The average person pays 6.2% of their lifetime wages into Social Security. In return, they receive an average of $446,800 in benefits during retirement.
If every child born in America were given an IRA funded with $1,000 and that money was invested in an S&P 500 index fund with an average annual return of 10%, it would grow to $490,371 by retirement—without any additional contributions.
Funding this program would cost $3.59 billion annually, based on current U.S. birth rates.
To cover this cost, a wage tax of just 0.0384% would be sufficient—an almost almost nothing compared to the current Social Security tax rate.