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AUTHOR: R Quinn on 5/04/2026
When I read Social Security is a scam or that Congress stole the funds, or “I paid for my own benefits,” I find it very upsetting.
When someone says they paid Medicare taxes while working so why should they pay premiums in retirement and also demand to know what happened to the money, such ignorance is disturbing-mainly because there is no effort to learn the facts.
During my working life I paid $132,817 in Social Security taxes. That was between 1959 to 2010. My employers paid a similar amount.
Since my wife and I began collecting Social Security benefits – on my earnings record- in 2008 we have received about $798,750 in combined benefits. That is 213 months of benefits including COLAs.
Based on my average monthly benefit alone, during the first six years I received in benefits more than I paid in taxes. After eighteen years of benefits we have collected way more than I and my employers combined paid in taxes.
As far as Medicare goes, sad to say, the return has been even greater. Frankly I wish it had been zero. My total Medicare taxes were $98,080 including a lump sum check of $16,000 I had to pay at retirement because part of my pension is considered by the IRS as deferred compensation.
Within a few years of retirement our Medicare claims were over twice the taxes paid and there has been much more over the years and ongoing.
Part A is funded mostly from the payroll tax, but also from a portion of income taxes paid on Social Security benefits.
Higher income earners pay an extra 0.09% payroll surtax on pay generally above $200,000.
Part B is mostly funded from general government revenue plus beneficiary premiums which equal 25% of the Part B costs. IRMAA premiums are higher than the 25% equivalent.
NOTE: income taxes paid on SS benefits go into the Social Security (up to 50% level) and Medicare Part A trust funds (between 50% and 80% level).
I will leave it to the spreadsheet gurus to apply present value, ROI, break even and such to these numbers. I see these programs as a good deal, probably too good. They definitely relieve financial stress for retirees.
And let’s not forget it is all insurance, there will always be some financial winners and some losers, but all seniors have protection.
For most retirees the ongoing cost for Medicare plus a Medigap policy protecting from out of pocket costs is under $500 a month including Part D. Part D varies greatly though based on plan choice and is also subject to IRMAA.
Not inexpensive, but when you consider the higher cost risk for the over 65 group, not a bad deal either. Most working Americans pay more that 25% of the cost for their health insurance plus high out of pocket costs.
Medicare premiums increase because the use and cost of health care services increase each year. Nobody is being unfair to seniors as some people claim. Interestingly, the fees Medicare allows barely and in some cases don’t cover the actual cost of services. This drives cost higher for other payers.
The fact we have four major types of payers-Medicaid, Medicare, commercial insurance and self-pay – each at different levels – is one of the major flaws in our system.
Please don’t comment that instead of paying taxes for SS, a person could invest the money and come out better. That’s a theory fraught with variables and assumptions that would never be realized for 99% of Americans- IMHO.🤑
QUINNSCOMMENTARY 
“… I will leave it to the spreadsheet gurus to apply present value, ROI, break even and such to these numbers. … And let’s not forget it is all insurance, there will always be some financial winners and some losers, but all seniors have protection. …”
It isn’t “insurance” if you are not properly pricing risk and assessing an appropriate premium. It is more akin to socializing home or auto insurance.
Medicare, and to a lesser extent, Social Security are risk transfer processes – nothing more than shifting expense. By spending more than revenues, and by promising more than projected revenue, Congress has in the past, continues today, and appears to be willing to continue tomorrow to use Medicare and Social Security to buy votes today and send the bill, via ever increasing national debts, to generations of Americans too young to vote, and generations yet unborn.
“… I see these programs as a good deal, probably too good. They definitely relieve financial stress for retirees. …”
Maybe, if you only look at past and current taxes vervus benefits paid to date – if you ignore the future. Also true only if you ignore the health care cost shift from Medicare, Medicaid and the VA, where 45% of Americans have health coverage where governments buy votes by deliberately reimbursing providers less than the actual cost to provide services, where they fix prices below cost, so that providers much charge excessive amounts (250+% of Medicare, 350+% of Medicaid allowables) to others who are not covered by a plan Congress uses to buy votes by setting prices.
When you have the power to set prices, it is really easy to create a “good deal” one that is “probably too good” and to “relieve financial stress” …
,,, one that ignores the “bad deal”, one that is “probably worse than you know” which “triggers significant financial stress” among most other Americans.
See:
https://www.ahajournals.org/doi/10.1161/CIR.0000000000001442 “… The United States is facing a growing health care affordability crisis. In 2024, national health expenditures totalled $5.3 trillion, or $15 474 per person, accounting for 18.0% of the U.S. economy. Spending on health care continues to rise, … Patients, even those with insurance, frequently face financial hardship, delayed or foregone care, and medical debt because of gaps in coverage and inadequate consumer protections.”
https://www.kff.org/health-costs/americans-challenges-with-health-care-costs/ Just under half of U.S. adults say it is difficult to afford health care costs, and about three in ten say they or a family member in their household had problems paying for health care in the past 12 months. … The cost of health care can lead some to put off needed care. … Notably three in four (75%) uninsured adults under age 65 say they went without needed care because of the cost. The cost of prescription drugs prevents some people from filling prescriptions. About four in ten (43%) U.S. adults say they have not taken their medication as prescribed in the past year due to costs. … Health care debt is a burden for a large share of Americans. In 2022, about four in ten adults (41%) reported having debt due to medical or dental bills including debts owed to credit cards, collections agencies, family and friends, banks, and other lenders to pay for their health care costs … “About two-thirds of adults say they are either “very worried” (30%) or “somewhat worried” (34%) about being able to afford the cost of health care for themselves and their families. …”
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It all boils down to paying for what you want, but not generating the required revenue does not mean the programs are to blame.
