Interesting Social Security Calculations
 

So I got my Social Security Statement in the mail yesterday. It shows my earnings since 1970 and how much, I and my employers, have paid. Actually, I paid it all since the "market clearing price" to employ me is what my employer paid in all wages and taxes. Anyway, collectively we've paid right about $182,000 over the last 36 years. I set up an Excel spreadsheet and used 3% passbook interest rate, which has been pretty constant since 1970. And that string of payments equals about $238,000. If I would have had those monies put into a savings account. Neglecting what it and future contributions would be worth, the SSA says they'll pay me about $1,607 if I retire at age 62, which is 9 years from now. To get just my money back with no interest (the $182,000), I have to live 9.4 years, to get the monies back that could have been earning as little as 3%, Remember, I still have 9 years before retirement, so the numbers will probably double. Such a deal huh?

Want to try it yourself? Open an Excel spread sheet, in Column A put the year, In column B put your earnings for each year from your SSA statement, in column C multiply Column B by .124, which is yours and your employers contributions, when you sum that column, you'll find it totals very close to what the SSA says you and your employer contributed over the years. In column D put in =POWER(1+i,n) where i is the interest rate (for example .03 for 3%) and n is the number of years, start at the top say for 1970 and put n=26, for 1971 n=25, and so on as you descend. In Column E mutiply Column D by Column C and sum the total. You can try any interest rate and any number of years.

You are meddling where you should not meddle. :D

How dare you question our government?!!
Where's Supe...? He'll explain it to you.

Somebody has to pay for the deadbeats who fake permanent disability, and their kids and spouses too.

I won't mention the fact that congress (re: feinstein and boxer) steals money out of social security every single year so they can pay for their pork barrel projects and to give money to all those misunderstood welfare families and crack mommas, I wouldn't want to seem uncaring.

Except to get any sort of disability benefits you have to have work credits - 20 or so. Not completely sure how it is figuered but 20 credits is a few years worth of work at least.

I don't think it is as easy as you think to get disability benefits.

I know people who have done it, and they are lazy and dumb. How hard could it be?

Once a person gets past that concience thing and accepts the concept that he or she is a worthless POS, the rest would be easy.

Now I am still in college, so I haven't even begun to pay yet, but this thread is extremely depressing to me, as I have a severe dislike for social security, and most social programs in general.

Something tells me you aren't going to be happy about where this country might go to by the time you graduate.

Well the alternative isn't much better.

Just for fun, put 10% in your spreadsheet and tell us how much money you'd have if you were allowed to invest in the market.

$538K and some change.

Like most government programs, SS had noble beginnings and will have ignoble never-endings.

Fight.

There is nothing stopping us from investing for our retirement outside of SS, except for our own lack of discipline.

Sure it's very hard to make ends meet when you're young and putting extra money aside is a hard concept, but once you start it becomes habit and you will never miss it.
When I retire I won't be relying solely on SS to get by.

Me either...whats your point, that its ok for the government to promise the moon and deliver cold pizza?

Sammy touched on it and its a good piece of advice. As soon as you enter the work force, open a savings account, put 10% of EVERY paycheck in that account and forget about it. That is YOUR tithe, that is the first bill you pay every week. It will not be much at first but it will grow with your career. Then you decide where to invest it as some time goes by. Put 10% of your income away your entire working career and you'll never even need your SS check.

Again...wtf:confused:

The system is broken, must be fixed...not for you and Sammy but for those who would benefit most.

I will never use SS other than as yet another investment source...so what.

Hugh,

You're forgetting something in your calculations. You'll most likely pay taxes on those SS checks you'll get. It does not take too much extra retirement income to have them taxed.

Capt.

Your right. So just to get what I paid in back with no interest whatsoever by payback is going to go from 9 years to about 12. This is why Bush wanted to privatize part of SS, do you think the Dems understand the value of compounded money over time? I look at these numbers and realize I should have put a lot more away. I do put it away, but its that early invested money that adds up.


Forget what I wrote earlier about the money. I revisited the numbers and corrected them. Its no where near as much money. But still significant.

Believe me guys, I will never have a reliance on a SS check...which is why I wish that I did not have to pay into the damn thing. I'm 19 and I have been saving heavily for as long as I can remember. I have just shy of 20K in the bank right now, and I am hoping to leave college with between 25K-30K.

