We also have government run nursing homes and plenty of destitute old people live in them. But, even for a selfish person SS is not exactly a terrible idea. Consider, pensions and SS have a huge benefit over traditional forms of investing.
Imagine setting one up a pension for a group of savvy investors. As you near retirement you pool your money with 10,000 other people and all split the dividend each month (based on what % you put in). As people start to die off there is a smaller pool of receptions who keep getting a larger monthly check. Granted you lose the ability to give money to your spouse/children when you die, but you don't need to worry about outliving your savings. (Assuming the fund is not mismanaged etc.)
PS: There are many problems with SS, but when you consider it's inflation adjusted it represents a vary large and vary safe investment. (Run a Monte Carlo Analysis assuming you are only willing to accept a 1% risk of running out of money at 100 and a safe retirement takes a huge nest egg.)
That structure is often called a Tontine. It's illegal, because after a while it's basically a massive monetary reward for offing your fellow investors.
Yep, that's a major bug with the simple implementation.
The simple solution is to cap the benefit and and use a large enough pool that no single death ever makes a big difference on it's own. Which gives you something like "Long Term Care Insurance" is basic a bet that you will live long enough to need it, which is subsidized by those who don't. The benefit is also fairly small so a reasonably large company is not going to try and collect.
Imagine setting one up a pension for a group of savvy investors. As you near retirement you pool your money with 10,000 other people and all split the dividend each month (based on what % you put in). As people start to die off there is a smaller pool of receptions who keep getting a larger monthly check. Granted you lose the ability to give money to your spouse/children when you die, but you don't need to worry about outliving your savings. (Assuming the fund is not mismanaged etc.)
PS: There are many problems with SS, but when you consider it's inflation adjusted it represents a vary large and vary safe investment. (Run a Monte Carlo Analysis assuming you are only willing to accept a 1% risk of running out of money at 100 and a safe retirement takes a huge nest egg.)