# I wonder how many get back what they pay to Social Security.



## rkunsaw (Nov 12, 2020)

I was looking over the Social Security website this morning.

My employers and I have paid in $132,137 over my 49 years of working.

I've been drawing Social Security for nearly 14 years and so far have draw over $302,000.

I've known many who paid in but didn't live to draw much or none at all.


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## Ken N Tx (Nov 12, 2020)

The wife and I have collected close to $300,000 (12 years), not sure what we paid in, my wife was a stay at home Wife/Mom..


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## Sunny (Nov 12, 2020)

That's a very interesting question. I have no idea.  It sounds like you did very well with Social Security, in your case, rkunsaw. Probably most people come out ahead, though those who unfortunately die young do not.  I wonder what the statistics are on this.


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## gennie (Nov 12, 2020)

Why should it matter?  Social Security is an insurance policy, not a savings account.

We pay auto insurance premiums and are grateful when we never  have to make a claim.


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## Don M. (Nov 12, 2020)

I have already received several times what I paid in, over my working career.  I started drawing out as soon as I became eligible, and if I live as long as my parents did, I may get 8 to 10 times what I paid.  There are all sorts of "recommendations" saying one should delay getting benefits until age 70, but that only works if a person lives well into their '80's, or beyond.  Personally, I see the day coming when there will be "means testing" where those with other sources of income will see their SS benefits reduced, substantially.  Where any government benefits are concerned, I believe in the "bird in hand" principle.  

Unless there is a substantial change in SS funding, that program will be in serious trouble in another decade.  Prior to that, Medicare will be in dire straits....and how the government handles Medicare will go a long way towards determining the long term viability of SS.


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## fmdog44 (Nov 12, 2020)

You have to pay income tax on SS so deduct that.


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## mathjak107 (Nov 13, 2020)

most of us get back way more  .. in fact the less you made the greater your payment is per dollar paid in . the lowest level worker gets 6x  per dollar paid in , in benefits compared to the highest earners .

plus ss passes to a spouse. odds of one in a couple seeing 90 is almost 50% and 74% one will see 85


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## mathjak107 (Nov 13, 2020)

gennie said:


> Why should it matter?  Social Security is an insurance policy, not a savings account.
> 
> We pay auto insurance premiums and are grateful when we never  have to make a claim.




not the same thing . ss is an insurance product like an annuity is an insurance product , not  like auto insurance ...we all want to collect from an annuity we bought


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## Tommy (Nov 13, 2020)

mathjak107 said:


> most of us get back way more


You're usually very good with financial numbers mathjak, so you response really surprises me.

If rkunsaw had been able to take that money and invest it prudently in the market over those 49 years rather than giving it to the government, and then leave it in the market for another 14 years (less distributions), his current balance plus total distributions would certainly add up to far more than $302K.

To get a rough idea, using an investment calculator I find that $2500 invested each year between 1957 and 2006 would have yielded something over $1,250,000 (based on DJIA).  If that $1.25M was then left untouched in the market for the next 14 years, his current value would be in excess of $2,500,000.

The federal government isn't a particularly good investor to begin with.  Then overhead and non-retirement drawdowns ensure that no SS retiree will ever even come close to breaking even.


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## Buckeye (Nov 13, 2020)

Tommy said:


> You're usually very good with financial numbers mathjak, so you response really surprises me.
> 
> If rkunsaw had been able to take that money and invest it prudently in the market over those 49 years rather than giving it to the government, and then leave it in the market for another 14 years (less distributions), his current balance plus total distributions would certainly add up to far more than $302K.
> 
> ...



The average wage in 1957 was $5,000, but the max for SS payments was $4,200 and the total rate was 4.5%, so the max payment in was $189.  Nowhere near $2,500.  Try again with real data.  

As an aside, I started indirectly receiving SS payments in 1954 as a dependent child to my widowed mother.  I'm waaaay ahead.


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## Camper6 (Nov 13, 2020)

Don M. said:


> I have already received several times what I paid in, over my working career.  I started drawing out as soon as I became eligible, and if I live as long as my parents did, I may get 8 to 10 times what I paid.  There are all sorts of "recommendations" saying one should delay getting benefits until age 70, but that only works if a person lives well into their '80's, or beyond.  Personally, I see the day coming when there will be "means testing" where those with other sources of income will see their SS benefits reduced, substantially.  Where any government benefits are concerned, I believe in the "bird in hand" principle.
> 
> Unless there is a substantial change in SS funding, that program will be in serious trouble in another decade.  Prior to that, Medicare will be in dire straits....and how the government handles Medicare will go a long way towards determining the long term viability of SS.


