If someone asked to borrow a dollar from you today and promised to pay you back 70 cents tomorrow, would you lend them the money? How about if you could have invested that dollar so that it would have been worth $1.05 tomorrow—would you be happy with your 70 cents? Probably not, yet that is the deal the current Social Security system offers today’s young Americans.

Under the current system, young Americans will pay thousands more in Social Security taxes than they will ever receive in benefits. Someone in their late 20s today will lose about $84,000 (in today’s value) under the current system.⁵ That money could buy enough gas to drive around the equator 32 times or one cappuccino every day for 76 years! Instead, that money is lost to the Social Security system.

On the other hand, personal retirement accounts would allow young workers to invest their Social Security tax dollars and earn a high rate of interest that will be compounded over the entire worker’s life. In fact, if you could have invested that $84,000 when you were ready to retire you could have $1.2 million dollars!⁶