The dirty little secret about SS is that it used to be a “good deal” with lifetime benefits exceeding lifetime taxes for the average beneficiary (of course, that’s also what started the system down the road to fiscal instability).
Moreover, that no longer is true. A man who retires in 2010 who earned an average wage will have paid $290K into SS, but will only get back $256K in lifetime benefits. By 2030, lifetime taxes will exceed lifetime benefits by $74,000. http://www.urban.org/UploadedPDF/social-security-medicare-benefits-over-lifetime.pdf
When Bernie Madoff does this, it’s called a Ponzi scheme. When the Feds do it, it’s business as usual.
I paid a lot more than that.
I've been been working full-time for 30 years, including about 6 years of part-time work before that, I've paid over $700,000 into Social Security.
A clarification: that includes the employer contributions, plus the actual interest that was being paid on the longest-term Treasury bonds during that period. I chose this interest-rate benchmark because that's what the SS "trust fund" is supposed to be invested in.
I made the (conservative) assumption that my contributions for each year were invested at the end of the year, at the average long-term rate that Treasury bonds were sold at auction that year. And each year, the interest earned from all the bonds was reinvested into the same Treasury bond with my contributions for that year -- so, there's no false compounding.
Looking out to when I actually plan to stop working, and when I plan to start receiving Social Security benefits, I would have over $1.8 million. And no, that's not a typo.
Again, taking the time value of money into account, I'd have to live until 110 to "break even" -- i.e. receive a stream of payments that are equal in value to the balance I would have had if I had invested the money in long-term Treasury bonds myself.
BTW, that's if I wait until age 70 to start receiving benefits. If I start at my "full retirement age" a few years earlier, I'd have to to live to 122.