Replacing part of Social Security payments with private accounts would leave today’s young generation of workers farther behind in retirement than if nothing was done to head off an anticipated shortfall in funding, which has been predicted to occur right around the time they’re hitting retirement age, according to a recent report by the Economic Policy Institute (EPI).

EPI economist Josh Bivens examined the impact of partial privatization of Social Security on today’s 25- to 35-year-old workers, and, using the Congressional Budget Office’s (CBO) analysis of a popular model for privatization, he projects how large a share of their pre-retirement income they could expect to receive in retirement under a system of reduced Social Security payments supplemented by private accounts.

Bivens compared that replacement rate to both the rate scheduled under the current law and the rate that is fundable, given the anticipated trust fund shortfall. He finds that the privatized plan has much lower benefits for these workers at all income levels.

Bivens emphasized two lessons from this data: “First, the ‘cure’ of private accounts will do more harm than the disease it’s supposed to be treating, leaving young workers in a much more precarious position than today’s retirees. Second, the data underscore that the ‘crisis’ label privatization supporters have used is overblown, and that the problem requires minor surgery, not the extreme makeover of privatization.”