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Author: alchook Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75898  
Subject: Re: Future of retirement Date: 9/18/2011 12:16 PM
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I'm not sure why the first link showed higher values up to $150k

The table in your link was making assumptions on benefits based on income in the years close to retirement age. Your benefits are based on the average of your 35 highest earning years. So the estimate is made assuming that a person earning just enough to make the maximum contribution in the near retirement years probably didn't do that for 35 years. A person making $150K a year will have made the maximum contribution for most of those 35 years and will thus have contributed more over those years than one earning $110K.

Your overall point is well taken and often forgotten in the discussions on these boards. There is a certain sense of outrage that Social Security taxes are capped. What's generally ignored is that the benefits are capped as well.

Furthermore, the benefits are progressive in that they replace a larger percentage of a lower earner's income than a higher earner's.

This was, of course, the original design of Social Security. It was meant to benefit everyone rather than to function as a welfare program.
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