You pay 6.2% of your income (up to 102K) to Social Security, and your employer pays 6.2%. You "save" 12% of your income for retirement, in theory. I have no illusion that I will ever see "my" Social Security money again. I'm a good retirement saver, a high earner, and young. I'll be the first excluded. I view my Social Security deductions as an incredibly inefficient charity attempting to help people who didn't save.
I just got my first check with no Social Security withheld. Zero, nothing. I knew this day would come, but it feels like a big raise. I finally hit the $102,000 cap. My income is fairly regular, but it varies depending on my projects and some small bonuses. I had hoped this would come earlier, but I'm still doing well. This is my first check EVER without Social Security snatched. YAY!
I was having about $500/check going to Social Security. Without that monkey on my back, it's like a $500 raise. Wheee!
9 comments:
Hey, AWESOME :)
I wish I didn't have CPP (Canadian pension plan) taken off my paycheque.. *sigh*
Interesting, are you still eligible for what you paid in so far once you retire, regardless of your salary at the time?
I have honestly never heard of this before. I am glad I read your blog it forced me to do some online research and learn something new. Thanks! Also, this has really inspired me to work harder and EARN MORE MONEY!!!Lol.
You are, in theory, still eligible for your max benefits when you earn over the cap. However, I believe that by the time I retire Social Security will be a totally different beast.
Well you hit the cap for this year at least. Depending on who's elected might determine if that cap still exists period. I believe that social insecurity won't even be an issue for people in their twenties today. It is sad that the government can steal 6.2% from us every year. Then on top of top of that we have to pay income taxes. I'm assuming you're in the 28% bracket, based on you filing single.
I would like to see an option for people to opt out of social security deductions from their paycheck. If we were paid in cash, and there was a G-Man standing at the door asking for 6.2% of your money before you left the door, would you give it to them? The government thinks people are too stupid to save money, so they take it from us before we knew it was there. IRS: Another name for the world's largest collection agency.
Interestingly, one quick fix for our ailing (though not as ailing as the pessimists would have us believe) social security system is to continue to take FICA out, with no cap. My banker sister, she of the 7 figure annual income, believes this is the fairest and fastest fix to the system.
It makes me sad to see that people who are so young feel so insecure about FICA--personally, while you might have to wait till age 68 or 69 to get it, I have no doubt that you WILL get Social Security when you retire.
And yes, I do believe we have to take care of our elders--even those who did not manage to save as well they should have.
The lack of compassion or realism in some of the responses is disturbing as well
I put in over 10K to Social Security this year. It makes me sick to think how much my local Meals on Wheels could do with 10K, as opposed to Congress, "borrowing" from Social Security to finance war.
If I could opt out of Social Security, I would in about 20 seconds. I don't even want the crap benefits that will be left by the time I retire. I bet it will be less than what I would get just from investing the 10K at 25, and that is SAD.
Congrats on not maxing out!
And yes Grace we won't get SS. Why? Sure it'll be available to me at 29, but heck it will be MEANS based and I will have been responsible enough to saved!
I thought you made over $150k a year? But this is the first time you're over $102k, ever?
First time this year, nicely done, first time ever, not adding up.
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