1612 It's not going to go away

We still need social security reform. I wish the President would get back to business. He's frittering away his "mandate." He won the election; he needs to stand up and do the job he said he'd do. City Journal continues the discussion in the Summer 2005 issue.

"For Social Security purposes, politicians already define high earners as those who make just $45,400 a year. So all middle-income earners underwrite a delayed income-transfer system to the poorest earners. In other words, this is already a tightly compressed welfare system. Though middle-income folks don’t pay much attention to how much money they will eventually lose in retirement income to lower-income retirees, conservative leaders shouldn’t be shy about reminding them that Social Security, despite the myths surrounding it, is by no means a fair retirement program."

So, did you realize you're a "high earner?" Here's examples from the article on low and high end ("high" as we understand it, not as the gov't defines it):

"A nurse’s aide who earns about $16,500 a year, or slightly less than half of the average American wage, over, say, a 44-year career, contributes about $106,900 to Social Security under today’s system (in today’s dollars, but adjusted for 1 percent real wage growth). In return, if she retires at 65, in 40 years or so, she can expect to receive an $11,900 annual benefit during her golden years. If she lives for 12 more years, it comes out to about $142,800. In today’s dollars, she’ll get back 34 percent more than what she put in (though without reform, the Social Security Administration estimates the government will only have the money to pay her 74 percent of that). This isn’t terrible, but she’d earn as much or more investing her money in government bonds, without needing an income transfer from richer earners.

But then look at the senior manager who earns today’s equivalent of six figures straight out of college and then every year thereafter during his 44-year career. He pays about $583,300 in today’s dollars into Social Security over his lifetime under the $90,000 cap. But he can expect to receive only about $31,700 a year from Social Security—or $380,400 in total, if, like the nurse’s aide, he lives for 12 years after he retires. How relevant is Social Security to him, when he’ll get back just two-thirds of what he put in?"

And no matter what you put in to Social Security, your heirs get nothing when you die. With private accounts bolstering the base, everyone will be better off. And again, I remind all you teachers that you don't get both a teacher's pension and Social Security, even if you've had two careers and paid into both. NEA statement.

Entire article here.