[Hugh R]

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.