If I walked up to you and told you that if you would give me $10 today, I would give you $4 tomorrow, you would hopefully laugh in my face and walk away. Well, for anyone legally working in America, a transaction such as this shows up on every paycheck you get.

Paying into Social Security, for most people, is just throwing money away. Unless you lead an amazingly long life and make very little money, you will never recover the money you paid into the system. This does not even take into account the amount of money you will lose from the interest you could have accumulated by investing your savings.

In 1935, the Social Security Act was passed in Congress as part of the New Deal under Franklin D. Roosevelt’s Administration. The act supplied benefits to workers in commerce and industry upon retirement, and a lump sum payment at death. It originally was designed as a short-term solution to the problems faced during the Great Depression.

Before the Depression, the retirement plan most Americans used was their children taking care of them once they were too old to work. During the Depression, however, this plan failed because the children of the retired could not afford to take care of them.

The government put together a hasty plan to solve this problem with socially sponsored government-retirement payments. It was meant to last only a short time until Americans could adjust to saving for their own retirement instead of relying on their children to take care of them.

Since then, the Social Security system has become too large to be sustainable. In 1950, there were 16.5 workers paying into Social Security for every one person receiving benefits. As of 2000, that number has dropped to 3.4 workers paying in for every one, and projections show the number will be at 2.1 by 2030. At this rate, Social Security will not last long, as originally was intended.

In 2017, Social Security will begin to spend more money than it brings in. From that point on, Social Security will need large and growing amounts of money to pay all of its promised benefits. In 2009, the Social Security surplus, which the Congress has been spending on other social programs, will begin to disappear. These two dates are not far away, and it is today’s students that will be punished for previous generations’ oversights and procrastinations.

In 2041, the Social Security trust fund will run out of its special issue bonds. This will mean a required 25 percent decrease in benefits and will cost Congress $300 billion a year extra to repay all of the issued bonds. This means we will either have to cut benefits drastically, monumentally increase the taxes on the people paying in or work to privatize the system so people run their own retirement. Americans would make more investing privately even with today’s benefits.

Let’s run a few numbers to see exactly how much money people are missing out on.

To start, anyone born after 1960 must wait until the age of 67 before he or she can receive regular benefits. If someone born after 1960, which includes most students, starts working at 18, this gives them 49 years of paying in to the system.

Let’s take a hypothetical worker earning $33,000 a year, which is a very modest salary, as our subject. With no salary increase or decrease, and paying 8 percent per paycheck to Social Security, a total of $129,360 will be paid in over the worker’s lifetime.

With the average age of death for Americans being roughly 78 years, this gives a time of 11 years to receive benefits. With a monthly benefit payment of roughly $1,000, this worker would stand to receive $132,000. This translates into an investment, during a 49-year period, with a return of 2 percent. This is not even high enough to outrun inflation.

For anyone who knows about investments, and for most who don’t, it is clear this is a pathetic rate of return. Now take a worker earning $100,000 a year. This worker will pay in a total of $392,000, yet still only withdraw the same $132,000. If you are wondering where the other $260,000 this worker put into the system went, so is he or she. This shows the less you pay in, the more you get back.

I sure wish I could walk into a store with this same system and spend less to get more. If this wasn’t bad enough, about one third of people collecting Social Security must pay income tax on it. The only solution to fixing Social Security is to slowly phase it out.

By allowing workers to invest in private retirement accounts, Americans will get the benefit of not only receiving higher returns and more money at the end, but they will also know that the benefits will be guaranteed and not cut by the time they reach retirement age.

This will allow people to withdraw their own money at a rate that they see fit. Not many people like the idea of the government behaving like a parent who hands out a monthly allowance of their hard-earned money.