Social Unsustainable

Retiring at 65 in 2012 after working since age 16, the maximum possible Social Security contribution (including employer contribution) is $177,069 *. Using a 4% interest rate the value of the investment over 49 years* would be worth a maximum of $270,511 *.

A standard Social Security benefit payment for maximum earning would be around $3,500. $270,511 will last 6.44 years, after that the funds are coming from other tax payers.

A retiree, retiring in 2005, investing the very maximum in the system (plus interest), $122,500, exhausted that contribution in 2010 A retiree, retiring in 1992 (20 years ago) had a possible MAX contribution of only $50,022 and exhausted it by 1996.

With more and more retirees, living longer, supported by fewer and fewer contributors the system is unsustainable. It is time to retire this system.

From the Social Security Administration:

            MAXIMUM POSSIBLE SOCIAL SECURITY INVESTMENT*
Maximum         Contribution for 49 years
Year Tax Base Employee Employer Total
1937 $3,000 $30 $0 $30
1938 $3,000 $60 $0 $60
1939 $3,000 $90 $0 $90
1940 $3,000 $120 $0 $120
1941 $3,000 $150 $0 $150
1942 $3,000 $180 $0 $180
1943 $3,000 $210 $0 $210
1944 $3,000 $240 $0 $240
1945 $3,000 $270 $0 $270
1946 $3,000 $300 $0 $300
1947 $3,000 $330 $0 $330
1948 $3,000 $360 $0 $360
1949 $3,000 $390 $0 $390
1950 $3,000 $435 $0 $435
1951 $3,600 $489 $0 $489
1952 $3,600 $543 $0 $543
1953 $3,600 $597 $0 $597
1954 $3,600 $669 $0 $669
1955 $4,200 $753 $0 $753
1956 $4,200 $837 $0 $837
1957 $4,200 $932 $0 $932
1958 $4,200 $1,026 $0 $1,026
1959 $4,800 $1,146 $0 $1,146
1960 $4,800 $1,290 $0 $1,290
1961 $4,800 $1,434 $0 $1,434
1962 $4,800 $1,584 $0 $1,584
1963 $4,800 $1,758 $0 $1,758
1964 $4,800 $1,932 $0 $1,932
1965 $4,800 $2,106 $0 $2,106
1966 $6,600 $2,360 $23 $2,383
1967 $6,600 $2,618 $56 $2,674
1968 $7,800 $2,914 $103 $3,017
1969 $7,800 $3,242 $150 $3,391
1970 $7,800 $3,569 $197 $3,766
1971 $7,800 $3,928 $243 $4,171
1972 $9,000 $4,342 $297 $4,639
1973 $10,800 $4,866 $405 $5,271
1974 $13,200 $5,519 $524 $6,043
1975 $14,100 $6,217 $651 $6,868
1976 $15,300 $6,974 $789 $7,763
1977 $16,500 $7,791 $937 $8,728
1978 $17,700 $8,685 $1,114 $9,799
1979 $22,900 $9,910 $1,355 $11,265
1980 $25,900 $11,226 $1,627 $12,852
1981 $29,700 $12,815 $2,013 $14,828
1982 $32,400 $14,564 $2,434 $16,998
1983 $35,700 $16,492 $2,898 $19,390
1984 $37,800 $18,647 $3,389 $22,036
1985 $39,600 $20,904 $3,924 $24,828
1986 $42,000 $23,298 $4,533 $27,831
1987 $43,800 $25,765 $5,168 $30,933
1988 $45,000 $28,462 $5,821 $34,282
1989 $48,000 $31,340 $6,517 $37,857
1990 $51,300 $34,491 $7,260 $41,751
1991 $53,400 $37,772 $8,035 $45,807
1992 $55,500 $41,183 $8,840 $50,022
1993 $57,600 $44,724 $9,675 $54,399
1994 $60,600 $48,451 $10,553 $59,005
1995 $61,200 $52,216 $11,441 $63,656
1996 $62,700 $56,073 $12,350 $68,423
1997 $65,400 $60,098 $13,298 $73,396
1998 $68,400 $64,309 $14,290 $78,599
1999 $72,600 $68,780 $15,343 $84,123
2000 $76,200 $73,459 $16,448 $89,907
2001 $80,400 $78,390 $17,613 $96,003
2002 $84,900 $83,600 $18,845 $102,444
2003 $87,000 $88,940 $20,106 $109,046
2004 $87,900 $94,318 $21,381 $115,698
2005 $90,000 $99,814 $22,686 $122,499
2006 $94,200 $105,570 $24,051 $129,621
2007 $97,500 $111,521 $25,465 $136,986
2008 $102,000 $117,750 $26,944 $144,694
2009 $106,800 $124,252 $28,493 $152,744
2010 $106,800 $130,729 $30,041 $160,771
2011 $106,800 $137,207 $31,590 $168,797
2012 $110,100 $143,883 $33,186 $177,069
*Assumes   maximum earned income for full OASDI deduction for a non-self-employed   employee for each year of earning to achieve the maximum deduction amount   possible.  49 years assumes an employee   earns that maximum income from age 16 through age 65.  Any earning or time span less than these   will result in considerably lower contributions.
FV @ 5% $325,701
FV @ 4% $270,511
FV @ 3% $227,270
Years @ $3500/mo Monthly for 25 years Monthly for 20 years Monthly for 10 years
$177,069 4.22 $590 $738 $1,476
$325,701 7.75 $1,086 $1,357 $2,714
$270,511 6.44 $902 $1,127 $2,254
$227,270 5.41 $758 $947 $1,894
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