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Social Security tax paid over life time of career
Old 06-16-2014, 11:47 AM   #1
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Social Security tax paid over life time of career

I am not sure if this question is even meaningful, though I am just kind of curious how much SS tax I have paid over my career.

I have my contribution and benefit bases copied and totaled from SS site, that comes up with about 2M. If I take 6.2% employee tax rate (2014), that will come up with about $125K paid over my career.

Is that within the ballpark?
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Old 06-16-2014, 12:12 PM   #2
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I just logged into my Social Security.gov and they have my Earnings Record going back to 1973. At the bottom, they estimate my and my employers' taxes paid.

For SS I paid 5.39% and employers paid 6.13%
For Medicare I paid 1.44% and employers paid 1.44%

Hope that helps.
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Old 06-16-2014, 12:28 PM   #3
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You also need to consider if any of your years of earnings were over the limit for the SS tax.
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Old 06-16-2014, 01:13 PM   #4
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Estimated Total Taxes Paid
For Social Security
Paid by you:
$98,756

Paid by your employers:
$115,322

For Medicare
Paid by you:
$38,741

Paid by your employers:
$38,741
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Old 06-16-2014, 01:13 PM   #5
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I started collecting social security at 62. Just went to SSA.gov and got signed in (PITA password requirements) and discover I was a prodigious underachiever: total taxes paid for social security were $9,567 me and $2109 employers. Having received 25 months of social security payments I've now been paid about 20% more than was paid in.

I would feel really badly if I hadn't just mailed off my quarterly tax of about $300 more than was paid in in my lifetime for social security.
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Old 06-16-2014, 01:25 PM   #6
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Based on my Quicken records, my wife and I have paid over $94K so far (we are 40 years old).
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Old 06-16-2014, 01:32 PM   #7
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Originally Posted by fh2000 View Post
I am not sure if this question is even meaningful, though I am just kind of curious how much SS tax I have paid over my career.
I don't think simply measuring the total amount is very meaningful, unless you include the effects of inflation and a rate of return, and include the employer's portion. Kinda like this guy's attempt.
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Old 06-16-2014, 01:59 PM   #8
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Originally Posted by fh2000 View Post
I am not sure if this question is even meaningful, though I am just kind of curious how much SS tax I have paid over my career.

I have my contribution and benefit bases copied and totaled from SS site, that comes up with about 2M. If I take 6.2% employee tax rate (2014), that will come up with about $125K paid over my career.

Is that within the ballpark?
That's ballpark for your half.

Note that the rate was lower than 6.2% prior to 1990. You can get the annual rates here: FICA & SECA Tax Rates

If you've got your wages in a spreadsheet, you can accumulate the taxes with some interest or inflation or wage index that you think is appropriate.
You can even do stuff like "If I live till 82, my IRR on my lifetime taxes and benefits would be ___"

If I were doing this, I would definitely include the "employer share" of taxes since I think that I paid almost all of that through lower wages.
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Old 06-17-2014, 02:06 AM   #9
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I agree that including the employer contribution is needed for any meaningful look at SS. The only exception might be trying to understand the progressive tilt to the individual contribution/benefit structure.

Edit: I take that last sentence back. For low income earners, the employer contribution is a factor, maybe even a bigger factor since those funds are effectively taken from what the individual would have been paid otherwise. Because the payroll tax is discontinued at high earnings levels the total effect is a somewhat hidden anti-progressive tilt to the overall payroll tax structure.
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Old 06-17-2014, 10:56 AM   #10
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All I am sure is that I paid too much (for most years, the maximum limit) and too often (every year like a clock).
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Old 06-17-2014, 12:08 PM   #11
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A few months after I retired, I finished digging up old records (packrat that I am) re Social Security. During my total working years the amount that went into SS “on my behalf” was $193,818.88. I did a spreadsheet using the historical interest rates for plain old savings bonds.



If, year by year, the money that went to the SS had instead gone into savings bonds and I held those bonds, at my retirement there would have been $406,234.15


Per the SS statement, supposedly five years later at age 62 I could start to receive $1,692 per month. Of course, if the wife & I die before I turn 62, everything in SS goes “poof”.
$400k, if today put into modest rental real estate, would be 4 units each renting at $750 per month ($3,000/month gross income). Unlike SS, there would be no waiting till 62, on my death there would be no “reduced” spouse benefit, and there WOULD be assets and income for heirs.


Why have politicians kept this mess ongoing? SS has been a federal spending slush fund since it was created, with just enough smoke & mirrors to preclude too many people whining about it. There has NEVER been any reason for the tax to be one cent higher than operating expenses. Every extra cent has been spent in a slush fund for political BS. The “trust fund” has always been a sick joke.
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Old 06-17-2014, 12:34 PM   #12
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Originally Posted by FIREd View Post
Based on my Quicken records, my wife and I have paid over $94K so far (we are 40 years old).
Just my own contribution is higher than that, but I am older and had been working longer. But that's not all.

I have been at or above the SS contribution limit ever since I started work. In 1980, my 1st full-time work year, the SS limit was $25,900 and my salary was $25,049. For a perspective, the cumulative inflation from Jan 1980 to Jan 2014 is 201%. Then, the numbers above in today's dollar are $78K and $75.4K.

So, the cumulative SS contribution must be compensated with inflation factor, which is huge when accumulated over several decades.

