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Originally Posted by buggyone
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Figure it out. If you worked for 40 years with an average salary of $35,000, you would have contributed $105,000 (at 7.5%) to FICA. You start collecting at age 62 and live until 80. That is 18 years. The first $5,800 per year is what you contributed. I read the average SS pay check is $1600 per month. That is $19,200 per year or $13,400 MORE than what was contributed. No, your Social Security benefits are far more than what you ever paid into the system! Social Security is a form of government welfare! Quit complaining about welfare until you start returning all the excess of your Social Security check.
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I accept your calculation but Social Security is an Insurance program, just like private industry. The I in FICA is Insurance. Private insurance companies turn premiums into benefits everyday. It's their job to keep it in balance. Social Security was designed to do the same. The FICA "Premiums" are exactly like private insurance premiums. They come from after-tax dollars. On the benefit side, just like private insurance, some win, some lose.
By law Social Security must be actuarially sound. They can not borrow money. Hence, in recognition of the impending Boomer Bubble, excess contributions were collected and the system is set to pay full benefits for about the next 30 years. Sadly, most of us will no longer be around at that point.
To your point, some of us may not need the full benefit and maybe it should be limited or completely eliminated. My classic example is Ronald Reagan. When he took office at age 70, he reach max benefit and his checks automatically arrived at the White House every month. Clearly, he was entitled, since he paid the premiums all those years. But, maybe there's a better way.