Our Gov't
 

The Social Security check is now (or soon will be) referred to as a "Federal Benefit Payment?" I'll be part of the one percent to forward this. I am forwarding it because it touches a nerve in me, and I hope it will in you. Please keep passing it on until everyone in our country has read it.
The government is now referring to our Social Security checks as a "Federal Benefit Payment." This isn't a benefit. It is our money paid out of our earned income! Not only did we all contribute to Social Security, but our employers did too. It totaled 15% of our income before taxes.
If you averaged $30K per year over your working life, that's close to $180,000 invested in Social Security.
If you calculate the future value of your monthly investment in social security ($375/month, including both you and your employers' contributions) at a meager 1% interest rate compounded monthly, after 40 years of working you'd have more than $1.3+ million dollars saved!
This is your personal investment. Upon retirement, if you took out only 3% per year, you'd receive $39,318 per year, or $3,277 per month.
That's almost three times more than today's average Social Security benefit of $1,230 per month, according to the Social Security Administration. (Google it – it’s a fact).
And your retirement fund would last more than 33 years (until you're 98 if you retire at age 65)! I can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.
Instead, the folks in Washington pulled off a bigger "Ponzi scheme" than Bernie Madoff ever did. They took our money and used it elsewhere. They forgot (oh yes, they knew) that it was OUR money they were taking. They didn't have a referendum to ask us if we wanted to lend the money to them. And they didn't pay interest on the debt they assumed. And recently they've told us that the money won't support us for very much longer.
But is it our fault they misused our investments? And now, to add insult to injury, they're calling it a "benefit", as if we never worked to earn every penny of it.
Just because they borrowed the money doesn't mean that our investments were a charity!
Let's take a stand. We have earned our right to Social Security and Medicare. Demand that our legislators bring some sense into our government.
Find a way to keep Social Security and Medicare going for the sake of that 92% of our population who need it.
Then call it what it is: Our Earned Retirement Income.
99% of people won't SHARE this. Will you?
This Blew My Mind

https://scontent-mia3-2.xx.fbcdn.net...5Q&oe=640331E0

Fact - While it is true that Social Security checks are referred to as federal benefits, this is not a recent development. In fact, Social Security payments have been called "benefits" for the entirety of their existence, with retirement payments first identified in the Social Security Act of 1935 as "Old-Age Benefit Payments." by USA Today

I don’t care what they call it as long as it’s still available when I’m ready to collect.

Some pretty bad math in there.

Agreed. It is beyond bad math - it is a bad premise. In order to achieve the payment plan illustrated one needs to contribute 30 years before withdrawal starts. Social Security started paying out soon after becoming law thus the money coming in was immediately funneled back out without time (IE 30 years) to be accrued. Second point it also provides income for people who may have put no or little money in the pot such as disabled, widowed, etc. Finally like it or not it is just what the title proclaims - a SOCIAL program not an individual bank account.

OP, if the Government sent you a bill for $98,000 for every person in your family, to pay off the National debt, would you pay it?

Less than 40% of working individuals are invested in retirement plans like 401k’s or IRA’s. Only 21% of working people are covered by Company pension plans.
Gratification for most is purchasing the latest greatest tv than investing money or savings.

What's the difference what they call it as it's still green money.

There is a lot of stuff in the original post that isn't correct. I actually took a look at this a while back. Here are some numbers to ponder:

I'll consider one of the fringe scenarios for kicks. Assume you retired today at age 70 after working for yourself for 35 years and you were at the SS max tax for the last 35 years. I'll ignore any less than max tax contributions when you were younger (that could be a non insignificant amount). This would amount to $386K in tax paid. If you computed the future value of that assuming 7.5%, you would have $1.3M. If you started taking a "safe" withdrawal of 4% from this future value pool of money you could withdraw about $54K per year. Your social security benefit would be about $55K per year. A wash. If you dropped dead tomorrow, your heirs would inherit the $1.3M but with SS the benefit stops. If you wind up collecting SS benefits for a long enough period of time then you might wind up better off with the SS benefits than the pot of money, depending on how it is invested.

I don't think anyone doubts that you could do better by investing the money yourself. However, that is not the point. SS is a "pay as you go" safety net and we all participate as part of society. Congress does need to fix SS as the trust fund will be depleted in about 11 years and the benefit will be reduced about 25%, IIRC. Fortunately, the steps needed to fix SS are clear. Unfortunately, any attempts to do what needs to be done gets labeled as wanting to eliminate SS and our less than informed electorate doesn't understand the issues.

If you do the same calculation using the lowest income level, you will find that the Social Security benefits would greatly exceed the investment potential for the individual. That is because the Social Security system is a wealth transfer system, and it was never designed to benefit all participants equally.

