Concerning Retirement

I asked Grok the following question concerning savings:

If I started working in 1979 and put away 5% of my paycheck for savings, how much money would I have in 2020 if I made the average paycheck and realized a 3% return on my savings?

This is a very conservative scenario. Here is the answer without the background it gave:

Thus, if you saved 5% of the average U.S. paycheck from 1979 to 2020 with a 3% annual return, you’d likely have approximately $175,000 by 2020. This is an estimate, as exact figures depend on precise income data and when contributions were made each year.

I then asked what the average return of the S&P was during that same time frame:

Thus, the average annual return of the S&P 500 from 1979 to 2020, including reinvested dividends, was approximately 9.9%. This reflects the power of compounding and dividend reinvestment over those 41 years, despite significant market volatility.

I then asked the first question with a rate of return of 9.9%:

Thus, with a 9.9% annual return, you’d have approximately $885,000 by 2020. This reflects the power of a higher return like the S&P 500’s, turning modest savings into a substantial sum over 41 years.

Not a bad return and a nice nest egg on which to retire. My next question was:

If I had $885,000 at age 65, at what age would I run out of money if I withdrew $3000 a month?

Grok gave two answers: one with no interest and one with the 9.9% historical return.

No interest:

I would run out of money in 24.58 years.

With the standard S&P return:

Notice the balance grows for a while because 9.9% of $885,000 ($87,615) exceeds $36,000. Let’s fast-forward:

• Year 20: Balance ≈ $5,150,000 (compounding outpaces withdrawals initially),
• Year 30: Balance ≈ $13,500,000.

This suggests the money never runs out—it grows indefinitely—because the 9.9% return exceeds the withdrawal rate. The sustainable withdrawal rate for perpetual growth is roughly the return rate (9.9% of $885,000 ≈ $87,615/year, or $7,301/month). At $3,000/month ($36,000/year), you’re withdrawing only about 4.07% annually, well below 9.9%, so the principal increases over time.

To confirm, the “4% rule” (adjusted for higher returns) suggests a safe withdrawal rate for 30 years is conservative at 4%, but at 9.9% returns, $36,000 is sustainable forever. Mathematically, the fund lasts until withdrawals exceed growth, which doesn’t happen here until the balance grows so large that $36,000 becomes insignificant.

I want to make two points:

1. The principal is secure. If I die, my heirs will get it. When I die, the balance of my social security goes into some politicians pocket.
2. The government took 12% (conservatively) of people’s paychecks for social security in this time period from 1979 until 2020. So we could multiply the above calculation by 2.4 to get the real figure that social security should be paying if the money was well managed.

The reality is social security has been raided by the government to line their pockets and steal our money. Their solution is to reduce benefits and raise the age of retirement. Let’s ask the real question: why are they so opposed to audits of the social security administration?