How much of your Social Security, how much of that money is yours? (55, divorce)

[StealthRabbit]

IIRC... NONE of it (SSI) is actually YOURS. (as in a personal savings acct that you filled for yrs)

Your contributions during your working yrs were adding to the fund and paying for the then current obligations of those who retired before you. Future contributions from the future workforce will be meeting your defined withdrawal benefit... (hopefully meeting them).

This, it is a good idea to educate and inform future generations of workers, for the security of meeting your expected benefit.

It's a bit of a fragile system with Congress involved. They'll always get theirs FIRST

[Dire Wolf]

Originally Posted by StealthRabbit

IIRC... NONE of it (SSI) is actually YOURS. (as in a personal savings acct that you filled for yrs)

SSI is something different altogether. It stands for Supplemental Security Income. It is a welfare disability program. Among other things, it exists as a means-tested program for disabled people that don’t qualify (in terms of credits) for SSDI (which is part of OASDI/SS).

[GWoodle]

Originally Posted by homenj

I’ve heard that not of all your Social Security is yours. Is that true?

How much of it is accumulated from the money you paid into vs, how much of it is through someone else paying for it?

Is it like 60% your money and the rest is someone else paying into it?

I honestly want to know.

Also, if you’re on SSDI through your dad’s Social Security, how much of that money you’re getting from SSDI is from your dad’s earnings?

Thank you.

SSDI payments are different from Retirement SSI benefits. Money comes from the general FIT fund. Your dad would have worked 10 years to be eligible. A child that is blind or disabled can get SSDI benefits. You could be getting a survivor benefit from your dad's SS earnings.

SSI benefits come from a work history. In general you can have a 40 year work history where SSI counts the best 35 years. Wages from 35-40 years ago are adjusted into today's dollars. How much your taxes are depend on the job pay.

So your wages could amount to 40% and with the employer match could be another 40%. In a way total benefit depends how long you get SSI or SSDI benefit. About 90% of SS comes from the people that pay OASDI taxes. About 8% comes from interest in the government bonds SSI buys. About 2% comes from people that pay taxes on their SS income.

[moguldreamer]

Originally Posted by homenj

I’ve heard that not of all your Social Security is yours. Is that true?

Actually NONE of it is yours. It belongs to the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds. See the following website: https://www.ssa.gov/OACT/TR/2022/

[moguldreamer]

Originally Posted by LookinForMayberry

The FICA taxes you have withheld from your paycheck in part fund the SSA

True...

Originally Posted by LookinForMayberry

... which manages the account like any other investment manager.

Not really. By law, SSA trust funds can only invested in US Treasuries. Critics correctly observe this is actually one pocket of the federal government loaning money to another pocket of the federal government.

Originally Posted by LookinForMayberry

It's relatively the same as the old passbook savings model that we used to have

There is absolutely nothing similar between them.

Originally Posted by LookinForMayberry

before the banking industry started forcing us into stocks and bonds...

I don't think that word means what you think it means.

Originally Posted by LookinForMayberry

When banks still offered a useable passbook savings, they paid you interest for depositing the funds so it could be used in loans to others, who paid interest for the use.

That's the kindergarten version. The real business of banking is much, much, much more complicated.

Originally Posted by LookinForMayberry

That was before banks started making money off of making bad loans and then selling them to the junk market, and everything went down hill for working people.

Let's look at what actually happened.

The genesis of the Great Recession occurs in the 1st Clinton Administration, when Henry Cisneros was Secretary of HUD and Roberta Achtenberg was the Assistant Secretary of HUD for Fair Housing & Equal Opportunity.

During the economic boom of the 1980s, the financial model of family had been flipped on its head. In the old days (1960s and before), dad had a job, and his paycheck paid the mortgage, put food on the table, and clothed all the family members, and some of what was left went into savings for college for the kids, for retirement, for a vacation, etc. But, during the 80s, the model flipped: in most cases, a house became a family's primary source of wealth, and dad's job existed just to pay the mortgage.

Disgraced Roberta Achtenberg kept seeing families wealth going up due to residential real estate, and that bothered her. She feared poor people, and in particular poor people of color were not part of the home ownership/equity appreciation bandwagon. Poor people and specifically poor people of color were being left at the station while the prosperity train left with its white passengers.

Achtneberg, being the Assistant Secretary of HUD for Fair Housing & Equal Opportunity, launched a pan-governmental effort to increase home ownership among her constituency (poor people and specifically poor people of color). She coordinated efforts to twist the arms of banks & mortgage originators to issue more loans to people farther down the economic ladder.

Banks, responding that they were already issuing mortgages in a color-blind manner to everyone with a pulse who could reasonably be expected to pay back the loan. If they were to issue more, the mortgage originators said, each of those loans they would be forced to issue (forced in the sense of the Federal regulatory apparatus) would have a negative expected value (EV). The only way to do that would be if they could package up these smelly negative EV & sub-prime loans together with loans that had a positive expectation, and sell them off to Wall Street. The Federal Government acquiesced, and Bear Sterns became the first Wall Street Bank to securitize such a portfolio and sell slices of it off to eager investors - frequently widows & orphans and sometimes sovereign wealth funds. Those were the first CDOs. That happened in the waning days of the 1st Clinton Administration.

