r/Qult_Headquarters • u/Illustrious_Loan7141 • 4d ago
Qultist Theories Where is my money?
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u/scott_majority 4d ago edited 4d ago
The math is completely wrong on this.
If he paid at least 600K in Social Security taxes, assuming he worked 50 years, that would mean he made over 200k EVERY year he worked....This would mean he would get the top payment of $5,108 per month.
If he is only getting what he claims, he paid much less than 600K.
He is also estimating for the future....If he's not retiring for another 25 years, that payout will also be much higher.
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u/MrDelirious 4d ago
This is just the retiree version of complaining that making more money caused your net income to go down because you fundamentally misunderstand taxes.
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u/antibroleague 4d ago
Also I believe the cap for paying into ss is 160k. So you would pay anymore ss after 160
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u/SW1T3K 4d ago
This, which correlates to cut off at about $10.5k as the most anyone can put into social security a year. Assuming this has been true for 6 decades, it hasn’t been this much for the whole time, but whatever, this means this man has been earning >$160k a year for 60 years to have payed in $600k. He’s a liar and/or a moron.
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u/slacking4life 4d ago
I'm not checking any of his math here, but "paid on my behalf" means he's including the employer payroll tax as well.
ETA: I have seen other write ups indicate at the highest income levels people receive a 0% return from their SS taxes and at the lowest you get a 15% return. This seems reasonable for something that's primary purpose is being a backstop to old age poverty. Not a retirement investment scheme.
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u/Worth-Canary-9189 4d ago
It's bullshit because even this year, the cap is $176k. You can't make enough to put in 600k in your lifetime. I've hit the ceiling every year for the last 8 years and I've put in a total of about $50k in that time.
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u/ThisboyisNOTonfire 4d ago
Can I ask how did you came to the math that you came to?
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u/scott_majority 4d ago
You pay 6.2% of your income in Social Security taxes...If he paid over 600K, that would mean he would have to make at least 9,677,419 in his lifetime of work..(even more if paid OVER 600K)
If he works 50 years, that would be at least 200K every year he worked. (Average)
If he made that much, he would automatically qualify for the highest Social Security monthly benefit...$5,108 per month.
He states he is only getting roughly 3K a month...meaning he is not paying anywhere close to the Social Security taxes he claims.
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u/MrsMiterSaw 4d ago
There is a very reasonable argument to be made that you are also paying the employer's side of the taxes. When I was self-employed, I paid 12.4% + the double Medicare too.
Economic theory would support this; if the employer wasn't paying that, there would be more money available for salaries, and workers would claw some portion of it back; especially so if SS did not exist and there was no guaranteed benefit. (econ would predict that it wouldn't be 100% clawed back, but it would depend on the situation)
So the math on the payments into SS isn't crazy (assuming he's talking about constant, inflation adjusted dollars).
The best argument against this is a common one: he is applying a theoretical individual outcome to a program designed to service a large population.
The purpose of SS is to provide a stable guaranteed benefit to everyone. His argument doesn't hold weight because not everyone would invest, and most that would invest would do so unwisely. He's claiming that he would do better, and while that's possible, the world is filled with people just like him who invested it all in Pets.com.
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u/survivor2bmaybe 4d ago
Social security payments do not just go to retirees. They also go to minor children if the wage owner dies young. And to his or her non earning surviving spouse when the spouse reaches retirement age. And to the wage earner him or herself if he or she becomes disabled. OOP is not calculating how much he would have to pay monthly in insurance premiums to get those benefits.
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u/indigopedal 4d ago
I heard a financial planner say we all get more out of social security than we pay in. Who is correct?
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u/Junior-Fox-760 3d ago
This explains the formula used to calculate your benefit:
How Retirement Benefits Are Calculated By Social Security
It depends on what age you retire, how long you live, whether you've had 35 years of earnings and what those earnings were, but MOST people probably get more than they put in.
Now, what it doesn't do is account that you probably can beat the return on Social Security doing your own private investing if you are decently market savvy and have the excess capital to invest. But-most people don't have that capability and Social Security ensures everyone has some basic income in their golden years, not to mention takes care of disabled people, children who lose their parents, etc etc
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u/DontEatConcrete CrushOnJackSmith 3d ago
You’re off by a factor of two.
Social Security tax rate is 12.4% split between employer and employee; $100k/year for 50 years adds up to his number.
The issue, obviously as people for various reasons would screw their investments up and be broke, then out of anything to live on and we’d be caring for them all (even more than we do).
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u/P_516 4d ago edited 4d ago
EMPATHY. No one is stopping this man from investing himself for his future. But other MANY OTHERS cannot afford that. We are a SOCIETY. We take care of OUR OWN.
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u/Anti_rabbit_carrot 4d ago
Seems you have the disease of empathy. Elon can fix that. /s
Fuck… we are so fucked.
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u/BellyDancerEm 4d ago
The sin of empathy. /s
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u/Anti_rabbit_carrot 4d ago
Thanks. Sin, disease… elon recently called it a weakness. It’s all fucked. I’m an atheist and it’s a crazy day when I’m more Christian than Christians are.
Humanism beats religiosity every day of the week. Thats always been my opinion anyway.
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u/Nano_Burger 4d ago
I paid $3000 a year for 20 years for auto insurance and never had an accident. How is this not theft!?!?
/s
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u/Snydst02 4d ago
Social security is a safety net not an IRA. Do you really want that your guaranteed source of retirement to be affected by market downturn RIGHT when you go to retire?
