The National Academies of Sciences, Engineering and Medicine has issued The Growing Gap In Life Expectancy By Income: Implications For Federal Programs And Policy Responses. It's well known that persons with higher incomes live longer than those with low incomes. As an example, for those born in 1960, life expectancy at age 50 was 28.3 years for those in the lowest 20% of income but 41.9 years for those in the highest 20% of income. Naturally, if you live longer, you're going to receive more Social Security and Medicare benefits. The effect of this is that the value at age 50 of those benefits for males was $391,000 for those in the lowest 20% of earnings but $522,000 for those in the highest 20% of earnings. For females, the comparable numbers were somewhat less dramatic, $452,000 for those in the lowest 20% of earnings and $480,000 for those in the highest 20% of earnings.
It would be possible to correct this bias in favor of persons with high incomes by reducing their Social Security benefits but that's unlikely to happen. The other possible way would be to increase benefits for lower income people. I'd say that while that's unlikely, it's not out of the question. Populist campaigns seem to be in vogue this campaign season.
5 comments:
now let's compare what those in the top 20% paid in v. what those in the bottom 20% paid in and determine a ratio of paid in to received....
Hmmm. It would show "poor" people have a MUCH greater return on investment (even given lower overall payout) than wealthy. Is this a problem? I don't know, it's a philosohpical question.
If all of this is a code word for social security means testing
it is a terrible idea.
It would actually penalize upper income people for actually
planning thier retirement financial affairs.
The above respondent's narrative is incorrect.
I know a lot of crazy lower income people after many years of employment will try and fail to live off a SS check of less than $1500 a month or much less because of lack of personal responsibility and planning.
I have a younger brother as soon as he gets paid in a local sloppchute resort hotel he's employed at he gets roaring drunk and falls down on his arse down on the barroom steps.
He is so predictable abouth is behavior and habits you can set your watch by it.
He don't care.The man is a born loser.
He is not even 50 years yet and often complains about he has to work
while me and the rest of my brothers are either current or retired
federal employees living the life of riley on our retirement pensions
while he will have to work until he CROAKS.
The next thing you know people like Chris Christie will try
to means test people of lower income collecting social security
turning it into a welfare program.
How about a windfall provision for a separate federal or
state retirement pension even if you do pay social security taxes ?
@12:44 PM:
You frame this a a moral question but it is really a public policy question. From that perspective , it is good policy, in my opinion, to encourage people to be responsible and save for retirement. Therefore, people who do that should have a better life in retirement than those who don't. The public policy question is: How much better? Is it good policy for you to live the "life of Riley" while your brother lives in abject poverty? Would it be better to means test or eliminate the income limit on FICA taxes so your irresponsible brother can at least have a minimal lifestyle in their senior years?
If you say "NO!!", I respect that answer. I think people with this philosophy should be honest about it. In the last presidential campaign, one of the republican candidates asked at a forum what we should do with those who need medical attention but did not have medical insurance and someone from the audience shouted "Let them die!" and other audience members clapped.
Again, this is a legitimate position, though it is one that I don't agree with. I just wish more people who believe this would be honest about it. Then we could have a real debate.
How much money from those who plan and take responsible action must the government take before the poor are happy? How many systems such as Social Security must be voided? When will people with an unused bedroom be required by government to take in those who do not want to use their SSI check to pay rent? When do we reach that tipping point where there are no consequences for choices?
Insurance programs like Social Security are always a gamble. Some will never receive anything, while others will collect for decades. The concern should not be that wealthier and healthier people receive more, but that Social Security (with other resources) provides a sufficient basic income.
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