Two important facts about Social Security no one mentions

Two important facts about Social Security no one mentions

Sean Lewis

The Baby Boomer Generation site is a source for trends, research, comment and discussion of and by people born from 1946 - 1964.

So with this is mind the Baby boomers born in 1946 will retire 65 years after they are born, 2011. they will live on average of 77 years. So they will no longer be an issue after 2033. The Baby Boomers in 1964 will retire in 2034 at 70. Lets say they live to 82, so after 2046 they are no longer an issue.

Now the consensus is that Social Security will begin to be in trouble as of 2042. How? For 45 years baby boomers have been paying into Social Security. This money is the money they will be drawing out for only 12 years on average. If the money they were putting in was only getting 3% above the rate of inflation, that means in 45 years it should have increased by 188% with out compounding. With compounding there will be more. There should be enough money.

Add to this that as of 2034 the number of retirees drawing Social Security will have peaked and by 2042 the numbers will actually begin to fall, this is still before the 2046 'bankrupt' date when Social Security will only be able to pay 70% of benefits owed.

Can any one say 'Motivation through fear'?
Can any one say 'WMDs'?
Can any one say 'misrepresentation of the facts'?

OK now the math.

Deductions for Social Security and Medicare taxes—The 2005 Social Security tax rate, for both employees and employers, is 6.2 percent on wages up to $90,000.

OK so for 45 years a worker and his employer have been putting aside a combined amount 12.4% lets can it lower because it wasn't this much originally. So lets say 7%. So for 45 years 7% of your check has been put away at 3% plus inflation.

Now the formula is Retirement=(((annual pay X .07) Plus 3% inflation) over 45 years)
$6.95

Retirement payout=((Retirement/12 year life expectancy)/12 months a year)
$0.048


Being that you only need 60% of what you were earning at retirement the numbers work. I purposefully left out real dollars because I am dealing with imaginary numbers.

So let me explain. At the end of 45 years you should have 695% of what your average annual wage was paid into Social Security. You would then receive 4.8% of this value monthly for the next 12 years.

0.07
$0.14
$0.22
$0.30
$0.38
$0.46
$0.55
$0.64
$0.73
$0.82
$0.92
$1.02
$1.12
$1.23
$1.34
$1.45
$1.57
$1.68
$1.81
$1.93
$2.06
$2.20
$2.34
$2.48
$2.62
$2.78
$2.93
$3.09
$3.26
$3.43
$3.60
$3.78
$3.97
$4.16
$4.35
$4.56
$4.77
$4.98
$5.20
$5.43
$5.66
$5.91
$6.16
$6.41
$6.68
$6.95

Sean Lewis
Virtual Truth
New York City
VirtualTruth@aol.com
Founder Open Debate Forum
OpenDebateForum@groups.aol.com



We are Americans first. Not black or white, conservative or liberal, Republican or Democrat. We are Americans first. Until this fact is understood we will be a nation divided and ineffective. We need to forget our differences and stop blaming each other for the errors of the past. We need to be non partisan about the future of this country. Our greatest enemy is from within. We have turned upon each other. . We need to change our old way of business as usual and be united for the common good. Which is, we are all Americans first.