What if we’d been allowed to invest those Social Security payments?

If you are as old as I am, every year you get that depressing letter from the Social Security Administration telling how much of your money they will send you each month if you retire now or at age 66 or age 70. All the numbers are paltry.

At the beginning of this year the average monthly Social Security check was about $1,164. The numbers listed in my letter are a little north of that.

With all the talk of raided trust funds and privatization for younger workers, this weekend I did the math. I took the rates at which I and my various employers paid into Social Security each year and calculated the pay-in based on the annual earnings listed in my Social Security letter — all the way back to the $534 I earned in 1963 working a summer job as an oil field roustabout. Of that, the Social Security got about $40, based on the rate at the time.

My employers and I have been paying ever-increasing amounts ever since.

If I were to retire at age 66 at the rate listed in the letter I would get back every dime I paid in — no adjusting for inflation, mind you — in about 8 years. But to get the buying power of that $40 in 1963, today I’d need $277. So, in inflation-adjusted dollars I can’t live long enough to get it all back.

But what if I’d been allowed to keep everything I’d paid in over all these years and put it all in a simple savings account paying 2 points less than the prime rate each year. Today I’d have 2.2 times what was paid in and concurrently spent each year by a Congress that knew better than I how my money should be spent.

But what if each year I’d used that money to buy gold? Today I would have 3.3 times as much for my retirement years.

Do the math.