Concerning Social Security payments, my contributions have been made for nearly 40 years on every salary I received. I always had a job. The Social Security check is now (or soon will be) referred to as a "Federal Benefit Payment?" I'll be part of the one percent to forward this.
Well, it's probably more than 1% that forwards it — because people are dumb. Social Security payments have been called "benefits" for as long as I can remember. It's nothing new.
I am forwarding it because it touches a nerve in me, and I hope it will in you. Please keep passing it on until everyone in our country has read it. The government is now referring to our Social Security checks as a "Federal Benefit Payment." This isn't a benefit. It is our money paid out of our earned income! Not only did we all contribute to Social Security but our employers did too. It totaled 15% of our income before taxes.
One thing that I don't understand though, is what is the big objection to calling a Social Security check (more likely a direct deposit) a "benefit"?. I met the requirements by having payroll tax deductions taken out of my paychecks and I BENEFIT from my meeting of those requirements. I guess the idiots who make these up got tired of getting "entitlement" explained to them.
If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security. If you calculate the future value of your monthly investment in social security ($375/month, including both you and your employers contributions) at a meager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3+ million dollars saved! This is your personal investment. Upon retirement, if you took out only 3% per year, you'd receive $39,318 per year, or $3,277 per month.
That's almost three times more than today's average Social Security benefit of $1,230 per month, according to the Social Security Administration. (Google it – it’s a fact).
And your retirement fund would last more than 33 years (until you're 98 if you retire at age 65)! I can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.
I won't argue against the figures that indicate that privately invested money
would have yielded more retirement income than what the typical person receives
as Social Security payments, but seriously, how many people would do that?
Investing 15% of their income? Especially in the early years of lower income? Many people living paycheck-to-paycheck find it very difficult to save, let alone invest.
Even as it is, I just calculated that if I live until 80 I will receive roughly twice what I and my employers were FICA taxed over the course of my working life (51 years). I don't argue that it would be more than if invested in something like a mutual fund, but it's certainly more than if there was no Social Security.
Even as it is, I just calculated that if I live until 80 I will receive roughly twice what I and my employers were FICA taxed over the course of my working life (51 years). I don't argue that it would be more than if invested in something like a mutual fund, but it's certainly more than if there was no Social Security.
A big myth is that what we "paid in" is our money
setting in an account somewhere. The money that came out of our paychecks
immediately was used to pay people who were then receiving benefits. OUR
benefits are based on a formula that takes into account a portion of our lifetime
earnings.
Instead, the folks in Washington pulled off a bigger "Ponzi scheme" than Bernie Madoff ever did. They took our money and used it elsewhere. They forgot (oh yes, they knew) that it was OUR money they were taking. They didn't have a referendum to ask us if we wanted to lend the money to them. And they didn't pay interest on the debt they assumed. And recently they've told us that the money won't support us for very much longer.
But is it our fault they misused our investments? And now, to add insult to injury, they're calling it a "benefit", as if we never worked to earn every penny of it.
Just because they borrowed the money doesn't mean that our investments were a charity!
There's another big inaccuracy in this copy & paste job. The whole myth of "they took our money & used it elsewhere". Until just a few years ago the amount of revenue collected via FICA payroll deductions exceeded what was paid out in benefits. By law, this surplus was invested in US Treasury bonds, which paid interest into the Social Security Trust Fund (SSTF). Right now it's reversed: the benefits being paid out exceed what is coming in, so the difference is being taken out of the SSTF. The SSTF balance will be down to $0 in around 7-10 years. After that payroll deductions of current workers will cover 70-80% of benefits payments.
The whole "Congress raided Social Security myth" persists. Democrats blame the Republicans, Republicans blame the Democrats. But there's no blame needed, because it didn't happen. The Social Security Administration is required by law to invest any surplus in US Treasury Securities. This is what is meant when you hear about "the government" borrowing money from the Trust Fund. Look at what happens to your money when you deposit it in a bank. Even though there is a vault in every bank with cash in it, this does not represent all the bank's deposits. Once you put your money in a bank, a percentage of it is loaned out, and some is invested in interest-bearing securities. Currently, banks are required to have a cash reserve of 12% of assets. That means that 78% of what has been deposited in a bank isn't physically there in the form of piles of cash. It's earning its keep. This is similar, but not identical, to what happens to the surpluses in the Trust Fund. The Trust Fund, rather than sitting on a pile of cash, is freeing up the cash for current use, paying out benefits to current retirees. If, rather than investing in Treasury securities, the Trust Fund invested in private securities, it would be a similar situation, except that the cash would now be in the hands of private companies (or individuals), rather than the US Government. Having this cash in government hands, rather than private investors reduces the amount of borrowing needed to make up annual budget deficits.
Let's take a stand. We have earned our right to Social Security and Medicare. Demand that our legislators bring some sense into our government.
Find a way to keep Social Security and Medicare going for the sake of that 92% of our population who need it. Then call it what it is: Our Earned Retirement Income.
99% of people won't Cut and Paste this to their timelines. Will you?
Please, for the sake of our country, Copy & Paste. It's important. Then type Done!
This affects everyone!
I don't know what the originator of this, or other Social Security posts, intends to accomplish. The problem isn't that Congress or a past president "stole" or "borrowed without paying back" our money, it's not that your direct deposits are called benefits or entitlements. What are the people who repost or share these posts demanding be done?
In reality, what needs to be done is to find a way to make up the 20-30% gap between revenue from payroll taxes and paid benefits that will exist when the Trust Fund is depleted in 8-10 years. Increase or eliminate the income cap? Increase FICA withholding by a percentage point? Means test benefits? Something that no one yet thought of? That's what we should be getting worked up about. Not these imaginary "raids", or whining about "our" money.
Previous articles about Social Security:
https://tjpolitics.blogspot.com/2020/01/social-security-tutorial.html
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