Wednesday, July 22, 2009

'Encouragement' from the Social Security Administration

Yesterday Megan got her yearly social security statement in the mail. It updated her on her current projected savings by retirement and described all of the wonderful benefits of the social security program. One heading in particular caught my eyes: "Will Social Security still be around when I retire?" It seems to be that by even asking the question they are letting on that there is in fact some reason to be worried about this. After reading their explanation I'm having a hard time understanding why I should be encouraged.

Most people know how SS has been working for quite some time now. We all give a portion of our paychecks to social security - in effect, the government is requiring us to save for retirement. But, they don't just store our money away some where so that we can retrieve it when we retire. Rather, they use the money that they receive from SS for other budgetary needs, hoping that there will be enough left when you and I retire to actually give us our money back.

Here's the ss administration's encouragement for us as we wonder if we will ever see this money:
"Even if modifications to the program are not made, there would still be enough funds in 2041 from taxes paid by workers to pay $780 for every $1000 in benefits scheduled." So, we can count on getting 78% of what we pay in ss? And that's if things don't get any worse. So basically, whatever I pay to ss every two weeks from my paycheck, I can take 22% of that and just consider it to be part of my income tax. Unless I'm missing something, that's a pretty bad deal.

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