Is Social Security an Insurance Policy or a Pension Plan?

From today’s Arizona Daily Star:

Do you think of Social Security as an insurance policy or as a pension plan?

Your answer likely defines how you respond to the headline on Monday’s front page: “For many, S. Security is no longer a good deal.”

The story, by Stephen Ohlemacher of The Associated Press, explained that today’s retirees are the first generation that can expect to pay more in Social Security taxes than they will receive in retirement benefits.

If you consider Social Security an insurance policy, you may not be upset by that news. After all, Americans don’t purchase car insurance hoping to get in a wreck so we can recover our premiums.

Insurance protects against events we hope won’t happen – and there’s no question that Social Security covers some of those scenarios. In Arizona, it pays benefits to 150,000 disabled former workers, plus more than 34,000 of their spouses and minor children.

More than 76,000 widows and widowers and nearly 35,000 children in Arizona receive Social Security survivors benefits.

No one hopes to become disabled or to die and leave his or her family in precarious financial circumstances. Social Security is there as protection in case those disasters do occur. See full article here: