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Reply #8: My mother retired 20 years ago. [View All]

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Igel Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Nov-22-10 11:33 PM
Response to Reply #4
8. My mother retired 20 years ago.
She'd worked for 33 years. She's collected a fair chunk of change since then, and collects about 1/3 of her former salary, adjusted for inflation.

However, at no point, including her employer's portion, did more than 15.8% of her salary go into the system.

So she's collected over 6 years' full pay, but only put in about 4 1/2 years' full pay--at most. I say "at most" because for much of her 33 years at work the FICA tax was less than 15.8%.

If you put it in dollar amounts, it's even more stunning--not because of inflation, but because you can't include inflation any more than you can include interest. What she paid in the '50s was paid out, fully, in the '50s to others. What she paid in the '60s was paid out fully, as well.

She is entitled to her $1260 per month in two ways: Because of what her salary was and the law as set by Congress, she gets her benefits set at that level; because of having paid into it for the minimum number of years as specified by Congress, she gets the benefit. She doesn't get that amount because at some point some actuary sat down and said, "Mama Igel paid in $X, her cohort is expected to live Y years, so therefore she'll get $X/12Y each month." It's not an investment account, with the monies held in trust. Congress has said she is entitled to that much money; therefore she is entitled to that much money. If there was a COLA increase for 2011, she'd be entitled to an increase in her Social Security, not because they suddenly found that she had paid in more or because there was a sudden spike in interest payments on the money held by the government, but because Congress would have said she was entitled to it.
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