That's right...$56k.

I used a retirement calculator, and figured out how much I would currently have set back towards my retirement if my social security contributions had been invested (figuring my annual earnings rather conservatively) in a private retirement account with a modest 5% annual return. The result was just over $56,000, which would result in retirement savings of over $410,000 when I retire (assuming I maintain my current income average until retirement). I realize that 350,000 will not be a fortune at that time, but I also realize one staggering fact.

The amoung I would have today is $56k more than I DO have. With decreasing assurance of the continued viability of social security, I will likely need to be at least 72 until I retire.

Let's examine that, shall we? 4 grandparents. 1 lived to 62, another to 80, still another to 78, and the fourth to 79. This puts my life expectancy at just under 75 years (74.75), meaning I will, under this scenario, likely enjoy about 3 years of retirement. Assuming my wife also lives this long, we would receive the 2042 equivalent of about $100,000 for those three years of life (granted, it does increase if we live longer, but these investments are conservative estimates). Given annual inflation of 3%, this means I will still come up short of the total invested by a good margin. But again, this is assuming I work with no increase in wages, and the constant rate of 5% (a rate of 6% hikes the total up to about %580,000).

Now, understand, I make well under the median income. If I were to make closer to the median income, the numbers would increase and the deficit between what I should have and what I do have would become even more staggering.

The model of social security upon which our current system is built is flawed. Declining birth rates and increasing longevity, combined with governmental misappropriation has all but gutted the system, and stands to ensure that my generation is increasingly unlikely to receive a return on our investment. Paying for the generation ahead of us is, as another blogger put it, one of the greatest pyramid schemes ever invented. We need to gradually work towards privately managed, accounts to ensure the possibility that future generations will be able to enjoy retirement.