How much are you “earning” on your Social Security account?

Surprise, surprise you’re doing better than you think!

Critics who want to junk the system keep up a drumbeat of complaint. They say that you’re getting a return of only 2 percent and could do better even in a lowly bank account. They cite official Social Security reports to “prove” their story.

But they’re giving you the wrong impression. You’re hearing subtle propaganda, aimed at getting you to support or passively accept turning Social Security into a private investment system.

Here’s the truth, from the Social Security Advisory Council’s report:

Your contribution earns as much as you’d get from any investment that’s completely free of risk. You’re doing as well (or better) as you would with Treasury securities.

Also a point that’s completely ignored by Social Security’s critics the “return” on your money includes the cost of providing you with life insurance and disability insurance, as well as retirement income. Many young people don’t even know that their families have this extra government protection.

I’ve had many letters from readers asking about that “2 percent.” So let me give you the rest of the Social Security story.

It comes in four parts:

– How does Social Security calculate your “return on investment?” The method is very different from the way you track your return from stocks or bonds.

Social Security estimates a total return for every age group and income range. It starts each group at age 22 and tracks the members through the expected end of their lives. Along the way, a certain percentage of each group will become disabled and start drawing benefits.

Another percentage of the group will die. Their young children will receive Social Security benefits through age 17. Surviving spouses often get benefits, too.

Social Security assumes that the remaining group starts drawing retirement income at 65. A percentage of accounts will include benefits for a spouse. Some will provide payments to young children or an ex-spouse.

Social Security also considers rising life spans, probable wage levels and possible future payroll tax increases to maintain the current set of benefits.

So lots of things go into the calculation. You can’t compare an age group’s estimated average Social Security “return” with the investment return you might get from stocks, bonds or certificates of deposit.

Imagine subtracting the cost of life and disability insurance from your outside investment returns. If you did so, you’d have a much lower net yield.

– How good are your Social Security returns? Surprisingly good, when you consider everything that’s covered.

Take the classic (and almost mythical) married couple, with two children born when the parents were in their 20s. Assume, for each, the average lifetime income now earned by women and men.

Social Security calculates their “real” return that is, the amount they get after subtracting inflation. For this group, real returns range from 2 percent to 3 percent, depending on the age group.

By comparison, look at 10-year Treasury notes. New investors are currently earning around 5.2 percent. Inflation is running at 3.3 percent. After inflation, the real return on Treasuries is just 1.9 percent.

Social Security not only pays these couples a little more, it also effectively throws in life and disability insurance “free.”

– What about groups other than the mythical average married couple? Today’s teen-agers will earn closer to 2 percent real, if they start families when they’re young. Today’s middle-aged couples with teen-age children are earning closer to 3 percent.

One-earner couples get higher Social Security returns. That’s because only one person contributes while two or more people are eligible for benefits. Their average returns range from 3 percent to 4 percent after inflation up to twice what Treasuries currently pay.

People who never marry get lower returns that couples do. People with lower incomes get more than higher-income people do.

Again, that’s on average. Individually, we never know in advance which of Social Security’s benefits we’re going to use. That’s what makes it an insurance, not an investment, program. You’ve bought a safety net to protect against death, disability or insufficient retirement income.

– What is Social Security earning on its current surplus? Today’s surplus (or “trust fund”) is being credited with 5.6 percent interest more than Treasury notes pay.

Funny that opponents are kicking Social Security around. If it really was a pure investment, buyers would be flocking in.

Syndicated columnist Jane Bryant Quinn can be reached in care of the Washington Post Writers Group, 1150 15th St., Washington D.C. 20071-9200.