Oddly, Social Security benefits go to divorced spouses without affecting the primary beneficiary, at the right age. It goes to dependent children, with a cut off at 21 (if that is still true), should the breadwinner die. And, of course, it had disability pensions and other welfare provisions added. It has never borne a rational relationship to contributions or a putative "account".
My wife had a small pension obligation left over from her junior executive days, before switching to TIAA- CREF (which is one of the best pension plans around, mostly for academics). When the college wanted to retire that plan, they owed her money (not much, of course, since there were only a few years of contributions, and less than 20 years had gone by). Still, she was vested, and they had an obligation to buy her out, at calculable rates, because it was her money, and her account.
With Social Security, they have just made it up as they went along, essentially. It has never had a serious investment component, it has just been a bunch of dumped IOUs from the federal government. To the extent you take these non- negotiable bonds seriously, well, they have, as Bush mentioned, an egregiously low rate of return, and you would be better off with your money in a savings account, at about 6 % per annum, compounded quarterly..... |
