Current calculations make it clear that for the vast majority of young workers, the rate of return on Social Security taxes and benefits will be
A)lower than what would have been generated in private stock-market investments.
B)roughly equal to what would have been generated in private stock-market investments.
C)greater than what would have been generated in private stock-market investments.
D)taxed more heavily than what would have been generated in private stock market investments.

Question

Quizplus · Accepted Answer

Multiple studies have shown that the rate of return on Social Security taxes and benefits is lower than what would have been generated in private stock-market investments for the vast majority of young workers. This is because Social Security is a pay-as-you-go system, meaning that current workers finance the benefits of current retirees, rather than investing their money into private accounts. In contrast, private stock-market investments have the potential for higher rates of return due to market growth and individual investment choices.

Current Calculations Make It Clear That for the Vast Majority