- Individual Government Sponsored Retirement Accounts
- Start at 18 years old and follow the individual from job to job to age 55
- Each employer contributes 7% of earnings to the employees account
- Each employee contributes up to 15% of earnings to the same account
- Accounts are invested in most common mutual funds for growth
- Interest free loans available in times of hardship
- No early withdraw until retirement age of 55
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About 18 years or so ago, our pension accountant conducted a study comparing the power of the stock market to social security. If instead of paying into SS the same amount of money we and our employer contributed to SS had been invested into the Vanguard 500 at the time it was invested into SS, the average employee with full retirement benefits would be worth $1.3 million dollars at their retirement based on what was an average $30,000 lifetime annual income. That was about 18 years ago. In today’s dollars, I’m sure that $1.3 million would be double that amount or more! I’ll never draw $1.3 million out of SS. Furthermore, the federal government wastes approximately 50 cents out of every dollar plus their bloated administrative costs.
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