Skip to comments.Do SS retirees now die before collecting all their lifetime contributions?
Posted on 11/20/2008 10:38:12 AM PST by Conservababe
click here to read article
they don’t collect their ‘lifetime contributions’ because ytheir lifetime contributions are already gone. they were spend on current recipients. there IS no relation between your contributions today and your benifits tommorrow.
tommorrow’s benificiaries will be paid from tomorrow’s workers.
this is a pay as you go program, similar to a Ponzi scheme. in fact if you tried to use Social Security as a business model, you’d be jailed for fraud.
Back when, people were paying 0.5% on $2000 per year so it easy to recoup all they paid in very quickly.
Will be new condition of eligibility that you have to die have x years of collection.
Unless I live to 200, I will never break even on SS.
With every single pension or life insurance, the beneficiary is your spouse or your designated person. With Social Security your designated beneficiary is Uncle Sam!
I know, but I’m wondering about now. If you have on one side of the balance sheet the amount of lifetime contribution will the amount be depleted before your death or leave a balance that you did not receive. I know it’s all theoretical but so many retirees on SS believe they are paying much more than they receive before death.
People that contribute to the SS system do not own the money they put in. In 1959 the Supreme Court ruled that the SS system is a welfare program.
SS is a TAX- I don’t know why people don’t realize this.....oh wait- yes I do. It’s because that is the lie they started with and it’s the lie they keep repeating.
It is NOT a “savings account”, it is NOT a “retirement account”...it IS a TAX on the generation behind you. If it WERE a retirement account, you would withdraw EVERYTHING you put in, plus interest, in something like 4 years. Now since people are living 20 years beyond retirement (with that number looking to grow in the next 10 years)- we can all do the math.
Let’s start calling SS what it IS- welfare for old folks. And let’s stop treating it like some sacred cow. And for crying out loud!- start MEANS TESTING!
Yes, folks, I know SS is all those things you say. But does anyone have any stats as to whether the “tax” they pay in over a lifetime is bigger than what they receive after retirement. That is my only question today.
Wait until they take the 401k money you have invested and give you a f****** allowance from your savings back to you.
If they have their way (>200 votes in MN to remove all doubt now) no more late life big ticket purchases with “your” money like a cruise or the classic sports car you always wanted and saved for all your life.
Oh, and another thing, die young with a large balance of “your” money? No inheritance to your survivors, the entire balance will go back in the “system”, not to your family.
If someone told me I would be typing that out in all seriousness 10 years ago I would have laughed my ass off at them, now I almost do it with a tear in my eye.
They are extracting far more than they put in.
Treat SS as a “retirement program” - THEN give young workers the opportunity to opt-out of it.
You don’t want to contribute - fine, but don’t expect to collect benefits.
It’s a deal I would take.
I am not sure that is the case. If you and employer paid max SS (not medicare) tax, your libaility this year is about 13K. I know for the past decade I have maxed out and probably (hopefully) will for the next 17 years until I retire. I think I and my employer have paid close to 200k thus far and you could multiply 17 years x another maybe 15-16 k a year for another 250 k or so. Total contributions then will be around 450-500k. At age 67 I would collect about 30k p/year in todays $, so it would take me about 15-20 years to recoup my $, albeit in money worth far less than I paid, and with no interest accrual benefit.
Leaving a balance? A Balance?
Myth 2: Workers get less out of the system than they paid in
While the current Social Security payroll tax is 15.3 percent on income up to $94,200 a year (2006 figure), the tax rates and the wage base were much lower when most current retirees were working and contributing to the system. As recently as 1972, the maximum payroll tax paid (by the employee) was only $419 a year. Even including interest earned since the contributions were made, most retirees receive back significantly more than they contributed.
This may not be true for current workers, since both the tax and the wage base upon which the tax is determined have increased dramatically since the 1970s. Whether current workers will recover their entire investment will depend in part on how long they live, whether they are married and whether they earned a high or low wage.
Can’t give a stat, as I don’t know the current withholding and payot, but ...
if you know YOUR payin per month (average it if you need to), simply take this amount and multiply by 12 and then by the number of years you will pay in (47 if you start at 18 and work to 65).
Then take the monthly payout you expect to receive and multiply it by 12 and then the number of years you expect to collect.
Subtract B from A.
More class warfare. You want to means test people who have paid the maximum amount every year for 30 or 40 years and did the best they could to save for retirement? Screw that! You're no better than the thieves that are stealing that money from me today.
