A question for those of you who work and belong to a Retirement Plan

[ThomWV]

I have a question for you if you don't mind. What cost more per paycheck, your contribution to your Retirement or your contribution to Social Security? Also, if you don't mind discussing it, how much do you expect each of them will payout after you retire?

[DrDan]

1. easy one to answer

SS contribution was more. Retirement contribution was 100% paid.

Hard to compare the two. I took retirement after 20 years with the corporation - but will have double that in SS years contributions.

[ThomWV]

2. I paid half as much into Social Security and get much more from it

To answer my own question:

I was paying twice as much into my retirement plan* as I was into Social Security, but now that I'm drawing from both the Social Security monthly payment is much larger than my retirement. To be fair both life and health insurance come out of the Retirement check, but if they weren't there the SS check would still be twice as large as the Retirement check. I am in the Federal Employee's Retirement System (FERS).

* I always contributed the maximum allowed into my retirement fund, ending with a contribution of 13% in my last year working

[liberal N proud]

4. Similar observation here

But our retirement plan was frozen last year. No more contributions and the benefit will be frozen at what ever the funds are at as of last year. I fear that next they will take it away completely and we will have nothing, including Social Security.

[econoclast]

3. Personally, we are pretty good savers

None of our parents ever owned a credit card and drummed into us the "if you can't pay for it now-don't buy it" mentality. Own a small house - smaller than the friendly realtor told us we could afford. Usually have "previously-owned" cars. Never carry a credit card balance...Well at least not for long. So we have always managed to save somewhere about 10% of our take-home pay. Counting the employer portion of SS that means that historically, we saved less than we paid into SS.

About 2000 or so I mentally wrote off SS. So we've tried to boost our savings recently. I'm 52 spouse is 53. If we see a dime from SS I'll be pleasantly surprised.

[ThomWV]

5. That is an amazing attitude - and and good in in many respects

Savings is the key, and you are to be congratulated to my way of thinking.

The thing that amazed me is that if nothing at all is done to Social Security you are going to get yours no matter what. With 10 or 12 years to go to the standard retirement age you are still easily within the window of Social Security's miscalculated demise. So I can't understand why you don't expect to 'see a dime' when your time comes. The only way you wan't get your full measure of Social Security is if we let the Republicans and their equals on the Democrats side to gut Social Security.

[econoclast]

6. The math just doesn't work

You know how SS works. Current contributions go immediately to pay out current benefits. If there is anything left over it gets invested in US treasuries. That's the 2.4 trillion dollar surplus in the SSTF. But to get at the cash represented by the surplus, those treasuries have to be redeemed. Where is the government get the cash to do that? Since it appears that we are going to continue to run deficits, that means the government has to borrow to get the cash. Which means that that 2.4 trillion will bet added on to whatever we have to borrow to finance the future deficits. I just don't see the markets being able to absorb all that extra supply of treasuries. Couple that with the fact that most of the developed West and Japan are in worse shape demographically than we are. So every government is going to be looking to borrow more to fund retirement for their retirees. I just don't see where the money's going to come from.

There used to be 16 or 18 workers contributing into the system for every retiree. Now there are 3 or 4 contributors per retiree. Soon it will be 2.

In the near future I believe it will dawn on legislators faced with collapsing bond markets that the real name of the program is SS INSURANCE and that those of us who DID save for retirement don't really NEED the SS benefit. Like auto insurance. You pay the premiums but if you never have an accident you never get a payout.

Maybe I'll be wrong about that. But if I'm going to get surprised, I'd rather get my surprise on the up-side.

[SoCalDem]

7. Never really checked, but my husband has $800 a month into 401 k deducted

and his boss matches $400.. We may add more this year, since he's going to retire in a couple of years...he has no pension..

[W_HAMILTON]

8. Pretty easy to figure out...

...I figure most people do not make over the Social Security taxable threshold, so 6.2% of most employees' gross income goes to Social Security. Well, this was true in past years, since I believe they temporarily lowered the percentage paid this year (and maybe future years?).

So, if you have a 401k like most people, whether you pay more to Social Security or more to your 401k depends basically on your contribution rate to the 401k. Back when I was doing well, I contributed 10%-12% of my gross income to my 401k, so I would have spent more money on that than Social Security. In 2007 or 2008, times were a little tougher, so I cut my saving back drastically (read: completely), so my Social Security taxes were more costly.

I went back to school, and I liquidated all of my 401k to help pay for necessary costs. Needless to say, I expect nothing from my 401k :) I still believe that Social Security will be there when I retire in ~40 years, and I believe that between it and hopefully getting to save a little more money once I start working again, I will be able to "survive" retirement.