Well, maybe ‘smarter’ isn’t the best word (see headline). Perhaps ‘a better investment’ would be more accurate.

[...]private capital investment remains remarkably safe over the long term. Despite recent declines in the stock market, a worker who had invested privately over the past 40 years would have still earned an average yearly return of 6.85 percent investing in the S&P 500, 3.46 percent from corporate bonds, and 2.44 percent from government bonds.

In contrast, Social Security,

• Once the safety net for the poor, is the safety net for most retired Americans. Nine out of ten people age 65 and older receive Social Security benefits.
• As of 2009, 55,905,731 Americans–rich or poor–received Social Security benefits. In 2011, it cost us $727 billion.
• Once funded by 159 workers per beneficiary, there are so many Social Security beneficiaries that there are only 1.75 workers in the labor force  per Social Security recipient to fund it. That’s down from 2.9 in 2010 and the most dramatic drop since 1955.
• Today, it is completely unfunded. The Social Security trust fund has been raided so many times by politicians, that there’s no longer any money in it…just IOUs.

So, which system do you want to be covered by when you retire? One that has paid out an annual return of 6.85 percent or one that’s completely bankrupt and funded from current tax dollars? Apparently, America is split on that question:

• 50% of the workforce has no private pension coverage.
• 31% of the workforce has no savings set aside specifically for retirement.

I have only one question if you are part of that 50% or 31%: are you crazy?

APROPOS: See also my review of Congressman Jason Chaffetz‘s notable effort to reform, fix, and revitalize Social Security to make it solvent again here.

Related articles

• Milton Friedman and Social Security Taxes (capitalisthistory.com)
• Could Congressman Chaffetz save Social Security? [Charts] (publiusonline.com)
• Opinion: Don’t ignore Social Security (cnn.com)
• At CPAC, Romney’s Calls for Cutting Social Security and Medicare Rankle Conservative Rank-and-File (my.firedoglake.com)