Depressing letter from SSA
The Social Security Administration recently sent me a letter about how much I can expect to receive when I retire. Included was a statement about how much taxable earnings I had each year. I made the mistake of totaling up those numbers. It came to not quite $560,000 for 40 years in the work force. 
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What is depressing for me is what I have paid in.
Being self employed for the last 35 years I have paid both the employee and employer portions of SS tax. However I will not get back anymore than someone who worked for an employer and had the employer pay in half of their SS tax.0 -
I think anyone who planned to live on their SS check is in trouble. I worked under Civil Service and didn't pay into SS(IIRC I'd paid in around $900 at age 60). This caused a big upset when I became MediCare age. Not even enough SS payback to cover the MediCare premiums. I still have to pay SS on my current part time job earnings but it's somehow calculated at a different rate so within another year +/- my SS will have increased to the point of covering MediCare. 0 -
I get $1700 a month. No house payment, no car payment. Not bad. 0 -
My projected payment went up by about $100/month for each additional year I worked. Staying past earliest retirement date also allowed my other investments to compound longer and be added to. I could have retired on pension several years before I could draw social security but did not. While I did not stay to age 65, I quit at 63, it makes life a little easier. I can still afford to go to 3 or 4 gun shows each year. 0 -
SW0320 wrote:What is depressing for me is what I have paid in.
Being self employed for the last 35 years I have paid both the employee and employer portions of SS tax. However I will not get back anymore than someone who worked for an employer and had the employer pay in half of their SS tax.
The half the employer pays in is part of the employee's compensation package. The employee making the same income as you pays in the same amount as you. Why is it you would think you are entitles to more return?0 -
Mobuck wrote:I think anyone who planned to live on their SS check is in trouble.
We make it just fine on our SS checks without having to touch anything in savings. I get $2,043 per month and my wife gets a little over half that much. Just make sure everything you owe is paid off before you retire.0 -
SCOUT5 wrote:SW0320 wrote:What is depressing for me is what I have paid in.
Being self employed for the last 35 years I have paid both the employee and employer portions of SS tax. However I will not get back anymore than someone who worked for an employer and had the employer pay in half of their SS tax.
The half the employer pays in is part of the employee's compensation package. The employee making the same income as you pays in the same amount as you. Why is it you would think you are entitles to more return?
I was thinking the same thing, maybe I am misreading it. I mean, the part paid towards employee SS would just be part of business expenses, not much different from paying for any healthcare or investments for the employee. Or, even for paying for rent or electricity for that matter; just a different place to send payments to.0 -
SCOUT5 wrote:SW0320 wrote:What is depressing for me is what I have paid in.
Being self employed for the last 35 years I have paid both the employee and employer portions of SS tax. However I will not get back anymore than someone who worked for an employer and had the employer pay in half of their SS tax.
The half the employer pays in is part of the employee's compensation package. The employee making the same income as you pays in the same amount as you. Why is it you would think you are entitles to more return?
Because I paid it all in which has limited the amount I could put into retirement. The employee not having to make that extra payment can put more into retirement. Simple cash flow.0 -
SW0320 wrote:SCOUT5 wrote:SW0320 wrote:What is depressing for me is what I have paid in.
Being self employed for the last 35 years I have paid both the employee and employer portions of SS tax. However I will not get back anymore than someone who worked for an employer and had the employer pay in half of their SS tax.
The half the employer pays in is part of the employee's compensation package. The employee making the same income as you pays in the same amount as you. Why is it you would think you are entitles to more return?
Because I paid it all in which has limited the amount I could put into retirement. The employee not having to make that extra payment can put more into retirement. Simple cash flow.
Damn.
Using this logic, I paid in for between 20 and 35 employees over the past 20 years, including myself.
