Author: James Eichenlaub, October 2, 2024 / Ormond Beach, Florida

Social Security: aka OASDI (Is it an “entitlement?”)

Entitlement: “a government program providing benefits to members of a specified group also : funds supporting or distributed by such a program.”

Social Security’s Old-Age, Survivors, and Disability Insurance (OASDI) program limits the amount of earnings subject to taxation for a given year. The same annual limit also applies when those earnings are used in a benefit computation. This limit changes each year with changes in the national average wage index. We call this annual limit the contribution and benefit base. This amount is also commonly referred to as the taxable maximum. For earnings in 2024, this base is $168,600.

The OASDI tax rate for wages paid in 2024 is set by statute at 6.2 percent for employees and employers, each. Thus, an individual with wages equal to or larger than $168,600 would contribute $10,453.20 to the OASDI program in 2024, and his or her employer would contribute the same amount. The OASDI tax rate for self-employment income in 2024 is 12.4 percent.

For Medicare’s Hospital Insurance (HI) program, the taxable maximum was the same as that for the OASDI program for 1966-1990. Separate HI taxable maximums of $125,000, $130,200, and $135,000 were applicable in 1991-93, respectively. After 1993, there has been no limitation on HI-taxable earnings. Tax rates under the HI program are 1.45 percent for employees and employers, each, and 2.90 percent for self-employed persons.

(Source: Social Security Administration: United States Government)

https://www.ssa.gov/oact/progdata/taxRates.html

OASDI: The finer points for 2024:

1. Limits the amount of earnings subject to taxation for a given year
2. The same annual limit…used in a benefit computation
3. This limit changes each year – called the “contribution and benefit base.”
4. Commonly referred to as the taxable maximum. (2024 — $168,000)
5. Current HI (Medicare) tax is 1.45% for both employee and employer = 2.90% of ALL wages.

So what does this all amount to?

How much are we talking about over the years of “withholding” to pay for this government issued insurance policy that nobody asked for?

If you EARNED it, and they took it, how does that meet the definition of an “entitlement?”

Sixty Years in the Workforce: Two Million Dollars Earned

Is that surprising? Does that sound like a lot of money to you? It does, but in this instance, it’s not! Not if you raise four children and, at the same time, plan to survive to retirement. Although it sounds like a lot, there will be very little if anything left over after child rearing, education, college, home, vehicles, medical, dental, i.e., life in general, etc.

As well, I am not going to begin to try to figure out what the rates of withholding were over each of the years, it’s mind boggling enough on an annual basis.

Suffice it to say that the above chart, published in 2024, shows the varying rates as the years passed, and I never gave them a second thought; you know…”Render unto Caesar,” and all that! America giveth and America taketh away!

No, it wasn’t until we actually retired that I began paying any attention to what the government does and does not do when applying its socialistic medicine to the old and disabled. So…please! Correct me where and when I am wrong, but when you log into your home page: https://secure.ssa.gov/myssa/bec-manage-ui/home, you will see this at the bottom of the page:

Click on the “Review your full earnings record now,” and copy/paste the results into your Excel spreadsheet and sum them up! With a little searching, you can also find the total withholdings from you and your employer. The result of your research is this, “If you don’t live long enough to use it, you never get it back.”

Also: Do you trust your employer?

One aspect of the withholding that I neither thought about, nor did I EVER CHECK to ensure, was the accuracy of the OASDI withholdings. According to the Social Security Administration:

If the earnings missing from your Social Security record are for the current year or last year, you don’t need to worry. Because these earnings are recent, we may not have recorded them yet. They should appear on a later Statement.

However, earnings could be missing from your record for earlier years for one of the following reasons:

• Your employer reported your earnings using the wrong name or Social Security number.
• Your employer reported your earnings incorrectly.
• You got married or divorced and changed your name, but never reported the change to Social Security.
• You worked using a Social Security number that didn’t belong to you.

(Found on the “Your Earnings Record” section when you log in to view your Social Security information.)

It was twenty years ago, but I recall receiving a notice from the administration that somehow, two different social security numbers appeared under my name. It took several months to get it removed and the records rectified, but the issue is, to this day, I don’t know if I lost anything along the way!

OASDI: What you earned. What they withheld. What you receive. (Entitlement; seriously?)

What I learned since I began discussing “SSI” (aka: Social Security Income / Social Security Insurance / Social Security Benefits, et al.) on our BLOG page, is that I had no idea what I was talking about when I first began!

Well, I did know to some degree, anyway. Allow me to say that, I “thought” I knew what I was talking about. (I never make mistakes…I thought I did once, but I was wrong! (ha ha)). Just saying: as a writer and author, I should know, well, I do now know, that it is better to share nothing than to share misinformation. So, I apologize.

From now on, for me, it is called OASDI, and it IS a government mandated insurance policy that has no death benefit, and it is not an entitlement.

If you die…

• If you die before or during retirement, what you paid into OASDI is kept by the government, i.e., if you retire at 62, and die at 62 and-a-half, your money stays in the kittie for others to use.
• With very few exceptions, your family does not receive any of it, and what little they are eligible for can be limited by your survivors annual income.
  • I personally know a single mom, going to college, working full time, and collecting benefits for her daughter after her husband died, who was subsequently required to PAY BACK every cent of what she’d received because her earnings went above the limit! Ergo, they kept all of what was TAKEN from her family!
• Also, what is it about the portion of our income that the government demanded of us that makes it an “ENTITLEMENT” for others who never paid into the fund ?

If you live…

And you want to collect what you paid in…there is only one way to do so.

• • You must outlive the government-determined statistical limits for longevity.
  • Consider the following “HYPOTHETICAL”
    • From years 1969 to 2024, we will say that OASDI withholdings totaled: $278,000 for all earnings
    • Let’s estimate that your benefit payment is then calculated to be about $3000 per month.
    • If you live, however, to age 95, let’s say…you will have withdrawn a benefit of more than $1,091,000.00
    • Logically, then, the longer you live, the more you collect in return, and so it is “use it, or lose it.”

So then, assuming that all that I presented here I have understood correctly: may I ask these questions?

https://www.facebook.com/watch/?v=10156092171648632

***Does is not make you feel a bit nervous that the government is counting on your early demise?

***How many insurance companies will pay benefits to a person who NEVER PAID INTO A POLICY?

***Does this make you rethink whether or not Social Security Withholding should be suspended?

***Does it make you angry that, when you die, everyone except YOUR FAMILY will benefit from the earnings taken from you?

***Do you feel that this socialistic behaviour of the government is fair and proper, or do you feel that the wealth should should be “spread to all?” 

***Use the ‘Comments’ section below to post your views…