Agreed. I was trying to address the scenario that people are getting royally screwed.

Given that 99.2% of social security checks are direct deposit, what it says on the check is not of much interest.

This "chain letter" has been going around since at least July 2012, over 10 years ago. It was untrue then, and it's untrue now.

Social Security as 'Federal Benefit Payments' | Snopes.com

If you do the math (I have) you get back what you put in around 5 years (or so) after you start collecting.

Your exactly right. Thanks for posting. It is very insulting to honest, tax paying citizens. Not to mention it’s taxed, so it’s double taxation. I’ll never receive what I and my employer has put in, back out. Our Government, especially with our current, “out of control spending” administration is a dangerous joke.

Well, it's all semantics. Technically, it's NOT your money. If it was, you could put it in your will and bequeath it to your kids. But, if you die before collecting, you get nothing (example). Also, everything you (and everyone else) ever paid has already been stolen and spent. Social security (FICA) taxes have been dumped into the general fund for decades and spent on everything from defense to missiles to food stamps to housing for illegal immigrants. It's all gone. There is no trust fund ... no lock box. It's all an accounting trick.

All you have is a promise to get payments from future taxes (and debt). The US Dollar is being destroyed and those payments will eventually be worthless. I encourage all to find / read a book "When money dies" by Adam Ferguson. This house of cards will fall / fail. The dollar and the USA will collapse. Inflation and debt are past the point of no return. This can no longer be fixed - it is a mathematical certainty. The social consequences will be catastrophic.

Think for a moment. If your money becomes worthless, how will you acquire your needs? When the dung comes in contact with the rotating blades, are you ready? If the dollar isn't accepted for food, how will you acquire food. Food shortages are already evident around you. You can live without money, silver, gold. You can not live without food & water.

What they call your social security payments is the least of your concerns.

Since your employer contributed the same amount it's about 10 years to get back all that was contributed in your name. I plan to collect for at least 20 years so not a bad deal for me.

And what happens to the money for those who die and never collected?.

So glad I am retired and receiving benefits no matter what it is called

There is a trust fund and it has just shy of $3T in a special form of Government Treasuries. The Government can only invest the excess FICA taxes in Treasuries. Yes, the excess money (FICA taxes collected in excess of benefits paid) did go into the general fund - that is how the Government works - but SS got credit for the excess plus interest, it is called the Trust Fund. Nobody stole anything. The Trust Fund is essentially a guarantee that the Government will borrow $3T on the global markets to help pay benefits. We are just now getting to the point where FICA taxes don't cover the benefits and SS will start cashing in the Trust Fund to make up the difference. The current and future debt is clearly not an optimal situation. I'm sorry you consider the situation hopeless. Not everyone shares your pessimism.

SS is not an investment plan. It is a "pay as you go plan".

Math error
 

Math error. We Pay 6.2% and company pays 6.2%= 12.4%

12.4% of 30k is 3720 per year. For 40 years that is 149,000. That is how much paid in. Then figure assumed interest. NOT 1.3 MIL

A lot of inaccuracies. The people working now pay for the SS checks elders get today. The money you paid 30 years ago does not go into a holding area just for you, it paid for all the retired people’s SS checks and congress stole the rest to pay for their spending.
If they would have asked me to choose pay into social security or invest it yourself, I would never give the government the money, I would be much better off investing my money myself. If you invest $500 a month in your 20’s, you would have $1.5M in your 60’s, and if you raised your contribution from $500 a month to say $1000 or more when you make more money in your 40’s, you would have much more than $1.5M. I would have to live to 150 years old to get what I paid into SS

Wrong premise. Social Security was never a "retirement program." The payees (all of us) were never putting money aside for later.

From the very beginning in 1935, the program was envisioned as current workers paying into a fund that provided benefit for current retirees. My money didn't pay for my retirement; it paid for my parents' retirement.

So yes, all of us on Social Security are actually receiving a federal benefit. We're part of the majority. It was 12 years ago, in 2011, that the number of people receiving federal benefits exceeded 50% of the population.

Some more interesting facts and corrections. The word "All" should not be in the OP comments. Example, I for one lived in a state, and not sure if all states are the same, where I received a public pension. Contributions were about the same, 1/2 by employer, 1/2 by employee. We could not participate in SS, unless we had a second job in the private sector. But even then your SS benefit was discounted by approx 50%, if you were a public pensioned employee. Kind of discouraged you from getting a second job. So I never got SS. Which, by the way you need to get medicare. I only got medicare as a result of what they (SS) call piggy backing on your spouse. So, not everyone gets medicare, those that did not qualify for SS and were never married have to continue to buy health coverage through their employee. Many changes, including this one came out during the Reagan SS reform act.

