Saturday, June 14, 2008
Another Sign Of The Aging Process
So, I was going through my accumulation of paperwork and trying to file and discard some things, when I found a Savings Bond that had been given to me at birth (I think from my dad's employer at the time.) Curious to know what it was worth, I logged on to the US Treasury and found that my $25 bond is now worth $106.67. I also discovered that it had matured and is no longer earning interest. Oh yeah, these things mature after 30 years.
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So, do you think after inflation $25 then would be about equal to $106 now?
Not quite. Over the last 30 years, inflation has been about 4%, and the return on the bond was about 5%. With inflation, the $25 would be close to $85 today, so I made around $20 in real terms.
Had it been in invested in a good mutual fund, say the American Funds' Fundamental Investors fund which started in 1978, the same $25 would have grown to $1,205 today.
And that, my friends, is why we need to privatize Social Security.
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