I should be getting a butt-load more than scheduled.0 -
I see your point, but it is just a business expense; part of the deal, the cost of doing business. Your business also pays your SS, your income would then be your "wage" which is the profit from company after all expenses, including SS portion for all. If you think of it like that, your wage is the exact same as an employee would be. I find it easier when I was self employed to not think of my business finances overall as my personal profit center. I largely let the gross income and expenses fade quickly from memory so I would then concentrate on gains/losses based solely on the net numbers. Things like taxes, electricity, fuel, SS, etc can be managed and sometimes reduced, but only to a point.
My wife works in a non profit hospital and they have a huge gross throughput of money (in the billions), but net a few million in the end which they use to squirrel away because next year may not be as good. They also sometimes need to buy new equipment. I do not see how they can work with such small margins year after year. Careful management I suppose. This is the modern world I guess in non profit healthcare.
Now, only real business I have of my own anymore is some gun buying, selling, trading. I don't do it for profit, but just to try a lot of things out. If I think of each transaction individually, I win some and lose some. But, if I again just look at the over all of "what's left", I don't pay much thought to those expenses and losses.0 -
Just pulling your chain a bit, bambihunter.
From a cost standpoint, I look at employer FICA withholding as part of cost of the employee, including myself. Just as workermans's comp, UI, and Medicare deductions.
The total contribution, employee plus employer, goes into the fund for the future benefit of the employee. From that standpoint, everyone gets the same percentage return based upon their wages.
The big picture, however, is that it is the Federal Government hiding cost of employment from employees. While many are aware of the impact on the bottom line, I would think the average employee sees the 7-odd percent as what is being paid without internalizing that the Feds are actually taking 15-odd percent of each dollar they earn. I would much prefer to see the total as a line item on the employee's pay stub. It would open some eyes as to what our friends in DC are taking from them.0 -
The thing about SS. Inflation over time can really eat away at it.
Increases in SS do not keep pace with inflation and force old folks to at times eat dog or cat foods. :ugeek: :shock:0 -
The way they calculate SS benefits is what chaps me. They calculate your average earnings and then use that amount to calculate your benefit.
Your benefit is 90% of the first $895 of your average monthly earnings, then 32% of the next $4,502 of your average monthly earnings and then 15% of everything over that.
This means that anyone who has earned more (and paid in more) gets screwed. It is like saying to someone who made less income "We will give you 15% annual rate of interest on your savings" while telling those who made more (and paid in more) "We will give you 2% annual rate of interest on your savings."
Someone who had an average annual income of $50,000 (and paid in the taxes on such) should have a SS benefit of twice that of the person who had an average annual income of $25,000 (and paid in the taxes on such).0 -
Maybe not what you had dreamed of but you probably earned every penny of it and should be proud of having accomplished a 40 year work history Wyatt Burp wrote:The Social Security Administration recently sent me a letter about how much I can expect to receive when I retire. Included was a statement about how much taxable earnings I had each year. I made the mistake of totaling up those numbers. It came to not quite $560,000 for 40 years in the work force.
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neacpa wrote:The way they calculate SS benefits is what chaps me. They calculate your average earnings and then use that amount to calculate your benefit.
Your benefit is 90% of the first $895 of your average monthly earnings, then 32% of the next $4,502 of your average monthly earnings and then 15% of everything over that.
This means that anyone who has earned more (and paid in more) gets screwed. It is like saying to someone who made less income "We will give you 15% annual rate of interest on your savings" while telling those who made more (and paid in more) "We will give you 2% annual rate of interest on your savings."
Someone who had an average annual income of $50,000 (and paid in the taxes on such) should have a SS benefit of twice that of the person who had an average annual income of $25,000 (and paid in the taxes on such).
I whole-heartedly agree with the sentiment. But, it could be argued (and likely was the original reasoning behind that schedule) that those that made the least, could afford to save the least. I think to a point that is absolutely true. But, I am constantly seeing people with zero money, living off public assistance, making the worst financial decisions just furthering their situation.0 -
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I whole-heartedly agree with the sentiment. But, it could be argued (and likely was the original reasoning behind that schedule) that those that made the least, could afford to save the least. I think to a point that is absolutely true. But, I am constantly seeing people with zero money, living off public assistance, making the worst financial decisions just furthering their situation.
