Originally posted by: Nines
SS payouts are based on indexed lifetime earnings (the top 35 years) adjusted for wage inflation. The more years worked and SS FICA taxes paid, the higher the monthly benefit paid out can potentially be for a given eligible retiree. FICA taxes fund Social Security and Medicare (from separate trust funds for each).
FICA taxes collected from current workers are spent almost immediately for eligible retirees benefits.
I enjoyed your response. There are two studies that I've seen that calculated the time needed to receive back the individual contribution. Each of them had a "person" who paid the maximum into SS for their entire career and retired at their retirement age of 66. One had a "person" receiving their contribution in 4.6 years and the other study in 4.86 years. Double it to include the employer contribution. After that time, the taxpayers are paying their SS. It's so easy to calculate because at the bottom of SS statement is printed the amount contributed by the individual and the employer. I did mine and I'm presently being paid by the taxpayers. Take care.