What would a private plan offering all that Social Security does cost?

Question

Whenever I see debates on the value of Social Security, they always focus on retirement and how much better someone would be if they could invest 12.8% of their income in a retirement account.
This always bugs me since Social Security offers quite a few benefits that are not usually discussed.(http://www.pueblo.gsa.gov/cic_text/fed_prog/ssundben/ssundben.pdf). It's kind of like talking with someone about cars, but all that they care about is how fast it goes.

So what do you think it would cost for a private company to offer what Social Security does. Any actuaries out there who are up to the challenge?

This question is not intended as a debate as to whether Social Security should be privatized. All I am asking for is a rational basis on which to compare government done Social Security to private offerings.

There are a few ways to go about this. One would be to analyze what is spent and see what you could get on the market for your 12.8%. Another would be to go backwards from benefits paid and try to figure out what a company should charge for that benefit level and what that would work out to against current income demographics.

This question is really not that hard. I'm just looking for a dollar amount with some justification. Instead I am getting responses of the irrational sort that prompted the question in the first place.

Answer 1

535 Senators and Representatives can't get a good answer to this question. You think some sixth grader on a break from their homework is going to know the answer?

Answer 2

It's a good idea to invest into a private account like a Roth IRA account which you can put up to 4000 a year. The best thing about that is the fact that the interest is taxed-free earned unlike traditional IRA which is interest taxed at the end. While you do the Roth IRA, you can also do a 401K plan and then do up another retirement plan and work till you're 55 or so. By then you'll have the money to do whatever.

Social Security will not be around when you retire. The funds are already in the whole and the fact that there's more people retiring in the next 20 years then those that will retire in the next 40 years, means the fund will be short lived unless the government wants to double the tax for Social Security on us younger people right now to ensure the funds later on. In terms of the benefits, you'll be more likely to buy a plan with the benefits.

Answer 3

Having gone the SS route for a few years.

I'm willing to debate the "benefits" of Social Security Vs a Private investment for retirement. Private companies already offer this...it's just not called "Social Security". It's called retirement Investing.

Had I been able to do this at age 21....

#1 I want to hire my OWN private firm for investing.
#2 I want to invest 15% minimum.
#3 I can become "self insured" in my golden years. Along with Long Term Health Care, I will be just fine.
#4 Social Security LMAO....equals about 40% of your "average" salary when you worked. Getting a 2% annual raise based on a 60% reduction in annual salary/benefits. Is not a benefit!

My aunt currently receives $138 per month in benefits....nothing else. Oh she gets medicaid...but that's not a Social Security benefit. I say she would have been much better off investing the money.

Can you point out some of these perceived "extra benefits" that no one discusses. Since I was on Social Security, and my mom is currently on it...I can tell you whether or not you're nuts.

Answer 4

One is to get out of the SS system all together. SS is strictly voluntary nor are we required to have a SSN unless of course you are looking to the govt for services. We all should take responsiblity of ourselves and stop leaving it with the govt to take care of us. If we do, we are doomed to lose all we and our forfathers fought for. And besides, since when the govt has been into the insurance/retirement industry? Wake up folks! Your SS money does not exist. Its already spent before you even pay it. Get out of the system and invest your own way with your own money. Gold and Silver is the way to go.