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Giving their retirement savings to the federal government to manage has proved a lousy deal for Americans, particularly black Americans.

Even though workers are required to put 6.2 percent of their paychecks into the Social Security system, matched by an additional 6.2 percent from their employer, and have been doing so for eight decades, there is exactly zero real dollars stored in the account to provide for them when they stop working.

Instead, they have a lot of IOUs from Washington that won't cover their expectations. By 2034, the Social Security System will only be able to pay out 78 percent of promised benefits, a figure that will keep sliding every year. 

With so much money going to fund a government Ponzi scheme instead of into their own bank accounts, it's no wonder that the future wealth projections for African-Americans is so bleak.

A report last year from Prosperity Now and the Institute for Policy Studies warned that the median wealth of black households is steadily eroding, and calculated that by 2053 it would stand at zero.

So no money in the bank, and no real money in the Social Security fund. This despite working their entire lives.

No group of Americans should be more insistent than blacks that Social Security be privatized and they be allowed to keep and invest their own money.

It's the surest way for them to build wealth.

If the 6 percent savings mandate for both the employee and employer remained intact, but the money went into private accounts instead of the holey pockets of the government, African-Americans could immediately reverse the negative wealth trend.

A 21-year-old individual starting work today at a modest $30,000-a-year income and increasing that by just 2 percent a year, saving at the current rates demanded by Social Security (with the employer match), could have roughly $500,000 in the bank in 35 years, with a decade of savings left before retirement.

If annual income accelerates more rapidly as the worker moves up the economic ladder, as it should, the amount saved could easily double or triple. 

And that's if the money is invested in long-term government bonds, which have produced an average annual return of 5.6 percent since 1926 with little risk to the investor.

If the money were allowed to go into the stock market, the average annual return over the past 90 years has been above 10 percent, a rate that would double the accumulation of dollars.

So doing very little different in terms of the amount saved could in just 35 years turn even a lower-income worker into a millionaire, and would make middle- and higher-income workers downright rich.

The return on that money, even at the more conservative 5 percent T-bill average, would surpass the amount of the monthly Social Security benefit. 

The best part: The pot would still be full when the beneficiary dies.

The cash could be passed on to children, who could either use it to bolster their own savings or to invest in their communities. It would provide African-Americans in particular with the inherited wealth they've missed out on. 

Government can never take care of us as well as we can take care of ourselves. We can get a lot richer if we dumped the sticky-fingered middleman. 

nfinley@detroitnews.com

Catch “The Nolan Finley Show” weekdays 7-9 a.m. on 910 AM Superstation.

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