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ised, $1,559 a month is not very much to live on in retire-
ment. Yet it may be all that the retiree has.
Typical workers, who earn an average of $33,200 a year
during their working years, will receive approximately 70
percent of their retirement income from Social Security.3
By contrast, if the same workers were able to invest their
Social Security taxes in bonds, a virtually risk-free in-
vestment, at retirement they would have accumulated enough
money to purchase annuities paying $2,671 a month. If they
invested in a balanced portfolio, divided equally between
stocks and bonds, they could purchase annuities of $5,002 a
month. And if they invested it all in stocks, they would be
able to purchase annuities paying an astounding $9,575 a
month.4
Or workers might choose to make programmed withdrawals
from the accumulations in their accounts (more than $400,000
from a bond fund, more than $1.1 million from a stock fund).
In that case, if a worker died before exhausting the
account funds, the worker's heirs would receive all of the
remaining money.
No matter which investment or retirement strategy was
chosen, both the workers and their families would be at a
greater advantage in the private system.
Breaking Barriers between Capital and Labor
An important side benefit of Social Security privatiza-
tion is that it would give working Americans an opportunity
to participate in the American economy by owning a part of
it. In effect, privatizing Social Security would act as a
nationwide employee stock option plan that would enable even
the poorest workers to become capitalists. Through Social
Security privatization, workers would become stockholders.
The artificial and destructive division between labor and
capital would be broken down.
Americas have more economic and social mobility than do
the people of almost any other nation; Americans move both
up and down the social and economic ladder. Most people who
are poor today are unlikely to be poor 10 years from now.5
However, when it comes to the accumulation of wealth, work-
ers are at a distinct disadvantage. For example, the bottom
50 percent of American income earners own just 2 percent of
the nation's financial wealth. The top 1 percent owns more
than 56 percent of all net financial assets. The financial