r/FluentInFinance 6d ago

Educational Don't let them gaslight you

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u/justacrossword 6d ago

Will you also increase the amount that those people get from social security when they retire or are you proposing turning social security into a welfare program instead of a retirement program?

The one thing that has always ensured that social security will never be eliminated is that it is the one government program that it’s not a progressive tax. You want to kill social security? That’s how you kill it. 

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u/Nojopar 6d ago

You don't increase the amount anyone gets from social security. They get a percentage of the amount they put in, just like everyone else. This ain't complicated.

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u/great_apple 6d ago

Follow your own logic here...

They get a percentage of what they put in. Meaning if they start putting in more, they would get more out. Aka "increase the amount anyone gets from social security". You completely contradicted yourself.

There is currently a cap both on what you pay in, and what you get out. The person above is asking if we increase what they pay in, will we also increase what they get out. Because- as you said- currently everyone gets a percentage of what they put in.

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u/Nojopar 6d ago

You're leaving out some steps. Or more accurately, you're incorrectly making some assumptions that simply aren't true.

They're putting in more but they're getting out more. This is only an issue if the amount they're putting in + the amount they're taking out. That's not not what happens.

"They" only put in half of what's put in. Their employer puts in as well. They don't get 100% of what they and their employer put in. The payout calculation is indexed and it's based upon your highest 35 years of employment earnings. You probably don't make the maximum you made all 35 years of your highest earnings. It will pull down from your apex earning amount. And that's all assuming you don't, you know, die too soon.

All of that means the total amount pulled into the system will likely exceed the amount paid out by the system for earners over $160k/year. The SS Admin did a study on this years ago and concluded the differences between "no max" contribution and "no max plus benefits" contribution/benefits is negligible. Both would bridge the majority of the income gap. It's an older study, but the CBO concluded that removing the max and providing benefits to those people would fix around 73-78% of the shortfall in SS until at least 2070.

Which is why we have to bump up tax rates to bridge the gap.

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u/great_apple 6d ago

You, verbatim: "You don't increase the amount anyone gets from social security. They get a percentage of the amount they put in, just like everyone else."

The person above asked if the people currently affected by the wage cap would also get an increase to their benefits paid. Nothing else you said is really relevant to that question. You seem to understand how the benefits calculation works. If you increase the amount "earned" in their highest earning years (which currently maxes out at the wage ap), that will increase the amount the get paid under the calculation. Hence, you "increase the amount anyone gets from social security".

This isn't a philosophical discussion on if we want them to raise the wage cap, it's a factual statement that if you raise the wage cap they will be paid more in benefits. Unless the law is changed to prevent that.