Transitioning Social Security

VANITY | SEPTEMBER 18, 2025 | CIB-173RDABN

[CIB-173RDABN]

Transitioning Social Security: Lessons from the GI Bill

The GI Bill provides a valuable example of how a large government benefit program can be restructured over time without breaking commitments to those already enrolled. When the GI Bill was updated, existing veterans retained their full benefits, while new recruits gradually began contributing toward their education benefits. This phased approach balanced fairness with fiscal responsibility.

Why Change Social Security?

Social Security, as it currently stands, faces significant financial challenges. With an aging population, longer life expectancies, and a shrinking ratio of workers to beneficiaries, the system’s trust fund is projected to be depleted within the next couple of decades. Without reform, benefits may need to be cut, taxes raised, or both — posing a serious risk to the retirement security of millions.

A Proposed Transition Model

• Grandfather Current Beneficiaries: To honor commitments, those already receiving Social Security benefits, or near retirement, would remain on the current system.
• Phased Implementation for Younger Workers: New entrants to the workforce would have their Social Security taxes redirected into private, individually managed retirement accounts (similar to 401(k)s), giving them greater control over their savings and investments.
• Government Role: The government would transition to a regulatory and safety net role—overseeing these private accounts, limiting investment risks, and potentially providing minimum guarantees to reduce individual risk.

Pros of this Approach:

• Individual Control: Workers manage their own retirement savings, tailoring investments to their risk tolerance.
• Potential for Higher Returns: Historically, diversified investment accounts have yielded better returns than the current Social Security system.
• Fiscal Sustainability: Reduces the long-term financial burden on the government by shifting responsibility toward individuals.
• Preserves Promises: Grandfathering current beneficiaries respects existing commitments.

Cons and Challenges:

• Transition Costs: Funding current retirees while accumulating private accounts for younger workers requires significant government outlays.
• Market Risk: Individuals bear investment risks, which could jeopardize retirement security if markets underperform.
• Administrative Complexity: While managing millions of individual accounts can be complex, much of the administration would be outsourced to private financial institutions—similar to how 401(k) plans operate today. This could reduce government overhead but would require strong regulatory oversight to ensure transparency, security, and fairness.
• Equity Concerns: Not all workers may have equal ability to save or invest wisely, raising concerns about disparities.

Conclusion

Just as the GI Bill’s phased transition balanced fairness with fiscal realities, a similar approach could help modernize Social Security. It offers a pathway to sustainability while empowering individuals—though it must be carefully designed to manage risks and maintain equity.

[CIB-173RDABN]

I am putting this out there for consideration. It is an idea, a starting place if you will. I am not saying this is the best plan, just that is a plan.

[T.B. Yoits]

The G.I. Bill has become a fraud. There are so many caps exclusions to it which is why it's flush - people can't utilize it.

It would be interesting to see the GAO provide a no-bull report of how much people paid in and didn't even use the amount they paid in - not just dollar amount but the number of individuals.

[Blood of Tyrants]

I have been advocating a phase out or SS for years.

[Nicojones]

Without an estimate of the transition costs and a plan for paying them, its impossible to evaluate

[Diana in Wisconsin]

You’ve thought about this more than Congress ever has or ever will!

And it’s THEIR program!

ALL of the ‘Money People’ I’ve ever worked with have told me over and over again to not count on Social Security. Plan for your own retirement as if you were not getting those funds back.

If and when you DO get SS...it’s gravy!

That’s what I did. Retired debt-free at 56.

Personally? I don’t think those coming up behind us, unless they are devotes of say, Dave Ramsey, have a clue about living BELOW their means and SAVING in the first place and investing FOR THE FUTURE in the second.

Many people 20-30 years out are going to be hurting financially, won’t be able to ‘retire’ and will still be working as Walmart Greeters at age 80. :(

[DesertRhino]

Also no payouts to foreigners for SS disability AND the account must be yours and if you die it becomes part of your estate. It’s outright theft that you die at 67 and the government keeps the change.

[maddog55]

SS needs to end period just like every government funded social/welfare program.

Yes it needs to be phased out, they all do and put back in the pockets of individuals to do what they want. They do nothing it’s their problem not the American taxpayer problem.

SS, Medicare, Medicaid, unemployment, welfare, government housing, subsidies of any kind etc all need to go including all the state and local crap as well. It’s not the governments job to take care of you it’s your job.

The federal government’s job is to protect us from enemies both foreign and domestic and handle interstate trade. Everything else needs to go.

[chuckee]

“Transition Costs: Funding current retirees while accumulating private accounts for younger workers requires significant government outlays.”

This is the elephant in the room in for every transitioning peopsal. The annual outlay is 1.5 trillion currently for SS recipients. If the woking population shifts to a private plan and is no longer funding current retirees, it becomes a massive current deficit hole

[goodnesswins]

Ha...by then, according to my husband, a Robot will be the Walmart greeter...and Security.

