Never ignore that.
As an employer I assure you that is part of your compensation calculation along with insurance and your 401 and Workman's comp and your "half" of medicare tax and the cost of hiring someone to work all this out.
And the interest is not that hard to figure. You just take the lump sum for the year and calculate it. It is not exact but close enough.
If you want to make it very simple you can average it. I admit I did go for a young employee because the concept of someone getting their first paying job at 52 is a bit out there. So your amount would (using ten year bonds) would, on average double every 12. And then that would once again double.
Once you work in that you can see how I got my number.
Also remember that the amount is not frozen when you retire.
It still continues to be lent to the government and so it still continues to earn interest. And that is how you get to ninety two.
As you can see even your low earner would rarely empty his "account" and your high earner, poor soul, never would. Not even if he lived to be 122 which is I believe is the oldest anyone has lived in the modern era.
And of course that still does not factor in all the people who never draw because they die before they can.
Privatized savings accounts would work out much better for people.
But not for the government who would not have all that lovely money to buy votes with.
Yes, I did all that with my numbers.
But if everyone is a net payer in, and it’s extremely rare for someone to achieve a net pay out, then why does SS expect to go in the negative about now, and burn through all their built up reserves by 2035? Where is all the money going, if not net to all the retired people?