Note : None of the figures here attempt to adjust for inflation so I used some very low estimates for earnings and returns to shoot for the low end of the spectrum)

Note: All calculations done using these tools.

Note : I didn’t start this as a bash of Social Security but it ended up that way.

I am going to start at very low rates of contribution and work up from there.

Had I started contributing to the TSP (or any savings program) over the course of my 14 year career:

Values Used:   

$18,000 a year average over my career (a bit low)

            lowest TSP return over 10 years 5.45%

(I used 5% to be even more conservative and 7% for a more optimistic average)       

Total @5%: $21,858

Total @7%: $25,603

Lets assume I never contributed another dime until I retired at age 65 (in 33 years)

Total @5% :  $135,282

Total @7% :  $256,210

Modest for retirement but not too shabby considering I only contributed for 14 years.

Monthly payments for the 5%:

and for the 7%:

Better but still poor…..

Let us further assume that I continued to contribute at the exact same level (and that I’m a schmuck and never got over $18,000 a year even through inflation!)

Total @5%: $204,013

Total @7%: $395,397

Still modest but not too shabby (also shows the amazing power of compound interest) 

Payments @5% :

and @7%:

Not great but not bad considering how ridiculously conservatively I have been figuring…

Let us further modify this to expect some small level of performance from me as a worker (but nothing special from the economy) 

Values :      

$30,000 a year average from age 18-65 (still only contributing 6%)

Total @5% : $340,022

Total @7% : $658,996

Payments @5%:

and @7%:

not too shabby eh?

The Modest Success scenario… Let’s assume that I made the US average per capita from 2005 from age 18-65 and never get a raise ($37,800). Figure for per capita income taken from the CIA factbook – USA (make of that what you will) and that I contributed 8% instead of 6% and further assume a decent growth of 8% on average (TSP funds range from a 10 year average of 5.45 – 11.99%).

Total : $1,568,324 

That works out to a payment schedule of :

I could certainly live with that.

But if I had the 6.2 percent that I am forced to give up to Social Security to contribute on top of that… (assume that my employer wouldn’t pay me an extra dime even though he would get to keep his matching payment as well…)

 $37,800 from 18-65 at a 14% (the 8% I contribute now +plus the S.S. 6%) contribution earning 8% interest comes out to….

Total : $2,744,567 (sweet hopping Jesus!)

Payments:

Frankly I’m a bit shell shocked by that result. Risk in the market? Sure but I think I would like to chance it.