4 ms·

To assume I'm one of those types just from that tiny comment... Jeez it's math. Why do I have to pay way more into my retirement than I am going to get back? I

• refurb 4y ago
  If you're talking about US social security, your premiums are capped and your payout is directly linked to your contribution. Not sure how you could ever put $1M in of your own money over an entire career. Do the math but ignore inflation (because the cap and payment is indexed to inflation) If you work 30 years at $150,000 per year, you've put in 6.2% per year ($9,300) or a total of $280,000 (your employer put in another $280,000). You can't contribute more than that, since income above ~$150,000 is exempt from the social security tax. Assume a 3% real return, your contribution turns into $500,000 plus the employers $500,000, so $1M. If you get the max payment (because you put in the max contribution), you'll get $3,627 per month or $43,524 per year. If you retire at 65 and die at 95, you would have drawn over $1.3M. That's more than what you put in. I'm not sure where the "rip off" is? I guess it is if you die early, but hey, that's how pensions work.
  • gymbeaux 4y ago
    It's directly-tied to a certain point. There is a maximum, so it's not really fair to say "hey you make more, you get more back in SS!" You're using 95 when the average lifespan in the US is 77 ($522k given back to you in SS payments). At least with an IRA/401(k) next of kin can get the money if I die at, say, age 66.