An analogy between Social Security and private life insurance

[eridani]

Both are contracts that insure you against possible bad outcomes.

In the case of life insurance, you get it to provide extra money for dependents in the event of your premature death. Now what happens if you pay the policy in full, have not died, and your dependents become self supporting? You get to cash it in, that's what. The insurance company can't say "Well, you are still alive and have lots of other assets besides this policy, so we'll just keep your money."

Social Security is mandatory public insurance against the possibility that whatever you have planned for income in your old age might not work out the way you hope. You are entitled to a payout because you have paid in. The government should not be allowed to say "Well, your savings weren't depleted by personal tragedy of some sort, you chose a more frugal working life to have a more comfortable retirement,and/or your other investments gained instead of losing a lot in bad markets, so we're taking your Social Security money."

Whether you are lucky or unlucky, if you worked you paid in. Therefore people with more assets in retirement are just as entitled to a payout as those with fewer. In any event, higher income people get much less paid out proportional to what they paid in than lower income people. IF they are required to do that, then they certainly should not have their payout eliminated.

[whyverne]

1. How about comparing it to car insurance?

I keep paying yet I never wreck. I don't get anything back.

[eridani]

2. I still think life insurance is a better analogy

--because you are SUPPOSED to get something back if the policy is paid in full.