[businessprofessor]

$37,000 was the maximum amount that could have been contributed by both employer and employee contributions since 1946. I used the maximum tax amounts provided in the SSA website. My dad did not make enough to contribute the maximum amount until perhaps the end of his career. Most of the money was contributed late in his career so there would not have been a large compounding factor.

You need to use a risk-free rate in the compounding. Social Security benefits are risk-free. 7% is much too high for a risk free rate especially during the 50s, 60s, and mid 70s.

If the means testing had been started in the mid 80s, everyone would have become aware of the returns instead of complaining about the measly benefits. Means testing would have allowed annuitizing the benefits for at least the wealthy. The greatest generation could have been part of the solution instead of part of the problem. The attitude of the greatest generation has been a large part of the problem.

[Kellis91789]

My rate of 7% was based on what a pension fund would have done, or what an individual putting money into a 401k would have done. During the savings period prior to retirement, no financial advisor would recommend risk-free investing.

This is one of my pet peeves about the SSTF. While there were surpluses and there was still a long time horizon before the SSTF would need to be drawn down, it should have been invested in markets rather than the risk-free IOUs.

Had that been done over the last 25 years, and ahead for the next 10 years, the higher rate of return would have built much more than the $2T in the SSTF.