I don't believe in the sad stories about SS funding and such. 

We have been struggling with that for years.  It always works out somehow. 

In Canada the income tax uses "clawbacks" for people whose income doesn't warrant funding.

There's a cap on the amount of income before the clawbacks kick in.


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## Camper6 (Nov 13, 2020)

Tommy said:


> You're usually very good with financial numbers mathjak, so you response really surprises me.
> 
> If rkunsaw had been able to take that money and invest it prudently in the market over those 49 years rather than giving it to the government, and then leave it in the market for another 14 years (less distributions), his current balance plus total distributions would certainly add up to far more than $302K.
> 
> ...


But Tommy.  There is no guarantee that the market would have performed as well as it did.  That's the problem. *It's a gamble*.  The market.  And how long you will live. Both are unpredictable with certainty. 
I had money in the market.  Then the Asian market collapsed.


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## gennie (Nov 13, 2020)

mathjak107 said:


> not the same thing . ss is an insurance product like an annuity is an insurance product , not  like auto insurance ...we all want to collect from an annuity we bought


We're both wrong.  It is actually a contract between the U. S. government and it's citizens.  In an effort to prevent abject poverty in the event of another depression, the government told the people - you give me a little of your money (payroll deduction/insurance premium) while you work and I will *save it, invest it wisely, and allow it to grow*..  Then when you become old or sick and no longer able to work, I will return it to you in small, monthly increments.  

The Trust Fund would be healthy and solvent today if the government had done it's job and had also kept the payroll deduction amounts current with wages and cost of benefits.  Politicians kept adding benefits without raising the premiums/payroll deduction percentages.

The fund is not going broke because too many people are drawing so much from it.  It's because the payroll deduction percentage has not kept up with the times.

But I suspect you already know all this.


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## Lizzie00 (Nov 13, 2020)

Sunny said:


> That's a very interesting question. I have no idea.


Just an FYI if you’re interested in finding out....you can go to your account on ssa.gov and click on View Earnings Record, and then scroll to the bottom of the page....it provides Your Estimated Total Social Security Taxes Paid by both you as well as by your employer(s) on your behalf.


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## fuzzybuddy (Nov 13, 2020)

gennie said:


> Why should it matter?  Social Security is an insurance policy, not a savings account.
> 
> We pay auto insurance premiums and are grateful when we never  have to make a claim.


I don't believe that most know SS is not a "savings" plan, but as an insurance program. as Lizzie stated. The premiums payed into SS go to pay recipients today.


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## Pecos (Nov 13, 2020)

Social Security is far more than a retirement safety net. It greatly benefits widows, orphans, and the disabled and that is an extremely important reason why it needs adequate support.

As for the retirement part of it, I ran the numbers starting from the beginning of my 45 year working career, added in a reasonable fixed interest growth and concluded that it was still a reasonably good deal for me even though the government calculates the payout based on the top 35 years of earnings. So ten years of my contributions did not get entered into the calculus. Personally, I am fine with that since I greatly appreciate the overall role that Social Security plays in our society.


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## Lethe200 (Nov 13, 2020)

Social Security is a 'pay as you go' system. It does not bank your deducted funds; it uses them to pay current benefits.

As Pecos points out in post #16, it is intended for minimal financial assistance for all, including those who do not or cannot work. Like almost all government benefits, whether SS, disability, or welfare, the dollars paid out circulate through communities and actually benefit local economies in the plus category. 

Money that goes to pay rent, buy food/medicines/clothes/entertainment, etc., is what keeps an economy alive.

Money that sits in the bank or in a Wall Street portfolio does little to keep local businesses profitable and their workers employed. Small businesses are responsible for over 64% of net new private sector jobs. 98% of US export firms are small businesses. (#s from SBA administration website)

The only change I'd like to see in SS is the option to decline benefits. As Warren Buffett says, he's hardly in need of his SS benefits!