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I understand the sentiment about those earning less, but this was designed to be a person's retirement supplement. Social security is probably going to be the primary retirement of 90% of the population. Welfare should be coming from the government and not from someone else's retirement.0 -
Confession of stupidity here.
When you start drawing your SS retirement- if you have other income- maybe you are still working, or have an IRA or a 401K that you are drawing income from- please note:
Up to 85% of your SS retirement is subject to income tax when you have OTHER income- but you must ask them to withhold taxes.
Dummy that I am, I musta missed that in all my reading. I planned to continue working for one year after I began drawing SS retirement. No taxes withheld from SS. Then I did my taxes. HOLY MOTHER OF DEDUCTIONS! I owed the IRS 9 grand.
Please note that my retirement income is NOT champagne and caviar aboard my private yacht. But Uncle Sugar wants his taxes on 85% of the $3k a month wife and I get. If you have not talked with your tax folks, you should. That is a bite.0 -
11b6r wrote:Then I did my taxes. HOLY MOTHER OF DEDUCTIONS! I owed the IRS 9 grand.
Back before I was old enough to where there was no limit on what I made I've went over before. You don't have to pay it back. They'll just delay sending you any more checks until that $9,000 is made up.0 -
Smitty- that was not a matter of me earning too much and having my benefits decreased. I was at full retirement age- that was the bloody INCOME taxes! 0 -
bambihunter wrote:neacpa wrote:The way they calculate SS benefits is what chaps me. They calculate your average earnings and then use that amount to calculate your benefit.
Your benefit is 90% of the first $895 of your average monthly earnings, then 32% of the next $4,502 of your average monthly earnings and then 15% of everything over that.
This means that anyone who has earned more (and paid in more) gets screwed. It is like saying to someone who made less income "We will give you 15% annual rate of interest on your savings" while telling those who made more (and paid in more) "We will give you 2% annual rate of interest on your savings."
Someone who had an average annual income of $50,000 (and paid in the taxes on such) should have a SS benefit of twice that of the person who had an average annual income of $25,000 (and paid in the taxes on such).
I whole-heartedly agree with the sentiment. But, it could be argued (and likely was the original reasoning behind that schedule) that those that made the least, could afford to save the least. I think to a point that is absolutely true. But, I am constantly seeing people with zero money, living off public assistance, making the worst financial decisions just furthering their situation.
Thus proving the value of education. Some folks seem to remain perpetual adolescents when it comes to making choices.0 -
11b6r wrote:Confession of stupidity here.
When you start drawing your SS retirement- if you have other income- maybe you are still working, or have an IRA or a 401K that you are drawing income from- please note:
Up to 85% of your SS retirement is subject to income tax when you have OTHER income- but you must ask them to withhold taxes.
Dummy that I am, I musta missed that in all my reading. I planned to continue working for one year after I began drawing SS retirement. No taxes withheld from SS. Then I did my taxes. HOLY MOTHER OF DEDUCTIONS! I owed the IRS 9 grand.
Please note that my retirement income is NOT champagne and caviar aboard my private yacht. But Uncle Sugar wants his taxes on 85% of the $3k a month wife and I get. If you have not talked with your tax folks, you should. That is a bite.
With the numbers you stated, unless your income other than the social security is around $300,000, the social security did not create a $9,000 tax burden. Not of all of the $9,000 IRS tax bill would have been due to the social security. Sure a good portion of it would have been, but not all. Your tax person could easily tell you exactly how much the SS cost you.0 -
It always amazes me how many people don't understand that FICA (Social Security) is just another income tax with different rules, laid on top of the regular graduated income tax system. Social Security benefits are no different than any other government "benefit." The more you earn, or earned, the lower your rank in the benefit side of the coin. 0 -
SW0320 wrote:What is depressing for me is what I have paid in.
