Appendix B: Social Security Benefits vs. Market Benefits--Stock Fund (Continued)
Replacement Rates
Low-Wage Worker ($13,365.92)
100% Equity Investment
Equity
Constant 1997 Dollars
Market
Crash
Social
Required
Private
Security
to Equal
Private
Annuity
Projected
Increase in
Social
Year of
Year of
Age at
Account
Monthly
Monthly
Private
Social
Private
Security
Retirement*
Accumulations**
Benefit***
Benefit****
Birth
Retirement
Benefit
Annuity
Security
Annuity
1930
1995
65
$127,828.97
$788.76
$581.00
75%
56%
36%
26%
1931
1996
65
$165,721.07
$1,022.57
$587.00
96%
55%
74%
43%
1932
1997
65
$191,135.08
$1,174.14
$599.00
110%
56%
96%
49%
1933
1998
65
$197,483.92
$1,213.14
$591.00
112%
55%
105%
51%
1934
1999
65
$203,216.58
$1,242.84
$592.00
115%
55%
110%
52%
1935
2000
65
$210,448.48
$1,287.07
$596.00
119%
55%
116%
54%
1936
2001
65
$217,990.76
$1,327.36
$600.00
122%
55%
121%
55%
1937
2002
65
$225,309.51
$1,371.92
$604.00
125%
55%
127%
56%
1938
2003
65:2
$254,479.26
$1,540.56
$604.00
139%
55%
155%
61%
1939
2004
65:4
$266,479.47
$1,624.98
$608.00
145%
55%
167%
63%
1940
2005
65:6
$275,095.98
$1,675.07
$612.00
148%
55%
174%
63%
1941
2006
65:8
$284,380.29
$1,744.36
$616.00
153%
56%
183%
65%
1942
2007
65:10
$298,705.27
$1,845.90
$621.00
161%
56%
197%
66%
1943
2009
66
$298,984.64
$1,861.57
$629.00
154%
54%
196%
66%
1944
2010
66
$307,907.42
$1,917.13
$634.00
157%
54%
202%
67%
1945
2011
66
$317,921.61
$1,967.00
$640.00
160%
54%
207%
67%
1946
2012
66
$327,318.15
$2,025.14
$646.00
163%
54%
213%
68%
1947
2013
66
$336,758.56
$2,083.55
$651.00
166%
54%
220%
69%
1948
2014
66
$347,918.39
$2,152.59
$657.00
170%
54%
228%
69%
1949
2015
66
$357,600.68
$2,212.50
$662.00
174%
54%
234%
70%
1950
2016
66
$366,297.84
$2,246.18
$668.00
175%
54%
236%
70%
1951
2017
66
$373,706.84
$2,291.61
$674.00
177%
54%
240%
71%
1952
2018
66
$381,450.88
$2,339.10
$680.00
179%
54%
244%
71%
1953
2019
66
$386,707.68
$2,371.33
$686.00
180%
54%
246%
71%
1954
2020
66
$384,553.81
$2,358.12
$692.00
177%
54%
241%
71%
1955
2021
66:2
$413,619.19
$2,514.15
$698.00
187%
54%
260%
72%
1956
2022
66:4
$412,177.17
$2,523.79
$704.00
186%
55%
258%
72%
1957
2023
66:6
$410,168.50
$2,423.31
$710.00
178%
55%
241%
71%
1958
2024
66:8
$405,443.88
$2,519.85
$716.00
183%
55%
252%
72%
1959
2025
66:10
$399,820.03
$2,503.83
$724.00
180%
56%
246%
71%
1960
2027
67
$395,316.52
$2,471.85
$732.00
169%
54%
238%
70%
1961
2028
67
$388,284.08
$2,446.57
$739.00
166%
54%
231%
70%
1962
2029
67
$380,793.76
$2,399.37
$745.00
161%
54%
222%
69%
1963
2030
67
$374,613.89
$2,360.43
$751.00
157%
54%
214%
68%
1964
2031
67
$366,058.46
$2,306.53
$758.00
152%
54%
204%
67%
1965
2032
67
$358,812.42
$2,240.19
$765.00
147%
54%
193%
66%
1966
2033
67
$354,639.22
$2,214.13
$771.00
144%
54%
187%
65%
1967
2034
67
$349,638.44
$2,182.91
$778.00
135%
54%
181%
64%
1968
2035
67
$342,459.89
$2,138.09
$785.00
136%
54%
172%
63%
1969
2036
67
$337,823.97
$2,109.15
$792.00
133%
54%
166%
62%
1970
2037
67
$332,563.16
$2,048.40
$799.00
128%
54%
156%
61%
1971
2038
67
$327,422.21
$2,016.73
$805.00
125%
54%
151%
60%
1972
2039
67
$323,767.69
$1,994.22
$813.00
123%
54%
145%
59%
1973
2040
67
$320,566.19
$1,974.50
$820.00
121%
54%
141%
58%
1974
2041
67
$317,987.45
$1,958.62
$827.00
119%
54%
137%
58%
1975
2042
67
$316,672.54
$1,933.32
$834.00
116%
54%
132%
57%
1976
2043
67
$318,317.49
$1,943.36
$841.00
116%
54%
131%
57%
Average
184%
63%
*This is the Normal Retirement Age currently stipulated by law.
**Accumulations assume work from age 21 to retirement and contributions are equal to OASI employee and employer taxes. Returns are historical returns minus 1% from 1951 to 1996
and are assumed to be 9% net of administrative costs from 1997 forward.
***The annuity assumes a bond return of 6.5% each year and payments increasing at 3.5% each year and are made from retirement to the average life expectancy of a 65 year old as fore-
cast by the Social Security Administration.
****This is the percent that the equity market would have to fall in the year of retirement to give an annuity benefit equal to that of Social Security.
20