The Cato Institute, a libertarian think tank, has released a Social Security reform plan that would allow individuals to invest half of the 12.4 percent Social Security tax in personal investment accounts, provided they agreed to forgo all future accrual of benefits under the traditional Social Security program. The other 6.2 percent in Social Security taxes would be used to pay transition costs.

Individuals who chose personal accounts who had already accrued benefits in Social Security prior to the transition would receive a "recognition bond" - which would be equal to the value of their accrued benefits - that could be redeemed at retirement.