Being self employed for the last 35 years I have paid both the employee and employer portions of SS tax. However I will not get back anymore than someone who worked for an employer and had the employer pay in half of their SS tax.
If your single and drop dead before 62 you get 250.00 dollars, hows that for a ripoff by Our great society and all those lying politicians in D.C.And I mean
all of them!
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As noted SS is a tax PLAIN and SIMPLE however if you make over 135K a year you get a automatic 12.6% tax cut on the money you make over the limit. Cap should have been gone a LONG time ago. The argument that the wealthier people don't get to draw a higher benefit is stupid, they also don't get food stamps. IT IS A TAX that you get a deal out of for all earnings over X 0 -
Honestly, it may not matter. I am in my late 40's and there's a good chance barring me going on disability prior, that I'll ever get anything at retirement age anyway.
But, even though I have had a lot of health issues and had to file bankruptcy years ago due to medical expenses, we have lived thrifty. We have been living well within our means since. Only thing we owe on currently is our home and we are currently paying over double our normal payments since we finally got our combined student loans paid off. I doubt I'll have much of a retirement if I live that long, but my wife should be comfortable after she sells much of my gun collection, classic car, tools, etc when combined with what we've put away and paid for ahead of time. We want to be debt free well before retirement age.0 -
bambihunter wrote:Honestly, it may not matter. I am in my late 40's and there's a good chance barring me going on disability prior, that I'll ever get anything at retirement age anyway.
I was saying the same thing 30 years ago when I was in my 40s. As soon as I was old enough I retired. If the government had kept their hands out of it and quit giving money to people that never paid into it then it would never have gone broke.0 -
It is a really depressing that The Supreme Court has established that no one has any legal right to Social Security benefits. The Court decided, in Flemming v. Nestor (1960), that "entitlement to Social Security benefits is not a contractual right". I believe another one in the past few years held up that notion. So, we are forced to pay into a system that we very well may never get anything from. I wish it were like the option to be self-insured. If you have the money, tie it in escrow certain ways, you can be self-insured for about anything including obligatory auto insurance. 0 -
Don McManus wrote:Just pulling your chain a bit, bambihunter.
From a cost standpoint, I look at employer FICA withholding as part of cost of the employee, including myself. Just as workermans's comp, UI, and Medicare deductions.
The total contribution, employee plus employer, goes into the fund for the future benefit of the employee. From that standpoint, everyone gets the same percentage return based upon their wages.
The big picture, however, is that it is the Federal Government hiding cost of employment from employees. While many are aware of the impact on the bottom line, I would think the average employee sees the 7-odd percent as what is being paid without internalizing that the Feds are actually taking 15-odd percent of each dollar they earn. I would much prefer to see the total as a line item on the employee's pay stub. It would open some eyes as to what our friends in DC are taking from them.
A better idea would be to have everyone make quarterly estimated tax payments. Then you would really see how much the Govt is taking.
I have seen many a friend go from being an employee to self employed and they are shocked about how much they have to pay in on a quarterly basis.0 -
He Dog wrote:My projected payment went up by about $100/month for each additional year I worked. Staying past earliest retirement date also allowed my other investments to compound longer and be added to. I could have retired on pension several years before I could draw social security but did not. While I did not stay to age 65, I quit at 63, it makes life a little easier. I can still afford to go to 3 or 4 gun shows each year.
Planning on something similar. Can retire out with my 30 years on a state plan at age 58, and with the field I'm in (software dev) and my "extra work" (teaching software devs and network admins how to be software devs and network admins) I figure on being able to get a job fairly easily. If not, I have an office location available in a medical park/complex at "pay the land taxes and utility bills" costs and can offer a direly needed and unique service to a captive group of 1000 or so potential customers.
SSA money will be the "fun" money for a while0 -
"We make it just fine on our SS checks without having to touch anything in savings. I get $2,043 per month and my wife gets a little over half that much. Just make sure everything you owe is paid off before you retire."
And you receive that at the whim of the Federal government. Those figures can be changed by a penstroke.0
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