4 ms·
I am confused by the wording of that graph. Does it include a lifetime of contributions and a lifetime of benefits? Or 12-15 years of contributions and a lifeti
by jeffdavis 10y ago
I am confused by the wording of that graph. Does it include a lifetime of contributions and a lifetime of benefits? Or 12-15 years of contributions and a lifetime of benefits?
- loeg 10y agoI read it as "After age 50 by income group," but it is somewhat ambiguous. Maybe it uses "lifetime" to distinguish ordinary payouts from survivor benefits? I'm not sure.
- twoodfin 10y agoI think it's the (less interesting) average benefit minus tax per year, not in aggregate. The latter is presumably much harder to measure. I'd be shocked if high earners with average life expectancies could expect to recoup (inflation-adjusted) their lifetime contributions, given the "bend points" of the benefits formula.
- basseq 10y agoCorrect. Given average life expectancies, the IRR of contributions vs. benefits of Upper-Middle and Top 20% are 2.9% and 1.7%, respectively. Given a 3.22% inflation rate, both are negative (meaning the returns don't even keep up with inflation).