“....into an investment fund earning 6% “
How do you justify this assumption.
A better assumption would be 1%:
160 hrs a month x $10 per hour x 12% x 40 years
@6% = $382,366 - except you won’t find a 6% investment today
@1% = $113,259
@1%, he’d be able to withdraw $2300 per month for 50 months - a bit more than 4 years.
He could also withdraw his usual $1600 per month for 73 months, or about 6 years.
Or, he could spend it all along the way, collect food stamps, EITC, then claim disability and get SSI, subsidized housing, a free obama cellphone, EBT card, medicaid....
That’s why these programs are popular. Everyone likes to say the government owes them the equivalent of their social security payments with optimally invested returns. They then change their tune with medicare, and insist that the government owes them medical care, no matter what the inflated cost because they “paid”.
No matter what people were told, they were simply current year taxes, with benefits paid with current year taxes.
It is a foregone conclusion that the benefits will not be paid as supposedly promised. It’s just a matter of how they will not be paid - whether not paid outright, through benefit reductions & eliminations, means testing, inflation, or some other creative means.
Everybody cannot have everything they think they are due.
If a 1% rate of return is considered realistic, then no one would ever invest. Stocks as a whole have exceeded 6% over the past 40 years.