I think this is a fitting post considering it’s tax-day here in the US. If you haven’t filed yet, you should probably get on that. If you have, read on:

Except for the fact that the SSA and the federal government is completely dishonest about the merits, the solvency, and the guarantee of future benefits regarding social security and OASDI, at least they differ from pickpockets in one small regard. Over the weekend, I received my annual social security statement. Coincidentally, I also received the quarterly report for my 401(k) investment, which posted a modest gain of 6.44%. If you’re not familiar with the social security statement, basically it documents the amount of money that you have contributed throughout your working life, including “employer contributions” to the perpetual Ponzi scheme.

My total was in the neighborhood of $15,000 over ten years of contributions.

I can only imagine what I might’ve rather spent that money on: My Master’s Degree. Half of my undergrad. 4 years of rent at college. A new car. Camping equipment. Video games. Computers. New shoes. Whiskey. The list is very expansive. And although I probably would not have spent fifteen grand on whisky, that sum of money would have wiped out (three times over) the net of high-interest credit card balances I accrued on similar goods & services (read: bar tabs and fast food) during my undergraduate studies, of which I’m still paying a portion of each month…

But it prompted me to do a very, very rudimentary time-value-of-money problem. I don’t remember the formula for annuities, so I wanted to keep it retardedly simple: What if all that money had been accruing in a non-interest bearing account, and now, having reached the age of maturity (dubiously) I would like to put it into a retirement savings account. If I could put all of that money into my 401(k), as a lump sum payment, and make no further contributions for the rest of my working life, how much money would I have at age 56? At 66? At 71?

Assuming a ROI of 7% compounded quarterly over 30, 40 and 45 years respectively:

At 56, it would be worth approximately $120,000.
At 66, it would be worth approximately $241,000.
At 71, it would be worth approximately $341,000.

Now, I still don’t remember the formula for annuities. But fortunately the internet does. Repeating the problem with an initial principle balance of $15,000 and an annual investment of a meager $4,000,

At 66, it would be worth approximately $1,080,000.
At 71, it would be worth approximately $1,500,000.

(*none of these figures are inflation adjusted*)

I doubt very seriously that I’ll ever receive anywhere near a million dollars from Uncle Sam in my golden years. The $341,000 figure is much more realistic.
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Of course, the problem with that, is I could’ve realized that sort of return with no investment in my future after the age of 26.

Uncle Sam will require that I keep making contributions until I retire.

But at least they have the decency (or gall) to inform me.