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Old 08-07-2012, 05:19 PM   #21
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Originally Posted by Cut-Throat View Post
Not even Close!

Everyone pays in the same percent and draws a proportional amount based on the amount that they paid in. The more you pay in the more you draw out.

In fact it probably works in reverse to what you said. Poor people on average die sooner than rich people and actually draw less proportionally of the money that they paid in.
Noone knows you've been ranting about SS here and on other forums for years. I thought you decided to go live in a van down by the river and give us a rest...
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Old 08-07-2012, 05:21 PM   #22
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Old 08-07-2012, 07:46 PM   #23
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Originally Posted by Cut-Throat View Post
In fact it probably works in reverse to what you said. Poor people on average die sooner than rich people and actually draw less proportionally of the money that they paid in.
Nope. Poor people do (on balance) die sooner. But those who earned less during their working lives still "get back" a much larger percentage of what they paid in. It's not an opinion, it's hard, objective data from SS, and it's precisely the way the system is designed to work. If you make more money you get progressively less in benefits for additional amounts you pay in (the formula has a couple of "knee points", it's not smoothly progressive). SS is a much better "deal" for the poor than for those earning more.

From a study performed by the US Treasury:
The very first line of the Treasury study (for anyone questioning that SS is designed to redistribute wealth):
Quote:
A basic redistributional goal of the U. S. Social Security program is to award higher rates of return on the contributions of low-wage than high-wage workers.
And to your point, from page 4 (emphasis added):
Quote:
We find income has a significantly negative effect on the probability of death for men and women, a result consistent with recent mortality research. Next, we incorporate the income-adjusted mortality rates into a detailed simulation of lifetime benefits and real rates of
return for a subset of the 1895-1922 cohorts. Here we find income-adjusted mortality rates do affect the distribution of Social Security benefits across income classes, but not nearly enough to alter the basic progressivity of the benefit structure.
And I'm sure you don't dispute that the system is a transfer from the young to the old--that's the way the system was designed from day one. The taxes paid by today's (younger) workers go to today's (older) reirees.
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Old 08-07-2012, 10:21 PM   #24
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Originally Posted by ziggy29 View Post
In a booming economy like the one I remembered in Silicon Valley in the late 1990s, employers would almost certainly have to give most of that as wages to remain competitive. In this economy? No chance -- they'd pocket the entire amount as pure profit because they don't *have* to pay it to be competitive or attract applicants.
+1

And that's why I think these articles are deceptive when they don't explicitly mention that the employers contributions are being included.

IMHO Headlines suggesting that people are getting less out of SS than what they put into it will invoke very different responses in the masses than a headline that would suggest that YOU are getting $2 out for every $1 that YOU put in.
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Old 08-11-2012, 12:45 PM   #25
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Haven't been able to get back here since I posted earlier this week. My initial reaction to the published article is still the same - I now believe that one of the individuals who helped author the article did not understand the Urban Institutes study that is quoted. I really think that individual believes someone (or w someones - that is not clear) who makes $43,000/year (the salary used in the study) actually paid over 1/2 million dollars into Social Security over their working years.

I also think that the author(s) went looking for some sort of "economic" study to help "justify" the premise of their story - that SS is a good deal for older folks (the 79 year old woman), might or might not be a good deal for those close to retirement (the 52 year old man), and not a good deal for those who are a long way from retirement (the 22 year old young lady).

The scary part is, this is the first of 4 segments on social security this "team" is writing - can't wait to see what the other three have to offer
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Old 08-11-2012, 01:10 PM   #26
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If you live a long time, you will get your money back, if you die early, you don't.
Personally when I'm on my death bed, the last thought I'm going to have is "Gee, did I get my money's worth from SS?"
TJ
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Old 08-11-2012, 01:27 PM   #27
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Personally when I'm on my death bed, the last thought I'm going to have is "Gee, did I get my money's worth from SS?"
TJ
I bet DW will; that's why I'm waiting till age 70 - primarly for her benefit ...

She want's to ensure she gets every last cent of "my" benefits ...
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Old 08-11-2012, 07:37 PM   #28
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Not necessarily Sam Clem. Businesses consider this part of the cost of an employee. Not part of their wages. That said...if businesses did not have to pay it...it would free up some money for wages....maybe...but I doubt it.
When I was working, I was a financial analyst. One of the companies I worked for sold products through employees and through independent contractors. I did the analysis for a new commission system and helped present it to the sales people. We had both employees and independents in the room, and I showed the difference in commissions and the details on why the company paid the indies more cash than the -ees.

The first item was FICA. Nobody batted an eye when I said that the entire amount of the employer contribution was included in the rate differential. (It probably helped that many of the -ees had 1099 income at some time in their careers, and knew all about self-employment taxes.)

I also did cost/benefit studies on automation projects and on outsourcing. We always included the -er half of FICA as an expense that's marginal to our employees. I've got no doubts that in that environment the employees' wages reflected a full reduction for FICA.
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Old 08-11-2012, 07:41 PM   #29
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Originally Posted by ziggy29 View Post
In a booming economy like the one I remembered in Silicon Valley in the late 1990s, employers would almost certainly have to give most of that as wages to remain competitive. In this economy? No chance -- they'd pocket the entire amount as pure profit because they don't *have* to pay it to be competitive or attract applicants.
I just posted why I think employees pay the so-called employer half of FICA.

But, I have to agree with you that in a depressed economy like we have today, some employers would be able to get a net reduction in labor costs if we suddenly switched the -er half to employees.

However, I think that's just a short term effect of the current economy. It's fair to say that in the past, employees paid both halves. And, IF employment ever recovers, it will be true again.
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Old 08-11-2012, 07:47 PM   #30
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Originally Posted by Cut-Throat View Post
Not even Close!

Everyone pays in the same percent and draws a proportional amount based on the amount that they paid in. The more you pay in the more you draw out.

In fact it probably works in reverse to what you said. Poor people on average die sooner than rich people and actually draw less proportionally of the money that they paid in.
No use arguing about this. Just get the facts from the SSA. Here's the PIA formula:
Primary Insurance Amount

Here's a discussion of overall progressivity, including a mortality differential.
A Progressivity Index for Social Security
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Old 08-11-2012, 07:59 PM   #31
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Originally Posted by Independent View Post
No use arguing about this. Just get the facts from the SSA.
Hey! Don't be muddying up this thread with facts....
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Old 08-11-2012, 08:46 PM   #32
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Originally Posted by ziggy29 View Post
In a booming economy like the one I remembered in Silicon Valley in the late 1990s, employers would almost certainly have to give most of that as wages to remain competitive. In this economy? No chance -- they'd pocket the entire amount as pure profit because they don't *have* to pay it to be competitive or attract applicants.
So I wonder if this is true. Yes, when workers were in demand, employers had to pay up to compete. But they didn't pay a penny more than they had to in order to get the talent they wanted.

Same is true today, they pay as little as they can for the talent they need. Not sure there is any difference.

-ERD50
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