> Let's say from.. I don't know, 50 years ago. Taxes were increased such that social security is 2-3x what it is now. Some level which basically guarantees you

> Let's say from.. I don't know, 50 years ago. Taxes were increased such that social security is 2-3x what it is now. Some level which basically guarantees you have descent money for retirement. Sure you should still save some more over the years, but you won't be completely fucked. Social security is, essentially, a de facto PAYGO system*. The issue with PAYGO is that you need a stable ratio of working aged taxpayers to retirees who draw income from the program. This is untenable with current US and OECD demographics, which is why countries that use PAYGO in part or in full are 1. raising retirement ages and 2. transitioning to a mixed model where income replacement comes as much as possible from savings and investments. > In that situation, there is no way 150% of the GDP would be invested in retirement savings. Retirement in the US is much more than social security. This figure includes pension plans, 401Ks, and IRAs. It's also a cumulative amount, so the annual input to grow the proverbial pot is significantly less than this. However, if you were to take the expected outlays from this and, instead, fund them through direct taxes, you're likely looking at an additional 1.2T USD in social security taxes each year, which would more than double the social security tax rate. This looks remarkably similar to how much workers in countries that rely almost entirely on PAYGO programs currently pay. This is also with current demographics - the picture becomes significantly bleaker once you project out several more decades. > I guess that just makes it a foreign concept- but most people in this country can't throw 10-20k a year into retirement funds. That's a massive part of most peoples income. Other countries actually do require forced contributions into employer pension or invested retirement accounts. The idea being that, if you start early enough, you only have to contribute an small portion of your salary each year to replace a large percentage of your salary in retirement. > The social security pot would be massive, instead of inflating the stock market. Social security funds are actually invested. Government debt is an asset class and, as with everything else, a large amount of demand for an asset class has supply side repercussions. The same applies for private retirement investments. Also keep in mind that only portion of any good retirement plan will be invested in equities, and that pension plans are increasingly turning to alternative investments, such as private equity and real estate. *The social security "pot" will be insufficient to cover expected outlays in a couple of years, which is why it's better to think of it as a PAYGO program.