Ernie the Electrician Understands Social Security

Written By: William Shipman  |  Posted: Friday, May 13th, 2011

            Ernie was pretty certain he had made the right decision after hearing the senators propose that the Social Security retirement age should be increased to age 70. At first glance it seemed to make sense. People are living longer so their benefits should start a little later. And this would help the system's finances. But looking back at his own career as a self-employed electrician, he began to question if it actually did make sense. He also wondered whether the senators knew what he knew. If they didn't, they should. If they did, why did they make such a proposal? Here's what he thought they should know.

            Ernie started working in 1966 at age 21. He made $6,900 his first year, and just average wages thereafter. But he was frugal, for his parents taught him to save no matter what. So he saved every year the same amount he paid in Social Security taxes that he assumed were set aside for his retirement. In the first year it wasn't much, just $360.

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