$4000 per year, or 10% of $40k/yr combined income x 30 years @ 12% return (standard mutual fund) = $437k adjusted for 3% inflation, or $1,000,000 without inflation.
$437k * 6% income fund = $26220
$26220 / 12 months = $2185/month monthly income
This is a bare-bones calculation using only 10% savings rate and 30 yrs of compounding. Even for the poorest Americans, a percentage saved each year, compounded over time = a modest retirement. So, I fail to see the great benefit of Social Security.
How to solve the problems? Good question. Only way I can see this happening is if SS continues to take in payments for say 30 years, and cuts off payments in say 15-20 years. Would you like a lump of coal with that, sir?
