I think the computation should be:
Clawback = Your normal Social Security 'contribution' + ((Your normal Social Security 'contribution) * 8)/24)
For me, the deferral lasted eight pay periods. The clawback will occur over 24 pay periods.
The reduction in take home pay from the high point (with the Social Security deferral) will be about $250/pp for me.
My actual point is that this could very well be a shock to some younger folks who do not value, or expect to get, Social Security. Will they simply just accept a take home pay decrease of $175/pp? Maybe. Or, maybe a discussion will start regarding the return on investment for that $175/pp. Most GenXers (me) and younger think they will get nothing from Social Security - or, at the very least not what is promised. They may want to actually know what their benefit will be if the politicians renege on funding it via the general fund.
President Biden is on record over the decades claiming that Social Security is funded, is a good retirement investment, and is sacrosanct. If he elects not to fund it doesn't Social Security start looking optional rather than sacrosanct? I don't think he wants that. He needs to borrow from the Social Security to fund his programs. He really cannot allow the system to be questioned.
Conversely, can President Biden sell a 30 year old on the value of an investment that is currently earning 0.875% when his TSP/401(k) did about 18%? Especially when that 30 year old is convinced that he will get no Social Security benefit. Remember, in two pay periods that 30 year old will lose 10% - 15% of his/her perceived take home pay. They might start thinking that their TSP/401(k) is a better place for that money than Social Security - AND IT IS.
It may not come to this. Maybe our younger workforce will just blah their way through without looking at it. Personally, less than this changed me almost completely. For different reasons - tax increases, I saw my take home pay decline when a promotion should have dramatically increased it. It changed the way I think and made me start to question the norm.
We shall see. I think the first of the 'clawback' will be happening this pay period. It will be the biggest chunk - namely the return of the Social Security 'contribution'. The following pay period will initiate the true clawback. I'm thinking that President Biden will have to sell this take home pay reduction since it will occur on his watch. Can he?
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