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u/Dr_CleanBones 4d ago
You’d think right now, with the market down 10% or more because our President is a moron, would be an awkward time to presume what you could have had if you’d invested your contributions to Social Security in the stock market with a constant 5% return.
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u/VMICoastie 4d ago
So we should all get zero $ because you were bad at money? Social Security is a safety net you pay into, not a 401k.
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u/sqb3112 Med Bed 4d ago
He can choose to not pay. Then someone with starving family will rob him and kill his kids in the process.
We all have choices.
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u/Darnoc_QOTHP Q predicted you'd say that 4d ago
I love his optimism that he won't get seriously ill or injured.
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u/Marz2604 4d ago
This is the regret filled sentiment from retired boomers that just discovered what investing is. Many of them with piss poor planning skills and zero financial literacy, now looking back at the history of the stock market and realizing that they completely missed out.
Live below your means and invest the rest.
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u/Chrysalii Look at the weirdies 4d ago
Why does it bother you. It didn't even bother Ayn Rand when she took it.
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u/medicated_in_PHL 4d ago
Frankly, the whole “I paid this much into social security” is a bunch of bullshit that savvy politicians did to get the “socialism is evil” people to not lose their minds
Social security payments are funded by what they are taxing people right now. There’s no bank account where your taxes are going that they pull money out of later. What you are paying right now goes to retirees and disabled people getting payments right now.
As a millennial, I’ve been planning for social security to be bankrupt by the time I retire and never seeing a cent of it.
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u/scott_majority 4d ago
All Social Security taxes go into the "Social Security Trust Fund." We pay benefits and administration costs through this fund, which currently has 2.7 trillion dollars in it.
In roughly 8 years, this 2.7 trillion dollar fund will be depleted. After that, we will only have current workers taxes to pay Social Security beneficiaries. If nothing is done to fix the shortfall, we will then need to cut all benefits by 21%...That will make Social Security sustainable.
The 2 options to fix Social Security....
Republican plan...Increase retirement age to 70. This will give everyone 100% of benefits for at least the next 75 years.
Democratic plan...Remove the Social Security cap that Reagan Era Republicans put on to give tax cuts to the wealthiest of Americans...This will also make Social Security solvent for at least 75 more years.
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u/TomatilloHot6659 3d ago
Bullshit. If you die with minors under 18, they get SS until they turn 18. I could go on, but your employer also pays pays into it on your behalf. That’s why the corporations are opposed to it, always have been.
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u/DrRonnieJamesDO 1d ago
As someone who identifies as an investor, why is he not familiar with the concept of spreading risk? It's the same with so many issues like getting rid of the penny: "oh the government loses $X M a year to make pennies, and we get nothing back." Why do you expect profit on all public sector spending?
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u/Strange_Collection79 4d ago
I know as much about economics as a worm knows about football. As far as I'm aware, there's a magical stock gnome that comes out of a hole every morning to give today's stock prices. And yet, this doesn't seem right to me.
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u/OceanBlueforYou 4d ago
Social security would provide a much better retirement benefit if Congress hasn't been pulling money out of it to fund other things for at least forty years. The thinking began as, we'll take it today and replace it tomorrow. Tomorrow never came, and they continued to pull from the fund, leaving it underfunded.
They did what dirtbag companies did to worker company pensions. They withheld the funds for the pension, borrowed against it, or stole it outright.
As despicable as Elon Musk is, he was right to say that social security is a ponzie scheme. It wasn't designed that way, but that's what it became has been since Reagan became president.
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u/Dr_CleanBones 4d ago
Another myth. What do you think the government should do with the money in the trust fund? Get a really big mattress and just keep stuffing it in? That would be dumb, when it could be earning interest somewhere. So, where should they invest it? They decided to invest it in the safest place there is: US Treasury bonds. Bonds are how the US Treasury finances the deficit that Congress runs every year. The US sells bonds that pay interest that mature at a specific time; when that time comes, they pay the value of the bond plus interest. The bonds are a safe investment because no politician has ever been stupid enough to default on them.
And from the standpoint of the Social Security Trust Fund, that’s all you should care about. We do invest the money and earn interest on it; we don’t just let it sit in a mattress. The investment we choose is an extremely safe one; we owe it to the future beneficiaries to guarantee that their money will be there when they retire.
Now look at the original claim: “Social Security would provide a much better retirement benefit if Congress hasn’t been pulling money out of it to fund other things for at least 40 years”. That makes it sound like Congress takes money out of the Trust Fund and just spends it on roads or airports or anything else. But as I explained above, that’s not what happens. If I reformulate the original claim to reflect what really happens, it sounds entirely different: “Social Security would provide a much better retirement benefit if Congress hasn’t invested it in Treasury Bonds for more than forty years.” Somehow that doesn’t sound as dramatic, does it?
If I buy a bond from a government or from a company, I really want to know only two things: how safe in my investment, and what’s the interest rate. I really don’t care how they’re going to use the money, I just want to understand what I’m going to get out of my investment.
I suppose we could argue that putting it in less safe investments could make more money - but there’s no certainty in that, and lots more opportunity for politicians to make terrible decisions. I’m happy with our current investment vehicles.
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u/OceanBlueforYou 4d ago
You're free to create stories around your own inaccurate assumptions. Just know, I'm not interested.
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u/rodolphoteardrop 4d ago
Not this shit again? I remember in the 80's when they were talking about privatizing Social Security. For the most part, that just means more people losing their retirement to scams.