Bear Sterns discovered it could make huge fees foisting this government-mandated dreck & detritus off onto unsuspecting investors. So they ramped up production during the 2nd Clinton Administration. They didn't make money on the loans; they made money on the fees.

The rest, as they say, is history. True to everyone's a priori belief, those people far down the economic ladder couldn't pay back the money they had borrowed. They stiffed their mortgage holders - pension funds, university endowments, sovereign wealth funds, and the like.

Then, it all started to collapse.

But by then, the disgraced Roberta Achtenberg had left the Federal Government. The rest of the country bore the burden of her experiment where the Federal Government mandated banks and other mortgage originators to extend loans to people who could not be expected to pay them back.

There is a special place in Hell reserved for Roberta Achtenberg.

[nicet4]

I just downloaded my statement yesterday and here is my record

I paid $123,035 for Social Security and for Medicare I paid $29,286

My Employer paid $123,785 for Social Security and $28,831 for Medicare. I should add that for half my life I was self employed so I paid a large portion of both.

I started work in 1966 and here's my first five years earnings:

1966 $302 (Junior in High School)
1967 $2,716 (Graduated in June)
1968 $2,324 US Army
1969 $1,940 US Army Vietnam
1970 $4,759 (College)

I remember something about Vietnam that they didn't deduct social security from combat pay which explains why my earnings were so low for the year I was there as I remember my pay being around $330/month. Good thing about Vietnam was all the food, cigarettes and ammunition you wanted was free!

So my employer and I paid a total of $246,820.00.

My monthly social security is $3,226 before the Plan B deduction so my employer and I paid in enough for 76 1/2 months or just over 6 years and 4 months.

I have been collecting social security for 4 years and 9 months now so my "break even" point is 17 months down the road when I am 75 1/2 years old. But even that is a little off because of COLA's I didn't collect that much for the previous 4 years.

It was about eight years ago when I spread sheeted my annual contributions and what I would have had IF I would have been able to simply stick my contributions, along with my employers, into a stupid stupid simple bank passbook savings account. I looked up annual passbook interest rates, which were pretty high in the late 1970's, and the figure I came up with was right at $850,000 in a simple passbook savings account.

But with that said you need to remember social security is a lot more than just retirement. I often think of the young father of two who fell off a ladder cleaning his gutters who will never be able to walk again without a walker. Bad things happen to good people and I am happy we have the system we have to protect us from total disasters.

And then what happens if I collect my $3,300 a month and live to be 100 which is a possibility? 31*12*$3,300=$1,227,600.00! A million and a quarter dollars without the COLA increases that are sure to come!

And it is guaranteed money that I can count on. Not just me but my beautiful wife as well for she will receive my benefit (thank God) should I go to heaven before her. It is good knowing my wife might never be rich but she won't be living in poverty either.

In my opinion social security is the best system we could ask for and the "break even" points you hear about are just stupid. It shouldn't be about if you die early but what if you live to be 106?

[moguldreamer]

Originally Posted by luv4horses

Not true about having no claims to the benefit. Future enrollees may see slightly different rules but the rules that exist for you are steady.

Courts have ruled Congress has the power to change the rules for existing SS beneficiaries. Courts have ruled the SS benefit is not a vested right.

As a practical matter, Congress is not inclined to reduce SS benefits. SS benefits are called "The Third Rail of Politics" for a reason.

[Kosh55]

I don't believe we earned all of our Social Security benefits-, we receive $2100 both applying at 62.

Honestly we didn't earn that much our entire lives

We receive a free dental cleaning once a year compliments of taxpayers and taxpayers pay $100 combined for us to be on the Medicaid rolls. At least until I hit 72, then RMD's will cover our healthcare expenses with a little leftover. He will be 78 yrs old so its likely we can go until then not even seeing a Doctor. We are active, physically fit and eat right.

[Kosh55]

Originally Posted by moguldreamer

Courts have ruled Congress has the power to change the rules for existing SS beneficiaries. Courts have ruled the SS benefit is not a vested right.

As a practical matter, Congress is not inclined to reduce SS benefits. SS benefits are called "The Third Rail of Politics" for a reason.

I believe they've already planned to reduce SS benefits by as much as 30% in 2033 or so. This Ponzi scheme will run out unless something is done. I feel sorry for the young's who will see very little of their SS and the Stock Market is going to be even more rigged than it is now

People will need to learn how to supply their own needs thru farming, ranching, hunting, growing food, solar, etc

[Igor Blevin]

You can't compare the lifetime social security benefit you receive to just the principal you contributed over your working years. That is not how money works.

Money has a time value. That $100 social security deduction from your pay check in 1990 would be worth $2,000 today if you had invested it in the stock market.

So if you had $100,000 deducted from your pay over 30 years, and you die after collecting $500,000 in social security benefits, it is not as if you collected only $100,000 of "your money" and taxpayer paid for $400,000. The fact is, you probably lost money by having it deducted by the government compared to investing that $100,000 over your lifetime.

Just a reminder that money has a time vaue to it.