Social Security and the Stock Market: How the Pursuit of Market Magic Shapes the System

The U.S. retirement income system faces an enormous challenge as the Baby Boom generation nears retirement age. Social Security faces a long-term shortfall, defined benefit plans have become few and far between, and 401 (k) plans have failed to yield the accumulations that many people thought they would. How will future retirees get by? Many observers suggest that equities would help solve this problem. In this book from the Upjohn Institute, Alicia H. Munnell and Steven A. Sass explore the use of equities as a means of solving Social Security's financing problems. While including equities in some form promises the potential for higher yields that could keep the system afloat, the use of equities also poses a host of challenges that could dramatically alter the structure of Social Security. Munnell and Sass identify these challenges and their implications for the U.S. retirement income system. They base their findings on experiences that three nations (the UK, Australia, and Canada) have had with the use of equities as part of their retirement systems and point out the successes and setbacks that occurred in each country as a result. Overall, this highly readable book will appeal to anyone looking for answers to the financing problems facing Social Security and the rest of the U.S. retirement income system.