[CIB-173RDABN]

Without an estimate of the transition costs and a plan for paying them, its impossible to evaluate
—
True for anything. But before you have a plan, you can not calculate the cost.

What “cost” we do know is that the current system is unsustainable, and will eventually exceed our national debt.

So the choice is do something now, or do nothing and let the system collapse. I believe transferring social security back into the hand of the individual is the best way to go, but I am sure others have ideas I have not thought of.

[1Old Pro]

It would need to be a bit more complex than this. First, The people entering the workforce would still need to supplement the program so all of their contributions cannot be in a personal account. Percentages would transition as the current pool of recipients pass on and stop collecting. The phase in would probably take a couple of decades.

[chiller]

The current director of SSA, Frank Bisignano, was on radio yesterday. Confirmed 3 months ago.

He is committed to saving the program and similarly suggests a phased-in implementation. I’ll bet there’s lots of options that would work....some voluntary, I’d imagine. No changes or danger for current beneficiaries....a slam dunk winner but...

If suggested during Trump administration, Donks will jump on the wrong side of another 80/20 issue.

Look for Trump to right this wrong...another notch in the belt.

[plain talk]

Well done as a starting point! I’m sure similar approaches have been floated for decades to no avail.

It would also be important to have restrictions on withdrawals prior to retirement somewhat analogous to what we have now for SS and 401K’s.

[CIB-173RDABN]

The annual outlay is 1.5 trillion currently for SS recipients. If the woking population shifts to a private plan and is no longer funding current retirees, it becomes a massive current deficit hole

---

That is true today, there is no “lock boxes”.

The problem will not go away. Every year there are more receiving benefits than are paying in.

With the grandfather provision the government will be on the hook until those receiving benefits would continue until they die, that would be easily calculated (they are doing it now with the mandatory distribution. The amount distributed is calculated on how long they expect you to live).

Eventually everyone drawing social security from the government will die, with it a major financial drain on the treasury.

[Dr. Sivana]

George the Younger talked about this a little bit after his re-election, and burned through all his political capital real quickly.

Personally, I would rather keep government programs as separate form private investment as much as possible. The temptation for corruption is too great, where even MORE money is directed to firms favored by Blackrock et al, and new or smaller players are locked out.

We have all seen what happens when Universities and Pharmaceutical firms are recipients of government directed revenue. It is corrupting, and it is ugly.

[rktman]

Hmmmm. I’ve been collecting my SS for 16 years now. If they can pay me they ain’t broke. I might be though....LOL! Interesting take. I have read that locations that opted out of SS and put in alternatives for the employees have done quite well.

[Macoozie]

Thoughtfully proposed. But I disagree . . .

The public policy of a government guaranteed minimal Soc Sec benefit is the point of it all. It's purpose, Old Age Insurance.

Something to get crackers and milk for the otherwise-destitute when all your teeth are gone so you don't starve.

Promoting investment in other things can be encouraged through public policy of all sorts. Roth IRA's for instance.

Soc Sec is not supposed to be everything to everybody.

Unfortunataely, for many, it's all there is.

[oldtech]

As a vet & retiree living on SS (had no employer-provided retirement fund) I look at it this way: I get by OK with my SS, but no high living or new cars for sure. Some folks will fare much better in their years of employment partly because of better pay & an employer-provided retirement plan than I do, so their SS could be downgraded a bit without hurting them. Also, I do receive some VA benefits,but I didn’t make anything close to decent pay in my military years. The VA benefits now help to make up for that & are greatly appreciated in my senior yrs. or else I would be a long ways up the creek without them. For those without a workable retirement plan & no VA benefits; well, they would seem to be between a rock & a hard place.

[Uncle Sham]

The way to “fix” social security is to end it. You do this by gradually getting the government out of providing any assistance to retirees.
You must 1., Remove over a four year period, everyone who was never meant to receive benefits in the first place. These people get four years to make adjustments for themselves.
2. Retirees currently receiving benefits continue to do so but cost of living is decreased. Family, churches, and good will organizations can step in to fill the void.
3. Offer a cash buyout to those within fifteen years of retirement such that halve of them take it, then reduce social security benefits for those who dont.
4. Those who are over fifteen years from retirement will not receive social security and will still pay social security taxes until all recipients die off. This means their taxes will diminish each year as well as they will have time to invest in a retirement plan that THEY will own.

In a span of thirty years, government ownership of old people will have been removed from our society.

[cherry]

SS "benefits" makes it sound like charity...its not...we PAID for it and I worked many decades.

the govt continues to give out nice govt pension checks...we are in drastic debt as a country so why doesn't anybody question the federal retirement plans?....but no,it's always the relatively meager SS check that gets questioned.