I am currently trying to figure out some relatively low-risk alternatives to a savings account right now because I really do not need any of that money and I would like a higher yield. I had most of my money in CD's last year, which was nice for not doing anything, but I think it is time to step up to a slightly more aggressive path.

Seahawk the system is not broken, it is corrupt. until congress learns to keep their grubby paws off our money we are screwed.
They use it as a pork grab bag and I can't stop that.
What am I supposed to do? Ranting about it won't help. I vote for people with more fiscal responsibility but they rarely win the election. Instead the idiots I am forced to share this state with vote for vultures like feinstein and boxer who spend our money in a way that make Paris and Brittney look like cheapskates.
I write to my congressional and senate representatives, they don't listen.

So instead of being a perpetual victim I decide to be self-reliant and prosperous.
I deal with the issue in the most productive and logical way I know how.
In the end, I will be well off and those who do not save will be crying themselves to sleep in a cardboard box blaming others for their misfortune when they could have prevented it and did nothing. Which situation would you rather be in?

As I have stated, I don't need SS, never will...but your giving up in the face of a certain crisis is weak. The most logical and productive way is to work towards change. Whine about it all you want.

I am only giving advise to a young guy just getting out in the world.


Depend of the government to help you and you'll be in a rut.

Make plans at a young age to take care of yourself and you'll be fine.

I agree its broken and its in the governments hands to fix it which means it will stay broke.

Trillions can be spent to free Iraqi's but our baby boomers are going to be left out in the cold.

All Politicians are corrupt and they will never fix it.

SS sucks.
My mom was getting her check and then they told her that her company retirement was too high and they reduced her SS Check. My dad died, and because she was a county employee, they said she did not qualify for his portion; they kept that.

And because they did a small error for around 6 months, they are not paying her until it is reversed. No money period.

If she were alone, the government would definitely have killed her!

I am 20 years away from hitting my 62 retirement age, but I hope to start collecting at 67 and take the larger monthly amount. Now I have to figure how to keep alive from 62 to 67!!

Wow, where did that come from?
You brought it up, not me.
I already stated that I do things about it, more than most people do. I write to my congressmen on a regular basis and I vote for fiscal responsibility. How can you call that giving up?
What else would you have me do, a terrorist act or something? Walking around with a sign so everyone can think i'm a lefty wacko?
Maybe ranting and raving about it so everyone knows that I'm pissed about it? Lots of good that will do.
As long as there are greedy libs who want something for nothing, there will be people in government willing to give it to them in exchange for votes. The only place they can easily steal the money to give to those who don't deserve it is SS.

The solution is to stop giving away money to those who don't at least try to earn it. Then they will either have to knuckle down or starve, either way is fine with me but the bleeding heart left would never let that happen.
They want to turn this country into a socialist or communist state where everyone gets an even share even though they don't contribute. That might sound good on paper but if you take away the incentive to get ahead, the very small percentage of people who support everyone else will stop trying. Then you will have nothing. You can't steal from the rich if you eliminate the rich.
With no rich, everyone will be poor.

No one ever talks about taking incentive away. Another tin hat gross generalization.

There is no small group that supports everyone else. It is the spenders who support the US economy and from which we all are supported. And the spenders are all the average people buying groceries, gas, appliances, haircuts, etc. Why do you think Bush told everyone to just go out and spend? He did not want a depression along with a war.

The last statement is ludicrous. " With no rich, everyone will be poor". What a joke. So you magically make all the money in the economy disappear?

Can you imagine putting the federal government in charge of more? Health Insurance? Good god, imaging socialist paradise now! Glad to hear that in spite of the government's best attempts, your mom has pulled through.

the scariest words in the English language, : Hi I'm from the government, I'm here to help"

Government always finds a need for the money it gets

Ronald Reagan

I am so tired of my tax and SS dollars being used to support special interest programs and government leeches. There is obviously a problem with our dollars being used on a national basis, when our country is so regionalized when it comes to demographics, interests, social programs, etc. I would think one fix might be to capsulate the funds on a state-by-state basis. This way, you could choose to live in a conservative or liberal state and contribute your dollars appropriately. For example, Billings Montana just last week was reported to have the lowest personal debt of any city in the U.S. Imagine that, a little town of 100,000 people in Montana behaving responsibly. I wouldn't feel so bad paying into SS for the state of Montana when I know it's residents are serious about fiscal responsibility. On the other hand, I have paid into SS while living in California for the past 23 years. I wonder if my investment in the state of California was handled responsibly?