Does Your Social Security Add Up?
This week’s cheek smacker is for all of us who will be collecting or who are now collecting Social Security benefits. Here are some numbers that will surprise you.
In 2019, there will be a 2.8% cost of living increase from the Social Security Administration (SSA). For the average check, that’s about $40.
That’s a good thing. We can use it. But here’s where it gets a little dicey and very government-like.
Between 2016 and 2017, the amount of income taxed by the SSA increased by 7.3%. It went from $118,500 to $127,200. Between 2017 and 2018, it increased by just under another 1% to $128,400. Between 2018 and 2019, it will go up another 3.5% to $132,900.
Now, I have to ask you: How can you increase revenues by 11.8% and still be going under?
I don’t get it. An 11.8% increase in revenues has to be huge.
Here are some other numbers that mystify me.
Payroll taxes funded 87.7% of the SSA in 2017. That makes sense. But with an 11.8% increase in revenues, how are we still running the trust fund dry?
What am I missing? According to the SSA, its costs to run the agency are only 0.6% of its trillion-dollar budget. There has to be some magic accounting going on here that I don’t get.
Here are the numbers that really stand out. The average couple in 2010 paid about $722,000 into Social Security and Medicare during their working years and can be expected to collect something in the area of $966,000.
Now it’s beginning to make sense – sort of. But the average beneficiary gets only 13 checks. At an average of $1,404 per month, that’s $18,252.
Getting confused yet? Yeah, me too.
But here’s the real killer: If you make $128,400 this year, you will pay the maximum payroll tax, and it will be the same dollar amount as a person who makes five, 10 or even 20 times what you make.
Now I understand – maybe.
That’s the “government” part of Social Security.