How do companies and the government afford to pay people a pension?

Question

How do companies and the government afford to pay people a pension?

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Answer 1

In the U.S., people think of Social Security as a pension system where money is contributed and invested and then paid out over time, but it’s mostly just a tax and spend system. There is some money invested, but mostly it’s tax money paid in this year is paid out to beneficiaries this year.