PS. Just having gathered up my income records for the SS calculator the other day, I have these numbers right at my fingertips. Nice to know once for all...
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Old 06-17-2014, 01:18 PM   #13
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I'm not sure what we can conclude from these numbers.
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Old 06-17-2014, 01:39 PM   #14
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I'm not sure what we can conclude from these numbers.
Maybe there is no conclusion but just a topic of general interest if not universal importance. I think it would be better for everyone if people tracked and understood the amount of money they pay into these programs over the course of their working careers as well as how much they might receive in benefits. From what I have seen, most people have no idea how much they pay into the SS and MC programs (even though the amounts are clearly marked on every pay stub) much less how the programs actually work.

Fortunately I retired early so I have had plenty of time to run the numbers for myself:

Paid into SS (employee only): $113,900
Paid into MC (employee only): $63,300
Paid into both via SE Tax via consulting jobs: $28,500
Total: $205,700
Total including employer contributions: $382,900

And, for what it's worth, I have paid over $1.8 million on what I call "total work-related taxes" to SS, MC, and income taxes to various federal, state, and municipal governments over the course of a 22 year career (including employer contributions to SS and MC).
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Old 06-17-2014, 03:26 PM   #15
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Originally Posted by unno2002 View Post
A few months after I retired, I finished digging up old records (packrat that I am) re Social Security. During my total working years the amount that went into SS “on my behalf” was $193,818.88. I did a spreadsheet using the historical interest rates for plain old savings bonds.



If, year by year, the money that went to the SS had instead gone into savings bonds and I held those bonds, at my retirement there would have been $406,234.15


Per the SS statement, supposedly five years later at age 62 I could start to receive $1,692 per month. Of course, if the wife & I die before I turn 62, everything in SS goes “poof”.
$400k, if today put into modest rental real estate, would be 4 units each renting at $750 per month ($3,000/month gross income). Unlike SS, there would be no waiting till 62, on my death there would be no “reduced” spouse benefit, and there WOULD be assets and income for heirs.


Why have politicians kept this mess ongoing? SS has been a federal spending slush fund since it was created, with just enough smoke & mirrors to preclude too many people whining about it. There has NEVER been any reason for the tax to be one cent higher than operating expenses. Every extra cent has been spent in a slush fund for political BS. The “trust fund” has always been a sick joke.

Just looking, and about a $400,000 rental investment means about $35,000 in profit per year to us, assuming the places are fully paid off. I will say that though the IRS considers it unearned income it is anything but that. A far cry from the social security check appearing in our bank accounts every single month without fail or drama.
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Old 06-18-2014, 02:57 PM   #16
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If I were doing this, I would definitely include the "employer share" of taxes since I think that I paid almost all of that through lower wages.
You definitely did pay the "employer's portion" through lower salary. The gov't has falsely called it an employer contribution, but if that same employer did not have to pay the 6.2% (or whatever percent it was/is at the time) then that would be money that you could be getting in form of salary. An employer has a total cost to have you as employee, and their portion of SS is a part of that total cost.

Also, I am sure you are aware that self-employed persons have to pay both the "employee portion" and the "employer portion". So they directly experience the cost of the SS mandatory contribution out of their salary.
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Old 06-18-2014, 05:58 PM   #17
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..................Why have politicians kept this mess ongoing? ............
Because the average person (no, you are not average) will arrive at retirement age with nothing saved and a mortgage. SS keeps them off welfare.
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Old 06-18-2014, 06:23 PM   #18
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Because the average person (no, you are not average) will arrive at retirement age with nothing saved and a mortgage. SS keeps them off welfare.
This is so true. How many wives (talking about back in the dark days of the 50's, 60's, 70's) were left with nothing after their husbands death, how many kids had fathers who squandered the money, and on and on.

It's a safety net. Most on this board are probably "hurt" by SS in that they can invest better. But most people don't or can't. It's better than watching people huddle on the street.

By the way, I consider myself a conservative. But FDR was right in starting SS.
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Old 06-18-2014, 07:39 PM   #19
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You definitely did pay the "employer's portion" through lower salary. The gov't has falsely called it an employer contribution, but if that same employer did not have to pay the 6.2% (or whatever percent it was/is at the time) then that would be money that you could be getting in form of salary.
One can choose to look at it this way, but I'm not sure that an employer, if relieved of the requirement to pay this tax, would instead add it to employees' paychecks. Thus I wouldn't say that you "definitely" paid the employer's contribution. Likewise, I'm pretty sure that the employer, if he realized a 10% saving in, say, material costs, wouldn't tell himself that the 10% saving should really be given to the material supplier anyway.

In the United States, Social Security is primarily the Old-Age, Survivors, and Disability Insurance (OASDI) federal program. As an insurance program, if it is to remain viable, the majority in the pool are going to have to pay more than they receive, in order to fund the minority who can't pay. If we all expect to get back in old-age pensions as much or more than we put in, then there's nothing left to fund the survivors and the disabled. My perspective is that our SS contributions and the differential between what everyman pays in and gets back in pension benefits needs to balance out the benefits paid out for the social umbrella portion of the program. We can all get angry about waste and mismanagement of the trust funds, but fundamentally as individuals we can't expect to get back what we put in unless we are among the survivors or disabled. I'm talking about averages, of course, as how long each individual lives in retirement will determine his/her total pension payout.
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Old 06-18-2014, 08:10 PM   #20
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By the way, I consider myself a conservative. But FDR was right in starting SS.
+1, on both sentences.
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