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The benefits received compared to income taxed slopes downward pretty dramatically within the range of income that is subject to FICA taxation. The Primary Ins
by khuey 10y ago
The benefits received compared to income taxed slopes downward pretty dramatically within the range of income that is subject to FICA taxation. The Primary Insurance Amount is currently 90% of the first $885/mo, 32% of the next $4451/mo, and 15% of the amount above that. So Social Security will replace most of a low-income person's income during retirement (and it's also tax free for those people) but will replace a much smaller proportion of a higher income person's income despite the latter having paid more taxes to fund SSI.
- zacharytelschow 10y agoThis is what people don't understand. Though the contributions may happen at a flat rate, the payouts are highly progressive. While the rich may get out more in absolute terms, on a per month basis it isn't much more and they still will have a worse ROI on SS than the poor will.