DJ Drummond a Polipundit writer gives the best reasoning for Social Security Private Accounts that I have seen:
Anyway, a quick review of the Dow Jones History shows the rises and falls for more than a century, certainly a reasonable time frame. Since 1900, the Dow Jones Average has risen from 66.61 (January 3, 1900) to 10815.3 (June 5, 2000) . Even with the Great Depression, it’s impossible to miss the fact that simply investing in an Index Fund produces historically strong returns.
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The Social Security Administration has a calculator for people who want to figure out what they’ll be getting from SSA, assuming it exists when the time comes. As an example, let’s run the numbers for an average guy. The results for someone making $50,000 who is now 45 and retiring at age 75, projects $1,392.00 a month in SSA benefits. Contributions from age 22 to retirement, assuming $40,000 in average salary means (at 6.2%) an average of $2,480.00 contributed a year for 53 years, or $131,440.00 put in.
Taking the numbers then and plugging them in as a Stock Market investment, let’s say our guy averages that $2,480.00 each year over the years from 1982 to now. By 1997, my stock portfolio is worth all the money I will have invested by 2035. By 2009, I will have $576,376.05 in the portfolio, enough to pay me 1,440 a month to live on, better than Social Security can promise 26 years later. If I keep putting in that money, at that average rate, I will have $1.6 million saved by the time I am 60 years old. I could retire fifteen years earlier than with Social Security, and give myself $83,000 a year to live off (never touching the principal, by the way, which I can give to my children), against waiting another fifteen years in hopes the government will grant me $16,704 a year.
Even if there is no crisis, how big an idiot do you have to be to not understand the difference here?