posted by BRF

I’m 68 and was just made aware of this a year ago.

Not sure what your financial situation is, but maybe look into backdoor Roth conversions.  Basically, you convert taxable 401K distributions into non-taxable Roth IRA.  You'll pay ordinary rates on the conversion amounts, and also have to wait 5 years before taking IRA distributions.

Ideally, people would look into this in those years [hopefully] between retiring and collecting SS.  You have to work thru the math, but potentially you could still save yourself thousands in taxes.  Might also explore this strategy filing separate returns for you and your wife.

posted by gut

What's sad is there isn't a lot of "waste" with SS - the gubmit just collects money and redistributes it.  But as his math shows, you get a horrible return if you're a "giver" instead of a "taker".

His math also shows someone who maxes out the SS contribution over their 35-yr window.  Maxing out SS I think puts an individual @ top-5% of earners, so it's a pretty impressive accomplishment to do that every year for 35 years.  Clearly already a multi-millionaire, and most will read that and think "gee, I wish I made enough money to pay $600k in social security taxes".

But LOL only government could create math like this.  The real hidden crime in all this is a perhaps perfect example of how govt actively prevents the building/accumulation of generational wealth.  Yes, someone in this scenario should be worth several million...and yet that "social contract" has cut his wealth by as much as 50%.

Most people start working in their early 20s and don’t retire until 65+ that’s 45 years, not 35 that you pay into the system.

Someone making $20hr will contribute $600k in 45 years with  their employers numbers too.

posted by jmog

Most people start working in their early 20s and don’t retire until 65+ that’s 45 years, not 35 that you pay into the system.

Someone making $20hr will contribute $600k in 45 years with  their employers numbers too.

You pay FICA on every dollar you earn, starting as a teenager working part-time.  But your benefit is calculated only off your top 35 years of contributions.

And, again, your math is way off.  A person making $20 per hours would contribute less than $250k (INCLUDING the employer share, ignoring inflation) over 45 years.

posted by gut

You pay FICA on every dollar you earn, starting as a teenager working part-time.  But your benefit is calculated only off your top 35 years of contributions.

And, again, your math is way off.  A person making $20 per hours would contribute less than $250k (INCLUDING the employer share, ignoring inflation) over 45 years.

So your math and assumption is that the person got no raise in 35 years? Come on, use an ACTUAL realistic assumption.

If you use 3% raise per year, which is typical and actually low as that is including no promotions at all, just same job and cost of living increases...that's $500,000 contributed from 20 to 65 for someone who starts at $20/hr.

If we assume some promotions or other raises and that puts that average wage increase per year at 4% the number is $654,000 contributed.

You are that hell bent on trying to prove me wrong that you pulled a completely non realistic case rather than realistic. How many people do you know that work for 45 years and don't get yearly raises?

My dad is nearing that age of 65, he makes $35/hr now, when he was 20 he made $7/hr full time (about 5x what he made at 20).

I have been working for 20 years and I make 3x what I did at 20 already. 

My dad works a union hourly job, I am a salaried engineer (for comparison). 

Come on, be smarter than that.

I literally said that a person making $20/hr in their 20s will contribute $600k (with their employer contributions) by the time they are 65. That is factual information you tried to dispute with some asinine "never get a raise" fictional person.

I have never met anyone who worked from their 20s to 60s, the whole time, and didn't make WAY more in their 60s than they did in their 20s.

You hate me so much you made up some BS scenario in your mind to try to prove me wrong, when in fact I was right.

I can share the spreadsheet if you can't do the math, I will copy/paste the math here for you (yes, I am boardering on ad hominem and I know that, but you are getting ridiculous, almost as bad as SnL was).

OMG Memes.

posted by jmog

So your math and assumption is that the person got no raise in 35 years? Come on, use an ACTUAL realistic assumption.

Oh JFC....here you go again, clowning yourself at an increasingly alarming rate, and then moving the goal posts and engaging intellectually dishonest arguments (but maybe "intellectual" is a poor choice of words).

Before I waste my time further responding to the rest of your bullshit, do you actually understand the time value of money, and the difference between real and nominal inflation?

It's really simple guy - you said "someone making $20 per hour will pay in over $600k in their lifetime".  No.  That math is very easy.  You said nothing about where that person is in their career, or what their REAL wage increases will be.  The FACT is, middle class wages have seen very, very little real wage growth in the past 30+ years.  Given that trend, regardless of inflation the present value of their contributions - and present value is the relevant comparison - is less than $250k.

I really fucking hope you don't build bridges.

posted by jmog

but you are getting ridiculous, almost as bad as SnL was).

Look, the whiny bitch leads out with the insults, again. What did you say that implies about your argument?  I didn't insult you in either post, and just said you're wrong (and you definitely are).  Every time someone says you're wrong, YOU are always the first to go right to the personal insults.  Or at least that's my experience in my last two exchanges with you.

