Retirement

Who wants to retire as a millionaire?

You would have the opportunity to do so--if you were allowed to opt out of the Social Security system, and invest your money in a private retirement account.

Now, you don't have the choice. By law, the government collects Social Security taxes--12.4% from every employee and employer combined--and pours it into a system that is headed for economic collapse.

Even the Social Security Board of Trustees admits this. According to the Board, the Social Security System will start running a deficit by 2016. By 2032, the so-called Social Security Trust Fund will be depleted, and the system will be insolvent. (It's "so-called" because there is no trust fund.)

Fortunately, there's a better way. Instead of relying on a bankrupt government system, we could allow individual Americans to control their own retirement accounts. Under such a system, average wage-earners could retire in comfort and security with more than $1 million in the bank.

Sound too good to be true? The Cato Institute crunched the numbers. Over the past 70 years, Wall Street investments have returned an average of 7% per year (after inflation). By contrast, Social Security pays an average family a paltry 1.2% annual return. Over the years, thanks to compound interest, the difference between those two numbers adds up to staggering amounts of money.

For example, a typical single wage-earner with an income of $36,000 could accumulate $1.2 million in a stock-invested pension fund by retirement, according to the Cato Institute. That would pay an annual retirement income of $124,000. Under Social Security, such a wage-earner would get one-fifth as much, or just $24,000 per year.

Libertarians propose to move America toward a private, non-government retirement system that would allow you and your family to depend upon yourselves instead of politicians' promises for a secure retirement.