Generational Inequity

["William J. Burrows" <bill_burrows@amecom.com>]

Here is the proof. Worker who paid in max. will do worse!

CASE 1.  AVERAGE WORKER$									
YEAR OF RETIREMENT	        1940	1950	1960	1970	1980	1990	1999	2010	2020
LIFE EXPECTANCY AT AGE 65	12.8	13.6	14.2	14.9	16.4	17	17.2e	17.5e	18.0e
VALUE OF PAYMENTS AT RET.	68	492	2035	5175	24764	88005	179853		
FUTURE VALUE OF BENEFITS	3825	8642	15530	31376	42238	100955	172623		
RATIO OF BENEFIT TO PAYMENTS	56	18	7.6	6.1	1.71	1.15	0.96	.85e	.75e

RETURN ON INVESTMENT	      243.00%	28.20%	16.55%	12.50%	9.50%	7.65%	5.30%	2.5%e	1.5%e







$WORKER EARNED AT THE INDEX WAGE (AVERAGE NON-FARM INDUSTRIAL) AS CALCULATED BY BLS									
   WORKER ASSUMED TO HAVE WORKED FULL TIME EVERY YEAR FROM AGE 21 ON							
*ALL ANNUITY VALUES ARE CALCULATED BASED ON THE LONG US BOND INDEX WHIICH IS THE PRIMARY VEHICLE FOR SS INVESTMENTS.							
   ALL VALUES ARE IN DOLLARS AT YEAR OF RETIREMENT, IE PRESENT VALUE OF FUTURE BENEFIT PAYMENTS							
   BOTH EMPLOYER AND EMPLOYEE PAYMENTS ARE INCLUDED (MEDICARE IS EXCLUDED). 							
   WORKER RETIRES AT AGE 65 (NO SPOUSAL BENEFIT IS INCLUDED)							
NOTE: FUTURE YEAR BENEFITS BEYOND 1999 CALCULATED ON ZERO INFLATION, LONG BONDS AT 1.25%							
^RATE THAT WOULD HAVE TO HAVE BEEN PAID ON EVERY DOLLAR "INVESTED" UP TO AND UNTIL THEORETICAL ACCOUNT HAS ZERO BALANCE AT DEATH.