Social Security Question ?

I want to formulate a question about Social Security.

A person that retired on January 1 2006. Paid SS taxes from Jan 1, 1961 to Dec 31 2005. (45 yrs) Earned the mean* income for each of those years.

How many years will it take for this retiree to get all the money he paid into SS?

How many years will it take for this retiree to get all the money he and his employer paid into SS? (I know it's double but this clarifies question 1)

I plan to submit the question to SS and some policy think tanks, so I want to ask the right question or have the right data used to answer the question. Suggestions for where to send the question will be helpful.

  • I'm not sure if the mean, average or middle class income would provide the most useful answer.

Your thoughts appreciated. Thanks, Mikek

Reply to
amdx
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This is absolutely the WRONG newsgroup for this discussion. What are you gonna do with the answer? Stated another way, what action will you take tomorrow that depends on this answer.

Bottom line is that you take the present value of that 45 year income stream and create an annuity based on YOUR estimate of future interest rates. Don't forget to subtract out the administrative costs.

Bottom line is that you can never get back more than the present value, or the system won't be sustainable...OOPS!!!! You must die before you get your money back...not the total dollars you paid in, but the present value of those dollars.

And all that changes at the whim of wall street and congress and and and... I'll ask again, what are you gonna do tomorrow that depends on the answer? If it doesn't affect the outcome, the answer is irrelevant.

Last time I did the math, you can start taking SS at different times with different amounts. The total dollars is the same no matter when you start at age 82 or 85 or somewhere in there. So, the system is designed for you to die somewhere in there. But that's a different question from what you asked and also different from what really matters.

Are we having fun yet?

Reply to
mike

I agree that this is the wrong newsgroup for the question. But I am pretty sure you can get the answers you want by using the calculators at the Social Security website. But I am way too lazy to do all the work for you.

Dan

Reply to
dcaster

you spent more time with your off topic - off topic rant then he did with the off topic question.....hmmm

Reply to
brent

Dan

I don't think so, I don't know what a mean, average or middle class income was in 1941, 42, 43, etc. When I get those then I need to apply the tax rate for that year. Mikek

Reply to
amdx

Hmm... don't know if that has any relevance to SS, other than administrative costs.

Well that's part of the thought process, is the average retiree getting more out than they paid in? I think benefits need to be cut, but I am willing to moderate that if people are only getting out somewhere near what they put in. Because of the economic problems I think everyone receiving taxpayer benefits needs to take a cut.

That's what I want to know, you're saying you get your money back but not the interest. I want that pinned down.

Modify my thinking.

So, if "age 82 or 85" is the payoff age, then the question becomes, what was the life expectancy of a 65 yr old in 2006?

I'm enjoying the banter, wouldn't mind pulling a few young people over to proper thinking. :-) Mikek

Reply to
amdx

When the politicians are making up more excuses to fleece us, they usually use the median.

I hate the way the Dummycrats keep threatening to cut Socialist Insecurity when there are so many unelected bureaucrats sucking front tit.

But I wish some Repugnacrats had the balls to cut the EPA, stop the assault on the Middle East, defund Obama's Czar brigade, etc, etc, etc.

Good Luck! Rich

Reply to
Rich Grise

Don't know that one. But I know this one.

  1. We ignore inflation.
  2. If you graduate and start working at 25 and work until you're 65.
  3. You start working at a third of your final income and get 2.8% raise every year.
  4. You save 20% of your income for retirement and earn 4% on it. You will have saved 10 times you final income and can live on 80% of your final income until you are 81.

Of course most peoples lives don't work like this.

#Python Code

def forOone(salary, srate, interest):

principle =3D 0 print "age", "salary", "principle" for i in range(25,65): principle =3D principle + salary * (srate/100.0) salary =3D salary * 1.028 principle =3D principle * (1.0 + interest/100.0) print i, " ", round(salary,2)," ", round(principle, 2)

fixed =3D salary*(1.00 - srate/100.0)

print "retire" print "age", "salary", "principle" while principle > 0: i =3D i + 1 principle =3D principle - fixed principle =3D principle * (1.0 + interest/100.0) print i," ", round(fixed,2), " ", round(principle,2)

#Python Output

age salary principle

25 0.34 0.07 26 0.35 0.14 27 0.36 0.22 28 0.37 0.3 29 0.38 0.39 30 0.39 0.49 31 0.4 0.59 32 0.41 0.69 33 0.42 0.81 34 0.43 0.93 35 0.45 1.06 36 0.46 1.19 37 0.47 1.33 38 0.49 1.49 39 0.5 1.65 40 0.51 1.82 41 0.53 1.99 42 0.54 2.18 43 0.56 2.38 44 0.57 2.6 45 0.59 2.82 46 0.61 3.05 47 0.62 3.3 48 0.64 3.56 49 0.66 3.84 50 0.68 4.13 51 0.7 4.44 52 0.72 4.76 53 0.74 5.1 54 0.76 5.45 55 0.78 5.83 56 0.8 6.22 57 0.82 6.64 58 0.84 7.08 59 0.87 7.53 60 0.89 8.02 61 0.92 8.52 62 0.94 9.05 63 0.97 9.61 64 1.0 10.2 retire age salary principle 65 0.8 9.78 66 0.8 9.34 67 0.8 8.89 68 0.8 8.41 69 0.8 7.92 70 0.8 7.41 71 0.8 6.88 72 0.8 6.32 73 0.8 5.75 74 0.8 5.15 75 0.8 4.53 76 0.8 3.88 77 0.8 3.2 78 0.8 2.5 79 0.8 1.78 80 0.8 1.02 81 0.8 0.23 82 0.8 -0.59
Reply to
Wanderer

income

You are in for a long hard road. =20

You can get median and quartile incomes from the IRS or BLS. You need these broken down by age group, the median income for 20-25 is different than that for 40-45. Then you can estimate median earnings over working life.

Next you should get various forms of CPI with breakouts for housing and transportation.

Next you pick your voodoo for predicting the future CPI etc.

Next you add the "at age" life expectancy from NIH. (life expectancy varies with how old you already are)

Now with all this punched into a spreadsheet you have the actuarial base to make estimates of total (scaled to present value) in payments versus=20 (scaled to present value) expected receipts.

=46or extra credit you can take the amount of SS.gov receipts that went = into treasuries ("trust fund") and the interest rates, received in additional treasuries, into account.

Does this help any?

?-/

Reply to
josephkk

Hey man, this is an electronics group! :-) (Wiping sweat from brow) Thanks, Mikek

Reply to
amdx

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