OK, I've done this to death but here's the comparison of SS to private investment

J

Jack 99

New member
I knew I could find it. This from the Cato institute:
http://www.cato.org/pubs/ssps/ssp2.html
Scroll down halfway to the table.

I'll try to paste it here:
+++++++++++++++++++++++++++
Figure 3

Monthly Benefit Comparison of Social Security and the Capital Markets by Date of Birth,
Income, and Age of Retirement (1995 Dollars)

[Bar graph omitted. Tabular presentation given.]

Year of Birth: 1930

Retirement Age 62 Normal Retirement Age
Low Wage High Wage Low Wage High Wage
___________________________________________________________________

Social
Security $439 $929 $551 $1,200

Bonds $380 $1,341 $574 $2,072

Stocks $864 $2,614 $1,301 $3,999


Year of Birth: 1950

Retirement Age 62 Normal Retirement Age
Low Wage High Wage Low Wage High Wage
___________________________________________________________________

Social
Security $468 $1,144 $631 $1,562

Bonds $749 $3,194 $1,069 $4,585

Stocks $1,599 $6,380 $2,490 $9,972

Year of Birth: 1970

Retirement Age 62 Normal Retirement Age
Low Wage High Wage Low Wage High Wage
___________________________________________________________________

Social
Security $529 $1,315 $769 $1,908

Bonds $676 $3,268 $1,085 $5,243

Stocks $1,363 $6,610 $2,419 $11,729


Source: Author's calculations based on figures in Social Security Administration, Social Security Bulletin, Annual
Statistical Supplement, 1994 (Washington: Government Printing Office, 1994); Stocks, Bonds, Bills and Inflation
(Chicago: Ibbotson Associates, 1995); and "IFC Investible Index," International Finance Corporation,
Washington, 1995.
 
These numbers are well and good but forget one thing . If you die at age 25 with 3 kids they will get a benefit until 19 or so . Your stocks would not do this. If you are disabled at age 30 you will get a SS check forever that is more than your portfolio would generate .
The Stock Market scenario is a "best case" situation . You must , at least factor in these benefits with an insurance policy guaranteeing these benefits . It will surely drain the increases that this plan "expects" .

------------------
TOM
SASS AMERICAN LEGION NRA GOA
 
Interesting. It may be oversimplistic, but I view SS as a car lease. Lots of people are going to end up having to foot the bill for a *car* they drove years ago.

[This message has been edited by RAE (edited August 20, 2000).]
 
Tom, you may be right, but consider this ... with less drag from a Ponzi scheme like Social Security, that 25-year-old could buy a decent, term life insurance policy. Which is what he should be doing in the first place.

Often, when you examine the arguments against free market alternatives, you find a desire to escape responsibility.

Live and let live. Regards from AZ

[This message has been edited by Jeff Thomas (edited August 21, 2000).]
 
When SS was first introduced, few companies had any pension plans. SS was primarily meant to be an old-age ASSISTANCE program, not a sole-support program. You were expected to do some savings and/or investing on your own.

Through the years, more and more "assistance" was added to SS. Plus, the corruption in the fundamental system, e.g., where foreign relatives of US citizens are collecting Supplemental SS*. These sorts of things add to the overhead.

Were the FICA monies put into a true trust system, there would not be the problem we have today.

Last: Given the relatively small percentage of disability recipients compared to the total number of folks 62 and older, that part of the system could be maintained, privatization or no.

Regards, Art

*An over-65 relative of a citizen comes here. They apply for and receive Supplemental SS, around $400 or so a month. They then return home. The check comes to the citizen's address; it is deposited into a joint bank account. A now-retired INS agent told me that Chicago and towns along the Mexican border have the majority of such addresses.
 
Art,

That's always the way, ain't it?

You start some gubmint program with the best of intentions and a stated purpose and 40 years later its out of control.
 
SS steals 15% of my money from each paycheck. Yes, I consider my employer's share to be my money. It is the cost to employ me.

Imagine is you put that money into a typical 13% Joe-average mutual fund. You would retire with millions in your portfolio.

My wife has a $250,000 20 year level-term life insurance policy which she pays just $12 per month.

The combination of those two items blows SS away.

And when I kick the can, I will be able to leave money to my grandkids. Can't do that with SS because the money isn't yours. The SS trust fund does not exist.

You said:
"The Stock Market scenario is a "best case" situation ."

No it is not. It is based on an average stock market going up and down over a period of years but always, ultimately, up. Name a five or ten year period where the stock market lost money?

No one in his right mind would enter into a SS-like contract of his own free will. Too much money in, to little out, and it isn't yours to begin with. No, SS requires government coercian at the point of a gun for you to "contribute." There is a lesson for ya.

Rick
 
Rick, I'll reiterate my own situation to show
what can work. I have a whole life policy through the "quiet company." I pay about $450 a month for the premium, or about half of what I pay into SS including co-pay. I've only had this policy for a few years, but the annuity portion is earning between 5% and 9% annually. It's pretty darned safe. At age 65 I'll receive about $1600 a month from that, which is more than I'll get from social security. So, I'm paying half as much for a much shorter period of time and I'll get more, and all from an investment vehicle that's about as safe as you can get. Why in the h*ll can't private citizens get this from their SS accounts? Government employees get this or better! :mad: :mad: :mad:


Dick
Want to send a message to Bush? Sign the petition at http://www.petitiononline.com/monk/petition.html and forward the link to every gun owner you know.
 
You must log in or register to reply here.
Back
Top