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No. Since 1939, the idiots in charge have been adding benefits and new spend to Social Security, far beyond the initial intent/design of the program, without adding new revenues, and without adjusting for changing demographics. They have been ignoring basic economics. The initial program isn’t to be blamed, but the monstrocity Congress has created surely deserves criticism.
The same is true, to a lesser extent, when it comes to Medicare where the most substantial change/abuse was Medicare Part D – added with NO, repeat NO new revenue source.
The programs are to blame, because they are so easily manipulated based on lies – both the ones you so frequently cite from uninformed individuals and, MORE IMPORTANTLY, from lies, for decades, told by your current and former Congressman AND mine too!
People still think of this as retirement/disability/survivor benefits that they earned (as if on a contract basis) from their contributions/taxes. You argue it is insurance. However, as insurance, it is an obvious failure – an insurance company that did what the federal government is doing would be insolvent, taken over by the state.
As designed, this is mostly a socialist welfare scheme to redistribute money from current and future taxpayers (via deficit spending) to current and past beneficiaries.
The study I would like to see is whether the Baby Boomers, as a generational group, who have been paying more Social Security taxes since 1983, and FICA-Med without a cap since 1993, and surcharges for high income since 2012, whether they have paid enough (along with taxes on current benefits and non-wage income) such that, had the taxes been properly invested, that they would have funded the expected benefits they will receive.
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The people who manipulate them are to blame. Would you blame the car if the driver hits a tree?
Where would we be without these programs? Call them what you will. A society of 340 million can’t function without some collective support. Most people can’t even manage their own finances or plan for the future. It’s fine to say, too bad, but the reality is quite different.
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“The people who manipulate them are to blame.”
Agree!!!!! That is Congress and more recently, Presidents Bush II (Part D), Obama (Medicare surtaxes as part of Health Reform), and Biden (Inflation Reduction Act and Social Security Fairness Act).
Other presidents have failed to act, or took action that corrupted the system by reducing the link between FICA and FICA-Med taxes and the benefits, or by lies and more lies – Clinton (instead of raising taxes by raising rates, he took the cap off of FICA-Med), and Trump (do nothing, lots of talk and lies).
That’s my point. They have lied so frequently, so disrupted/corrupted the programs, decoupling taxes from benefits, which has given too many Americans the understanding that their taxes justify the benefits they will receive.
“Would you blame the car if the driver hits a tree?”
You mean, if the driver steered a car into a tree? Yes, if the car had a defect!
“Where would we be without these programs?”
Exactly my point. With Congressional/Administration action and lies, Americans became dependent on a system which they are unwilling to pay for. Whose gonna pay, the French? Should we send them the bill for the outrageous actions by past Congress/Administrations?
“Call them what you will.” \
Liars.
“A society of 340 million can’t function without some collective support.”
Agree, and if we were all contributing, that would be a reasonable conclusion. However, in out progressive system (where 40% do not pay any income taxes to support national defense, Medicaid, etc.) and where many Americans are unwilling to pay FICA and FICA-Med, and income taxes (Medicare B & D) sufficient to pay for what they will receive (the progressive nature of Social Security and Medicare and Medicaid), we are increasingly a society of “don’t tax you and don’t tax me, tax that guy behind the tree” or “the best tax is the one I owe and you pay”.
“Most people can’t even manage their own finances or plan for the future. It’s fine to say, too bad, but the reality is quite different. Where would we be?”
When my firefighter father died at age 53, my mother was 44 years old so there were no Social Security spouse survivor benefits … only my brother Mike, 5 years old, qualified under Social Security for benefits. That benefit was no where near enough to maintain the household – three of the older children were in college or soon headed there. So, where would we be?
We would be back to work – mom found two jobs – working full time for the State of Ohio in highway relocation, and selling real estate on the weekends. And, just like that, of course, the Social Security child benefits were suspended.
Fourteen years later, Congress passed the Social Security Amendments Act of 1983 which included GPO. Sixteen years later, when my mom suffered a medical setback and was physically no longer able to travel for work, she retired. Applying for Social Security, lo and behold, they significantly reduced her spouse’s social security benefit (by applying the GPO offset that was added in 1983). Ironically, two of her sisters received their full spouse benefit, multiples of my mom’s amount, in addition to my uncles’ Social Security benefit, even though, as homemakers, with some part time work, they paid less in Social Security taxes than my mom (on her real estate earnings).
We should have long ago increased the FICA tax rate, capped the benefits at a level sufficient to assist those who worked and paid in for 35 years to avoid poverty, changed the investments, and most importantly, stopped buying votes by promising more and more and more and more while engaging in deficit spending, and issuing IOU’s – sending the bill to generations of Americans too young to vote and generations yet unborn.
That is, we have lots of welfare programs. Stop buying votes. Stop lying.
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