I would be happy to put the amount that is confiscated from my paycheck into my retirement savings. I've done that with my 401k for years...now the damn thieves are scheming to steal that too.
I know exactly what you’re asking. I don’t know the answer, but I get what you’re asking. Not sure why everyone else is misunderstanding the question.
“If you and employer paid max SS (not medicare) tax, your libaility this year is about 13,000”
Owning my own company, I pay my part and the match, have maxed out each year since leaving the US Army.
By all calculators, I get something like a negative 3% return.
Low wage earners and those who worked intermittently will have a better chance of collecting more than was seized from them. This is so because benefits are skewed toward more benefits to those who didn’t pay in as much.
Some who worked and paid the maximum over a 45 year period probably wouldn’t make it. Assume he starts at 20 and works until 65. However, someone who only worked for 40 quarters (10 years) but qualified for benefits might very well receive more than paid in.
The 62 vs 65 retirement age breakeven age is 78, I believe. If you know you will live to be 78 or older, you collect more if you wait until 65 to retire.
Notice I used the word “seized” instead of “contribution.” There is no such thing as a tax “contribution.” They don’t ask, they just take.
Older workers are much further ahead and get a much quicker pay-out if you will.
My baby daughter doesn't have an SSN yet. I could choose to not get her one, but then I'd lose out on some $3000/year in tax deductions. Since the feds get some $60,000 as a result (20 years of deductions), and get it 20 years early, and get it in pre-inflationary dollars, there really is no choice in the matter. You don't get to choose whether to contribute, just how - and they basically make it more painful to not contribute ("collecting benefits" aside) than to do so.
There really is no choice in the matter. You can choose to not opt-in (and I wish I hadn't), IF your parent's don't opt you in first (which they are hugely pressured to do).
They dont ask, they just take.
Yeah. They TAKE money out of my paycheck, and then refuse to give $3000/yr back if I don't sign my daughter up for Social Security.
If you really want to make yourself sick, do what I did one day. I got every W2 from the time I started working in 1968. Yes, I still have almost all of them.
Build an excel spreadsheet with all the SS taxes you and your employers have paid in. Then put in various assumptions for earnings for the money had you invested it yourself.
The Supreme Court ruled in Flemming v. Nestor that there is no legal right to Social Security benefits. Source: Flemming V. Nestor, 363 U.S. 603, 610�11 (1960)
FYI: Today's retirees are getting back, on average, much more than they have paid into the system. This is a Ponzi scheme. Future workers will not be so lucky.
Don’t forget: unlike money you save in your 401-K, money in ‘your SS account’ doesn’t become an asset for your estate. Instead, the government is able to remove you as a liability when you die and keep any excess contributions. Thus, as the government gets deeper into socialist programs like healthcare, they will have increasing incentives to ‘clear their books.’ That means denying you needed surgery or medication.
The question is how long will it take for a person to receive as much money from the SS-system as they paid into it. Never-mind that it’s not their money they’re getting back from the SS system. That’s a sad truth and a “given”. Rather, the question is how long will it take the average retiree to receive from the Social Security welfare system the same number of dollars that they paid in SS taxes??? It’s an interesting question.
I will be working and paying SS taxes for at least another 20 years (I’m a church pastor and will be working until I’m beyond 70 years of age). At the current SS taxation rate (I’m self employed), and assuming only a cost-of-living increase in income over the next 20 years, and at the current figure for what I will draw every month after retirement, I will have to live to be about 94 years old before I have received from the system the same number of dollars as I paid into it. That assumes I’ll get anything from the system at all ... something which I doubt.
Based upon current longevity figures, plus my family’s history, I have a good chance of making it to 94 ... and then some.
Thankfully, I am fully vested in a fantastic non-profit (Church sponsored) pension program and am making contributions to the non-profit version of the 401k ... so ... I’ll not be dependent upon SS checks for my retirement income. Frankly, I don’t expect to get any SS checks. I’m sure there will be some kind of system in-place by the time I retire to help cover health care and to provide some kind of credits for cash payments to retirees based upon the current SS system, but I don’t expect to be getting from the SS welfare system the number of dollars I paid into it. Not even close.
What people “put in” is less than what they “get out”. Exact numbers escape me, but you should periodically be getting a letter from the gov’t explaining how much YOU “put in” and how much you would “get out”, and the latter is greater than the former.
