I Want Mine - 社会保障 Simplified

I have this love/hate relationship with social media.

在四月底，当 The 2019 社会保障 and Medicare Trustees Reports were published, the key takeaway was that the trust fund 将 be depleted in 2035. Immediately, social media exploded. One poster claimed she’d paid in almost a half a million dollars over the years. 她想要回来. Another took issue with the word “entitlement.” It’s not an entitlement, we earned it! A third panicked post claims Congress has spent our money, that’s why 社会保障 is running out of money.

Let’s address those strident social media voices one by one. 一是公积金 将 be depleted because we currently have more people claiming than paying in. 它会破产吗? No. As long as we have a base of workers paying in, we 将 have 一些 要支付的福利.

国会在偷窃吗?? The trust fund is not a cashbox, and like any bank account, the funds are invested. In the case of 社会保障, the investment vehicle is Treasury securities, which are backed by the "full faith and credit" of the U.S. 政府.

The entitlement complaint is just a matter of semantics. 社会保障 is an entitlement since you’re entitled to claim when following the rules. But the word has taken on a negative connotation since welfare and food stamps are also considered entitlements. Maybe a better way to describe 社会保障 is to consider it a transfer system – income is “transferred” from the working to the retired, 残疾人士或幸存者.

U.S. 员工供款6.2% of their wages to 社会保障 and employers pay the same amount on their behalf. If you’re self-employed, you pay a total of 12.4%. This is assessed on all wages below the cap, which in 2019 is $132,900. Your 社会保障 statement 将 tell you exactly how much you’ve paid into the system. If you’re age 66 in 2019 and paid the maximum amount legislated from age 18, you’d have paid in almost $400,以名义美元计, not too far from that half million. But not everyone has paid in at the maximum rate for all of their working years.

The maximum benefit payable in 2019 is $34,332 per year. So without considering inflation, if that 66-year-old receives SS payments for 20 years, they 将 have collected a total of $686,640. Now I know this is a simplistic example, 当然, I haven’t considered inflation or potential investment returns, but bottom line: you’re likely to collect much more than you paid in.

There’s no doubt that we need 社会保障 reform, but very few of our elected officials are 将ing to take on the issue. In 2035, without reform, we 将 be collecting only about 75% of the full benefit. Difficult choices for potential reform include raising the wage cap beyond the inflationary adjustments currently legislated, raising the contribution rate or delaying full retirement age, which is currently at 67 for those born after 1960. 你会怎么决定??

Now that we understand the basics, our next article 将 tackle the right time to claim.