[jimbomaybe]

Originally Posted by biker1

A couple of years ago I put together a quick spreadsheet to figure out the future value of my SS contributions (both mine and my employer's). I assumed 7.5% return each year. I should have used an actual stock market index return - maybe I'll go back and do that. Regardless, the future value turned out to be approximately 5x what was put in. Assuming a withdrawal rate of 5%, it would provide me about 30% more than my SS benefit.

The numbers don't lie, the markets represent the hard work , creativity of the business system that is forever working to be more efficient, profit = productivity, productivity makes your standard of living . yes there are ups and downs in the markets and as you get closer to retirement you reallocate to a more conservative stance , the common sense , pragmatic idea of investing is lost on many so your government set up a welfare program , SS that pays out more than just retirement benefits, no thinking ' no discipline, just spend your money on all the shiny objects you see, your future taken care of by someone else, your government , setting up a system that is not sustainable , that's ok it will be a problem for somebody else . If you think SS was going to be your sole retirement income you were looking at a very meager standard of living , but then you were not looking too deep

[Rainger99]

Originally Posted by Bill14564

An individual who retired with an above average salary would have achieved just under $1M, not multi-millions.

I asked AI to use the average income (about $66,000) and to invest it for 43 years (age 22 to 65) at various rates of return.

According to AI, investing 15% of the average income annually at a 7% return for 43 years could grow to approximately $2.81 million.

A more conservative return (e.g., 6%) would yield around $2.2 million, while a higher return (e.g., 10%) could push it toward $4.5 million.

If the worker made $33,000 a year, a 7% return for 43 years could grow to approximately $1.39 million.

A more conservative return (e.g., 6%) would yield around $1.09 million, while a higher return (e.g., 10%) could reach about $2.23 million.

[Rainger99]

Originally Posted by jimhoward

If a percent of workers salary and an employer match are to be invested in the stock market and the resulting nest egg earmarked specifically for them, as some have suggested, why have a SSI program at all? Workers could just do that themselves. That is what a 401k does.

Despite complaints from those who have done the math and figured out they would have done better investing on their own, social security remains one of the most successful and popular government programs in history.

The good thing about a 401(k) is that if a single person dies at 62, the money goes to his heirs.

If a single person dies at 62, social security stops. If he dies before 62, he doesn’t get a penny of social security.

[Blueblaze]

Originally Posted by jimhoward

If a percent of workers salary and an employer match are to be invested in the stock market and the resulting nest egg earmarked specifically for them, as some have suggested, why have a SSI program at all? Workers could just do that themselves. That is what a 401k does.

Despite complaints from those who have done the math and figured out they would have done better investing on their own, social security remains one of the most successful and popular government programs in history.

Why have a forced retirement system at all? Because most people are idiots who will not save for their old age, and then the rest of us wind up having to bail them out.

SS is "successful" because those same idiots who won't save for the future can't do math and don't realize how much that Ponzi scheme cost them, so SS just looks like "free stuff" -- to an idiot.

I'm not saying we shouldn't force people to save for their old age. I'm not even saying they have to learn high finance and self-direct their investments. I'm just saying we ought to invest the money in real assets and not just some stupid Ponzi promise that only works when old people die quickly.

And I'm saying that the solution to paying off all of us previous victims is to make the wealthy chip in at some rational fraction of that 15% of our lives that this stupid scam has already cost us normal folks.

[Bill14564]

Originally Posted by Rainger99

I asked AI to use the average income (about $66,000) and to invest it for 43 years (age 22 to 65) at various rates of return.

According to AI, investing 15% of the average income annually at a 7% return for 43 years could grow to approximately $2.81 million.

A more conservative return (e.g., 6%) would yield around $2.2 million, while a higher return (e.g., 10%) could push it toward $4.5 million.

If the worker made $33,000 a year, a 7% return for 43 years could grow to approximately $1.39 million.

A more conservative return (e.g., 6%) would yield around $1.09 million, while a higher return (e.g., 10%) could reach about $2.23 million.

So you know many 17 year olds who make even $33,000?

Looking forward you are putting a lot of trust into AI and the markets to assume 10% every year for the next 40 years to achieve the first multi million.

And if you are right, if the 17 year old starts at $33,000, and if the market increases by 10% for every year from now until 2058 then he will have $2M in the account with the buying power of $700,000. Not bad, but hardly a large nest egg.

