Answer:
Contributions to personal retirement accounts remain the property of the individual or heirs, but Social Security payments are transferred to others.
Step-by-step explanation:
When working, the amount which you save for your personal retirement is your own money, however the money which is deducted for social security payments goes to those who are retired, have disabilities etc . When a person has been paying social security paymenrs, he becomes eligible for getting retirement benefits in future
Individual savers have different preferences when it comes to how much risk they want to take on their retirement accounts. Some are happy to take greater risks in order to (hopefully) earn greater rewards, but many, especially those close to retirement, would rather accept lower returns in order to avoid the possibility of losing part of their savings. Private retirement programs usually offer a range of risk options.
The Social Security Administration, however, handles things differently. Funds paid into the Social Security program are used to fund the benefits of current retirees; people working today will depend on payments made in the future by future workers to pay for their benefits. This is not how the program was originally envisioned, but people living longer lifespans, an increase in the number of retirees, and increases in benefits paid have all placed financial stress on the system.
Contributions to privately administered retirement programs remain the property of, and under the control of, the individual private contributors. Ownership may transfer to an heir or beneficiary, but that, too, is a private, individual decision.
The contributor's income that is invested into traditional IRAs is not taxed, but the withdrawals that are made at retirement age are taxed. The contributor's income that is invested into to Roth IRAs is taxed, but the withdrawals that are made at retirement age are not taxed.