Replies

Social Security is not a benefit. It is a person’s own money taken by the government over a lifetime and paid back only if he lives to 65-67. If he dies before that, it’s all gone; not a cent goes to his estate. A spouse may get a benefit but that spouse also contributed over their working lifetime.

On average you have to live to 76 to get back the raw cash you paid in over a lifetime. With compound interest over a lifetime the amount paid in would have grown to a much larger sum in an outside investment, like a savings account. So you really have to live into your eighties to get back the money plus interest that you would have had if you had your own personal savings account.

And your spouse would get any of the leftover if you died before your eighties, not the government.

Excellent post and would that more understood this simple concept which you explained so well and clearly. Too many today depend ONLY on SS OR a pension fund that is vastly underfunded - I should know, my own teacher's retirement fund is set to run out of money by 2017 at the latest. I live in California so there IS no state money to cover the shortfall. But then, I have understood this for years and made sure I was diversified into other things. SO MANY teachers have NOTHING or have foolishly cashed in their 403b's (to buy new cars, to take vacations and other such stupid things). I heard a lecture once on the Internet directed at a black group about how SS hurts them specifically because the average life span of blacks is 65 and, as you stated, SS does NOT become part of your estate as does a 401 or 403 that does and can be passed down to your heirs. Or, as my dear old dad used to say: The government Don't pay interest! SS is a PONZI scheme, there IS no lockbox and those who depend on it solely will be in for a world of hurt. Privatizing even a tiny percentage of it was the correct call, before it was shot down by the idiot media and duplicitous pols trying to scare old people for votes.