Entitlements – a pejorative term used frequently by Republicans and Tea Partiers
When I was around 40 and looking ahead to retirement
planning, I recall talking with my Dad about the then evident Social Security woes. I remember telling him that I expected Social Security to be bankrupt by the time I retired and was not planning on receiving a dime from it in my retirement. I just accepted the fact that the system was taking a significant chunk (6.2%) out of each of my paychecks.
Over 25 years have passed, as has my father, and now I’m standing in his place.
With utter amazement and gratitude, I am receiving monthly payments from the Social Security program – not much – it would be very difficult to live on this income only – fortunately I also have a monthly income from a company pension – a concept that has become extinct in most companies today.
Of course the age where you draw on full Social Security increases each year, but I have been receiving checks for over a year now. Medicare, Federal and State taxes are deducted just as if it were a normal income.
When I was feeling a bit guilty the other day receiving money from what Republicans disrespectfully call “another one of those government entitlement programs” I decided to look into this issue a bit more and do the math.
As some of you know, when you retire and apply for your social security benefits, you receive a complete accounting by year of your social security wages that were taxed. So knowing that both you and your employer were taxed at 6.2 % rate on your Social Security earnings (for a total of 12.4%), you can determine what you (and your employer) contributed to this “entitlement” program each year during your working years.
My SS labor record goes back to when I was 17 and worked a 12
hour / day shift as a seasonal worker on the bottling assembly line at the Heinz ketchup processing plant in my hometown, Fremont, Ohio. That was the summer before leaving home for college and I needed the money badly; this was the job experience that motivated me to finish college; that was the job experience that allows me to empathize with seasonal and migrant workers. (The SS record did not include my part-time job the year before at the Isaly’s ice cream store in the Potter Village Shopping Center where starting salaries was $.65 an hour – I worked my way up to $.75 before leaving to work at Heinz – for over a dollar an hour.)
To make any sense of all these payments made into the Social Security fund that occurred over nearly a 50 year period, one has to adjust for inflation using the official Consumer Price Index (CPI) published by the U.S. Department of Labor (see: http://stats.bls.gov:80/cpi/cpifaq.htm). For example $1.00 in 1959 is equivalent to $7.79 in 2008 dollars. In my case, to compare apples to apples, I had to put everything in 2008 dollars – that’s when I applied for Social Security payback (age 66) and my monthly payout was calculated.
So when I made the adjustments and added the numbers, here
is what I found.
I will have to live to be one hundred ten (110) years old to break even – to get out of Social Security what what I put in. If I live to be 111, I win and become a freeloader on American taxpayers. Seems to me that “Entitlement” should mean “Government’s Moral Obligation” rather than “Big Government Charity” as some in Washington would like us to think.
And there’s more….Part II
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