Letter: They’re Taxes, Not Investments
To the Editor:
A letter in the March 16 Forum headlined “Focus on the Real Entitlements” referred to the Medicare and Social Security programs as ones “that most of us have been investing in for decades.” Money that any individual has given to Social Security during working years is a tax, not an investment. The tax goes, as a money transfer, directly to then-current retirees.
An example clarifies this point. Suppose a person has contributed $30,000 to Social Security during a lifetime of work, makes arrangements to start collecting on his or her 67th birthday on May 11 and dies on May 12. One monthly payment of, say, $1,000 will arrive on May 11. There will be no more payments to the surviving spouse other than a death benefit of $255. What happens to the other $29,000? It has already been given to other retirees during the deceased person’s working years.
Every worker should understand that mandatory Social Security deductions from paychecks are not investments that behave as deposits in personal savings and retirement accounts.
T. Marll McDonald
White River Junction