What would a private plan offering all that Social Security does cost?

Posted by admin

November 21, 2008

Shared by Carolina:

Whenever I see debates on the value of Social Security, they always focus on retirement and how much better someone would be if they could invest 12.8% of their income in a retirement account.
This always bugs me since Social Security offers quite a few benefits that are not usually discussed.(http://www.pueblo.gsa.gov/cic_text/fed_prog/ssundben/ssundben.pdf). It’s kind of like talking with someone about cars, but all that they care about is how fast it goes.

So what do you think it would cost for a private company to offer what Social Security does. Any actuaries out there who are up to the challenge?
This question is not intended as a debate as to whether Social Security should be privatized. All I am asking for is a rational basis on which to compare government done Social Security to private offerings.

There are a few ways to go about this. One would be to analyze what is spent and see what you could get on the market for your 12.8%. Another would be to go backwards from benefits paid and try to figure out what a company should charge for that benefit level and what that would work out to against current income demographics.
This question is really not that hard. I’m just looking for a dollar amount with some justification. Instead I am getting responses of the irrational sort that prompted the question in the first place.

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