SS - Social Security

Social Security, Insurance and Retirement Resources

Social Security is a social insurance program which provides benefits for retirement, disability, and death. By dollars paid, the US Social Security program is the largest government program in the world. In 2005, the idea of changing the Social Security system became a major political issue.

Although Social Security (SS) is sometimes compared to private pensions, the payment of disability benefits distinguishes Social Security from such.

Also, a private pension fund accumulates the money paid into it, and eventually uses those reserves to pay pensions to the people who contributed to the fund.

Social Security, on the other hand, is fundamentally an SS wealth transfer system. The money that is paid in by workers is not invested, but quickly paid out to earlier investors.

In the business world, such an operation is known as a ponzi scheme, named after Charles Ponzi. This type of system is doomed to collapse because incoming funds are paid to earlier investors, and there are little or no underlying earnings from the money received by the ponzi scammer.

By 2012, Social Security will pay out more in benefits than it collects in revenues. The SS Trust Fund will keep Social Security solvent on paper only because it holds special-issue government bonds (really just IOUs). When Social Security redeems them the government will have to raise taxes or cut other spending to produce the needed cash.

Social security reform and privatization, as well as private retirement planning and retirement investing has become a hot topic. Former president Bill Clinton laid out the very limited options for fixing the SS problem: raise taxes, cut benefits, or privately invest. The best insurance may be to plan ahead and to make your own investment and insurance arrangements.

Enter the SS Forum.