If there is no balance then the money does not exist. It’s just a ponzi scheme. This is the reason why they keep saying that Medicare/aid whatever will be insolvent in a few years. Actually, there is a balance -- at least for Social Security. It's the "trust fund", which is a bunch of special treasury bonds. They really exist, on paper -- in a file cabinet in West Virginia. No, I'm not joking.
This balance (which is basically excess taxes from the past 30 years or so) is expected to be exhausted in about 2033. It wasn't so long ago that it was expected to be 2041. So, it is getting closer, and will probably continue to get closer. At that time, only enough Social Security taxes will be collected to pay 75% of expected benefits.
But, the "trust fund" is a balance for all of Social Security. Individual taxpayers don't have a balance. All you will get is the earnings that were taxed over your working career. That's what is used to compute your benefits: after all of them are adjusted to constant dollars, the highest 35 years are averaged.
Then, the benefit formula is applied. It's not linear, as this graph demonstrates:
However, this is all beside the point. In order to evaluate whether Social Security or Medicare beneficiaries receive more than they contribute, one must analyze it as if they really did contribute to their own account, and withdraw from their account. And in doing so, you must take the cost of money or return on investment into account. Since the trust fund is invested in the equivalent of long-term US treasury bonds, it's fair to use those rates for the rate of return.
It's hard to do it for Medicare, because you can't really predict medical expenses for an individual -- only as a large group. And it's not that easy to do it for Social Security, because as you can see from the graph: the relationship of contributions to benefits is non-linear. Lower income taxpayers get a great deal, and higher income taxpayers get screwed.
I did the calculations a while back. I'll try to dig them up and repost them.
I did the calculations a while back. I'll try to dig them up and repost them. Well, I didn't find them. But, it didn't take long to recreate it.
This graph requires a bit of explanation. Scroll down after it for more detail:
Each line plots the ratio between the cost of a lifetime of contributions vs. the value of the resulting Social Security benefit in retirement. So, if it is greater than 100%, you get more than you paid. If it's less than 100%, you get less than you paid.
Assumptions: you start working at age 21 and retire at age 67. Then, you live until age 84. This is approximately the average life expectancy at retirement. The average indexed monthly earnings is the average (after adjustment for inflation) of all of your earnings. This a bit of a simplification, as Social Security uses the highest 35 years. Each of the lines represents a rate of return AFTER inflation. So, the green line is if your rate of return matches inflation. If average inflation is 3% and your average rate of return is 3.5%, you should use the purple line.
The purple line is closest to reality for Social Security, because over the past 30 years or so, long-term Treasury bond rates have been about 0.5% higher than the inflation rate. Corporate bonds have returned a higher rate: about 2% above inflation. You don't want to know what equities have done, even after all the variability.
If we use the purple line as our benchmark, it cross the 100% threshold at average indexed monthly earnings of about $4,700. After that, it continues to decline until it reaches about 69% -- meaning that you would receive about 69 cents for every dollar you contributed plus what you would earned in dividends/interest.
So, now you see the problem with comparing Social Security contributions to benefits: it depends on your rate of return (relative to inflation) and your average income. Some people do well, and others don't. $4,700/month is $56,400/year, and pretty close to the median income. So, as a rough approximation: half get a good deal, and half don't. The half that don't get a good deal are effectively giving part of their benefits to the other half.