If you think Social Security beats the stock market rate of return, can you do math?

[yes we can]

Social Security's inflation-adjusted rate of return is only 1.23 percent for an average household of two 30-year-old earners with children

Such couples will pay a total of about $320,000 in Social Security taxes over their lifetime (including employer payments) and can expect to receive benefits of about $450,000 (in 1997 dollars, before applicable taxes) after retiring at age 67, the retirement age when they are eligible for full Social Security Old-Age benefits

______________________________________________________________________

Over the very long run, the stock market has had an inflation-adjusted annualized return rate of between six and seven percent. Going all the way back to 1871.
http://www.moneychimp.com/features/market_cagr.htm
http://www.heritage.org/research/reports...f-return#1
then use another source, its all over Google
the market rises and falls all the time, most years are not great. If you start investing when you are under 30 you have a pretty good shot at seeing at least 5% anyway.
3% still doubles Social Security

[brown9500v13]

If the FED had let the "too big to fail" banks collapse, like y'all say they should have... where would the Dow be now?

There wouldn't be a solvent 401k left in the country.

[Jedi Prairie Dog]

What if you were going to retire right now, would you have wanted your retirement in the market or in social security? If you say market, then you would be picking up a Greeter job at Wal-Mart.

Its funny that you use the heritage foundation's website to prove a neo-con point, since the Heritage Foundation is probably the most biased source of information available. Do you think its a coincidence that all of their studies conclude that the Free Market prevails?

[George B]

The employees of Galveston County, Texas, removed themselves from the Social Security System years ago before Congress closed that loophole (no surprise there) and funded their own private retirement program. On average that has resulted in their monthly income being 700% higher than if they had stayed in Social Security..... AND..... they contributed only the same amount to their private program as they would have to SS.

[jehen]

False assertion rant in the form of a question. Your math presumes that the lifetime contribution amount grows for a lifetime. It does not, the only portion that grows for a lifetime are those early years when your earnings were much lower than today

For someone who retired in 2000 after 44 years of work where they paid the maximum in every year they worked, the total contribution from individual and employer is about $120,000.
By 2010 that retiree has collected more than $200,000 in benefits. If they live another 10 years that is another $260,000 for a total of $460,000 on Contributions of $120,000 spread out over 44 years - In the first 10 years of that 44 Years the contributions are less than $500/yr

If the actual annual contributions are compounded at 5% the total after 44 years is about $246,000. The average rate of return in the stock market of the last 10 years is less than half that at 2.4%

If the person is healthy enough to enjoy 30 years of retirement instead of 20, then they collect about $750,000 in benefits on contributions of $120,000. Even a 10% annualized return does not get them there.

[A Nobody]

Your statement assumes that in the stock market, the only investing strategy is buy and hold stocks. This is the typical strategy used to grow 401k's and other retirement accounts. The buy and hold strategy is the slowest growing stradegy possible in the stock market. (oddly enough it is the only one known to most Americans) Other strategies, while perhaps more risky, will grow your money a lot faster. I said "perhaps" more risky because much of the risk in your investments can be controled if you will educate yourself about your investing strategy.