Social Security benefits are fading - Part1

[teejayevans]

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

 

[rescueme]

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 ...

 

[Independent]

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.

 

[Independent]

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.

 

[Independent]

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

 

[REWahoo]

No use arguing about this. Just get the facts from the SSA.

Hey! Don't be muddying up this thread with facts....

 

[ERD50]

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