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## mathjak107 (Nov 14, 2020)

Lethe200 said:


> Social Security is a 'pay as you go' system. It does not bank your deducted funds; it uses them to pay current benefits.
> 
> As Pecos points out in post #16, it is intended for minimal financial assistance for all, including those who do not or cannot work. Like almost all government benefits, whether SS, disability, or welfare, the dollars paid out circulate through communities and actually benefit local economies in the plus category.
> 
> ...


you just don't file ...ss declined ...... like any annuity program those who die pay for those who live


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## mathjak107 (Nov 14, 2020)

Tommy said:


> You're usually very good with financial numbers mathjak, so you response really surprises me.
> 
> If rkunsaw had been able to take that money and invest it prudently in the market over those 49 years rather than giving it to the government, and then leave it in the market for another 14 years (less distributions), his current balance plus total distributions would certainly add up to far more than $302K.
> 
> ...




the gov't is not allowed to own stocks of public companies since that would be ownership by the gov't of public and private companies . so fixed income is their only choice .

ss is not an investment , it is an annuity .... its is like buying a pension not a stock market investment


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## mathjak107 (Nov 14, 2020)

fuzzybuddy said:


> I don't believe that most know SS is not a "savings" plan, but as an insurance program. as Lizzie stated. The premiums payed into SS go to pay recipients today.


ss is the best annuity money can buy ...it pays more than any annuity , it is inflation adjusted and it can pass to a spouse .


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## mathjak107 (Nov 14, 2020)

Pecos said:


> Social Security is far more than a retirement safety net. It greatly benefits widows, orphans, and the disabled and that is an extremely important reason why it needs adequate support.
> 
> As for the retirement part of it, I ran the numbers starting from the beginning of my 45 year working career, added in a reasonable fixed interest growth and concluded that it was still a reasonably good deal for me even though the government calculates the payout based on the top 35 years of earnings. So ten years of my contributions did not get entered into the calculus. Personally, I am fine with that since I greatly appreciate the overall role that Social Security plays in our society.



actually if one delays ss  to 70 and one in a couple reaches 90 which is almost a 50% chance then ss generates a 5% real return which equals a balanced portfolio


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## Butterfly (Nov 14, 2020)

fmdog44 said:


> You have to pay income tax on SS so deduct that.


Your situation as to other income determines whether you pay income tax on SS benefits received.


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## mathjak107 (Nov 14, 2020)

Butterfly said:


> Your situation as to other income determines whether you pay income tax on SS benefits received.


we actually can pay tax 2x on ss .

we are taxed on the money that goes in to fica and then if we are taxed on ss when we get it , that money is taxed again . it is like taxing a roth if your ss gets taxed .


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## Lizzie00 (Nov 14, 2020)

mathjak107 said:


> we actually can pay tax 2x on ss .
> 
> we are taxed on the money that goes in to fica and then if we are taxed on ss when we get it , that money is taxed again . it is like taxing a roth if your ss gets taxed .


Yeah...nobody ever said life is fair, but that double taxation royally stinks IMO.

And tho IRMAA doesn’t apply to me personally, IMHO it stinks just as bad.


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## mathjak107 (Nov 14, 2020)

Lizzie00 said:


> Yeah...nobody ever said life is fair, but that double taxation royally stinks IMO.
> 
> And tho IRMAA doesn’t apply to me personally, IMHO it stinks just as bad.


I got hit one year by the surcharges ...they really suck .....

the problem is seniors are getting hammered on once in a life time sales ...plus these sales , while large lump sums do not represent much income draw ....yet they will pay thousands more than a peer who simply sold pre medicare .

I can sell a million dollar property , trip the surcharge and yet the 40k that  million generates is less then a neighbor with a 40k pension yet I would pay thousands more in premiums


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## OneEyedDiva (Nov 16, 2020)

rkunsaw said:


> I was looking over the Social Security website this morning.
> 
> My employers and I have paid in $132,137 over my 49 years of working.
> 
> ...


And I think that's one of the things the SSA counts on to keep it solvent. I'm sure a lot more people pass if they wait until age 67 or 70 to collect than if they start at 62. My (half) sister was one of them. She wanted to wait until age 65 (which I think was the FRA then).  She died at age 63 and I never got the chance to meet her.


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## mathjak107 (Nov 16, 2020)

So few delay to 70 it is really a moot point..the fra points and 62 are the biggies..it increased just a bit more recently towards the later years the last decade but nothing to speak of


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## Remy (Nov 22, 2020)

Never considered this. I'm certainly not waiting until full benefit to draw. I'll take the lower amount. At exactly what age, I haven't decided.


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## Remy (Nov 22, 2020)

I'm not eligible age yet but have some of you created a social security account through the official website? I guess that would be a good way to get more detailed information. Thanks for any replies to this question.


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## Pecos (Nov 22, 2020)

Remy said:


> I'm not eligible age yet but have some of you created a social security account through the official website? I guess that would be a good way to get more detailed information. Thanks for any replies to this question.


Yes, I did and it worked pretty well. My wife did hers locally and that also went pretty well. She still wound up creating an online account.
When you do set it up, it is wise to have the deposits made to an account that you intend to hold on to for a long time. Changing bank accounts was a bit tedious for my wife.


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