I have an idea for fixing social security. Please know this is just a rough idea of what could be possible. Not sure how to initially pay for it.
At age 21, each working American would be given a lump sum of 100k to fund their retirement with no expectation of social security or any safety net.
Over the course of a 40 year working career, each of us would have the potential to retire with financial security–assuming a comprehensive healthcare plan was available & affordable.
For the purposes of this very rudimentary discussion, I asked google what the average person contributes & withdraws from ss. The numbers were 367k in contributions over 40 years & 380k to 400k in withdrawals over life.
I used a portfolio backtest tool available free online. To avoid cherry picking, I used asset categories of us stocks & us bonds generically.
I used a rough estimation of the 100 minus age rule for a 21 year old who began work in 1990. I rebalanced annually & rolled all profits. After the first 4 years (for easy math) I reallocated every 5 years. I started 80/20 stocks to bonds. After 4 years 75/25 & then 70/30 for 5 years, etc.
At the end of 2023, my 100k investment had grown to $1,476,984.
This was without a financial planner or any hands on other than reallocating every 5 years. Fees were also not taken into account, as the tool doesn’t offer that.
If we could somehow eliminate ss, & allow each person 100k, we could possibly save alot of money. Also reducing the size of the ss administration would save even more.
I know there are people who would squander or otherwise lose it, and don’t have a good solution for them other than suck it up buttercup.
Also, how to account for people who cannot work or people who become disabled during their working career. Also, how would such a cash infusion affect the economy?
I know there are many unaccounted for issues here, but just trying to start a discussion.
One way to pay for this would be that upon retirement, 100k off the top goes back to repay the initial 100k that each person was given. Not sure how losses could be handled.
Rules would have to be in place certainly.
Does anybody have any constructive ideas to help this along?