3 ms·

> I thought the idea of Social Security was an insurance program to guard against you outliving your means if you live long enough, not an I-get-paid-back cash-

> I thought the idea of Social Security was an insurance program to guard against you outliving your means if you live long enough, not an I-get-paid-back cash-out of your payments. Is that a fundamental misunderstanding about what the purpose of SS is? Yes, this is a fundamental misunderstanding of social security. Social security isn't insurance or an investment, it's a tax that's presented as an insurance or investment in order to make it more palatable. The social security tax rates were set with the demographics and life expectancies in mind decades ago. And now that these demographics and life expectancies have changed we'll either have to drastically increase the tax workers are paying, or drastically cut the amount that people withdraw.

supernova87a 4y ago
I don't know what you're disputing over. It is both a tax, and it is an insurance program.
- jay_kyburz 4y ago
  I think if you call it insurance it assumes you are entitled to something, but you are not. A future government can decided to stop paying or reduce payments if they want to. I prefer what we have here in Australia where you are required to pay money into an account that is actually yours, with a balance that you can watch grow, and that you can withdraw as you need when you retire.
  - nazgul17 4y ago
    Is it true that you can actually withdraw it all the day you retire to buy real estate and then the government will start giving out a pension for you? This is something I was told by some Australians.
    - defrost 4y ago
      Not exactly: The Age Pension is designed to support the basic living standards of older Australians. It is paid to people who meet age and residency requirements. It is targeted through the means test to those who need it most. Pension rates are indexed to ensure they keep pace with Australian price and wage increases. https://www.dss.gov.au/seniors/benefits-payments/age-pension https://www.dss.gov.au/seniors/benefits-payments/age-pension If you only have the house you live in (that's more or less median) and no income (from additional rental properties | other investments) then you might qualify for a pension. Typically people might draw on their superannuation fund to provide a weekly income for themselves although they are free to use it for their retirement plans as they see fit.

supernova87a 4y ago

I don't know what you're disputing over. It is both a tax, and it is an insurance program.

jay_kyburz 4y ago
I think if you call it insurance it assumes you are entitled to something, but you are not. A future government can decided to stop paying or reduce payments if they want to. I prefer what we have here in Australia where you are required to pay money into an account that is actually yours, with a balance that you can watch grow, and that you can withdraw as you need when you retire.
- nazgul17 4y ago
  Is it true that you can actually withdraw it all the day you retire to buy real estate and then the government will start giving out a pension for you? This is something I was told by some Australians.
  - defrost 4y ago
    Not exactly: The Age Pension is designed to support the basic living standards of older Australians. It is paid to people who meet age and residency requirements. It is targeted through the means test to those who need it most. Pension rates are indexed to ensure they keep pace with Australian price and wage increases. https://www.dss.gov.au/seniors/benefits-payments/age-pension https://www.dss.gov.au/seniors/benefits-payments/age-pension If you only have the house you live in (that's more or less median) and no income (from additional rental properties | other investments) then you might qualify for a pension. Typically people might draw on their superannuation fund to provide a weekly income for themselves although they are free to use it for their retirement plans as they see fit.