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lectur3-page23 - contributed plus interest in 3.78 years As...

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Several years or so ago, ABC’s 20/20 news magazine broadcast did a story on the Social Security program and calculated that people retiring back then would receive all the money they had ever put into Social Security, plus the interest earned, in just three years. That is 36 Social Security checks. I decided to gather the data and check this claim out. I do not know the assumptions that were made by ABC’s 20/20 staff, but I will provide you with assumptions I used. An employee retiring at age 65 on January 1, 2000, started working when they were 16 years old (Jan. 1, 1951), and paid the maximum amount to the social security retirement trust fund (OASI: Old Age and Survivors Insurance Trust Fund) over their entire working career, will collect all the funds they personally
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Unformatted text preview: contributed plus interest in 3.78 years. As of December 31, 1999, the value of this employee’s trust fund (using the effective annual interest rates for the OASI trust fund, compounded annually, and as published in Actuarial Note, Number 138, October 1997, by the Social Security Administration’s Office of the Chief Actuary) is $64,998.21. The maximum social security benefit for a worker retiring at age 65 in January of 2000 is $1,433 per month (Social Security Administration Fact Sheet, revised April 26, 2000). $64 998 21 / $1 433 = 45 36 months Will social security be there for you? Click 23 $64,998.21 / $1,433 = 45.36 months. Will social security be there for you? Click on the links in the slide above and draw your own conclusion....
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