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Social Security and Medicare Taxes and Benefits Over a Lifetime

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Document date: June 20, 2011
Released online: June 28, 2011

How much will you pay in Social Security and Medicare taxes over your lifetime? And how much can you expect to get back in benefits? It depends on whether you’re married, when you retire, and how much you’ve earned over a lifetime.

These tables provide estimates of the lifetime value of Social Security and Medicare benefits and taxes for typical workers in different generations at various earning levels. The “lifetime value of taxes” is based upon the value of accumulated taxes, as if those taxes were put into an account that earned a 2 percent real rate of return (that is, 2 percent plus inflation). The “lifetime value of benefits” represents the amount needed in an account (also earning a 2 percent real interest rate) to pay for those benefits. 

View the tables: tables in PDF format | tables in Word format

Notes: All amounts are in constant 2011 dollars as noted, adjusted to present value at age 65 using a 2 percent real interest rate. Each calculation assumes survival until age 65 and then adjusts for chance of death in all years after age 65. It also assumes that benefits scheduled in law will be paid even if trust funds are exhausted. Workers are assumed to work every year from age 22 to age 64 and retire at age 65 or the Normal Retirement Age. An average-wage worker earns the average wage in the economy every year, based on Social Security’s measure of the “average wage.” The low-wage worker earns 45 percent of the average wage, while the high-wage worker earns 160 percent of the average wage. The tax-max wage worker earns at the taxable maximum every year. Medicare numbers are net of premium, other than the new premium tax on some high earners.

Revised: June 20, 2011

Read Q&A by C. Eugene Steuerle on how lifetime Social Security and Medicare taxes and benefits were estimated.

Topics/Tags: | Economy/Taxes | Retirement and Older Americans

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