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Old 06-30-2011, 01:32 PM  
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Social Security a Ponzi Scheme

I didn't check the math on this one, it came in an email today:

Quote:
Remember, not only did you contribute to Social Security but your employer did too. It totaled 15% of your income before taxes. If you averaged only 30K over your working life, that?s close to $220,500. If you calculate the future value of $4,500 per year (yours & your employer?s contribution) at a simple 5% (less than what the govt. pays on the money that it borrows), after 49 years of working (me) you?d have $892,919.98. If you took out only 3% per year, you receive $26,787.60 per year and it would last better than 30 years, and that?s with no interest paid on that final amount on deposit! If you bought an annuity and it paid 4% per year, you?d have a lifetime income of $2,976.40 per month. The folks in Washington have pulled off a bigger Ponzi scheme than Bernie Madhoff ever had.
Of course if the SS trust fund is held in government bonds then we would be paying the interest on our own investment which is also Ponzi like.
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Old 06-30-2011, 04:45 PM  
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assuming you made today's income for the last 30+ years is a big issue there since you don't account for inflation.... And I doubt you could get an annuity for that at 62, plus social security does cover additional situations where an annuity would not such as disability...

so no you didn't cheack the math, but you should, these type of chain emails tend to take advantage of a misconception.
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Old 07-01-2011, 10:07 AM  
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Not to quote specifics but $8000 in a mutual fund IRA in 30 years has far exceeded future value. It lost 30% in Dec 2008 but has more than recovered.

If one stops and thinks a bit any government retirement scheme that does not use private sector investment is a Ponzi scheme because it has no basis for growth other than from the taxpayer. Even Federal employees are offered a private sector investment program.
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