Social Security

The common folk view on expanding Social Security

Understanding how we get screwed up as a country starts with understanding what the people who vote believe; facts are irrelevant; perception is reality. 

Here are a few comments from the “Social Security Works” page on Facebook. These comments are related to the call to expand benefits. I urge you to visit the SSW page and view the outright nonsense that all too many people accept as fact. Personally I would like to continue explaining the facts about Social Security on SSW, but they have blocked me from commenting or replying to other comments. That should tell you something about their message. 

Hey, don’t get screwed by a 401k plan, just lobby for more Social Security🤑  Republicans and Wall Street; the great slayers of retirement. 

I am one of those lucky people with a pension, a pension like all pensions funded by stock investments over many decades. Just like the pensions of millions of other Americans, especially government employees. I also have a 401k plan, a plan that survived the 2008-2009 crash and has thrived the last seven years. Oh it went down in 2008 and 2009, but unlike those who “got screwed,” I didn’t panic and lock in my losses. 

The kind of thinking you see below is the way people end up living on Social Security and then complain because it is inadequate or wasn’t increased each year. 


Social Security was designed for all Americans and for all Americans to contribute so it was self-funding. Today it is in trouble because the changes related to demographics and the improvements in the program were not addressed to assure adequate funding. In other words, the payroll tax should have been raised gradually starting years ago. Congress controlled by either party failed to do its job and tell Americans the truth. The Democrats are the biggest critics of changes to Social Security yet in the years they controlled Congress nothing was done to address the problems. 

The people who “get screwed” are those who fail to understand the power of compounding interest, the power of long-term investing and the essential requirement to diversify. 

The S&P 500 in the last ten years:

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9 replies »

  1. You are absolutely right, not everyone gets the same benefit from tax dollars paid. As upper middle class the only benefit I get from my taxes is what everybody else gets or less. I have to pay full freight on everything, no tax credits, no welfare, no free college, and no free cell phone. I saved what I could and now you want the government to tax me more to bring up your standard of living during retirement while lowering mine? Explain to me how that is fair that I better myself only to live in poverty because I saved my money.

    I went from making $2.35 /hr to a college education working shift work missing a lot of holidays and family functions. I worked the equivalent of 2.5 years in overtime in the last 10 years so that I could save extra money and you want to tax me even more than I was already taxed? How is that fair?

    There is a break over point where married couples get penalized for being married in the tax code.

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    • Good points all. Plus the formula used by Social Security intentionally provides a higher benefit relative to earnings the lower your income is. For example, up to $856 a monthly in earnings you get 90%. By the time you get to around $6000 a month it’s 15% of your income.

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    • Dwayne, If you are being taxed in retirement you must have very high retirement income. I did not say the retirees need to be taxed, I said high income workers and their companies need to make up the SS shortage. Which is only an additional 3% tax for each. Also, the lower income worker should pay the additional 3% tax, but it will not add up to much since it is on very low wages.
      I believe all retirement income should be tax exempt up to $50,000 per year indexed to inflation and that SS income should not be taxed until taxable income is above $100,000. My married sister who has retirement income of $23,000 and SS income of 25,000 paid $568 in Federal Income taxes. Even someone with a $50,000 pension plus SS would only be taxed $8780 or 12% of income. But, I am sure you know the tax code is set up to tax people with higher incomes more. If I had $75,000 in income in retirement I would not feel bad about paying a 12% tax bill.
      At 60 my wife and I live on $19,644, retired and waiting for my SS at 62 I will see a 66% increase in income. We qualify for zero government benefits, here in MT.

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  2. The great majority of Americans do not know much about social security. Politicians like that. Where there is great ignorance, demagoguery and grandstanding fill in much of the vacuum. Indifference fills in the rest.

    The time will come when the House and Senate will be forced by fiscal circumstances to pass a law to make social security fully solvent beyond its present and near approaching shelf life expiration.

    Politicians will then congratulate themselves on “saving social security.” Of course, the solutions will be much more severe than they would have been had they been done many years before.

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    • You are so right. It drives me crazy at what people believe and then disseminate widely as if it were fact when it is so easy to look up the truth. But I suspect many people don’t want the truth when it does not fit into their political views. Plus there are politically motivated organizations that present themselves as unbiased truth tellers when in fact they seriously mislead people.

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  3. For the low income worker the stock market would not have helped much. I worked for 27 years in mostly low income jobs. Total income $300,000, if I would of been able to save 10% = $30,000 and it would of grown to $90,000, that would only provide $4,500 per year in 20 years of retirement. Plus inflation would have taken over half the buying power of the $90,000. This is why for the low income worker SS has to be fixed and yes the rich and rich corporations will have to be taxed to pay for it. The SS tax should be raised by the same percentage as the future COLA, this will cost the low income worker a little, but it will cost the high income worker and the corporations more. Some may say this is not fair, but not everyone gets the same benefit from tax dollars paid.
    The single person pays a higher tax bill on the same taxable income as a married couple. People without kids pay property taxes to fund schools, even though they never have any kids in school.

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    • If you had saved 10% of your average annual income for 40 years and assuming an average annual return of 6.5% you would have $229,699 of which only $48,100 was your own money saved. I think you underestimate the power of compounding interest. That amount could provide a supplemental income to SS of about $8,000 a year for life never touching the $229,699.

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      • I only have 27 years of work history, not 40. My average income was $11,000, per year. In 2005 and 2006 I made $6,000 delivering news papers. In the early years each $1,100 each year would only earn $71.50 So, the total of $30,000 would grow a lot slower. Then from year 27 to 40 there would not be any more added form zero income, so it would grow only about another $50,000.

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      • I have a hard time relating to your situation. My property taxes alone on a 50×120 lot are $14,000 a year.

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