Social Security Reform: Considerations for Individual Account Design

Social Security forms the foundation for our retirement income system, providing critical benefits to millions of Americans. However, the Social Security program is facing significant future financial challenges as a result of profound demographic changes. A wide variety of proposals to reform the program are currently being discussed, including restructuring the program to incorporate individual accounts. When designing a system with individual accounts, there are many options and issues to consider. The choices that have to be made will affect not only participation in the accounts, but also the amount of savings accumulated in the accounts, and the benefit received from the individual accounts. Congress asked GAO to discuss options for the administration of individual accounts, including the major design issues that are raised within the contribution, accumulation, and distribution phases of a retirement savings vehicle.