No. of Recommendations: 2
This analysis, so popular with wingnuts, always ignores the disability insurance that Social Security provides each and every year of the recipients life - and that once that is figured in, the "discrepancy" completely disappears.

Ok, let us do the math.

Let us take the worst case scenario, minimum wage grosses $15,000 (7.5 x 2000). FICA et al takes $1875 (yes, both sides, employer and employee).

Hard to get a quote without filling in a bunch of garbage and being inundated with emails/calls, so this link will have to suffice.

http://www.affordableinsuranceprotection.com/disability_prem...

So for $454 a year you can get $30,000 benefit. Don't know it would safe to assume $227 would get $15,000 but let us go with it. Keep in mind, this would still be an over estimation since (at least in my case) my disability benefits would be tax free because I pay my own premium.

That leaves $1648 for health insurance. Again, hard to find quotes but did find one for a $70/mon premium with a $2500 deductible for an HSA account. So the premium would be $840/yr and leave $808. Not going to cover the deductible. But being an HSA account, after 3 years and a little interest, you'd have $2500.

Admittedly a precarious position.

It wouldn't be until you made $30,000/year that the numbers work out. Now is that an argument to double minimum wage like so many are calling for? Another thread. But it does show you how little it would take to get the government out of the way.

So where would retirement come from? Not exactly a God given right to retire at 65 (or any age) nor guaranteed in the Constitution.

So let us do some more math.

Say you were unlucky enough to only make $7.50/hr for 50 years. To reproduce that income for a 25 year annuity payout, you would need a starting principle of $270,000. To accumulate that amount would take $2350/year for 50 years at 3% compound interest. Or $196/mon.

http://www.moneychimp.com/calculator/compound_interest_calcu...

Add up all the expenses and it comes to $285/mon. Very precarious for someone at minimum wage.

Still shows how low the bar is set to do better than the government.

JLC
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