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Agree totally. For instance, I could never figure out if these American polls take pension deductions into account. Where I live, the employer pays additional ~20% on top of base salary into various pension/saving funds, but since everyone gets it, it isn't taken into consideration when comparing salaries. I always wondered if seeing a quoted $100K salary in the US - does it include these pension payments or not.

My guess is that in general no, because for programmers, typically, there isn't any pension.

However, there's something called 401k which is a type of retirement account. You can contribute to it through pre-tax contribution directly from your paycheck. It's fairly common for employers to match a certain amount to what employees contribute. Some might match 100%, some 5%, some up to a certain amount, some have some vesting period, etc.

So that's one thing that is worth taking into account when comparing job offers, because if you plan on contributing $15k a year to your retirement account, if a company matches 100%, that more or less means an extra $15k a year.

So some people might include that if asked of their overall benefits, some might not…

there's something called 401k which is a type of retirement account. You can contribute to it through pre-tax contribution directly from your paycheck

That sounds very similar to a lot of private sector pension schemes that operate in EU member states, e.g. Ireland.

Fully 12.4% of nearly every American's income is going to Social Security, which is a national pension scheme. (er...national Ponzi scheme)

A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from any actual profit earned by the individual or organization running the operation.

Social Security is a social insurance program that is primarily funded through dedicated payroll taxes called Federal Insurance Contributions Act tax (FICA). Tax deposits are formally entrusted to the Federal Old-Age and Survivors Insurance Trust Fund, the Federal Disability Insurance Trust Fund, the Federal Hospital Insurance Trust Fund, or the Federal Supplementary Medical Insurance Trust Fund.

[above are copy/pastes from Wikipedia]

Back when the demographics worked, Paul Samuelson said that Social Security was a ponzi scheme. Yup, Samuelson with a Nobel prize in Econ.

However, there are a couple of differences. Ponzi schemes are voluntary and you only lose the money you put in. Neither is true of SS.

Why do some people defend the system so vehemently? It's a funds-in, funds-out scheme. New 'investors' are required to pay out old 'investors'.

I agree that 'fraudulent' is inflammatory but to pretend SS is some type of insurance or pension fund is just gilding the lily.

I think everyone would be better off if everyone was just honest about what Social Security is, and what it will be if the contribution/payout ratios start to skew badly. It's belief in financial impossibilities that get people into problems.

> Why defend the system so vehemently He wasn't. He was stating specifically how it worked.

>I think everyone would be better off if everyone was just honest about what Social Security is Calling it a ponzi scheme doesn't accomplish this goal.

You're right - I'm fixing the wording on my comment. I was associating the wrong comment with my reply.

If you remove "fraudulent" from the definition of Ponzi scheme, it accurately describes Social Security. It's an unnecessarily inflammatory way to note that current beneficiaries are funded by new inductees, which is generally a problematic funding structure.

Please stop commenting on this topic until you have the slightest damn idea of what you're talking about.


First of all, that article doesn't refute my point that Social Security is an "investment operation that pays returns to its investors from their own money or the money paid by subsequent investors."

Secondly, the points the article does try to make are wrong, and the very first comment on it explains most of it. The article also suggests that things are just fine since the government can just raise taxes or reduce benefits to eliminate the problem, but doing so fundamentally breaks the promises that have been made to enrollees. You can fix the finances of any government program by paying less or charging more taxes, so it's kind of a silly argument. Social Security will probably exist forever, but its financial structure requires promises to be broken when population growth rates change (that is, when the rate of new inductees into the scheme slows).

This is off topic; I'm done talking about it.

Shhh! When you say "Ponzi Scheme" people think you're saying "fraud" and get upset because they think you're taking way their free money!

The mechanics are similar, but the motivations are different - in a Ponzi Scheme, the numbers need to keep growing to keep paying out ever-increasing amounts, otherwise people will abandon the scheme. The payouts from Social Security will go down (or inflation will eat them, or some other equivalent) if less gets put in; but it won't kill the scheme. Young people will still put money in, because they have no choice.

Social Security isn't a magic pot of gold. Nobody believes it is. It's welfare that's designed to give more welfare to the people who contributed more when they are able, and less to the people who didn't contribute.

What's a pension payment? :)

I don't see it being that complicated. Just respond with your gross yearly pay, as seen on your paychecks. This works fine for anyone except perhaps co-founders are very early employees that don't receive a traditional paycheck.

I might have polluted the poll, but I didn't see it being US-only so I voted (less than 50k, "low" cost of living though some things are ridiculously expensive, it's not apples to apples).

My gross pay is more than twice my take-home pay (and my paycheck is monthly, not biweekly), I know Europeans face the same (and on top of that, I pay 22% sales tax on everything and 60% to 100% import tax).

Social Security and friends in the US are approximately 7.5% deduction from an employees "advertised" income, plus about the same on top of (called the "employer's portion") that is not advertised as part of the salary. It is a bizarre format.

Social Security is 6.2% employer, 6.2% employee...but most economists would say that the employee pays both halves, since the cost is directly related to a specific person's job. (this year there's a temporary cut in the employee half as a stimulus measure)

There's also a similar 50/50 Medicare payroll tax that totals 2.9% of each worker's salary.

Total hit on most Americans for both programs is 15.3% of gross income.

What's scary is that is nowhere near enough revenue to sustain either.

As a self-employed person, I have to cover both halves. It's a bit of a shock when it's taken out on top of income tax.

I apologize for commenting on a downvote, but what I wrote was a simple and accurate answer to parent's question, with only a mild bit of opinion at the end.

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