Now let's try something else.
John will work till he is 65. Let's say his lifetime salary average will be 60K. He started working when he was 18.
65-18 = 47 years contributing to FICA
At %15.30 (half unseen to John), that's $9180 a year.
47 x 9180 = $431460
John than retired at 65 and starts drawing $1200/month out of SS until he dies at 80.
He withdraws 216K total befire eating dirt.
Since FICA is capped for those over 100K and isn't really used for Social Security / Medicare. What the Federal Government is saying is that its OK for the middle class to support the poor and withering, but not OK for the uber-wealthy to support the middle class. With one hand they make it seem as though they are taking more money from them with the higher tax brackets and the other gives it right back because FICA is capped.
Last edited by baldylox; 10-16-2008 at 09:22 AM.