Originally posted by babybunnies
reply to post by Eurisko2012
Sorry, but the days of retiring at 65 are long gone, at least for my generation. 65 was instituted with social security in the 1930's in most
instances, when most people died before they were 70. Now, people are on social security for 30 years or more, and actively healthy way into their
late 70's.
I'm only 43 (today !), but I feel that by the time I retire it won't be until I'm 75 or 80. It's no wonder social security is going broke, when we
expect people to work from the time their 22/23 (allowing for time in University) until their 65, pay a very small percentage into social
security, then claim it for potentially the next 30 - 40 years at full rate. It simply doesn't make sense any more.
I normally let this slide, because I have already stated it and honestly I feel it will fall on deaf ears.
But, the hell with it, the FICA lesson for today:
FICA is 12.4% (You pay 6.2% and your employer pays 6.2%. If you are self employed, you pay the whole 12.4%)
Lets say one makes $40,000 a year for 42 years (start at 23 end at 65). For simplicity, no raises, bonuses etc.
12.4% @ 40,000 = $4960 per year * 42 years = $208,320
Now the government "borrows" this money with interest (although I doubt they will ever pay it back), so lets add yearly compounded interest at a
conservative 3%.
$419,040.11 is that " very small percentage into social security" you mentioned.
The real reason SS is going broke is the the US government has not paid back one dime on the money they "borrowed" from SS, which just happens to be
all the surplus collected over what they pay out in benefits.
Now the Feds are talking about cutting or stopping SS, and it has nothing to do with its costs as it has been in surplus since inception and continues
to this day.
The debt is coming due as the ratio reverses (baby boom retirements), and they do not want to pay.
Sorry, just a pet peeve of mine when people think that they contribute so little to SS and shortchange themselves, while the Federal government tries
to make their debt to the American people disappear with a simple slight of hand trick.
edit on 11-8-2012 by Dreamwatcher because:
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