Fantasy PRA's
(Faster Growth Scenario)

Two more images from our online Social Security Solvency Simulator.

Charts 1 and Charts 2, side by side.

Note that 2A, Payable Benefits, shows regular Social Security benefits being paid at 64% of the current law schedule.
(64% is just low enough to assure lasting solvency in the faster growth scenario.)
Meanwhile the PRA program matures steadily, raising total average benefits to 97% of the current law schedule by 2075.
(Not all retirees would do equally well. Some PRA's would pay out better, others would pay out less.)

Note Chart 1A - Total Assets: Pct of GDP. Trust Fund assets plus PRA assets rise to a value equaling about 80% of GDP
Note Chart 5: Stock Assets as Pct of Market Capitalization. PRA stock assets peak at 41% of total stock market capitalization
Note Chart 4. You might wonder why anticipated market capitalization is slightly lower than historic. A slightly slower GDP growth rate is the answer.
With even the "Faster Growth Scenario" a bit slower than historic GDP growth,
future market capitalization must be simulated at a slightly lower level than historic in order to be consistent with a real ROI of 6.5%.
Chart 3A. As PRA benefits are not coordinated with Social Security benefits, Chart 3A shows PRA annuities
being charted above the Social Security benefit line.

Results Page. You can use the settings on this page to recreate our results for yourself.

Note the "Benefits Actually Paid" line - $482 Trillion from Social Security, $182 Trillion from PRA's, total of $664 Trillion.
Note the tax rates: 10% to Social Security, 2.4% to PRA's.
(Today's rate is 6.2% from employees, 6.2% more from employers, for a like total of 12.4%)

Note the highly optimistic PRA assumptions.
- The PRA Portfolio is 60% invested in stocks.
- The Real ROI for Stocks is set at (an almost surely impossible) 6.5%.
- Management Fees are set at 0.1%, a tiny fraction of mutual fund rates.
- Inheritance Leakage is set at 0%. When PRA owners die before retiring, ALL their funds are assumed to go into spouse,
  child, and grandchild PRA's. Grieving heirs never get a penny of it for current needs.
- What's called the percent "diverted annually to non-retirement uses" is set at 0.0%.
   This is really the Family Emergency leak. "My daughter's dying, I need to get at my PRA funds to save her."
   A setting of 0.0% means that no one is EVER allowed to tap their PRA's for non-retirement needs, no matter how desperate.
Such assumptions are deeply unrealistic - hence the "Fantasy PRA" label for this scenario.

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