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Personal Stakes in Social Security

Posted on:5/23/2012
The stake that all generations have in Social Security results from the widespread preference individuals and families have for nonpersonal means of financial support in old age--that is, for the major responsibility for the financial support of older relatives being placed outside the family.


 

The stake that all generations have in Social Security results from the widespread preference individuals and families have for nonpersonal means of financial support in old age--that is, for the major responsibility for the financial support of older relatives being placed outside the family. The desire individuals and families have for a dignified and stable means of support for the disabled, the elderly and surviving family members is another reason why everyone has a stake in Social Security.

The need for a rational approach that allows individuals to contribute at a relatively low rate over time in exchange for protection for themselves and their families against basic risks such as reduction of income due to retirement, disability, or death of a breadwinner; along with the widespread distribution of the benefits and costs of Social Security across all generations  makes it important for everyone.

The centrality of Social Security as a source of income for the elderly, now and for the foreseeable future; and the reality that, despite recent financing problems and smaller rates of return for future cohorts of the elderly, Social Security remains a good deal for persons of all ages makes it an important part of our lives.

Much misunderstanding about Social Security derives from a lack of understanding both of the public stake in social adequacy and of the roles the principles of adequacy and individual equity play in social insurance programs--programs in which the prior contribution of workers and/or their employers establishes the right to government benefits. Unlike private insurance programs, social insurance programs hold social adequacy as a major goal--some would, in fact, call it the dominant goal.
  
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