Originally posted by: Kevin Lewis
That's true, whether or not David wishes to acknowledge it. I've been surprised by how many people think the government has this giant shoebox full of all the money they paid and it'll take decades to empty it.
David's been a welfare queen for a decade. Other taxpayers are supporting him.
And David supported others during his work years as he paid into the system.
Obviously. That's how it works. But he was posturing that that's not the case, and saying that he's only getting back the money he paid in.
He's not the only one who thinks that. The fact of the matter is that when the SS system was designed, the average period of benefit collection was three years. Now, it's sixteen years. So people's lifetime SS contributions are almost never enough to fund their retirement. When David gets his SS check, he's getting money that is being withheld from other people's paychecks--not his own money.
SOOOOOCIALISM!!!
Originally posted by: David Miller
Untrue. I am,not 76. The money I paid into social security has accrued interest during the years I paid into social security. The amount I curently receive comes from those monies. This is no different than money earned with a CD or a savings account.
Nope. That money was spent almost immediately. It didn't have time to accrue interest. There was no magical shoebox.
There's nothing wrong with that; the system is working. It's just important to understand that over 80% of your lifetime SS payments will be funded by other people's contributions, not yours.
In similar fashion, the payments you made when you were working went immediately to people who were on SS at the time, not to the magical shoebox. Your payments weren't set aside or invested, so they didn't accrue interest. They were spent.
Social Security benefits are paid for by a combination of taxes on employees and employers. In fact, every dollar contributed by an individual is matched by their employer's contribution. It's been 6.2% × 2 = 12.4% total for the past 4 decades.
You get all of your Social Security tax contributions back in the first two years of receiving benefits? Really?
I'd like to see the arithmetic on that.
Originally posted by: Kevin Lewis
Nope. That money was spent almost immediately. It didn't have time to accrue interest. There was no magical shoebox.
There's nothing wrong with that; the system is working. It's just important to understand that over 80% of your lifetime SS payments will be funded by other people's contributions, not yours.
In similar fashion, the payments you made when you were working went immediately to people who were on SS at the time, not to the magical shoebox. Your payments weren't set aside or invested, so they didn't accrue interest. They were spent.
For clarification for one who does not know what he is talking about (1) Social Security started in 1935 and was well founded when I first started working and paying into social security in 1965. Therefore, the funds that I contributed were not spent almost immediately. In 1977 President Jimmy Carter started "borrowing" social security funds - currently the total "borrowed" amount stands at $17.5 Billion.
Sorry, there's still no magic shoebox with your name on it.
Originally posted by: MisterPicture
You get all of your Social Security tax contributions back in the first two years of receiving benefits? Really?
I'd like to see the arithmetic on that.
On average, yes. You contribute about 1/16 of your income, up to the yearly threshold. so 32 years of employment would fund two years of retirement.
The math is a bit more complex than that, but that's the gist of it.
Originally posted by: Kevin Lewis
On average, yes. You contribute about 1/16 of your income, up to the yearly threshold. so 32 years of employment would fund two years of retirement.
The math is a bit more complex than that, but that's the gist of it.
Work 32 years and retire in your early 50's. Must be nice, but for most, it isn't realistic.
And self-employed pay about 1/8 of their income into Social Security, so they're out too.
And finally, a lot of us think that the employer contribution is effectively taken out of workers' pay, so even employees are effectively paying about 1/8 of their income into Social Security. And you know, that's the typical progressive argument for lowering payroll taxes and raising income taxes as an offset.
So I disagree with your arithmetic.
I was comparing a beheficiary's total personal contribution to his total benefit payments. Obviously, those contributions were matched by his employers' contributions. So a more nuanced way of putting it is, the first two years you get back the money you put in, then the second two years, you get the money your employers put in.
The fact that most SS recipients are collecting benefits for considerably longer than four years is why the system is sliding into deficit territory.
And by the way, the average person's total working life is indeed just a little over 30 years. Consider how many parents don't have jobs for a major portion of their lives.
