In Reply to: Yeah, a bait and switch posted by Dr.J on October 08, 2026 at 12:07:07
So seed it with more money.
Social Security pays roughly $20,000 per person per year. If that same amount were invested and earned a 10% nominal return with 2.5% inflation, that's a 7.5% real return.
Seed each newborn with a one-time payment of $20,000.
$20,000 × (1.075)⁶⁵ ≈ $2.3 million
Now suppose the retiree withdraws 4% per year. That would provide roughly $92,000 a year (inflation adjusted), while potentially allowing the principal to continue growing faster than inflation.
That is the basic argument for building wealth through investment and compound growth rather than relying entirely on a pay-as-you-go system.
And if the goal is long-term sustainability, the difference becomes even more important. Under Social Security, two workers in 2050 are projected to be paying for one retiree. It's unsustainable.
An individual investment account, by contrast, builds an actual asset that belongs to the individual and compounds over time.
Less than 10% of retirees have more than $1 million in retirement savings, so creating a pathway for an entire generation to potentially accumulate $2.5 million or more would be life-changing for an entire generation.
The real question isn't whether we can afford to give people a few thousand dollars today. It's whether we should use government resources to create assets that compound for generations rather than continually spending money after problems arise.