No. of Recommendations: 4
Dope1: Let's say someone would have offered me the following deal: I get to keep half of what my employer and I contribute to SS for myself to invest - pre tax - however I see fit.
Had that money been invested in something that paid out at 3% year on year it would be worth $226,000 today.
Had that money been invested in something that paid out at 6% year on year it would be worth $325,000 today.
First, that's a rather hopeful expectation. If you're investing in CDs or other shorter term (say 5 years) fixed rate investments, 6% is a bit optimistic, isn't it? And if you're thinking of investing in the stock market, well, a lot of people have bad years when they lose significant portions of their principle.
Which brings me to another point: as you know, social security is more of an "insurance" plan to keep you from eating dog food, or nothing, or from living on the street when you're 70. Social security is not meant to replace your income or enable you to travel the world when you retire, right?
Also, if you have been maxing out your contributions each year for more than 20 years and plan to continue to do so as you suggest, then your $24,000/year benefits guesstimate is too low. You don't disclose your earnings (nor would I expect you to) but today the maximum benefit is $4,194 per month (about twice what you're guessing), assuming you delay claiming benefits until you are 70, again as you suggested.
