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Reply #106: some charts showing lifetime benefits and taxes for SS & Medicare (hint-Medicare is toast) [View All]

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stockholmer Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Mar-29-11 03:22 AM
Response to Reply #48
106. some charts showing lifetime benefits and taxes for SS & Medicare (hint-Medicare is toast)
Edited on Tue Mar-29-11 03:53 AM by stockholmer
some quick points (btw, the interest earned on SS/Medicare tax payments IS included in the taxes paid portion)


1. In the past, single people got back a tremendous amount more in SS benefits than they and their employer put in (even including interest earned on the taxes paid in), but as of a couple years ago, all single people starting SS (and living to average age) will get back less than they nd their employer paid in, and that gap grows every year. However, when the employer's match is taken away, even the single gets back much more thn they actually paid in.

3. The system favours couples (and women), especially one-earner ones. BUT, the more the second spouse makes, the closer the couple comes to being in the same situ as a single person, with a two earner couple (one high, one average wage) wage already getting back less than they and their employers paid in. Once again, however, they get back much more than they themselves put in.

3. Medicare is the truly broken 800 pound gorilla. In the past, all got a huge amount more back (percentage-wise) than they paid in. But, unlike SS, this doesn't correct itself. Even singles in the future will get back at least 3 times of benefits (hundreds of thousands of dollars more), and couples will get back 4 or 5 times the amount they paid in.

4. Personally, these charts for medicare are way too optimistic, due to the USA for-profit health care costs simply exploding over the lst 20+ years' The rate of increase projected from 2010 to 2030 looks very underestimated to me.

Bottom line:

A. Anyone retiring now and in the future is not getting back the total paid into SS, except for one earner couples, but they are getting back more than just they personally paid in. Expect this to be used to attack the system by quotes that leave out the employer match.

B. In Medicare, all are getting back so much more than they paid in that the system will collapse without huge changes, IMHO.


http://www.urban.org/UploadedPDF/social-security-medica...





the article this is from:

http://moneywatch.bnet.com/retirement-planning/blog/fin... /

Whether you believe it or not, Social Security is going to be a part of your future, and when the time comes, youll be glad youve got it. Yes, our national pension system has some well-known fiscal problems, but Uncle Sam can solve them by any number of bearable cost-cutting and/or tax-raising solutions before the money runs out. The question remains, though: Is it worth it? Will the benefits youd receive under current law compensate you for the careers worth of taxes youll have paid into the system? The latest answer, generated by a new Urban Institute Social Security study, is: yes. (Surprised?) As far as its possible to project, Social Security and Medicare give you a positive return on your tax investment even after inflation.

That question has been chewed over through the years with generally less upbeat answers. Uncle Sam, for example, does its own Social Security moneys worth calculation and generally shows that the payoff for being a loyal Security Security taxpayer shrinks a lot with each succeeding cohort. The big difference is that the Urban Institute study, conducted by Eugene Steurle and Stephanie Rennane, adds in Medicare. That, it turns out, has been a very good deal, in part because all taxpayers (not just Social Security payroll taxpayers) pick up so much of the cost
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