There is, however, a catch:
You don’t get out - later - what you put in. You get out what others are putting in NOW. It takes 4-5 people paying into Social Security to support 1 person getting money out of it. Problem is, the number of people capable/available of putting money in is diminishing relative to the number of people getting money out. At some point in the not too distant future, there simply will not be enough money going in to cover the money going out - and that’s when the system will collapse, and those “contributing” won’t get anything back. Sure, the FICA tax could be increased, but between that and other federal spending, you just can’t tax people at/beyond 100%.
There is no Social Security “trust fund”, “lock box”, “investment”, or whatever. Money goes in, and goes right back out.
A few years ago I read that the typical SS recipient receives in his/her first four years the amount s/he paid in ... but that doesn’t account for inflation, interest, etc. And I don’t have any documentation, it was just a point often raised when SS reform would be raised.
The question is irrelevant. All their contributions were spent the year they contributed to them. Makes no difference if they contributed $1 or $1,000,000.
Don’t forget that if you pass away before you’re old enough to start drawing SS, you get exactly $0 of the thousands that were taken from you when you worked.
An important point. A 100% tax rate is slavery in every respect. If that be true, what is a 25% tax rate? 10%? 50%?
You dont know much about SS do you? You get a monthly payment..thats it.
Most people drew out more than they put in. That’s one reason it’s going broke.
I agree the return is negative but I still think you would get your money back before you reach 200. I was using todays $ figure for payout on SS to get the 30k per year. If you use anticipated $ adjusted for inflation the number rises to 50k per year. In either event we are screwed.
If you started working in 1967 and retired in 2007 and your salary always exceeded the maximum, then over those 40 years you and your employer would have paid $ 220,012.30 into Social Security.
This makes your $1500 per month social security check look pretty lousy.
If it makes you feel any better, you can look at the bright side and see how many government bureaucrats you have employed on your dime over the past 40 years.
Social Security is no better than Las Vegas. The HOUSE keeps 90% of the players contributions.
Gotta admit I'm in that boat. Before I retired at 65 in 1998 the max SS tax I paid was something in the range of $3600 a year. I am now drawing $2,100 A MONTH. In the early days, I felt guity, now I just take the money and run - and wonder how soon taxpaying citizens will take to the streets.
Not so, you also get disability compensation if you are injured and can’t work.
I started in 1966
at end of 07 I had paid $103,500 and my employer a similar amount
this does not include the 26,800 for Medicare (also my employer paid a similar amount)
so take the $207,000 SS amount, divide by my monthly check of 1700 (age 62) and get 121 months - however SS is indexed for inflation so it would actually be a shorter time - of course this all assumes somehow my kids can put enough into the tax system to keep it alive
Both you and your employer pay into FICA (Social Security). Each half pays 6.2% with a cap of $102,000 annually. I expect Obama of either removing the cap althougher or raising the percentage rate for FICA. Either way we are gonna get hit.
Ida May Fuller (September 6, 1874 January 1975) was the first American citizen to receive a monthly benefit Social Security check. She received the check, amounting to $22.54, on January 31, 1940.
Fuller was born on a farm outside Ludlow, Vermont. She spent most of her life in Ludlow, working as a legal secretary, but lived with her niece in Brattleboro, Vermont during her last eight years. She retired in 1939, having paid just three years of payroll taxes. She received monthly Social Security checks until her death in 1975 at age 100. By the time of her death, Fuller had collected $22,888.92 from Social Security monthly benefits, compared to her contributions of $24.75 to the system.
SS is 3 or 4 things combined in one.
It's a forced retirement plan.
It's a retirement insurance plan. (If you outlive your "savings" you continue to get paid.)
It's a Cost of Living insurance plan. (Your retirement payment goes up with inflation.)
It's a welfare/insurance program for the disabled.
It's a child survivor insurance benefit program.
They really need to separate out these components and manage and report on them accordingly.
Few people actually understand this fact and even fewer believe it.
Also, very few understand that as a "tax" the Federal Government has no legal obligation to return anything to those who paid into Social Security.
Balance? ROTFLMAO. There was no balance as far back as 1964 when Ronald Reagan told us about the “trust fund” scam.
Wow...what do we have here? Michele Obama signed up on FR?
Absolutely. If you have the means to not need SS, then you are EXEMPT from PAYING as well as collecting. But I'm sure that is not what you mean, he asked testingly.