Day: February 2, 2005

Let’s say you and your family made $75,000 a year. And you never got a raise, but you made $75,000 every year. And let’s say you made these assumptions so that it would be easier for me to do the math.

And instead of Social Security, you put the money into some sort of cheesy money market / bond fund at 5% a year. Right now 12.4% of your salary goes to Social Security; half of that is paid by your employer. That’s $9,300 a year.

And you started working at 25 years old and worked till you were 65. That’s when you noticed your cheesy money market / bond fund is now worth $1,179,610.

Or instead of cheesy, you bought an S&P 500 Index fund. It’s been averaging something like 12% a year, so let’s assume you could make 10% a year on your Social Security funds.

It would be worth $4,527,722.

What would it take for you to give up Social Security? I’m thinking a few million dollars would be nice. Just something to think about when President Bush gives his State of the Union speech tonight.