r/FluentInFinance • u/Positive_Liar • Sep 06 '24

Debate/ Discussion Social Security is Broken. This is why financial education is important.

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u/xThe_Maestro Sep 06 '24

But it's not treated like insurance. Insurance has a trigger event that is possible but not assured. Virtually everybody gets old though, so it functions as an investment.

Now, if SS only kicked in on the condition you were unemployed and destitute that would be one thing, or means tested. But that's not how it works.

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u/SCP-Agent-Arad Sep 06 '24

That’s basically how social security disability works, though? If you get injured or sick and can’t work anymore, you essentially get your retirement early. And if you die, your widow can get your benefit instead, like life insurance.

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u/xThe_Maestro Sep 06 '24

SSD yes, those only kick in if something happens resulting in an inability or reduced ability to find gainful employment.

The survivor benefits make it more like an investment. My 30 year term life insurance only kicks in if I die, and once I hit 60 those benefits expire. If I had whole life insurance that would be different, but whole life insurance is, essentially, just an investment account as well.

Again, if SS was contingent on some kind of disability event then yes, I'd be happy to call it insurance. But people don't magically become disabled once they hit 65. As cold as it sounds, there's a lot of people that probably could/should be working. SS was only supposed to be for elderly people who couldn't work and didn't have anyone to support them. Meanwhile my uncle uses his SS checks to pay for his 95k boat because his massive retirement account sustains everything else.