There is no return relating to Social Security

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Social Security is a bad deal – the main retirement savings tool and the largest tax payment for millions of Americans.

They argue that payroll tax is a bad investment as it only provides an annual average payment of $ 17,500 – a lousy return on the withheld funds.

“Americans would prefer to keep their payroll tax contributions and put them into private retirement accounts than to return them to the government's broken social security system,” according to the Heritage Foundation's study, “Is the cost of social security? ” t

But official Social Security counter is saying that the government's program is more comprehensive than private accounts.

“It is important to note that Social Security provides much more than retirement pension,” said Steve Goss, Chief Social Security Agent in response to the study.

“About one third of the benefits paid relate to the protection of disability insurance and survivors,” Goss said. “Such benefits cannot be provided from individual savings in a retirement account.” T

Goss also argues that some people would not do well in private retirement accounts partly because private sector firms would charge high management fees.

The income of the social security system is collected through payroll taxes charged at 6.2% each on the worker and employer.

Social Security recipient receives $ 1,461 per month.

The Heritage study found that younger workers who pay into Social Security would lose out over the years. Their return will be between -0.04% and -14.53%.

Rachel Greszler, one of the authors of the report, noted that an annual return compared to a 4.76% return for those making private conservative investments – half in stocks and half in government bonds, according to the study.

“We are telling young people to put money into this program that guarantees zero or negative returns,” said Greszler, adding that the long-term results of private investments are likely to be better than 4.76%.

Social Security taxes and benefits were much debated. Taxes and benefit cuts have been raised over 40 years.

“I tell people to be very conservative about Social Security payments when taking a retirement plan,” said Ronald Roge, Long Island consultant. “It should not be more than one-third of your income.” T

However, critics and defenders of Social Security can agree on this: There is a crisis before the next 15 years. Goss said that the program's “reserves” would be reduced in 2035. ”

This would mean a 20% reduction in benefits, he said – adding, in a mindset that reduces program critics, “Congress will have to act.”

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