A Dichotomy of Opinion....

[Buzz]

Make real money and not paper and buy undervalued real estate.

What seems undervalued today may seem overvalued tomorrow.

The unwinding of the mortgage mess is likely to bring on another financial sector meltdown. It seems that trusts may have sold claims against mortgages that they cannot prove that they actually own, which is fraud. Let the law suits begin. Stay tuned...

[YardleyLabs]

I can't remember the math details but there are many points in SS where those that pay more get less vs those who pay less get more based on ROI. At some point there are people who get a much higher ROI (lower income) than those who pay more (lower ROI)
Those numbers change based on SS caps and SS benefits. They are also directly effected by other income.

It would be an interesting calculation to see since it would also have to consider the number of years for which benefits are received. Obviously, the big losers in social security are those that die in their 60's, while the big winners are those who live to be 80 or more. Maybe that should be considered in setting tax rates. For example, low income black men has a life expectancy of 66.9 years, representing less than 5 years of SS eligibility. By contrast, affluent white women have a life expectancy of 81.3 years, or more than 19 years of eligibility. Obviously, the white women should be paying four times more than black men for the same levels of monthly benefits. Don't you agree? (See http://www.nytimes.com/2008/03/23/us/23health.html for life expectancy data)

[Buzz]

I can't remember the math details but there are many points in SS where those that pay more get less vs those who pay less get more based on ROI. At some point there are people who get a much higher ROI (lower income) than those who pay more (lower ROI)
Those numbers change based on SS caps and SS benefits. They are also directly effected by other income.

I took a quick look at how it's calculated. They use average monthly income for the 15 years that you earned the most. I did a quick estimate of what the maximum monthly earnings one could have had over the last 15 years and it comes to about $6364. Like taxes, they bracket the income for the calculation

They multiply the first $744 by 90%.
The next $3739 by 32%.
The last $1951 by 15%.

So the max monthly benefit you could receive if you earned the max or more over the last 15 years is:

744 x .9 = 669
3739 x .32 = 1196
1951 x .15 = 292

Total = 669 + 1196 + 292 = $2157/month

So yes, your ROI does go down. I would love to see a ROI calculation, especially one that takes into account that your employer pays half your contribution for you.

[ducknwork]

It would be an interesting calculation to see since it would also have to consider the number of years for which benefits are received. Obviously, the big losers in social security are those that die in their 60's, while the big winners are those who live to be 80 or more. Maybe that should be considered in setting tax rates. For example, low income black men has a life expectancy of 66.9 years, representing less than 5 years of SS eligibility. By contrast, affluent white women have a life expectancy of 81.3 years, or more than 19 years of eligibility. Obviously, the white women should be paying four times more than black men for the same levels of monthly benefits. Don't you agree? (See http://www.nytimes.com/2008/03/23/us/23health.html for life expectancy data)

That gambling almost sounds like that evil-gasp-health insurance! How are the lefties (esp. deppity) okay with social security, given the fact that everyone doesn't receive the same amount, no matter how much they pay in?

[Buzz]

That gambling almost sounds like that evil-gasp-health insurance! How are the lefties (esp. deppity) okay with social security, given the fact that everyone doesn't receive the same amount, no matter how much they pay in?

That's how insurance works.

[ducknwork]

That's how insurance works.

I know that...deppity is soooo against health insurance but loves SS, which runs on the same principles as insurance that he despises...Go figure.


Glad to know you are talking to me again though!

[dnf777]

Obviously, the white women should be paying four times more than black men for the same levels of monthly benefits. Don't you agree? (See http://www.nytimes.com/2008/03/23/us/23health.html for life expectancy data)

They may be right about you.....the master of spin~!

There are many hidden truths out there, some we don't want to see, so we just don't look!

One of the few things I remember from college days, was a book called "How to Lie With Statistics" from a sociology class. Talk about spin! Everything from word nuances, to the visual presentation of graphs and charts, you can just about argue ANYTHING.
Made me always question everything I hear and see.

[YardleyLabs]

They may be right about you.....the master of spin~!

There are many hidden truths out there, some we don't want to see, so we just don't look!

One of the few things I remember from college days, was a book called "How to Lie With Statistics" from a sociology class. Talk about spin! Everything from word nuances, to the visual presentation of graphs and charts, you can just about argue ANYTHING.
Made me always question everything I hear and see.

Well, what sounds like spin sometimes carries with it a truth that, as you suggest, we don't care to consider or simply didn't think to consider. There is no doubt that minimum social security payment levels are a little more generous for those at lower income levels than for those at higher income levels. However, it is also true that the only valid measure of ROI is based on lifetime benefits rather than monthly ones. Given that benefits do not kick in until age 62 or older, relatively small differences in life expectancy can have a significant impact on benefits received. There is also clearly a relationship between affluence and life expectancy. I don't know if anyone has actually analyzed lifetime ROI for SS benefits, but i suspect it has looked pretty good up until now. The book I had in gradate school statistics was called The Abuse of Statistics. The theory is the same.

Under the category of unrealistic expectations, the following Gallup poll follows along the same pattern as the one at the beginning of this thread:




Basically, this says that there is overwhelming agreement that Social Security and Medicare are bankrupting the country. However, there is also wide majority opposition to either raising taxes to fix the problem or cutting benefits. We will not reach any solution until political leaders are willing to exercise leadership instead of looking for sound bite opportunities for political advantage.

[luvmylabs23139]

I took a quick look at how it's calculated. They use average monthly income for the 15 years that you earned the most. I did a quick estimate of what the maximum monthly earnings one could have had over the last 15 years and it comes to about $6364. Like taxes, they bracket the income for the calculation

They multiply the first $744 by 90%.
The next $3739 by 32%.
The last $1951 by 15%.

So the max monthly benefit you could receive if you earned the max or more over the last 15 years is:

744 x .9 = 669
3739 x .32 = 1196
1951 x .15 = 292

Total = 669 + 1196 + 292 = $2157/month

So yes, your ROI does go down. I would love to see a ROI calculation, especially one that takes into account that your employer pays half your contribution for you.

We actually did the whole thing in finance class back in college. That's where I remember the ROI stuff from. That was a long time ago though!

[YardleyLabs]

We actually did the whole thing in finance class back in college. That's where I remember the ROI stuff from. That was a long time ago though!

But, once again, you are looking at ROI per month, not ROI per person. We know absolutely that they are not the same.