Letter: Straight talk on Social Security


After reading Larry Donaldson’s letter on Sunday, I felt a little refresher on how Social Security works might be in order.

Social Security is deducted at the rate of 6.2% and employers must pay a matching 6.2%. As these funds are paid in on a quarterly basis, they are invested in US Treasury securities. These securities bear an interest rate of anywhere under 1% currently to over 11% in 1980. An average rate of 5 to 6% over the last 40 years could be assumed.

When a person retires the monthly benefit is calculated by dividing what was paid in by the person and their employers plus the interest by the number of months until the person reaches life expectancy, currently about 80. So, Social Security should have enough to pay you. It is your money. The only danger of Social Security not having your money would be if the government could not make good on Treasury Securities.

This of course is why the national debt is such a concern.

Terry Knebel, Delphos

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