A single man who retired in 1980 at age 65 after earning an average wage of $43,500 would have paid about $96,000 in Social Security taxes, and probably received $203,000 in lifetime benefits, according to a study by the Urban Institute, a non-partisan policy think tank in Washington D.C. By contrast, a single man making the same average wage today and retiring in 2030 will likely pay $398,000 in lifetime taxes but receive just $336,000 in lifetime benefits — about 16% less than he paid in. "People who were first in the system got a great rate of return," says Alan Gustman, chair of the economics department at Dartmouth College. "It's the younger generation that is going to be in the most difficult position."Today's workers may get less out than they paid in, unlike the fortunate retirees of today and yesteryear.
As well, the more you earn, the smaller the share of your earnings will be paid out in future benefits.
Social Security is currently taking in less than it is paying out and has started dipping into its trust fund.
Related: Madoff was a voluntary Ponzi scheme and Social Security is involuntary.
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