I see. I think there is a lot of baggage with the insurance analogy, like probability and conditional payout which are absent.
The money isnt held in a dedicated account with your name on it. However, how much you pay in is rigorously tracked and used to directly to determine how much you get.
The closest thing is a pension. Like a pension, SS pays out X% of your taxable salary. X is progressive with high earners heavily subsidizing low earners.
SS starts by paying out 90% of taxable salary in the lowest bracket. As income goes up, this reduces to paying out 15% in the top bracket. The brackets are referred to SS bend points.
The money isnt held in a dedicated account with your name on it. However, how much you pay in is rigorously tracked and used to directly to determine how much you get.
The closest thing is a pension. Like a pension, SS pays out X% of your taxable salary. X is progressive with high earners heavily subsidizing low earners.
SS starts by paying out 90% of taxable salary in the lowest bracket. As income goes up, this reduces to paying out 15% in the top bracket. The brackets are referred to SS bend points.