OK. Bumpy but somewhat fun.
The people who were happy with only a burger flipping skill set and some other unfortunate folks don't get to retire. For many folks not getting to retire is bad planning or choosing a lifestyle they cannot afford. A better education would be a good start to remedy this. Sometimes job opportunities can limit where one lives and works though.
I believe if you are self employed, your 13% might be accurate.
Social Security benefits are based on how much one contributed while working. I cannot imaging you
not complaining if benefits were adjusted upward based on the amount contributed on the difference between $160,200 for 2023 (but I'm not going to fuss over the difference to $165,000) and any larger number such as $400,000.
Maximum Taxable Earnings (Social Security):
https://www.ssa.gov/benefits/retirement/planner/maxtax.htmlPeople on Medicare with high incomes pay increased premiums on their Part B (Doctor's office visits etc) and Part D (prescription medicine):
Income Related Monthly Adjustment Amount (IRMAA):
https://www.ssa.gov/benefits/medicare/medicare-premiums.htmlBrackets are not as smoothly incorporated as on Income Tax.
$1.00 annual income into the next bracket can increase your premium tens to hundreds of dollars per month.
There are some tax advantages to being retired. First off, you are not paying Social Security/Medicare Tax, unless you are only partially retired and still have earned income. Depending on your total income, some or most of your Social Security income will not be taxed on your Federal Income Tax. Oklahoma does not tax Social Security income and allows the first $10,000 of qualified retirement pension/income to not be taxed. Many other states offer something similar.
My numbers are just ballpark for this. Will be up to $165,000 sometime soon, I am sure - I was going from memory and knew it was above $160k, so just rounded up to next one.
Education;
Would be nice, and better lifestyles great, IF education opportunities and choice were more consistent. But we have a system designed to make most people starting down the post high school path into prey! By institutionalized predators! Fixing that major snafu - in the literal meaning of the acronym - would make a world of difference at leveling the playing field.
13% - a W-2 wage is half coming directly out of the paycheck every pay period. The other half is a pass through made by the company, which ALWAYS includes that as part of "total compensation", which literally means the employee is the one paying that tax! By definition. If the employee was not there, no tax would be paid, so it really has no direct expense to the company - it totally derives from the employee and their work.
And yeah, being self-employed now, when I get a paycheck, it is the 13% (approx).
Benefits are based on total pay in as it should be. If someone pays full amount on $400k, then their benefit would be higher than someone paying on the $160k. I was told by someone close who usually gets to that "no more SS tax" point about November that their tentative SS is going to be "around" $3,500 a month based on full age, this year. I think it is a touch higher than that, but this was a little over a year ago, so...

If someone pays on $400k,then the benefit would be higher, too. And should be.