Scrap Social Security. I’ll invest what I pay in payroll taxes and do much better. SS is a scam. Really, asks RDQ

I get frustrated sometimes. Okay pretty often, even oftener these days. 

The root cause of much of my frustration is reading the nonsense posted on social media and readily passed along as 100% fact and apparently driving a great deal of public opinion. Today’s political climate is making things much worse.

Social Security is a favorite target. 

What people claim, for example – Congress stole the trust money, actuaries didn’t consider some people die before collecting, the trust earns no interest – is appalling, but readily believed by so many. When I try and explain the facts, some people just won’t accept them and call me not very nice names. 

My current favorite is people claiming Social Security is a scam – a Ponzi scheme – and by personally investing the payroll taxes they paid, they could do far better financially in retirement. 

I bet Rick could construction such a scenario with a spreadsheet. The fact is the math could work given the right circumstances, but more likely would not work given real life and human nature. 

The overriding risk is that Social Security is not just a individual pension. It is

• Retirement income
• Disability income
• Spouse and ex-spouse income 
• Survivor income
• Dependent income

Many people are eligible for benefits never having paid a penny in taxes, including individuals disabled from birth. And, of course, there is no relationship between the FICA taxes and SS benefits. Two separate laws in fact. 

To make all this self-funding work as planned certain conditions are necessary it seems to me.

• Have the discipline to invest every penny from taxes avoided without fail for 40 years or so
• Pick the right investments during that period and hope for no market crash when you want to retire
• Have an inflation adjustment plan
• Don’t lose your job at any point
• Don’t get divorced or remarry if you do
• Don’t die early – if you have a spouse and children 
• Don’t become disabled
• Don’t retire early 
• Don’t live too long after retirement 
• Don’t have a disabled child

I’ll stick with Social Security and most Americans would be wise to do the same. 

Now all we need is Congress to do its job and assure unlimited sustainability for the program – which is not that hard, but getting harder the longer we delay.