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<Not to belabor the issue, but my point was not whether SS is double taxed, but how the perception that it is can derive from less than honest handling of the SS issue by politicians. If SS is welfare as TMFExRo stated (I tend to agree), why tax it at all? >

Going back to the original post, I would lend a sympathetic ear to grandma. However if she really wanted to get down to the core issue, she has no real complaint.

My IRA/401k has a current value of 100k. I deposited about 25k in it over the last 10 years. I can check the actual value of it any day. At 59.5 I can start withdrawing it at my choice. The risk and reward are all mine.

My most recent statement from SS says that I have paid in over 35k over the last 25 years. The total value of what my SS account has grown to is even EASIER to calculate than my IRA. It is ZERO! Over the next 20 years it will STILL be valued at ZERO.

Even TMFExRo's 88 year old father has received MANY more times in benefits than he ever paid in. That makes it a welfare system (not meant in a negative connotation). You (and your employer) pay in, but the government never "puts it away" for you. They spend it immediately and put in an IOU. Therefore, "your" money is never invested. The benefit you receive back many years later is not a return of principle and interest. If it was, many recipients would have used up their entire account years ago. Therefore, taxing a certain portion of the funds above certain limits is not unreasonable.

BRG (not counting on EVER seeing a penny of SS funds)
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