Divided We Fail?

It's a novel concept; If Democrats and Republicans united to create good legislation that would benefit everyone in society, then government would be a success.

Then you start to scratch the surface only a little bit, and you find a VERY important bit of information. The "Independent" organization backing DWF is none other than AARP.

This is the same AARP that is hell-bent on keeping the government in charge of retirement finances, as opposed to giving the responsibility to the worker.

Let's put this into perspective. The maximum benefit you can withdraw from Social Security is currently $26,220 per year (Max income to add money to SS of $102,000 per year based on 2008 FICA limit). Assuming you use your Social Security benefits for 15 years (starting at 65 and ending at death at 80) you have used a total of $393,300. If you simply put money in a savings account (making no interest) from when you were 30 years old until you retired at 65, you would need to save $936.42 per month....out of the $8,500 per month that you were making. That is 11% of your gross income. Currently Social Security takes 12.4% of income, which is $1,054 per month (a loss of 117.58 per month)

WAIT A MINUTE!!!!!

You're paying in 12.4%...and only getting out 11%??!! THAT'S NEGATIVE INTEREST!!!!

Now, let's run the numbers on a "privatized" Social Security fund, and see how much you make at varying interest rates, from 0%, to the market average 12% when we add that $936.42 per month to a mutual fund/IRA, here is how much you retire with;

0% - $393,300
1% - $471,067
2% - $569,868
3% - $696,151
4% - $858,488
5% - $1,068,292
6% - $1,340,798
7% - $1,696,381
8% - $2,162,357
9% - $2,775,406
10% - $3,584,875
11% - $4,657,259
12% - $6,082,300

So, is Social Security really worth saving for future generations? The longer you wait, the more it costs you.

Even investing just $100 per month at 12% for 35 years nets you $649,527. That's 65% more than Social Security.