decline experienced in savings. Empirical research shows that social security reduces private savings in the U.S. While the social security has both merits and demerits, its demerits have more impacts on private savings among U.S. adults compared to its merits. Social security caters for medical expenses, retirement benefits, and other social aspects requiring expenditures. In so doing, most people become reluctant in remitting substantial allocation for private saving. In reforming the social security policy, it is imperative to initiate obligations compelling people to remit income for personal