Will You Get Back Your Social Security Taxes in Retirement?

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You neglected to figure in the interest over those working years!
Therefore, your figures are in correct! Right?

Conrad Clippinger of OH 7:26PM March 19, 2013

When I am done working, the government can give me back all the social security and medicare taxes I paid into the system over my years of working along with all the money my employers paid on my behalf. I won't ask for another penny than that. I'm good at handling money. I would end up with a nice cushion for my kids when I die. Not going to happen? Fine. Then shut up and stop playing games with Social Security and Medicare.

Judy of WI 12:26PM March 09, 2013

There appears to be a lot of faulty figures given here. I worked from 22 to 64 and always made an average salary. The amount taken out for Social Security was capped at a fairly low figure for many of those years. I never cmae close to paying the average amounts suggested in this article. Consequently, I belive the 3 and one half years of receiving benefits is very close to what I paid over my lifetime. I know my employers also contributed on my behalf. One other thing - the rate was not always 7.65%.
My father-in-law recouped all of his contributions in the first six months of receiving benefits at 65. He lived more than twenty years beyond 65. Talk about a good deal.
The problem when Social Security is mentioned, people with their own agendas jump up and ridicule the government. Life expectancy of our population has a more material effect on the solvency of the Fund than any poor management. When this fact is faced up to, we can talk about other improvements.

John of PA 11:36PM January 10, 2013

are you counting the medicare contributions and the employer contributions to SS?

wayne fazio of OH 2:14PM September 26, 2012

This is what happens when people (most likely people looking to promote the liberal agenda) who know NOTHING about finance write articles to "inform" the public. The author seems to ignore the 43 years of non-linear compounding of the payments made. Note the lack of details: Does the calculation include the employer contribution (the same effect as if the individual is self employed), what it the starting average salary and ending average salary, and was it assumed to increase in a linear fashion even though inflation was not even remotely linear over the period?
So if half of the money the money had been invested the lowest yielding treasuries available, and the other half used in the current ponzi scheme method, the tax payer would be WAY WAY WAY ahead. I have done a quick excel analysis on Medicare, and at least with the skyrocketing medical costs the net effect to the tax payer is closer to zero than SSec, but still loses.
Jake

Jake B of IL 9:05AM September 24, 2012

So it seems people are getting approximately $130K extra benefits in SS and $110K extra in Medicare benefits (just doing a quick average based on the numbers above) for a net gain of approximately $240K per person. SEEMS LIKE A GOOD DEAL! But just curious, who will pay for the extra $240k? I'm guessing the Gov't has "wisely" invested this money to account for the extra money people will be pulling out of the system. Hmmm.
I also wonder how much money they would have earned if they had put that money into an investment account making 5% interest. Based on the Avg income provided above, $43K per year investing 15.3% per month ($548.25) for 40 years, you would pay in 263K and get back $840K or a gain of $577K if you invest and only get 5% return vs $240 the Gov't will supposedly give you on average. If you got the AVG stock market return for the past 50 years (9.62%) you'd get $2.8 million more back than you paid in. Yep, $240K sounds like a good deal!
Also, if you die, you don't get any money you paid in to social security, and your kids don't get it either. Say good by to the 15% paid in by you and your employer and your potential $2.8 million dollars you could have left to your kids, after all, you could live quite handsomely off of just the interest of 2.8 million dollars leaving the 2.8 million alone. I've left out other factors, such as the governments inability to pay these benefits for more than a few more years, and the fact that younger people paying into the system will get NONE of their money back when the system fails. Sounds like a great deal to me. Hmmm.

Paul Harris of MO 1:50PM September 22, 2012

So, Steve, you're saying that the government knows best how to spend our money? It sounds like you just resent people who have homes bigger than you and who take vacations you can't. The ROI on social security for self-employed people like me is a guaranteed loss. 13.3% of income withheld, and the little note at the bottom of your SS statement that tells you "by the way, the amount you are scheduled to be entitled to is only 70% funded"? That means that as of today, we know the money for me won't be there when I retire. THAT should be considered shocking.

Kevin of CO 1:27PM September 04, 2012

Problem with ALL the math in this poor innocent article is.. INFLATION!!!!
lol.. silly rabbit.
Mr. Author assumes a 2% interest rate.. but inflation has been an avg of about 6.3%(real) since the 70's, and over 8%(real) for the last decade. It ain't gonna get any better either. That money you've paid in quadrupled won't pay the rent for a year when you finally get yours.

Warrior22 of SC 11:43PM August 20, 2012

What is not factored is that many people die before they even start to collect or only collect for a few years. It also does not factor many seniors who do NOT need that much in medical payments.

phyllis of PA 9:12AM August 20, 2012

I am shocked by the comments being left here. The people who say they could have done a better job investing their money are the same ones who spent every last dime on the vacation they deserved or the bigger house they didn't need. Then you have the others who used the stock market like Vegas and lost their retirement accounts or had to borrow against it when the kids needed help with school tuition!
The problem with investing for retirement is we only get one chance to do it right and you won't know how bad you are until its to late.

Steve of CO 12:18AM August 17, 2012