7 Sep 2022 2:54 pm
In other words the only way to get the entire survivor amount they would have to have had 6 children born when he died.
Even so, if you consider the amount paid should you be fortunate enough to live that long, let's consider the benefit. You pay in 7.2% of each paycheck plus your employer must match that amount. So in essence you pay in 14.4% of your paychecks for life (half is hidden and paid by your employer). If you are self-employed you pay the entire 14.4%. If you die before retirement (excluding survivor benefits which as shown don't amount to much) you will not receive anything in return. If you survive to retirement and remain alive for 18 years (average life expectancy) you will receive back what you paid in plus a 2% rate of return.
For those of you familiar with retirement accounts you know this is a horrid rate of return. It doesn't even cover inflation. And Inflation is calculated in a manner deliberately intended to under estimate the rate of inflation.
As a comparison I put 15% of my income into tax deferred and after-tax retirement accounts for 30 years (10 years fewer). After just 30 years I withdrew $900,000 to purchase a home and have $1.4 Million remaining for when I retire. Gains on the 1.4 Million remaining are normally around 150,000/year (sometimes more, sometimes less). This is 20X what you get from SS! And it wasn't like my investment choices were akin to Warren Buffet's picks. To put it in a better perspective, these are my accounts and if I die early my children will receive the money, unlike SS where the government says, "Oh so sorry, We win!".
They force you to put money into SS at the point of a gun because no one would invest in such a one-sided contract. I could in fact pay 1/20th the amount into a life insurance policy and my heirs would get back the same amount no matter when I died.
Even so, if you consider the amount paid should you be fortunate enough to live that long, let's consider the benefit. You pay in 7.2% of each paycheck plus your employer must match that amount. So in essence you pay in 14.4% of your paychecks for life (half is hidden and paid by your employer). If you are self-employed you pay the entire 14.4%. If you die before retirement (excluding survivor benefits which as shown don't amount to much) you will not receive anything in return. If you survive to retirement and remain alive for 18 years (average life expectancy) you will receive back what you paid in plus a 2% rate of return.
For those of you familiar with retirement accounts you know this is a horrid rate of return. It doesn't even cover inflation. And Inflation is calculated in a manner deliberately intended to under estimate the rate of inflation.
As a comparison I put 15% of my income into tax deferred and after-tax retirement accounts for 30 years (10 years fewer). After just 30 years I withdrew $900,000 to purchase a home and have $1.4 Million remaining for when I retire. Gains on the 1.4 Million remaining are normally around 150,000/year (sometimes more, sometimes less). This is 20X what you get from SS! And it wasn't like my investment choices were akin to Warren Buffet's picks. To put it in a better perspective, these are my accounts and if I die early my children will receive the money, unlike SS where the government says, "Oh so sorry, We win!".
They force you to put money into SS at the point of a gun because no one would invest in such a one-sided contract. I could in fact pay 1/20th the amount into a life insurance policy and my heirs would get back the same amount no matter when I died.