CLEVELAND - A study by two Federal Reserve Bank of Cleveland economists says Social Security can be privatized without raising taxes or cutting benefits but it must occur soon.
David Altig, vice president and economist, and Jagadeesh Gokhale, economic adviser, in a study released by the Cato Institute, would allow workers under 32 to divert up to 46% of their payroll taxes to individually owned, privately invested accounts.
The rest of their payroll tax would be used to continue to provide Social Security benefits to retirees or those who will retire soon.
Assuming investment returns below historic averages, they say individuals in the privatized system would receive retirement benefits equal to or greater than those now promised under Social Security.
