20120725
Journal: July 25, 2012
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Government

Over about the past week or so, I pulled together following analysis of a typical Social Security "Account", assuming:
  • a typical salary for 50 years of work
  • associated Social Security "contributions"
  • interest such contributions would have earned
  • benefits starting at age 65
  • balance of the "account" through age 95
Summary
  1. Age 22, start work at salary of $2600, work 43 years, paying full social security contributions each year
  2. Age 65, retire at a salary of $50,000, about $175,000 total "contributions" plus interest
  3. Age 75, 10 years of retirement benefits basically "use up" all "contributions" plus interest ($216,000)
  4. Age 85, 20 years of retirement benefits total about $525,000, 2½ times total "contributions" plus interest
  5. Age 95, 30 years retirement benefits total about $1,000,000, or 4½ times "contributions" plus interest
  6. If inflation is ever greater than about 3 or 4 percent, these “deficits” will increase
  7. If less time is worked, or less is made while working, the ratio of benefits to contributions will increase
Analyses (pdf and xlsx)

Typical Middle Class Social Security Account.pdf
Typical Middle Class Social Security Account.xlsx contains calculations DOWNLOAD ONLY