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URL:  https://boards.fool.com/it-is-vital-to-remember-that-what-you-pay-to-32160533.aspx

Subject:  Re: Attitude Question - SS Date:  3/15/2016  2:06 PM
Author:  syke6 Number:  79347 of 97361

It is vital to remember that what you pay to social security is a TAX. It's not insurance. It's not a pension program. It's a tax. There is no account with money in it set aside for your personal benefits. The money is gone and no longer yours. It belongs to the government.

People say that a lot, but it doesn't make any sense as a criticism. Social Security is a government run insurance program that's essentially identical to a private inflation adjusted annuity. Don't believe me? Let's look at how regular insurance works.

Let's say you buy an annuity, or homeowner's or any other type of insurance. After you pay the premium it is gone and no longer yours. There is no special account set aside for your personal insurance needs. It all goes into a giant pot of money, and except for the mandated reserves, it goes out and gets invested somewhere. The insurance company does not have an envelope labeled "ptheland" stuffed full of dollar bills that you paid them.

The only meaningful differences between how Social Security works is that SS is in fact paid for by taxes, and the government has broader flexibility to change benefits or increase or decrease taxes.
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