I don't understand what you are trying to prove. I know the answer to your first question -you need for example around 13000-14000 France Télécom's shares to secure 20000€, so around 9000 for 20000$. That (9000) would cost 185000€, or about 275000$.
Now, what next? It's significantly more than the total contributions I've ever made indeed, but then I'm 32. On the other hand, that's pretty much the level I have now (compound interest and making maximum use of special prices for workers at the companies I've worked for sure helped ;-) ). That's far from enough to live off if my wife and I were to retire now, but I don't think you should have enough for retirement at our age (I know traders do but...).
So what exactly is the point? Maybe I'm missing it because in France we have a different retirement system. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
"It's significantly more than the total contributions I've ever made indeed, but then I'm 32."
That's the proof. Thank you for your demonstration of the ubiquitous sell-sheet --8% "return" (on principal; was 10% in the '90s) over 30+ years --barring anomalous share price and asset price movements that guarantee an "annuity" that is in the US a federal poverty level of income for <2 person HH. And where, theoretically, one would need to commit additionally the same level minimum investment to secure health care insurance of one's dotage. Everyone, male or female, should be so happy to rely on a wife's investments at that time. In the US a wife, much less other beneficiary, is not guaranteed distribution of deceased spouse's SS "annuity"!
Now can you find for us median portfolio value of US (vs French, if you like). This document tell us that in the US the number of participants in defined contribution plans increased from 22% to 58%, 1978-2004; 401(k) Balances Generally Increase the Longer Participants Work but Still May Not Fully Fund Retirement.
The median (cumulative) asset value for "Families" of the bottom 80% income class was in 2004 $37,761. Is it reasonable to assume that value would have doubled (return roughly 200%) annually to obtain today's minimum required investment in a US federal poverty level "annuity"?
If your investment plan began in 1978, you may have contributed a total $131,873 a/o 2004. That is not to say your "annuity" is today worth $131,873 in unearned income. Although you will have continued to work (or hedge investment instruments) for another 10-death years to conserve or increase your HH income extracted from other's and your own diminishing labor input.
In short, any social security strategy cannot be funded by individual financing alone. Transfer payments are a HUGE component of a living wage, regardless of age. Diversity is the key to economic and political evolution.
It cannot work to rely on the individual if he spends too much indeed. But why would I need to have a retirement ready after only 7 years of working? My investment plan did not begin in 1978 -I was 2 at the time- but in 2001. Also, as I said I haven't contributed that much money, but my savings (that neglects my mortgage, admittedly) are around 185000€, so you don't actually need to contribute that amount to get it since you get compound interest. Also, in France we pay quite a lot of our salary to the retirement system -money that would have come on top of that otherwise.
Now, I am not typical in the least, as I have comparatively high income, and indeed my wife works (as in most households -that's how it should be). I realise that most people must manage on much less. But what makes it unsustainable is low salaries, not an actual impossibility. We tend to save 22% of our pre-tax income, because we don't believe in living on credit. My wife's parents have rather low salaries, but they save as well because when they started they had very little and know the value of things. They are both immigrants and at least my mother in law will not get a significant retirement because of that (the Laotian government will not send records of years worked before the revolution). But they will manage, because they saved.
If it were impossible to rely on savings, it would be impossible to rely on transfer. The wealth must be created somewhere. Where it must not be stored is in super volatile funds. Transfer protects you against poor management, and anyway it is terribly unfair not to have redistribution. But that does not mean it could not theoretically work, and the need for redistribution arises because some wages are too low. Reduce inequalities during the working years and the need will be much reduced. Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi
