@Allison Yep, they do, at least at present. In 2013, as an employee you also pay SS taxes (6.2%) on earnings UP TO $113,000. If you have an employer, it pays the other 6.2%. (I think self-employed folks have to pay the whole 12.4% but double-check me on that.) So you're paying exactly the same SS taxes if you're making $113K or $250K.
One of the most interesting posts (with understandable math and an awesome table--scroll down) that outlines and explains a formula for early retirement is called The Shockingly Simple Math Behind Early Retirement: http://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/ Essentially you want your annual living expenses x25. If you retire at the traditional age and receive SS, you can subtract SS from your monthly living expenses to determine what the gap is. Let's say your living expenses are 5K a month, you get 2K in SS, then you need to replace 3K (or 36K per year). If you were to use a 4% SWR (safe withdrawal rate), you'd need $900,000. If you reduce your living expenses before you retire (pay off house, for example), you can live on a lot less and might need to replace only $1500 (or $450,000). Currently, Social Security monthly retirement tops out at $2500 in 2013 for people retiring at 65. If you're 70 and starting to collect in 2013, the amount is about $3300. (It depends on how much you paid into the system but you don't need to have earned a 6-figure income to get the max.)
Loved this--the data, the analysis, the inspiration. I have tackled and mastered a lot of things in the kitchen over the years, but I've had two boxes of Bell jars in my garage for um ... at least two years. Must take the plunge.
Did you buy the bracelet from an artesian or an artisan?
Really enjoyed this post. I'm pretty amazed at how aware and thoughtful and even deliberate about money "BP" is. I was super-broke and very underpaid at my first job in a large expensive city (SF), but don't remember being able to articulate long-term plans or goals. I just sort of drifted along ...
This was one of my favorite posts on The Billfold. I'm wondering whether Logan's dad could write a post on his views on teaching kids about money (can it even be done?) and what if anything would he do differently if he he could do it again.
@Michelle LeBlanc@twitter Same here!
@Catface Cannot stop laughing at this comment. Thank you.
"I was happy she asked me to do this, happy to do this, happy to have a job that allows me to do this. I said yes." You may have your money challenges, miss, but you are clearly an awesome friend.