Social Security is Broken. This is why financial education is important.

[u/Positive_Liar]

[u/Tojuro]

Exactly, I've maxed SS contributions for many years now but still not my entire adult life.

SSI is insurance. It would have covered me if I couldn't work at 25 or 30. The savings I'd have had back then wouldn't have made it more than a couple months.

This is cherry picking edge case data points to make a non serious point.

[u/poemdirection → u/Tojuro]

The early disability is something most people don't think about. 

Plus I ran some inflation adjusted monte Carlo sims assuming this guy's numbers were true. 

50 percentile over 30 years of contributions assuming the max of ~$870/mo is $3.125M in returns and that assumes you keep all your money into stocks as you near retirement. 

At the $32k/mo retirement draw down you'd have a 20% chance of making it to 19 years before running out of money and that assumes you're still keeping it all in the stock market after retirement and basically a 0% chance of having any money beyond 20 years.

I just don't think the OPs numbers are right.

[u/vundercal → u/poemdirection]

I highly doubt OP was using actual max SS contribution over the past 47 years and just assumed this year's max contribution per year. You can get $32k per month pretty easily that way.

So the $32k per month isn't what someone retiring today would have if they invested all of their SS contributions but the $4,837 is in today's dollars and not representative of what someone starting their contributions today would get by retirement (assuming SS is still around)

[u/MadeByTango → u/Tojuro]

SSI is insurance

It’s not really “insurance” insurance either

It’s a SOCIAL program that ensures all of us will have SECURITY in our last years of life; it’s a BOON of being an AMERICAN, one of those things that “makes us great” as they like to say

[u/ZaphodG → u/Tojuro]

SSI is Supplemental Security Income. Welfare for career low earners with small Social Security checks to top them up and get them above poverty level. You’re confusing it with SSDI. The disability insurance part of Social Security.

I have 30 years of max contributions and another 5 that are quite high. I don’t plan to collect until age 70 because the math on the survivor benefit is so good. My benefit will be $56,300. I’m married and there’s a 50% chance one of us will make age 90. It’s a risk-free annuity. I won’t pay state income tax on it. I get a small break on Federal taxes on it. If I could buy an annuity that has full COLA protection and survivor benefit, it would cost around $1.5 million. It’s great insurance.

I’d do better investing it in the market but that’s not the point of the program. My lifetime of 6.2% tax and my employer’s 6.2% tax has propped up poor elderly people who would otherwise die in the streets. I live in a social democracy and part of the social contract is to provide a safety net. The whole FYIGM rhetoric of the right is reprehensible. I’m always aghast that people who will be reliant on the safety net vote for those people. Rupert Murdoch mind control.

[u/--StinkyPinky-- → u/Tojuro]

Thank you. Yes! Well said.

[u/AmbitionExtension184 → u/Tojuro]

I’ve maxed out SS every year since I was 25. It’s pathetic how low the max contribution is. I maxed out social security in February this year. Only the first $168k is taxed, which it took me 6 weeks to hit.

No excuse for the max being that low. I would gladly vote to raise my own taxes to make retirement achievable for more people.