Social Security Tax Invest Retirement Privitize Social Security Tax Taxes – Yes

In 1935 the President Franklin Roosevelt scammed the American public by signing into law the Social Security Act, Roosevelt successfully began bringing Socialism into this country.

With the United States in the middle of a depression, Roosevelt took advantage of the fear of the American people. I can not blame the citizens of this great country, after all Social Security was intended to guarantee that the government would help people with their retirement. Since the Dow Jones was only about 50 years old and had not gone through a major recession or depression, no one knew for sure what would happen. Where the American people should have stood up was when they found out that you could not begin receiving your retirement benefits until you were 62 years old…at the earliest. According to the average life span in 1935 was 63 years old. That means that the government had successfully passed a program that would tax people for 40-50 years and pay them their “benefits” for 1 year or less!

Just for fun I ran a calculation to see what would happen if instead of paying a Social Security Tax, someone invested that money in a Mutual Fund. There are many Mutual Funds that have been around for several years and have averaged 12% growth over that time. As I am writing this, I have in my hand a printout from June 2007. This particular fund began in 1934, has had growth in 60 years and lost money in 12 years and the average growth of the fund is 12.84%. Now over the last 2 years this fund has lost money but it is still averaging in the 12% range.

Here is how I calculated. I took a 65 year old man that was going to retire in 2009. He began working at age 18 in 1962. He made minimum wage every year. I found the minimum wage history at and the Social Security Tax rate by year at I also used 11.4% growth on the Mutual Fund. I calculated the Mutual fund as having growth in 7 out of 10 years, with 2 years each decade as back-to-back losses.

After plugging in these figures and finding what his average annual earning were, I went to calculated his benefit. He would receive $846 per month at age 64 and 8 months. Had he invested the money that he was using to pay the Social Security Tax into a Mutual Fund that averaged 11.4% growth, he would have $184,492 in the fund. If it was earning 11.4%, he could leave 4.4% every year to cover for inflation and just take out the 7% growth every year. That means he would be withdrawing $184,492 X 7% = $12,914 annually or $1,076 per month. This man would also be able to withdraw to compensate for inflation each year.

As you can see from this example, this guy would make about $200 more per month if he did not have a government run Social Security program. That is based on him only making minimum wage throughout his life! The results would be much more drastic if he made more money.

Another thing to consider is when he dies.  Under the current Social Security plan, his beneficiary will get $255.  If he had invested in Mutual Funds, his beneficiary would get the amount in the fund.  In this example, had he died at age 65, that would mean his beneficiary would have gotten over $184,000!  Which would be better $184,000 or $255?  I think the answer is obvious.

It is time to privatize or eliminate Social Security.