Carve-Outs Not The Answer For Social Security



When AARP's National Legislative Council first began looking at various proposals to change Social Security by diverting money into individual accounts or "carve-outs," the idea was still fairly new and the stock market seemed unstoppable.

AARP closely examined the issue by collecting information from academics and policy experts, as well as studying the experiences of other countries.

AARP also paid particular attention to the impact that carve-out accounts would have on various stakeholder communities, like people of color.

What AARP concluded was that there were no easy answers to strengthening Social Security. And while carve-outs seem appealing, after AARP did the research, it was clear that they would serve only to worsen Social Security's long-term financing and substitute part of today's guarantee with individual risk.

AARP strongly encourages individual retirement accounts but they must be in addition to, not in place of, any part of Social Security's guaranteed benefits.

Our challenge as a nation will be to ensure that Social Security continues to provide future generations with guaranteed rock-solid benefits. But "privatizing" the system by carving out investments is not the answer.

Lupe Solis, AARP Arizona Associate State Director for Advocacy

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