Career premiums vs. the maximum benefit, by wage
Question: Over a 40-year career, at what wage do WA Cares premiums exceed the $36,500 maximum benefit, in simple and present-value terms?
Result: Inflation-adjusted career premiums pass $36,500 at a career-average wage of about $157,300. In present value at the fund's 4% return, premiums pass the value of the benefit used at 85 ($14,398) at about $82,600.
Operation: Compute total and present-value premiums at each career-average wage and compare with the maximum benefit and its present value at age 85.
Scope: Hypothetical workers, career-average wages $20,000 to $300,000 (2026 dollars).
- Compares premiums with the maximum benefit, which a beneficiary receives only if they qualify, need care and use the full amount.
- Assumes a 40-year career and the current 0.58% rate.
Robustness checks
- Sensitivity analysis: Break-even wages under alternative assumptions. The present-value break-even ranges from about $54,700 (5% discount) to $123,900 (3% discount) and rises to $89,300 or $96,500 if the benefit is used at 80 or 75. Shorter careers raise both break-evens sharply: $314,700 simple for 20 years of premiums.