ChiliPepr
Full time employment: Posting here.
Every year since 1988.
Not only did I not earn enough, but sometimes my jobs didn't even participate in social security or gave me the option of not participating (so I didn't).
Just curious- what types of jobs were they? Heck, they even withheld SS from my first official paycheck- for a week of delivering phone directories. I know clergy can opt out.
Just curious- what types of jobs were they?
Thanks, NW-Bound. I was multitasking and missed athena53's question. Yes, your answer is correct and applies in my case.Federal employees did not [-]have to contribute[/-] participate in SS until Reagan overhauled the FERS (Federal Employee Retirement System).
And to this day, some state employees still pay no SS, and have their own funding.
Luckily I hit it every one of my 35 working years.
5 times 1995-1999 then twice again 2012 & 2013.
It's a good system from my perspective. Even though I only hit the max threshold five times in the first decade of my career and never even close after that, when I started taking SS I got around 80% of the max benefit.
At age 44, this will be the first year as an adult I don't have reported earned income. I have 29 years of reported income of which 16 I maxed out. Total (my employer and me) have paid in $225K already to the system. I don't expect I'll get a good return on that.
It will not look that good if you compare it with what you would get from other non-SS pension systems, whose benefits are more proportional to the contributions.
SS has a welfare component to subsidize for low wage earners. Everybody should contribute to this, and non-SS pensions should not be exempt. Reagan did the right thing to change the FERS.
After learning about the Australian pension, I like it a lot. Their SS system separates out what is an individual unalienable benefit, like a 401k that a person takes from job to job, and what is the support for people with low income. The latter is means tested, and more generous than our SSI.
Another thing I like about the Australian pension is that if the economy goes bad, all retirees take a pay cut. Nobody gets a guarantee of a juicy pension if the country goes down the tube. They are all in it together.