The Rich Get Richer - Why We Need to Reform Social Security

[michiganmoon]

Originally Posted by Willamette City

That's not actually true. Every wage earner has 6.2% of their income up to a certain amount, not all their income. It's something over 100K but not that much. If ALL income was taxed at 6.2% it would make quite a difference.

Of course.

I agree that there is a cap Most people don't hit that. I was talking about the typical middle class person that isn't making over $132,900.

Also, don't forget that the employer matches so your employer takes that into consideration when figuring out your wages. Your total compensation includes the employer match.

Originally Posted by PilgrimsProgress

Social Security benefits should be means tested. Any retired person with an annual income of $75K or more from investments and/or other sources shouldn't get Social Security. For many people who never even made $75K a year in their lives, so never had extra money to invest, SS benefits are probably all they have.

Wait.

So two people.

Jill makes $60K a year and makes the tough choice to be frugal and not chase fads, not eat out, etc...and invests 25% of her pay and after decades of working and has millions in her accounts in addition to having an equivalent of 12.4% of her paycheck dumped into social security should get crap from social security, because she can withdraw $75K a year as she lives up her golden years?

Meanwhile...

Jack makes $60K a year and blows it all on the bar on the weekend, latest fads and gizmos, starbucks everyday...is constantly in debt by choice and he gets his social security?

Why reward bad behavior and punish good behavior?

[ddeemo]

Originally Posted by AnesthesiaMD

It’s around $120k. But let me ask you, if there was no yearly cap on how much you have to pay in, is there still a cap on how much you get out when you collect?

You are taxed on amounts up to $132.9K and it is really a 12.4% tax - your employer contributes an equal amount and you contribute the full amount if self employed.

There is a cap on how much you can collect because there is a cap on the contribution. Currently, in 2019, at 62 the max is $2209/mo, $2757/mo at 65 and at 70 it is $3770/mo - to get these amounts you would need to make above the max for at least 35 years - practically no one is getting those amounts.

If earn 1/2 the max which is close to the average income in the US, your SS would be $2251/mo or $27,012/yr at 65. Someone making the max pays 2x as much payroll tax but gets only about a 15% increase.

[RunD1987]

Originally Posted by RunD1987

Should have a -

30 to 30 tax

&

40 to 40 tax

So once your income goes over $30,000 in that tax year it is taxed at 30%.

Now anyone making $.01 to $150,000 in a year is taxed an additional 5%.that goes into your SS Account. Once you go over $150,000 no longer taxed an additional 5%.

The Government deposits funds into your SS Account. The amount determined is 15% of your total income for the year. Only eligible if income is $150,000 or less for the year.

Now anyone making $.01 to $150,000 has the option to have deducted from their income an additional 1% to 10% to be deposited into their Social Security Fund.

Now everyone has access to an SS Account.

Now anyone can deduct from their SS Account once they reach 65. However, it's a 10% percent penalty and that penalty percentage will diminish by 2% until the individual reaches 70.

Now companies with 40 or less are exempt from paying corporate taxes. However, those with 40 or more employee's pay 40% in taxes. With 15% of that 40% tax going towards funding Social Security.

So with transition to the reformed Social Security. Those 60 or older currently paying taxes would have $1,500,000 deposited into their SS account if the last ten year's of year to date income does not exceed $1,500,000 and currently not receiving SS retirement funds. Anyone 50 to 60 would have $900,000 deposited into their SS account if last 10 year to date incomes don't exceed $1,500,000. 40 to 50 $500,000 again same thing with YTD income. 30 to 40 $250,000 again same thing for YTD income. $50,000 for those 20 to 30 same thing with YTD income but last 5 don't exceed $1.5 Million.

Also once you reach retirement you receive 2.5% of your SS a year and then broken down monthly from there.

Also SS income would be non-taxable at any levels of the Government.

Can continue to work after 70 but would start to receive SS income.