Social Security: What You Pay, What You Get

by Alyssa Oursler | August 6, 2012 9:56 am

Social Security: What You Pay, What You Get

Today’s generation of retirees are making history — and not in a good way. They are the first people that have paid more in Social Security taxes during their careers than they will receive [1]in benefits after they retire.

But they won’t be the last.

If you turned 65 in 1960[2], for example, your lifetime Social Security benefits came to $259,000, in return for $36,000 in lifetime Social Security taxes. If you turned 65 twenty years later, both those numbers went up: Lifetime benefits were $452,000, lifetime taxes were $192,000.

But, once again, for those who turned 65 in 2010, the amount paid was more than the amount received. Lifetime Social Security benefits come to $555,000, while taxes total $588,000.

And that discrepancy is growing. For those who will turn 65 in 2030, benefits will only be $699,000 on taxes of $796,000.

On top of that, the trustees who run Social Security say its funds are on pace to run out in 2033.

And — assuming funds don’t run out — there’s really only one way to get more bang for your Social Security buck: Live longer. Estimates are based on average life expectancy, so out-living the rest means your benefits will keep adding up.

Endnotes:
  1. than they will receive : http://hosted.ap.org/dynamic/stories/U/US_SOCIAL_SECURITY_GOOD_DEAL?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-06-03-52-18
  2. If you turned 65 in 1960: http://hosted.ap.org/dynamic/stories/U/US_SOCIAL_SECURITY_HOW_MUCH?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2012-08-06-03-53-20

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