I have been a proud, full-time, member of the American workforce since 1988.
As of the end of 2009 I have earned $1,548,291 in base salary – excluding bonuses, stock option cash-outs, and other income streams.Â Â It also excludes the money I earned working part time while I was in school.
Since 1981 when I took my first part time job as a 16-year-old kid, I have paid over $91,000 in Social Security taxes.Â Â I have also paid almost $23,000 in Medicare taxes.Â Add it all up and it comes to roughly $114,000.
Wake Up: The Social Security Trust Fund Is A Ruse
That is why I was particularly interested when it was announced last week that, for the first time since 1983, Social Security will pay out more in benefits than it receives in taxes this year.
And although we were also told there was no reason to worry because the Social Security Trust fund won’t run dry until 2035 or so, that claim is an unabashed sham.
The truth is there is no money in the trust fund and there hasn’t been for years – if ever.Â That’s because our politicians have been using all of the Social Security surplus collected over the years that was supposed to go into the Trust to pay for expanding government and all of their pet projects instead.
The sooner you understand that sobering news, the sooner you’ll stop believing the feel-good Social Security office propaganda they send you every November that shows how much money you’ll be getting each month when you finally reach retirement age.
According to my statement, one lovely day many years from now I’ll be entitled to the following benefits:
- $3,083 per month if I continue working to age 70.
- $2,465 per month if I continue working until age 67
- $1,704 per month if I continue working until age 62
Couple that with the nest egg money I have already accumulated and, assuming hyperinflation doesn’t rear its ugly head, my golden years will be very comfortable indeed, financially speaking.
But I’m a realist.Â There is a reason why my kids shouldn’t expect an inheritance from me.
Lots of Options, All of Them Bad
The truth is, the only way I’ll have any hope of seeing any of that money is if Congress:
1) Raises the Social Security tax rate from the current rate of 6.2 percent (12.4 percent if you are self-employed).
2) Eliminates the current Social Security tax cap on earnings above $106,800.
3) Pays the Social Security shortfalls out the general fund.
4) Borrows even more money than they already are to cover the expenses.
5) Sharply reduces the benefits we have been promised (and advertised each year in our Social Security report).
6) Pushes the qualifying retirement age so far back that it hardly matters any more.
As I see it, the first two options are non-starters because our politicians have already shown that they are incapable of leaving their hands off any new revenues intended for a trust fund.Â The next two options are simply unsustainable, especially considering we are now running trillion-dollar deficits annually.
I’m betting Congress goes with one of the last two options, which isn’t too good either.
No matter how you look at it, I suspect I will never see a dime – let alone enough to ever get back what I’ve already put into the system.
The Sad Reality of It All
This blind faith in our government isn’t working.Â Â We need to stop relying on the Federal government to take care of us for everything from retirement to healthcare.Â Â It’s time to return to a culture of limited government, and increased personal responsibility and self-reliance.
As I mentioned before, I have already paid $114,000 into the Social Security and Medicare systems.
Assuming I retire at age 65, and can stay gainfully employed with continuing modest salary increases, I’m going to pay another $250,000 or so into Social Security and Medicare. Â It will be even more if Congress decides to hike those tax rates and/or raise the salary cap.
The sad truth is if Congress allowed me to keep all that money under the condition that I put it in an ultra-safe low interest savings account – or even a shoebox under my bed – I would be much better off than simply giving it to them to grossly mismanage.
Let’s Make A Deal
I’d like to make the government an offer it can’t refuse.Â Â If Uncle Sam lets me opt out of Social Security from here on out, I’ll let him keep the $114,000 he’s taken from me so far.
I’m confident I can do a much better job saving for my retirement than our politicians in Washington, D.C.
Even after spotting them $114,000.