| > The problem is the politicians control it instead of the individual so the money is not invested but spent. You're undercomplicating the story of Social Security. 1. The program was instituted with an eye towards applying to everyone immediately, not 30 years from now. You cannot hand out retirement benefits to people using savings that were never set aside; so the program was always pay as you go. Not necessarily a bad thing but considering the government has low borrowing costs, perhaps it should issue some low cost, long term debt to fund the program. On the other hand, investing on the margin like this is fraught, so /shrug 2. There actually was some investment made when the boomer population came around. They were putting in more money than their predecessors took out and thus we have a surplus. Those boomers are now retiring and drawing down social security surpluses has begun, leading to the '75 cents on the dollar' estimates we've seen 3. The actuarial estimate of the cost of running social security relies on predicting variables far into the future, many of which are affected by the rules of social security itself. Longevity in particular has gone up with time. 4. People on average are not great at investing. They buy high and sell low, they buy the dividend, they don't read the prospectus. They're not even great at saving; it's why we had to institute the SS program as mandatory. Folks pointing to their 401k strategy on HN ignores how the HN crowd is a highly biased sample of the population. |