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IPFS News Link • Social Security

Can Americans Really Depend on Social Security?

• Dennis Miller

To fund the plan, they passed the Federal Insurance Contribution Act (FICA). The law mandates that employers withhold a portion of the worker's salary (contribution) and requires the employer to match the contribution.

It was sold to the public as a form of annuity, with each worker's contributions and benefits based on their income. While Social Security has features similar to an annuity (paying lifetime benefits), in many ways it is different.


In 1960 the Supreme Court (Flemming v. Nestor) ruled, "that no one has an accrued property right to benefits from Social Security." Contributions are now taxes with an indirect correlation to benefits.

An annuity with a private insurance company is a legally binding contract. The insurance company must honor the agreement or risk being sued for breach of contract.

With Social Security the government is the insurer holding all the power.


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