Stay in your intellectual lane, because every time you wander out of it you get wrecked.

posted by gut

Oh JFC....here you go again, clowning yourself at an increasingly alarming rate, and then moving the goal posts and engaging intellectually dishonest arguments (but maybe "intellectual" is a poor choice of words).

Before I waste my time further responding to the rest of your bullshit, do you actually understand the time value of money, and the difference between real and nominal inflation?

It's really simple guy - you said "someone making $20 per hour will pay in over $600k in their lifetime".  No.  That math is very easy.  You said nothing about where that person is in their career, or what their REAL wage increases will be.  The FACT is, middle class wages have seen very, very little real wage growth in the past 30+ years.  Given that trend, regardless of inflation the present value of their contributions - and present value is the relevant comparison - is less than $250k.

I really fucking hope you don't build bridges.

I see back to the ad hominem once you are proven wrong.

I said someone who is in their 20s and starts making $20/hr. 

You assumed I meant someone who never gets a raise for some dumb fucking reason.

I can't help it if you don't understand the math and the logical discussion, not my problem (see, ad hominem is GREAT!).

Don't quit your day job because logical reasoning is not your forte, did you let SnL take over your account?

If you want to discuss the present value of money, which is a valid concern, then we also have to discuss the ROI if you invested same/said contributions in a normal retirement age mutual fund which would average 6-8% per year over the course of 35 years.

That would take my $600k into the $2 million dollar range.

I bet you don't want to go there, however, and will resort back to your bull shit ad hominem. 

Stick to real scenarios, not someone who gets no raise for 35 years. It may help your dumb arguments.

Let me know if you want me to share the table with the calculations as it appears you are having problems with them SnL.

posted by gut

Look, the whiny bitch leads out with the insults, again. What did you say that implies about your argument?  I didn't insult you in either post, and just said you're wrong (and you definitely are).  Every time someone says you're wrong, YOU are always the first to go right to the personal insults.  Or at least that's my experience in my last two exchanges with you.

Stay in your intellectual lane, because every time you wander out of it you get wrecked.

I can't believe you actually said I started the insults.

Did you get Alzheimer's all the sudden or dementia? You may want to go back and read your own posts, or just edit them to save face.

posted by jmog

I see back to the ad hominem once you are proven wrong.

So that would be a big fat "NO" that you don't understand time value of money, Real vs. Nominal, or how to build economic models and do comparisons?

And you always initiate the insults.  You don't want to get clowned and called a whiny bitch, then stop doubling and tripling down on your ignorant bullshit and calling people names because you don't know what you're talking about.

Seems to have generated into the worst thread ever.  

posted by jmog

I can't believe you actually said I started the insults.

Did you get Alzheimer's all the sudden or dementia? You may want to go back and read your own posts, or just edit them to save face.

LOL....the first engagement you started with "CNN talking points" before I ever insulted you.  Here again you start by calling me S&L before I ever insulted you.  Both cases you simply got triggered because I said "you're wrong".

posted by gut

So that would be a big fat "NO" that you don't understand time value of money, Real vs. Nominal, or how to build economic models and do comparisons?

And you always initiate the insults.  You don't want to get clowned and called a whiny bitch, then stop doubling and tripling down on your ignorant bullshit and calling people names because you don't know what you're talking about.

You calling someone a whiny bitch is rather ironic, keep it up. I was proven right by math, you started calling me a whiny bitch because you were proven wrong and changed the argument, aka moving the goalposts.

posted by jmog

You calling someone a whiny bitch is rather ironic, keep it up. I was proven right by math, you started calling me a whiny bitch because you were proven wrong and changed the argument, aka moving the goalposts.

No you aren't.  You have absolutely no idea what you're talking about because you clearly don't understand NPV and Real/Nominal. The math is simple and your assumptions, errr your new assumptions, are garbage.

Just stop already.  It's OK not to be an expert on every subject.

posted by gut

No you aren't.  You have absolutely no idea what you're talking about because you clearly don't understand NPV and Real/Nominal. The math is simple and your assumptions, errr your new assumptions, are garbage.

Just stop already.  It's OK not to be an expert on every subject.

I literally said that someone who starts at $20/hr will contribute $600k over their lifetime.

You said I was wrong.

I showed the math to prove I was right.

You moved the goalposts to talk about present value of money, which by the way chemical engineers take a whole semester on for project ROI and viablity, FYI. 

I never said they put in $650k of 2021 dollars, you decided to change it to that once you realized I was right.

Its ok to admit when you are wrong.

posted by Dr Winston O'Boogie

Seems to have generated into the worst thread ever.  

Indeed.