LizzyBee Posted October 16, 2008 Share Posted October 16, 2008 Since it was mentioned in that other really, really long thread, I thought I'd mention that the new wage limit for 2009 was just announced. The maximum amount of earnings subject to Social Security tax will increase to $106,800 in 2009, up from $102,000 in 2008, the Social Security Administration announced Oct. 16. Some interesting history about the SS wage limit: The wage limit used to be based on how much an average new college graduate would earn. As the number of retirees grew, the limit started growing faster than new college grads' salaries. Now, the majority of workers (college grads or not) will never earn the limit, let alone earn it straight out of college. Quote Link to comment Share on other sites More sharing options...
Parrothead Posted October 16, 2008 Share Posted October 16, 2008 We will never get to that limit. Quote Link to comment Share on other sites More sharing options...
Veritaserum Posted October 16, 2008 Share Posted October 16, 2008 We will never get to that limit. We'll also probably never see any kind of reasonable percentage of wages in payed back to us out of social security when we retire.... Quote Link to comment Share on other sites More sharing options...
Johanna Posted October 16, 2008 Share Posted October 16, 2008 THis whole topic is very confusing to me:001_huh: Can someone kindly explain to me what the limits mean?? Thanks. Quote Link to comment Share on other sites More sharing options...
LizzyBee Posted October 16, 2008 Author Share Posted October 16, 2008 THis whole topic is very confusing to me:001_huh:Can someone kindly explain to me what the limits mean?? Thanks. Social security tax is 6.2% of your salary. If someone earns $50,000 a year, their ss tax would be $3,100. If someone earns $150,000 in 2008, their ss tax would be capped at $6,324 ($102000 x 6.2%). Employers are required to withhold the tax from their employees' paychecks, match it, and remit the funds to the government. A self-employed person has to pay both the employee and employer portion of the tax, so they pay 12.4% of their profit and it is reported on their regular income tax return. Quote Link to comment Share on other sites More sharing options...
Nestof3 Posted October 16, 2008 Share Posted October 16, 2008 We'll also probably never see any kind of reasonable percentage of wages in payed back to us out of social security when we retire.... I agree. Especially not when they just raised how much a person gets in social security AND people are drawing it at an age when most are perfectly capable of working. I don't expect my husband to get much of anything when he ends up drawing social security which is a shame since he pays double since he's self-employed. Quote Link to comment Share on other sites More sharing options...
Plucky Posted October 16, 2008 Share Posted October 16, 2008 My fil still works and draws social security. Quote Link to comment Share on other sites More sharing options...
Nestof3 Posted October 16, 2008 Share Posted October 16, 2008 My fil still works and draws social security. So does my dad, but does your father-in-law also limit how much he works so that he doesn't lose any of this benefits? My Dad does. He alsways says, "They won't let me earn any more than _____." Of course they'll let him, but he gets a shorter end of the stick that way. I just think 62 is way to young to be able to draw SS. Quote Link to comment Share on other sites More sharing options...
Slartibartfast Posted October 16, 2008 Share Posted October 16, 2008 I think 62 is fair. If people wouldn't mess around with the money that was supposed to go to SS it would be there. I mean, you don't want to go straight from retirement to nursing home. :( It is hard to say how healthy someone will be at that age...it really is a genetic thing. Quote Link to comment Share on other sites More sharing options...
Plucky Posted October 16, 2008 Share Posted October 16, 2008 I think he does. He has a very creative work situation. Quote Link to comment Share on other sites More sharing options...
Nestof3 Posted October 16, 2008 Share Posted October 16, 2008 Okay -- what I really mean to say is I disagree with social security all together. And I agree, they should have done with it what they said they were going to do. If not, they shouldn't have been snatching it from us in the first place. Quote Link to comment Share on other sites More sharing options...
Slartibartfast Posted October 16, 2008 Share Posted October 16, 2008 Okay -- what I really mean to say is I disagree with social security all together. And I agree, they should have done with it what they said they were going to do. If not, they shouldn't have been snatching it from us in the first place. I will agree with that. Quote Link to comment Share on other sites More sharing options...
JudyJudyJudy Posted October 17, 2008 Share Posted October 17, 2008 Social security tax is 6.2% of your salary. That's only if you are an employee; the employer pays the other half of the actual cost. If you're self-employed, you have to pay the full 12.4% plus 2.9% for Medicare. Quote Link to comment Share on other sites More sharing options...
tibbyl Posted October 17, 2008 Share Posted October 17, 2008 That's only if you are an employee; the employer pays the other half of the actual cost. If you're self-employed, you have to pay the full 12.4% plus 2.9% for Medicare. And there is no wage cap on the Medicare portion. Quote Link to comment Share on other sites More sharing options...
JudyJudyJudy Posted October 17, 2008 Share Posted October 17, 2008 And there is no wage cap on the Medicare portion. Correct. Employees pay 1.45%; the employer pays the rest. Self-employed people pay the full 2.9%. Quote Link to comment Share on other sites More sharing options...
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