Social Security And Medicare Are A Bargain

     A new Urban Institute study shows just how big a bargain Social Security and Medicare are for most people. Here are some numbers from the study on total lifetime taxes and total lifetime benefits for various demographic groups turning 65 in 2020.

Single Male Earrning Average Wage:
Total lifetime benefits $536,000 Total Lifetime Takes $427,000

Single Female Earning Average Wage:
Total lifetime benefits $595,000 Total Lifetime Takes $427,000

One Earner Couple Earning the Average Wage
Total lifetime benefits $1,016,000 Total Lifetime Takes $427,000

Two Earner Couple with One Earning the Average Wake and the Other Earning a Low Wage
Total lifetime benefits $961,000 Total Lifetime Takes $618,000

Two Earner Couple Each Earning Average Wage
Total lifetime benefits $1,059,000 Total Lifetime Takes $853,000

Two Earner Couple with One Earning High Wage and the Other Earning Average Wage
Total lifetime benefits $1,183,000 Total Lifetime Takes $1,108,000

     The study gives numbers for other anticipated retirement dates and demographic groups. Those who oppose Social Security and Medicare will undoubtedly note that some of these demographic groups might have done better if they could have invested the money instead of paying taxes. It's also true that if I did not pay homeowners insurance on my house and invested that money instead that I would have a fair amount of money in the bank in 30 years -- as long as my house didn't burn down in the meantime. However, if my house did happen to burn down, I wouldn't have nearly enough money in the bank to cover the cost of rebuilding it.
     Insurance is a valuable thing. Social Security and Medicare are insurance. Their true value cannot be fully displayed in the way that this study presents it. What's remarkable is just how good Social Security and Medicare appear even in a study that does not fully show their value. Could any insurance company provide coverage comparable to Social Security and Medicare? Of course not.