4. How is inequality built into the Social Security system?
Social Security benefits are based on earnings history, so people with higher salaries during their careers often receive higher benefits, while those with lower wages or interrupted work histories receive less, creating inequality.
Additionally, the payroll tax cap means higher earners pay taxes on only part of their income, while lower earners pay the same tax rate on all earnings, which can affect perceived fairness over time.
5. Why is it important to invest for retirement (points from the video)
- Own savings matter: Investing helps you grow money beyond what Social Security may provide.
- Longer life expectancy: People live longer, so retirement funds need to last more years.
- Inflation protection: Investments can help pay for rising costs over time.
- Financial independence: Saving reduces reliance on promises of future benefits.
- Early start helps: Starting early compounds growth, boosting future retirement security.