1. People think its a lockbox where there's some account with your name on it that your money goes into that's managed and when you retire you get some annuity based off that. When in actuality today's contributors are paying off past contributors that are now drawing. There's a name for this that I can't remember
2. The rate of return is significantly lower than could be achieved in the market. The expected return throughout your life is 5%. However, for such a long time horizon, an investment into the stock market would make sense, and the long term yield there is around 10%. It's a huge difference.
If you work from 22 to 65 and contribute 5k per year, by the end you put in 220k. 5% return would be $755k while 10% return would be $3.2m
I can't understand why anyone would be opposed to re-thinking the system and moving it to private accounts that actually belong to you. Pay off the people grandfathered, but for people still contributing, let them choose. The only reason I see this not happening is that it would be a big up-front cost as we're now coming to reality that the old system was poorly structured and politicians would have egg on their face.