Annuity

VP Harris brought up an issue that needs more attention when she said, "home ownership is one of the best ways that we achieve inter generational wealth". One way to do this is to privatize social security which today has a strong bias against Blacks in particular Black males. The average Black male retiring today at age 62 has had life time average earnings of $30,000 per year. His social security check will be $1,300 per month. If he could take his social security contributions subtract the money the government needs for disability and survivor payment and invest those at 4% in a tax free account he would have $230,000 and could purchase a life time pension of $1,500 per month with a guaranteed 20 years of payments. Today his life expectancy is to age 69 so he will only collect SS for 7 years and at $1,300 per month that comes to $109,000 and the rest stays with the government. If he owned this account there would be $1,300 per month going to his heirs for the next 13 years. This is because a life annuity 20 year certain means payment for life to the annuitant plus a guarantee of 20 years of payments. The real winners are White females who at age 62 will live for 18 more years. Social security deductions are 6.2% which includes 2.2% to cover the cost of disability claims and survivor benefits. This leaves 4% plus 4% from the employer to invest. People who oppose this change under different circumstances would be called racist.