And if I don't break even at the end I will still consider myself a winner being lucky enough to help others that need assistance much worse than me.

The math is totally wrong. Social Security pays for retirement, widows, widowers, minor children of retired or disabled recipients and the disabled. If a person self funded their own retirement they would also have to make insurance premium payments to cover all of the other coverages that Social Security pays out on. Self funded retirement examples need to take that into account before you start saying which plan is better for people in society. If you argue a point you need to use math and not some pie in the sky made up examples.

It's a tremendous benefit for those who have spouses drawing on their SS earnings that have never paid a dime into the system for SS or Medicare. How much has this accelerated the system going bankrupt? Also, multiple ex-spouses being able to draw on an individual's account as long as they were married 10 years. I wish I could just ignore this fact but every time I hear that my benefits are going to expire I can't help but think how the politicians will never address this part of the system because it will cost them votes.

As I am preparing to do this year‘s fed taxes it hurts even more when filing on 1099 income. I’m both the filer and the company 😡

I agree, and there is no limit on the number of ex-spouses who can collect. As long as the marriage lasted 10 years, the ex-spouses can receive a Social Security check.

“ Social Security isn't a savings plan or an investment scheme; it's an Old-Age, Survivors, and Disability Insurance (OASDI) program intended to ensure that Americans are guaranteed a minimum monthly payment in their non-working years. As with all insurance programs, some people will eventually receive less than they paid in, and others will receive more.”

“ Likewise, the word "entitlement" has long been the standard terminology for payments made under government programs that guarantee and provide benefits to particular groups. Persons who have demonstrated their eligibility to claim such payments are entitled (i.e., "qualified for by right according to law") to receive them. The usage has nothing to do with pejorative connotations associated with the word (e.g., "a sense of entitlement") which are often applied to denote people expecting or demanding something they do not merit.”

As for “double taxation,” most states have state income tax as well as federal income tax, so it seems that “double taxation” is legal. Most also have sales taxes, even though you pay with doubly-taxed money. So I guess most people are triply-taxed. In Florida, we are only doubly-taxed. But your “Social Security Contribution” when you were working was taken out BEFORE taxes, so it has NOT been taxed. I would love a law that says Social Security income will not be taxed, but I still paid a third of mine in taxes last year. I had to borrow money from my retirement savings last year to pay that, and I had to pay an additional 20% on what I took out.
Social Security as 'Federal Benefit Payments' | Snopes.com

Wow someone who actually speaks the truth about social security. So many here in the Villages think as we the op that they are just getting their money back.

Unfortunately, this is true! For working folks, at least the government is looking out for you as you retire and regain some benefits even though they are yours to begin with. Money management should be a required high school course to help others understand the way to invest so that your social security payments are a perk rather than a necessity for your retirement survival. Thankfully this program is in place no matter what it’s called or we could have a mess of a society keeping the uninformed functioning without a form of forced savings such as social security.

If I had the resources to pay it, I would.

Okay - I'll bite...the words "Federal Benefit" set you off, but the word "Social" as in Socialism resonates well with you? Just curious to get the thought process there...

So, any time you use the word "social", you're referring to "socialism"?

That's a pretty far stretch...

Ice Cream Social
Social Distancing
Social Etiquette
Social Gathering
Social Ladder
Social Anxiety
Social Event
Social Norms
Social Network
Social Visit
Social Ties
Social Group
Social Circles...

Are they all tied to "Socialism"?

Your math is way off - first the social security portion is 12.4%, the other 2.9% is medicare. Second the rates were much lower in prior years and the maximum social security wages limits were much lower. As an example in 1962 the wage limit was $4,800 and the social security rate was 2% (each) so total employer and employee contribution to the system was $192.00 You would be surprised how little you contributed for the benefits you receive if you live a reasonable time.

The problem is people are living longer. - a problem for SS funding. Originally five people contributed to 1 retiree. Now the ratio of people working to retirees is much much lower.

I read about five years that the effective growth rate on social security was about 1.75% per year - a poor investment but in some cases forcing people to make any investment for retirement is a godsend considering left to them they would have had no "benefits:

Vote them out!

Agree
 

Things went bad a long time ago the government moved our SSA funds to the general pool. That was the beginning of the end.

No, the Ice Cream Social at your next club meeting is not Socialism, however Social Security is. Social Security is a government-run pension system that cuts out private money managers (aka the capitalist market). Medicare — a single-payer, government-run health insurance program is as well. Minimum wage, maximum hours and child labor laws are also "socialist" programs as again, by definition, they are government intervention in the capitalist market to require employers to meet minimum standards that might not be met in a pure, unregulated “free” market economy. You can not like the word, but the structure of these programs is Socialism and the word "Social" in Social Security is that definition not Ice Cream Social which is the shortening of the word Sociable.