The Structure Of Social Security Individual Account Contributions And Investments
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Overview: A system of individual accounts within Social Security could involve millions of Americans, billions of dollars, and could have a broad impact on the American economy. Thus, if IAs were to be adopted, the stakes are high to design a well-functioning system to administer the collection and investment of account assets. Each choice also involves a cost. Although competition may help to drive down costs, in general, the more decentralized the system, the higher the administrative costs. Costs would also be higher for options that provide participants with more services - such as account management options, multiple investment choices, and personalized financial advice.