For decades, Americans have been told the same story:

“Social Security may not be there for you.” The warning has become Wall Street’s greatest marketing tool. Convince workers that Social Security is on the verge of collapse, and suddenly expensive annuities become the “safe” alternative.

There is just one problem. The financial markets themselves don’t believe it, based on Credit Default Swap rates.  https://commonsense401kproject.com/2025/10/29/annuity-risk-measured-by-credit-default-swaps-cds/

“The market prices the credit risk of a typical annuity insurer at roughly 10-30 times, and sometimes 50-100 times during periods of stress, the credit risk of obligations backed by the U.S. Treasury.”

CDS spreads represent what sophisticated investors are willing to pay to insure against default. When you compare U.S. Treasury obligations to large life insurers, the difference is striking. That means the market itself prices the single-company credit risk of many annuity providers dramatically 10 to 100 times above that of obligations backed by the U.S. government.

Social Security Is Not Just Another Pension

Critics constantly describe Social Security as “going broke.” That is simply not how the system operates.

Social Security is a hybrid:

• an earned retirement benefit;
• a payroll-tax financed insurance system;
• a disability insurance program;
• survivor insurance;
• and an income redistribution program enacted by Congress.

Unlike a private insurer, Congress can:

• adjust payroll taxes;
• modify benefits;
• raise or eliminate taxable wage caps;
• change retirement ages;
• transfer general revenues if it chooses.
• Can change demographics ie let in select immigrants like a few million young engineers

Whether one agrees with those policy choices or not, they make Social Security fundamentally different from a private insurance company whose only source of payment is its own balance sheet.

The Political Solution Already Exists

Senator Bernie Sanders and others have long argued that Social Security’s projected funding gap could largely be addressed by applying payroll taxes to earnings above the current taxable wage cap.

For 2026, the Social Security taxable wage base is $184,500. Wages above that amount are not subject to the 6.2% Social Security payroll tax (or the employer’s matching 6.2%).

Whether Congress adopts that proposal is a political question. But it demonstrates an important point: Social Security’s challenge is primarily political—not one of corporate insolvency.

Those making over $184,500 who would pay the Sanders Tax probably make up 95% of the political donations to both parties and are helping push the media narrative through their connections.

Yet We Are Told the Opposite

At the same time politicians warn workers about Social Security, retirement plans increasingly steer participants toward:

• fixed annuities;
• private-credit backed insurers;
• private-equity owned insurance companies;
• pension risk transfers;
• lifetime income products.

These products depend on a single insurer remaining solvent for decades. If that insurer fails, retirees cannot simply vote for a new funding mechanism. Consumers are often reassured that state guaranty associations protect annuity owners. https://commonsense401kproject.com/2025/06/24/state-guarantee-associations-behind-annuities-are-a-joke/

If someone tells you Social Security is “too risky,” ask one simple question:

Would they rather trust the taxing authority of the United States—or the balance sheet of a single insurance company?

The credit markets have already answered.   Insurance Companies are 10 to 100 times riskier

And they are not buying the fear.

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Why Offshore Structures and Weak State Regulation Make Most Annuities ERISA “Prohibited Transactions”