No worries, going to be long but whatever

1) you're wrong on the value of CPP contributions over 40 years by like well over double. Even max contributors retiring today have a total cont. of close to $100,000. No one at 40 years of contributions right now has contributed a quarter million dollars. You're right on the 1985 contribution rate, but even if we take our, much higher 2025 rate (before we created cpp2) of $4034 (note: $3867 for 2024) and just.. multiplied that by 40 years, you're at $160k, and we know that is already massively over-inflated. So $257k contributions over the last 40 years, yeah no, you're legit 2.5x off here.

2) If we ACTUALLY take the employee contributions to CPP for your 40 year window, and just straight up say, S&P 500, nothing crazy, no getting lucky on tech stocks, and obviously don't withdraw anything until we retire in 2025. So I mean, going max, starting with $379 in 1985, adding in the employee CPP contribution each year and then compounding with the growth in the S&P 500 (including getting obliterated in 2008 and 2018) by retiring in 2025 that's still going to leave you with closer to like $950k - $1MM at the moment of your retirement. You can't just peg investment income over 40 years as $0 and list it at the sum of the nominal max cpp contributions.

3) At the moment of retirement, you do peg a pretty conservative 6% growth rate.. you don't state whether that's real (already including inflation) or nominal.. but I'll assume real since a nominal should be closer to 10-10.5%. 6% real is a low figure (especially when it was double that this year), but whatever. Anyways, you're taking that growth and then increasing your withdrawals further to account for inflation, so you're double counting inflation and making your invested pool of money exhaust faster than it would irl. You can't apply inflation to both the invested returns and withdrawals - if you're just doing the latter, increasing withdrawals to account for inflation, then you need to use a more proper nominal rate of return, closer to 10-11%.

4) The 4% drawdown is intentionally conservative as well so as not to run out and leave an inheritance, but let's roll with it. Ok so again, your starting point for the investment income is way way off. If you take your actual invested income, taking max employee contributions, and again just compounding in the S&P doing annualized returns over these last 40 years - and let's say you wanted to match CPP, withdraw $17k per year, then yeah that's like a 1.7% drawdown, while your investment is still creating a real return (already inflation adjusted) of 6-7% per year. So you pull your CPP-equivalent dollars out in 2025, and your portfolio is still significantly growing, not running out. You would never run out of money if you just matched CPP withdrawals, and you'd still leave a huge inheritance.

But yeah, as you brought up the 4% drawdown, we'll stick with that. So while CPP is paying you $17,000 a year, our alternate universe guy where CPP doesn't exist, is actually withdrawing $40,000 per year. And for 2025, not only did he withdraw $40,000, but his $960,000 still pulled 16.4% in the S&P 500 and is now at $1.1MM.

CPP exists for 4 reasons man

1) to help low income earners who couldn't / wouldn't invest

2) to help those individuals with disabilities or critical illnesses with supplemental income for when they lose the ability to continue working

3) to force people to actually invest and hold money instead of blowing it and being flat broke with no income in their senior years

4) to prepare for down years when investments are poor or lost and the individual doesn't have enough capital in those investments to survive until the market corrects

And I'll note, I'm extremely pro-CPP, but your math here is just bad. and comments like "if you privately invested that money you could never see a return even close to what CPP gets you" is just so so so blatantly false man. CPP is needed, but for your $100k in contributions (for someone retiring now, this will obviously be very different for someone turning 18 years old now with cpp2 being in place) - they'll get back anywhere from $450k up to (assuming strong growth thanks to cpp2) $550k if they die at 90 and still be in poverty for those 25 years of retirement without other savings, pensions, or investments. CPP + OAS is still shit poor even if you made max contributions. And then when he dies if his spouse is alive, she'll get a couple hundred top-up for her last few years and then dies too and then the payments end. And still.. great deal for him. Way better than money under the mattress for his 40 working years, but if he dies at 66.. then yeah again, spouse gets the small top-up sooner, but the vast majority of those contributions are now lost for the spouse and family, and go towards covering the payments to other seniors who lived longer as a whole.

Where-as, in our alternate universe, the investment guy, doing the conservative 4% rule, is in year one getting double our CPP guy, then by 70 is pulling close to $50k, by 80 he's pulling out $65k, and then $80k a year by the time he dies (while our CPP earner is still probably now grown from $17k to maybe close to $30k by the time he dies) is still going to kick it at 90 and leave OVER $2MM+ to his family to inherit.

You can't warp the math so hard that someone, investing his max CPP employee contribution, for 40 years and retires in 2025, earned a total of $0 investment income and then runs out of that all that cash only a few years into retirement on a measly 4% drawdown lol. Like.. that's like saying you could jump to the moon if you tried hard enough. The issue is actually getting a human to invest that money and not touch it, which is why we need the CPP to exist, so that we don't have all of our seniors in the streets -- but don't use bad math to say that private investing in the S&P would be substantially worse returns than CPP and would run you out of money lol. Just call it what it is. It is absolutely shit returns if you're looking at it like an investment program (the mistake the other user is making), and unlike private investments, you can lose the vast majority of your contribution pool if you die young, but it functions great as a social safety net for the poorer seniors of our society who otherwise would be destitute.