Comment on Social Security can be saved. Scrap the cap!
Rivalarrival@lemmy.today 3 days agoSocial security is not a retirement fund.
If I have an actual retirement fund that I contribute to every month for my entire adult life, and I die the year before I retire, the entirety of that retirement fund goes into my estate. It is ultimately bequeathed to my legal heirs.
If I die a year before collecting social security, my heirs will get nothing of what I paid in. The government keeps that money, and pays it out to other social security beneficiaries. (I am not married, and my children are over 19 and not disabled.)
A pension, maybe, but Social Security is in no way comparable to a retirement fund.
Ajen@sh.itjust.works 3 days ago
By that logic, a pension is in no way comparable to a retirement fund, which is a rediculous statement that no one would agree with.
boonhet@sopuli.xyz 3 days ago
A pension also means different things depending on where you are.
In my country, your pension comes from multiple parts. The national pension has a “citizens pension” portion that everyone gets, then the next bit depends on how many years you worked. Then there’s something that’s sort of our equivalent of a 401k and that’s called a voluntary pension fund.
I’d never heard of a pension being paid by your employer until I started hanging out online. Seemed ridiculous, as they could just go out of business or something.
Rivalarrival@lemmy.today 3 days ago
A pension is not a retirement fund either, from the perspective of the worker and the worker’s family. A pension is paid to the worker for the remainder of the worker’s life, regardless of the amount the worker has paid into the fund. If they put in 20 years worth of payments and live 40 years, they collect 40 years of payments. If they live only two months, they only collect two months of payments.
I would agree that social security is comparable to a pension or retirement insurance, in that the payout is not necessarily commensurate with the pay-in.
A 401k is a fund. If the worker puts in 20 years of payments, and only lives two months, the worker’s heirs receive 19 years and 10 months worth of payments.
Ajen@sh.itjust.works 3 days ago
401ks directly replaced pensions for most Americans. It’s disingenuous to claim they’re “in no way comparable.”
Rivalarrival@lemmy.today 3 days ago
Yeah? Cars replaced horses for most Americans.
The mechanism of operation is so different that they cannot be considered the same thing. Even though they are used for similar purposes, they are not reasonably comparable.