[SoCalGal]

Originally Posted by OrangeBlossomBaby

In 1983, Congress passed legislation to raise the "Full Retirement Age" (FRA) to 67, for anyone born in 1960 or later. People born in 1955 could still retire with full SS benefits at 66 years and 2 months. The change was intentionally gradual.

Thank you for spelling out the acronyms you used. Undefined acronyms have taken over public discourse and it's annoying.

[Rainger99]

Originally Posted by Bill14564

So you know many 17 year olds who make even $33,000?

I used 22 instead of 17 to allow for people to graduate college or trade school or to get a few years experience.

The average projected starting salary in the U.S. for the class of 2025 at the bachelor’s degree level is $68,680!

For those people, who don't want to go to college, the minimum wage in Florida goes up to $14 an hour in September. That is $29,120 a year for a high school drop out. I assume that most 17-20 year old people will start at $14 an hour and hopefully get raises as they gain experience in their job.

[jimhoward]

Originally Posted by Rainger99

I asked AI to use the average income (about $66,000) and to invest it for 43 years (age 22 to 65) at various rates of return.

According to AI, investing 15% of the average income annually at a 7% return for 43 years could grow to approximately $2.81 million.

A more conservative return (e.g., 6%) would yield around $2.2 million, while a higher return (e.g., 10%) could push it toward $4.5 million.

If the worker made $33,000 a year, a 7% return for 43 years could grow to approximately $1.39 million.

A more conservative return (e.g., 6%) would yield around $1.09 million, while a higher return (e.g., 10%) could reach about $2.23 million.

Shouldn’t you use the average income from 43 years ago?

If this is a going forward analysis you must consider that things double every 10 years or so. One million 43 years from now is worth about $60K is today’s dollars.


edit: I take that back.....with our lower inflation of late we are doubling every 20 years rather than 10, so a million 43 years from now is more like $250K today.

[PilotAlan]

There's a few things that people need to understand:

1 - There IS NO SS TRUST FUND. Current workers' taxes pay current retirees. Income in excess of benefits was "loaned" to the government and SPENT decades ago. Yes, SS holds Treasury bonds for those amounts, but that means nothing.
It's essentially like borrowing the money from your 401(k), spending it all, and saying "I'm set for requirement, my 401k has a million dollars in loans due to it!"

2 - You have NO RIGHT to SS benefits. The Supreme Court ruled long ago and multiple times that Congress can change the terms if SS at any time, or eliminate it entirely, and they don't owe you a penny.

3 - If someone averaged $50,000 a year for 45 years, and invested the money that Social Security would take, they would have over $2 MILLION DOLLARS after 45 years (20yo-65yo).
That's over $100,000 a year in retirement with essentially no chance of running out of money. Plus leaving substantial assets for a surviving spouse, or children.
Purchasing an annuity with that $2m would generate a guaranteed lifetime income of approximately $150,000.

[Blueblaze]

Originally Posted by biker1

The SS cap is actually at $176,100, not $110K. The SS tax is actually 6.2% to the employee and 6.2% to the employer, plus Medicare is 1.45% to the employee and 1.45% to the employer (no cap on Medicare). If you are self-employed it is 15.3% total as you pay it all. The Social Security Trust Fund is over $2T and that will be totally consumed (funding the deficit) in the next 8 years. Zuckerberg doesn't have several trillion dollars. The rest of the stuff in your post, whatever ...

By they way, I didn't say Zuck could pay for SS himself. I said he could pay the $100 billion total DEFICIT that is expected over the next hundred years.

Look it up.

[Bill14564]

Originally Posted by PilotAlan

There's a few things that people need to understand:

1 - There IS NO SS TRUST FUND. Current workers' taxes pay current retirees. Income in excess of benefits was "loaned" to the government and SPENT decades ago. Yes, SS holds Treasury bonds for those amounts, but that means nothing.
It's essentially like borrowing the money from your 401(k), spending it all, and saying "I'm set for requirement, my 401k has a million dollars in loans due to it!"

2 - You have NO RIGHT to SS benefits. The Supreme Court ruled long ago and multiple times that Congress can change the terms if SS at any time, or eliminate it entirely, and they don't owe you a penny.

3 - If someone averaged $50,000 a year for 45 years, and invested the money that Social Security would take, they would have over $2 MILLION DOLLARS after 45 years (20yo-65yo).
That's over $100,000 a year in retirement with essentially no chance of running out of money. Plus leaving substantial assets for a surviving spouse, or children.
Purchasing an annuity with that $2m would generate a guaranteed lifetime income of approximately $150,000.

