01 What you've paid
Since 2006, $0 has gone from your paychecks to Social Security and Medicare.
02 What it would be worth today
Invested in an S&P 500 index fund instead, you would have
03 Your retirement paycheck
The marker shows the check after the cut that's projected when the retirement trust fund runs dry in 2033: about 19–23% for everyone, unless Congress acts. The amounts above don't include it.
04 Yours to keep
* Benefits stop at death. A spouse or young children may get survivor benefits, but there's no account that belongs to you.
05 The years you could have back
The bottom line
It's your money. It should work like it.
Social Security was designed in 1935, when few workers could invest and many didn't live long past 65. Today a low-cost index fund is a few clicks away, yet more than an eighth of every paycheck still goes into a system where your contributions aren't saved or invested for you. They pay today's retirees.
You don't own what you pay in. In Flemming v. Nestor (1960) the Supreme Court ruled that workers have no legal right to the benefits they've paid for. You can't leave it to your children, and the program is projected to cut benefits for everyone within a decade.
Other countries do it differently. Australia, Sweden and Chile let workers own at least part of their contributions in personal accounts. Keeping a safety net doesn't have to mean giving up ownership.
Others invest the public's money in the market for the long run. Norway's sovereign wealth fund, the world's largest, has grown to nearly $2 trillion, more than $300,000 for every Norwegian. Canada's national pension plan invests workers' contributions in stocks and other assets and has earned about 9% a year over the past decade. Alaska's Permanent Fund pays every resident a dividend each year. Social Security doesn't invest your money at all. It's pay-as-you-go: this year's payroll taxes go straight out as this year's benefits. The only reserve, a trust fund of government IOUs, is shrinking and projected to run out by 2033.
Get the same returns on what you do keep
See every year
How we calculated this
Contributions use the payroll tax rates in effect each year, including the employer's share (which most economists agree comes out of wages) and the 2011–2012 payroll tax holiday. This year is pro-rated to today.
Investment returns are actual S&P 500 total returns with dividends reinvested, from 1928 to today. Each year's contributions earn about half that year's return, since they arrive through the year.
Your Social Security benefit follows SSA's formula: your top 35 years of wage-indexed earnings, the bend-point formula for your eligibility year, cost-of-living increases from age 62, and early or delayed claiming adjustments. Future wages and COLAs use SSA Trustees projections.
Projections use the return, inflation, income growth and withdrawal assumptions you set under .
What this leaves out: Social Security also insures against disability and pays survivors, which this comparison doesn't value. Markets can fall, and past returns don't guarantee future ones. Investment fees are not included.
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