3 ms·

After the first "bend", the ROI for SS tax is super-duper low. If you're working for 35 or more years, this would be ~12k/year in 2021 dollars a year. Thus, if

After the first "bend", the ROI for SS tax is super-duper low. If you're working for 35 or more years, this would be ~12k/year in 2021 dollars a year. Thus, if your income will put you over the poverty line, paying more unnecessary SS tax past that won't help very much. (I'd put a number on the ROI, but it depends on how old you are.) It's not very hard to make a spreadsheet to play with numbers if you want. I'm considering retiring soon, decades before eligibility, and I've enjoyed playing with the numbers, as I have the opportunity to contribute more or less in the coming years fairly easily.

caturopath 5y ago
FWIW, given my history and current payout schedules and that I die at 85 (when actuarial tables say I will) and counting the employer portion of the SS tax as tax paid and assuming I retire very soon, SS tax payed by me has a 1.4% real rate of return. That being said, SS has some benefits that make it more attractive than other investments with that return (in that it's an inflation-indexed annuity backed by the US government), especially when mixed with my other investments. Still not a fantastic deal for me and it will only get worse in the likely event I get more SS income over the years, but like all welfare programs it isn't meant to help someone in my current situation. Part of getting into my current situation was benefiting from welfare when I was part of a household wasn't in such an amazing situation financially.