Stipulated: The average American worker contributed to their Social Security and their employer did as well; that contribution totaled 15% of income before taxes.
These figures below reflect the 49 years worked by the man who made these calculations. Punch in your own numbers.
- If you averaged $30K/year over your working life, the 15% contribution is $4500 a year.
- Over 49 years, that adds up to nearly $220,500 total cash contribution.
- If you calculate the future value of $4,500 per year at a simple 5%, after 49 years of working you’d have $892,919.98.
- If you took out only 3% per year, you’d receive $26,787.60 per year and it would last better than 30 years.
(h/t friend Ed)