The taxpayer would not make up the difference. But if the choice is to
put 4% of your salary into stocks and the rest is the current Social
Security system, the hurt would not be too severe. If the choice is
limited to an index of stocks, then one stock tanking would not mean
that all of the investment in stocks would not tank. Since we are not
talking about those close to retirement, it is very unlikely that
funds invested ten or more years ago would be below the purchase price
( five years could be a problem ).

I have some stock in that large blue company. I bought it at hundreds
of dollars a share. Something like $500 or $600 / share back in about
1961 or 62. Could only afford a few shares. But take a look at what
say $3000 invested in big blue in 62 would be worth today. And also
what it would have been worth when your acquaintance sold. And finally
figure out what that would buy in an guaranteed monthly income from an
insurance company for a man aged 65. I have not done it, but guess
that it would be worth about $1000 / month.


Dan