Side note to all investors - take a close look at the ROTH IRA. You can put in up to $5,000 per year. Grows tax free and the proceeds are tax free after 59 and 1/2. You can't take out until after that time point but $5,000 one time invested at 8% from 20 till 60 (40 years) would be $108K
$200 per check or $400 month ($4,800 per year) 8% of the same 40 years works out to $1.2 Million. When young people understand this concept, getting them to invest, even if it is not $400 per month is not that a difficult challenge. What is difficult is for them to get a job that allows them the $400 per month plus cover medical and car insurance, rent, utilities and food.
Now let me present a possible alternative to Social Security.
After a person is born or 1 year after qualifying for SS, SSA opens an account for the individual with $200, and afterwards, adds $50 per month. 8 percent interest 64 years (retire at 65) the net value would be about $1 Million. The cost for such a program is about $180 billion for the monthly payments so less than $200 billion total. Can be paid for with a 1.5% sales tax. Sales tax would be about $250 Billion. The overage could be used to replace the SS tax. In 2015 the SS tax only brought in a little less than $1 Billion. This would fund SSA until the program becomes self sustaining (see below)
At 65, the account no longer grows, but the interest is paid to the account holder, about $80K for retirement. When the person dies, 20% goes to the person's estate, and the remaining 80% goes back to the Government to off set future costs. Should the person die between the age of 1 and 20, the first $10K goes to the estate the rest goes to the government. Between the ages of 20 and 30, the amount increases to $20K, Between 30 and 40, the amount is $30K. Between 40 and 50, $40K and 50 to 60 would be $50K, 60 to 65 would be $60K. At 65 and older, 20% to the estate, the rest goes back to the government. If the person is disabled for any reason prior to the age of 65, then they receive 1/2 of their declared disability percentage of the interest earned. I.e 50% disabled would be 25% and 100% disability would receive 50%. The remaining interest would go back to their fund.