No. of Recommendations: 1
Thank you for the link.

From it - "They found that every age group received a positive return. Among current workers and retirees, the rates of annual return varied by about two percentage points - from a high of 6.52 percent (for single-earning couples born in 1920) to 4.52 percent (for their counterparts born in 1985).

. . .

That is because Social Security's design includes valuable spousal features that pay benefits to nonworking spouses and surviving widows.

. . .

Lower-income workers come out ahead. Low-income workers enjoy higher rates of return by design, because Social Security's benefit formula is weighted toward lower-earning beneficiaries and their payroll tax contributions will be relatively lower."

"A projection by Favreault of Social Security data found that 82 percent of individuals who live to age 85 get back more in benefits than then pay in taxes; about 52 percent of those who die between 75 and 84 come out ahead. Meanwhile, just 21 percent of those who die between 62 and 69 get back more than they put in to the system."

So even if one lives to 85, there is still an 18% chance (slightly worse than 1 in 5) that one would get back less than the taxes paid.

And I suspect, that those making 85 and in the 18% would be dual career, high income persons.

It was not clear to me how the employer's portion of the taxes were counted in the analysis in article you linked. I am never (or rarely) willing to assume that those employer paid taxes would necessarily and automatically be paid to workers as earned income.

And if the winners under the current system are SAH spouses and lower income workers, to re-design the system to assure that everyone got back at least as much paid (as you seemed to argue earlier), without tilting the system even more, would mean "taking" from those who currently benefit most.

Regards, JAFO
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.