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Old 02-03-2017, 02:13 PM
 
71,592 posts, read 71,751,865 times
Reputation: 49194

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the reps are rather low paid script readers at the ss office . i never use them for advice , ever
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Old 02-03-2017, 03:07 PM
 
Location: RVA
2,165 posts, read 1,266,787 times
Reputation: 4456
Quote:
Originally Posted by DaveinMtAiry View Post
I thought about this thread as I opened my W2 a minute ago. The general feeling is with no SS we could have done much better with our own investments. Well I just looked at my 2017 SS contribution. I used that figure, compounded the sum by factoring in this same yearly contribution for the past 45 years at 5% and came up with a sum of money that when drawn at 4% is considerably lower than my estimated SS benefit. Now 5% is probably too conservative but keep in mind for nearly all of the 35 years I have on record with SS I didn't earn nearly the amount of money I do now so obviously my SS contributions were much much lower.

So it doesn't look like such a bad deal after all to me..
Exactly! Or BADA BING! The OP is in no way being reasonable in his thought process (yes, I know he is long gone), he was just a Monday morning quarterback with 20/20 hindsight. SS covers you starting at a time when you have no idea how much you will or will not make, and takes advantage of mortality credits and is income tested. Once the boomers are all dead, it will be far easier for it to be solvent. The current top heavy situation is an anomoly of population and income lopsidedness. Everyone always wishes for more. Just human nature. My wife and her employers only contributed less than $110k combined to SS & Medicare. She started collecting at 62 and by 69 she will have gotten all the principal back. Who can complain about that?
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Old 02-03-2017, 03:08 PM
 
Location: Haiku
4,082 posts, read 2,576,815 times
Reputation: 6023
Quote:
Originally Posted by DaveinMtAiry View Post

So it doesn't look like such a bad deal after all to me..
It's a great deal! It is not perfect by itself but it is a great complement to a 401k type savings plan.
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Old 02-03-2017, 04:41 PM
 
Location: SoCal
13,229 posts, read 6,335,450 times
Reputation: 9849
Quote:
Originally Posted by Larry Caldwell View Post
I did not forget to mention that.



The OP was just whining because he thought he should get a bigger check while he was still short of retirement age.
Read his post. He mentioned 62. You may have written that but your comment indicated otherwise. You wrote his number did not make sense. It did, I posted the link to maximum benefit a age 62 from SS. It was $2100 at 62.
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Old 02-03-2017, 04:41 PM
 
Location: Idaho
1,454 posts, read 1,155,436 times
Reputation: 5492
My quick comparison of the total SS payment which i will receive (for 25 years) vs my total SS contributions seemed to indicate that SS is a pretty good deal.

After reading this thread in the last few days, my number-crunching habit prompted me to dig up my SS earning record and find the OASDI (old age, survivor and disability insurance, which is more commonly referred to as Social Security) tax rate historical record

https://www.ssa.gov/oact/progdata/taxRates.html

I used the OASDI tax rates to calculate my total SS contribution which matched my SS record.

I then prepared a spreadsheet to calculate the cumulative SS contribution with different interest earning rates.

I used the current immediate annuity payment information from this website to calculate how much investment which I would have needed to obtain the same monthly income which I will get from SS at FRA

https://www.immediateannuities.com/annuity-calculators/

Based on this total needed investment, I adjusted the interest rates to see what rate was needed to obtain the same amount for my cumulative SS contribution.

I also played with different scenarios in calculating annuities for example a single female vs a married male (of the same age) with a wife 5 years younger.

It's interesting to find that for my SS contribution record, the effective interest rate was 7.95% for a single female and 8.9% for a married man. These return rates are quite impressive considered the fact that they are guaranteed.

In addition, SS is a lot more than just an 'annuity'. It is also an insurance program covering not only old age but also disability. The survivor benefit is also much better than for an annuity since it covers not only the surviving spouse but also all children under the age of 18.

Since my current SS estimate for the age of 70 is based on my 2015 income, I will have to wait until my $0 income for 2016 to be recorded to have a more accurate estimate. At least, I know that I will get 8% more per year by waiting from my FRA to 70. There is simply no better guaranteed investment return than the delayed SS benefits

Note that I did not take employers' SS contributions into account. It is extremely unlikely that my employers would have paid me more if they were not required to contribute to my SS!

Bottom line is that my calculations confirmed my impression that SS is not a crock. It is more like a crock pot simmering away the fruits of your labor giving pretty good sustenance at the end.
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Old 02-03-2017, 06:54 PM
 
Location: Midland, MI
505 posts, read 527,933 times
Reputation: 1084
Nobody should count 100% on Social Security. Set some aside yourself; the SS can just be supplemental.
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Old 02-03-2017, 09:33 PM
 
Location: RVA
2,165 posts, read 1,266,787 times
Reputation: 4456
As often mentioned, SS was never meant to be ones only retirement. But sometimes that is unavoidable. For 99% of recipients, it is still a huge percentage of their income, regardless of how much they save.
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Old 02-04-2017, 11:34 AM
 
Location: Myrtle Creek, Oregon
12,260 posts, read 12,507,549 times
Reputation: 19415
SS was intended to save the elderly from penury. Planners have always urged people to develop other means of supplementing their income when they grow to old to work.
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Old 02-04-2017, 11:43 AM
 
Location: NYC
2,910 posts, read 1,589,162 times
Reputation: 7952
Yes, if iirc before SS something like 80% of seniors lived in poverty, I know my grandmother considered it life-saving & utterly necessary.
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Old 02-04-2017, 03:59 PM
 
9,194 posts, read 9,275,870 times
Reputation: 28807
I couldn't resist posting this. Its less than two minutes long. Its the statement that FDR made when he signed the Social Security Act of 1935. He conceived of social security more broadly than as a pension for the elderly. Part of the original legislation contained provisions for the states to maintain unemployment compensation for their citizens as well. He also mentions providing for the children of deceased workers. The term "security" might include an old age pension, but it is broader than that. It was meant to help us deal with what FDR called "the vicissitudes of life".

When someone starts comparing social security to a private pension plan, your antenna should go up immediately. Never forget it does much more than that.



https://www.youtube.com/watch?v=iu1fPtPTx4o

Last edited by markg91359; 02-04-2017 at 04:30 PM..
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