Why Shouldn't I be allowed to opt out of Social Security

[freemkt]

Originally Posted by Mathguy

Yeah, I feel really stupid making over 50k in the first 3 months of the year off my 401k.

"You didn't build that."

[T-310]

Originally Posted by gunlover

please make the case? and don't give me the whole "you don't care about granny" "you hate the poor"

also what would America look like if people could?

Get hired by the railroads. They are exempt SS witholdings

[hnsq]

Originally Posted by JoeTheEconomist

Actually for the first 40 years of Social Security, the economic returns of Social Security were vastly superior to anything available in the public markets. Average retirees in 1960 expected to collect $7 of benefits for every $1 contributed on an investment adjusted basis. By 1985, the return had dropped to $3 to 1. For people just entering the system, the return is negative. The decline of return comes from the rising costs.

Comparing the stock market to the returns of Social Security is not apple to apple though. Social Security's economic returns stink because the system has to carry legacy costs. If the market had to carry legacy costs, the returns there would stink as well. If payroll taxes went to a private account, you would face substantially higher income taxes to pay for legacy costs. Or, you would bail on the promises of Social Security.

And during that time a risk-weighted portfolio re-balanced annually vastly outperformed social security's returns.

Even excluding legacy costs social security does not hold a candle to market returns. The numbers don't support what you are saying.

[JoeTheEconomist]

Originally Posted by hnsq

And during that time a risk-weighted portfolio re-balanced annually vastly outperformed social security's returns

What time period are you talking about? If you retired before 1985, you made a killing in Social Security. This wasn't a secret. My father who wasn't exactly tied-into math went back to work in a covered industry just to qualify.

Originally Posted by hnsq

Even excluding legacy costs social security does not hold a candle to market returns. The numbers don't support what you are saying.

Where is your research that workers who retired prior to 1985 vastly underperformed the market.

Social Security is a wage driven system. Wages tend to peak at market highs and trough months after market lows. Statistically, you will invest more at market highs and less at market lows. In my case, 30% of my SS contributions would have been invested within a year of a market peak.