If you pay in too much, or too much is withheld in your state and federal income taxes, then you can get back some of your own money when you file your taxes. Some people get some back, some don't, and some pay additional taxes. But when you get back your refund, that is your money that the government used, interest free, for that year. They keep the interest, and you don't get that with your refund.
Right, I knew that.
The SS money that is deducted from your pay check this week goes to pay someone else's SS benefits next month. There is no SS money pot with Cheri's name on it, holding your money (plus interest) until you retire. When you retire, your retirement money will depend on how many people are working and contributing after you retire.
If our population of young workers is smaller than the population of retirees, then something has to happen. Here are the possibilities:
1. each worker will have to have a higher percentage of pay deducted
2. workers will have to postpone retiring until an older age
3. retirees will get smaller pensions
Or it could be a combination of all of the above.
Already retirement age has been postponed for future recipients.
Thanks!! that's something I never knew.