This morning for some reason right out of the clear blue something I hadn’t thought of in years popped into my mind. I remembered that increase in pay you hopefully use to get at some point each year, dependent of course on your salary, after you had paid in the maximum amount of Social Security established by the Social Security Administration for that particular year.
The first year I reached and exceeded that maximum Social Security deduction was 1970 when the maximum deduction number was $7800 and I made $8600 that year. I remember first seeing that extra amount in my net pay on my pay check and simply thought I must have gotten a raise. What was odd is that I had not been informed of any such raise. Hearing of my curiosity about the pay increase, one of my coworkers clued me in as to what the increase was all about. Up until that point I was really a bit clueless about how all those deductions like Social Security and Medicare worked.
Having said that, shown below is an interesting chart of the yearly Social Security deductions beginning in the year 1937 and going thru the year 2016. For this year as a matter of information, 2017, the maximum is set at $127,000.
And so it was that from that first year that I received that increase forward, through my career as the latter part of the year approached with each pay check I anticipated that perhaps it was this week that I had reached that Social Security payoff threshold. And after looking at your pay check and another week was going to pass you by there was certainly at least a brief moment of disappointment if you did not see that increase.
The last year of my working career that I had met the Social Security deductible maximum was before the end of the year, 1989, when it had reached $48,000. I went into semi-retirement in 1990 so I had a substantial decrease in income from that point on and that Social Security deductible became but a fleeting memory of the past.
In looking at that chart today I am amazed at how high the Social Security deduction has gone. I did check however and according to the Pew Research Center Institute the income spread for a middle class family of three is anywhere from $42,000 to $125,000, dependent of course on many factors, the least not being where you are living and the associated cost of living. In other words, if you live in Vicksburg, MS you are far less likely to come close to that threshold than if you were living in New York City.
Now at age 75 I find myself on the other end of this discourse, benefiting in my old age from all those years of playing that waiting game, more thankful for what I paid in than for those token raises I was enjoying along the way…. 🙂