I hate Social Security.

I hate that it takes 6.2% of every dollar I earn (temporarily 4.2%), and takes 6.2% of my income from my employer (who would probably be paying me that extra 6.2% if they weren’t paying it to the government!).

Imagine how much more I could save for my own retirement if I had a 12.4% raise. That’s $3,720 for someone making $30k a year. That’s $6,200 a year for someone making $50k a year.

And finally, even though I hate any kind of tax or benefit that isn’t flat, this on is especially insidious. Social Security is an incredibly racially and socio-economically regressive tax. The tax helps rich white people way more than it helps middle class and poor minorities.

Race Matters

The full retirement age for social security is 65-67, depending on when you were born. When you consider that white men live to be 75.3 years old on average and black men live to be only 70.8 years old it doesn’t look so good. The average white man gets 8.3 years of benefits while the average black man gets only 3.8 years of benefits.

Let me say that again. The average black man pays 12.4% in taxes on his annual income for 40+ years, and in return gets less than 4 years of Social Security benefits which are so crappy he’ll probably need a part time job anyway.

Similarly, a white woman lives to 81.2 on average, while a black woman lives to 77.5, giving the white woman an extra 3.7 years of benefits.

Source of average ages can be found here.

Income Matters

Not only are white people getting the most benefit from Social Security, but rich people also live longer than poor people, which means the rich get much more out of Social Security than the poor.

I couldn’t find more recent data, but what I did find shows the top 50% of 60 year old earners in America live to an average age of 85.4 years, while the bottom half live to an average age of 79.6. If anyone knows of more recent data please post in the comments.

This should be no surprise: rich people live in safer communities, can afford healthier food, have more leisure time and can afford better health care. Don’t get me wrong; if you’ve worked hard and made a bunch of money then you deserve those benefits. I don’t think rich people deserve a big Social Security check paid for by hardworking (and potentially poor) Americans.

Think about this for a minute. A rich person who probably doesn’t even need supplemental income during retirement is going to get many more years of Social Security benefits than a poor person. This is truly disturbing when we look closer.

Remember that Social Security is broke and today’s benefits are funded by today’s Social Security taxes. That means someone making $10 an hour today is paying Social Security taxes, some of which are going directly to rich retired people who have millions of dollars in the bank. Social Security is taking money from poor working people and giving it to rich retired people. I don’t care who you are or what you believe; that’s not right.

Social Security

It’s time we stop pretending that Social Security can work as a retirement plan for the elderly. People who can afford to pay for their retirement should stop receiving benefits immediately, and those who can’t should be migrated into existing welfare programs.

What This Means For You

If you are a young person like me, I recommend that you start saving for retirement under the assumption that social security won’t be there to help. As for all that money you’ve already paid in; just consider it another tax from your friendly neighborhood Uncle Sam.

If you are nearing retirement and you are expecting Social Security, I’d recommend doing whatever you can to extend your career and save up money, because Social Security is going to collapse if it isn’t ended voluntarily.

Finally, if you are currently receiving Social Security then enjoy it while you can. I don’t think it’ll last much longer, and I hope you have a backup financial plan.