U.S. Social Security and FICA Contribution Amounts as Lump Sum Payout

I am having trouble finding out the answer to a specific question concerning the economics of the United States’ Social Security, Medicare and Medicaid. I haven’t found it in the SDMB archives, though that’s probably due to my ineptitude at using its search engine.

My question is this. What would the dollar amount of a lump sum payment be for all currently living Americans’ contributions to Social Security and FICA? IOW, how much would it cost the country if the U.S. Gov’t just cut everyone a check for the amount that they paid in? Ignore trying to adjust the payout to inflation. Also, ignore any interest that the contributions would’ve accrued. No payouts of deceased persons’ contributions. Ignore whether the US actually has this cash on hand. Just a simple lump sum. If you can split it between SSI/Medicare/Medicaid, that would be great.

Cites would be tremendously helpful; arguments about the stability, necessity, or morality of SSI/Medicare/Medicaid, etc…are not.


Ok, you realize that the trust funds used for Social Security are not an aggregation of individual accounts, right? It isn’t like there’s a Gray Ghost account with a specific figure of how much you have contributed that is somehow distinguishable from how much I have contributed?

As long are you are clear on that, there is just about $2.5 trillion in the Old Age and Survivors’ Insurance Trust Fund. Since the fund was never intended to be divvied up as lump sum payments, you can divide that figure up in any manner you wish.

Want to give a check to every living man, woman and child in the US? That’s about $8 grand each.

Want to give a check to every adult? That’s somewhere around $11 grand.

Want to give a check to everyone currently employed? You’re closer to $18 grand.

If you want to look at liquidating the Medicare trust funds, those have somewhere around $400 billion in them, but I can’t find an updated figure.

Not sure what you mean by a “lump sum payment”. SS is not an annuity or a pension; payments are based on eligibility- you have to have so much work history and paid a certain amount to receive benefits, but you are not paying into a personal account which is growing in value (say as you would with a 401K). Everyone pays into a common Social Security Trust fund from which benefits are paid. The younger people who are currently making social security contributions are being used to pay people who are drawing benefits now.

ETA: Or what **Ravenman ** said.

This pdf gives estimates of pay in over the lifetime of the average earner. Sadly you can’t just scale that to the average age of the US cititzen, since peoples earnings get higher as they age. But its a start anyways.

Ravenman I think the OP is just asking how much everyone has paid into the SS/Medicare system, not what the trust-fund would be divied up amongst the population.

The IRS knows how much you’ve paid in right? Your share of the pot would be that amount, it doesn’t need to be in an individual account.

True more or less for SS. For medicare your “payout” is more or less a function of how sick you are late in life. It doesn’t have any relation to how much you paid in.

It’s not true for SS either- what you get paid has no relation to what you’ve paid in earlier- i.e., their is no present value associated with the payments you’ve made in the past. Those payments have already been distributed to other beneficiaries, or added to the trust fund surplus.

But in calculating your payouts, the amount you’ve paid in is used. So its not true that “what you get paid has no relation to what you’ve paid in earlier”. They’re explicitly related.

Well, true, they are related, but only in the sense that it used to determine your level of benefit. It is not based on the value of your contributions, but on the formula SS uses based on your work history, the current level of inflation etc. One of the big debates about SS is whether that formula is sustainable to keep paying the benefits it does based on the current surplus in the SS trust fund and the amount paid into by the current and future working population. That wouldn’t be an issue if you were paid benefits based on the value of your contributions: you would get paid whatever the present value was at the time you received benefits.

I know there isn’t a lockbox or other Scrooge McDuck-esque vault where Tim Geithner and the rest of the Treasury Department play in the accrued FICA receipts like kids at the Chuck E. Cheese ball pit. (Though that is an interesting, and disturbing image…)

Anyways, I was just asking how much would it cost to repay all surviving contributors only the amounts that they paid in? I’m not asking what they are entitled to under the relevant law(s). I know that such entitlement has no resemblance to what their individual contribution was. And, as Simplicio accurately noted, I’m not asking about the actual amount in the SS Trust Fund; just how much has everyone paid?

E.g., Joe Doe paid X amount per year under the SSI and FICA part of his W-2. Sum up all years for all surviving Joe Does and Joe Does employer’s contributions: how much is that number?

Thanks again for your help.

I could come up with a number for how much has been paid in these social insurance taxes over the years, but there’s just no way to know how much of all that money was paid by people who are currently still alive versus those who have expired. There is no way to start with aggregated government data and arrive at an answer for an individual that reflects how much money he has paid, how long he has paid those taxes, while filtering out the tax amounts paid by people who died as recently as last year.

It depends on how much they made each year and how long they have been working. That question just can’t be answered as you’ve asked it.

The death rate for people under the age of 67 is pretty small in the US. I think you can just assume everyone lives till they are 67 and be pretty close to the correct answer.

Obviously no answer is going to be correct down to the penny. But taking some averages you can probably get down to within a couple hundred billion or so.

So the average lifetime pay-in for SS. is ~300k. Mean age in the US is 40, so the average person has paid ~135k. Times the US population gives something like 4-5 trillion.

So the median personal income is currently around $30,000. That would indicate that such a hypothetical worker would pay around $4,200 in social insurance taxes a year, including employer contribution.

If that person started working in 1990, a simple adjustment for inflation would indicate he paid $2500 in social insurance taxes that year. Adding up the years between 1990 and 2010, such a person paid $63,000 in actual taxes over those 20 years.

One cannot extrapolate this “average Joe” scenario into any larger picture about how much it would cost the government to refund all social insurance taxes to everyone. The calculation just wouldn’t work.

The OP isn’t looking for the size of the check each person gets, he’s looking for the total size of the cost to the gov’t to reimburse.

Sorry I can’t be of further help. Good luck.