OASDI/Social Security is not a financial investment
"Retirement Income Adequacy Insurance" is my own construct for a term that embodies the various missions and features of OASDI (Old Age, Survivor and Disability Insurance). Casualty insurance premiums are a better comparison for FICA taxes. The benefit obtained is protection against a risk that might never mature. Medicare is too large a topic for this post.
Social Security is a "generation transfer" so far as the needed funding is concerned. There are 3 factors which must be balanced: 1. Contributions from workers and employers. 2. Number of participants drawing benefits. 3. Adequacy of benefits once they begin.
Complexities do make it difficult for most people to see this simple fact, and there is a lot of detail and trade-off. For example, is it better for society to squeeze those over age 70 in order to allow some benefit to be paid as young as 62? Another consideration is the number of worker bees relative to those drawing benefits, and the real issue is the production of adequate goods and services to maintain quality of life. Considerations funding Medicare are similar but do involve different detail.
The OASDI trust fund is NOT like a private sector pension trust fund, it is more of a claim stabilization reserve. If the unfunded liability were calculated like a pension fund the number would be larger than the total of the stock and bond markets. Participant assets are their claims for future benefits as provided by statute, the concept of taking “their” money out of Social Security and investing it privately is meaningless.
There are similarities to a retirement program but there are social aspects that mean benefits relative to individual participant contributions are larger for lower income than higher income participants.
Rough modeling (my own work, not reviewed) of Old Age benefits at age 65 resulted in Old Age benefits that would recover the Participant's own contributions in about 3 years, but the higher income participants would not recover their own contributions until 6 or more years.
Further, when higher income participants change employers it is often the case that the sum of contributions from the two employers exceed the maximum that applies to an individual.
Further again, higher income participants are required to pay income tax on a larger portion of their benefits.
The complaint that the flat % rate of FICA tax is disingenuous at best.