1. The collection of loans owed to the SS Trust Fund are backed by the USG. I believe SS can (and does) call on part of those loans every year to make up the difference between what is collected and what is paid out. They will exhaust those markers in about eight years if nothing changes.

3. The average salary does not matter, the actual salary does. Working with the average salary will skew the compound interest from the earliest years. Working with the actual salary will show slow growth early and faster growth later but less than the growth seen when using the average. I'm tired of doing math for this thread.

[Rainger99]

Originally Posted by Blueblaze

By they way, I didn't say Zuck could pay for SS himself. I said he could pay the $100 billion total DEFICIT that is expected over the next hundred years.

Look it up.

Not sure what you mean by $100 billion total deficit that is expected over the next 100 years. If the problem were only $100 billion, it wouldn’t be a problem. We have given Ukraine about $180 billion in the past few years.

The estimated Social Security deficit over the next 100 years, in present-value terms, is approximately $28.7–$30.7 trillion.

[biker1]

Wrong, the SS deficit (benefits minus incoming SS tax) is over $2T for just the next 7 years or so. I don't know where you got $100B from but that is just nonsense.

Originally Posted by Blueblaze

By they way, I didn't say Zuck could pay for SS himself. I said he could pay the $100 billion total DEFICIT that is expected over the next hundred years.

Look it up.

[jimbomaybe]

Originally Posted by Blueblaze

OK, I can pick nits, too.

I already said that I hadn't recently checked the cap. OK, it's now $176K. So, what? What does that have to do with my point THAT THE RICH DON'T PAY? By the gooberment's own definition, you aren't rich until you hit that cap.

Yes, the employer picks up half of the 15% -- which they, of course, simply deduct from your wages. It's still 15% or your life that you could have used to save for your own retirement (and pass on to your kids!) THAT THE RICH DON'T PAY.

The entire point you ignored with your childish "whatever" response, is that SS is a literal broken Ponzi scheme that can easily be fixed without hurting anyone. We simply need to open our minds and eyes to the fact that, whatever you want to call it, it's a government debt which we have let the rich off the hook from paying for the past 100 years.

"which they, of course, simply deduct from your wages." wrong headed , that adds to their business expenses, just take what you feel you need from the "rich" no one but the rich should have any skin in the game

[OrangeBlossomBaby]

Originally Posted by Rainger99

I asked AI to use the average income (about $66,000) and to invest it for 43 years (age 22 to 65) at various rates of return.

According to AI, investing 15% of the average income annually at a 7% return for 43 years could grow to approximately $2.81 million.

A more conservative return (e.g., 6%) would yield around $2.2 million, while a higher return (e.g., 10%) could push it toward $4.5 million.

If the worker made $33,000 a year, a 7% return for 43 years could grow to approximately $1.39 million.

A more conservative return (e.g., 6%) would yield around $1.09 million, while a higher return (e.g., 10%) could reach about $2.23 million.

When you remove 7% from the "average income" then the net income becomes lower than average.

Meanwhile, MY average income from the time I was 16 until my retirement in 2020 was around $20,000/year. When I was 20 years old, $20k/year was a pretty decent living, the cost of living was low, I could rent a studio apartment on Beacon Hill in Boston for only $400/month including heat and hot water. That same studio was most recently rented for $2100/month. So no, $20,000 wouldn't work to cover the cost of living today. But it absolutely did in the early 1980's.

Eventually I discovered I wasn't cut out for full time work. I'm not disabled, since if I was disabled, I wouldn't be able to work at all. But I am autistic and have ADD, and working a normal full-time job has never been in the cards for me. It took me years to realize this. I worked sometimes 3 jobs every week, averaging more than 40 hours a week, but had to pay for my health insurance out of pocket, because all of the jobs were part-time jobs that didn't come with any benefits at all. I was actually the highest paid and most-assigned Kelly Girl for 7 years, getting my pick of temp jobs because I was so good with typing and data entry. I just couldn't deal with 8 hours a day, 5 days a week, at the same office for more than a few months before I'd burn out.

Everyone here is so quick to judge - to say "oh just work harder" or "oh just save better" or "oh get a better job" but that only works if you're ABLE to do all those things. When you're only earning part-time wages, and have to pay the bills, and are not CAPABLE of doing more, then it's pretty hurtful to constantly hear that you're not doing it right, or doing enough.

If you're capable of work, you're not allowed to be "disabled." Even if the work you're capable of doing is short-term, or part-time, or low-wage. You can work? Great. You can't get disability benefits. You can't work a long-term full time job or have a long-term career? Sucks to be you. That's how this system operates.