What Will The Return Be From Your Social Security Payments?

One of the big questions that many folks face with regard to Social Security benefits is – I’ve paid in so much, will I ever see it come back?

I thought I’d show what a payback break-even might look like, in terms of the money you put into the system and what you’ll get back out of it.  I made an assumption in the calculations:

  • Future COLAs were not calculated into the example, keeping things in terms of today’s dollars.  COLAs would only confuse the calculations.

Full Retirement Age

In this first series I assumed the normal, Full Retirement Age scenario, with two options:  1) you earned exactly half of the wage base that SSA requires withholding for each year of your 35-year working life, and you’re now age 66, Full Retirement Age; and 2) you earned exactly (or more than) the maximum amount of money that the SSA requires withholding during that period.  Here’s the outcome:

Earnings Withholding Benefit Payback Period
Half $1,037,350 $64,315.70 $1,728/month 3 years, 1 month
Full $2,074,700 $128,631.40 $2,427/month 4 years, 5 months

Did you find that surprising?  I bet you might have.  So, in terms of dollars in, dollars out, you get your money back out of the system in less than four and a half years, even less if you earned less.

I’ve included the half wage base example to point out the fact that people who earn more take a longer time to receive all of their money back out of the system.  This is because of the way your benefit is calculated – notice that the benefit for the half wage base earner is actually 71.2% of the benefit of the full wage base earner, even though the half wage base earner only earned (and paid in) half of what the full wage base earner did.

But wait a second… if I didn’t have that money withheld by SSA, I’d be doing something with it, right?  Okay, let’s look at the situation if you had put that money into a savings account for later use (but we all know you’d likely have just bought something with it, right?).

Saving The Withholding Yourself

So we’ll assume that you put this money aside in a savings account which earns 3% per year.  Here’s the outcome:

Earnings Withholding
(plus interest)
Benefit Payback Period
Half $1,037,350 $99,386.93 $1,728/month 4 years, 9 months
Full $2,074,700 $198,773.90 $2,427/month 6 years, 9 months

Still, in my opinion, a pretty surprisingly low number.  This means that, in the maximum withholding example, you’ll get back everything that you put into the system in less than 7 years, by your age 73.  And if you calculated in the value of the employer’s portion of the withholding, the figure would double, to your age 79½, approximately.  In the half wage base earner example, your money is returned to you in less than five years, by age 71.

What happens though, if you take your benefit early, at age 62?

Starting at age 62

Since at age 62 you’d be taking the benefit at a 75% rate, this will take a bit longer to pay back, but you’re starting earlier so you’ll perhaps have more life ahead of you to achieve the payback.  Here’s the result from these calculations (with the interest factor built in):

Earnings Withholding
(plus interest)
Benefit Payback Period
Half $1,037,350 $99,386.93 $1,296/month 6 years, 4 months
Full $2,074,700 $198,773.90 $1,820/month 9 years, 1 months

In the half wage base example, your payback period is increased to more than 6 years, but you’re only age 68 at this stage.  Also with the full wage base, more than two years is added to the payback period, but instead of age 73, you hit the break-even point at age 71.  And once again, if you factor in the employer’s portion of the withholdings, the payback period is doubled, to your age 80 – just slightly more than the payback period for beginning at FRA.

Just for grins, let’s figure this out for age 70.

Starting at age 70

By delaying to age 70, you achieve an 8% increase in your benefit each year.  Here’s the tale of the tape (again, with interest added in):

Earnings Withholding
(plus interest)
Benefit Payback Period
Half $1,037,350 $99,386.93 $2,281/month 3 years, 7 months
Full $2,074,700 $198,773.90 $3,204/month 5 years, 2 months

In the full wage base example, your personal money paid into the system, with interest added, is paid back in just over five years (less than four years in the half wage base example), when you’re age 75, or just over age 80 if you include the employer’s portion of the withholding.  In the half wage base option you’ve been paid back in full just after your age 73½.


If you happen to have the mindset that you should try to get your money back out of the system as soon as possible (which I believe is a short-sighted approach), then you should start taking your benefit as early as possible at age 62.  You’ll get your payback by age 71 if you’ve maxed out your withholding, or by age 68½ in the half wage base example.

Unfortunately, you’ll be short-changing yourself (and your spouse, if you’re the primary breadwinner) of future increased benefits at the cost of saving only four years in the payback cycle (or five years in the half wage base example).  See the article Ah, Sweet Procrastination! for more details on the benefit of delaying taking your Social Security benefit.

About the author

Jim Blankenship, CFP®, EA

Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP professional and has earned the Enrolled Agent designation, a designation that qualifies him as enrolled to practice before the IRS. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.

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A Social Security Owner's Manual


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  • Two comments that I think are relevant.
    My personal savings (IRA, 401K, etc.) survive me and benefit my heirs. With SS my money is simply removed from the table (thank you very much sucker).
    The SS experiment in socialism is a classic pyramid scheme and is unsustainable. When the house of cards collapses, What then?

  • Yes, I think you have identified one of the few downsides to social security. One never has a crystal ball, and all forms of saving involve some risk. I am happy to say, this will not be a problem for me!

  • Very good points, indeed! There’s another hand though, Gail (and in case you’re counting, that makes three hands!)…

    If you die at age 62 and 1 month (for example) with no spouse and no children, under the SS system you have nothing to leave to your favorite charity (or nieces and nephews, sisters and brothers, or parents) – whereas, in the case of the savings account, you have the account to bequeath as you wish.


  • Thank you for posting this analysis. I found it very helpful. I would like to add one observation. Once you have withdrawn the savings accrued from the self-funded account, the money is gone. However, a social security pension continues to pay till the end of your life, a potentially much larger total payout. Of course, one could argue that you could have invested the money better to earn a higher return. On the other hand, you could have done worse! The advantage of social security and state and federal pensions is that it provides an inflation protected floor to one’s standard of living in retirement. One is then free to attempt to improve that standard by investing other money saved.

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