From a Washington Post editorial:
With the federal government $39 trillion in debt and running deficits larger than during the Great Depression, there’s no reason that the largest federal spending program should be sending six figures in annual benefits to rich people. Yet that’s exactly what Social Security is set to do.
Starting this year, the Social Security benefits formula gives the very highest-income couples who retire at age 67 over $100,000. While few will receive that now, their numbers will only increase as time goes on and the formula, which raises benefits faster than consumer price inflation, keeps boosting payments.
Though it won’t fully address the program’s long-term sustainability, capping benefits for the richest seniors would help restore sanity to a program millions of Americans depend on. The Committee for a Responsible Federal Budget is proposing what it calls the “Six Figure Limit” to ensure that no couple who retires at the normal age receives over $100,000 in annual benefits. …
25 comments:
Buzz off, Bezos. First of all, the projected Social Security Trust Fund shortfall is a separate problem from "$39 trillion in debt" (blame stupid wars past and present for most of that.)
Second, there's already a cap, which is the root of the problem and it needs to be removed: the cap on FICA tax paid by the wealthy. Somebody making $100 million a year pays into social security the same amount annually as someone making $184,500: $11,439.
Donate 6.2% of your net worth to the trust funds, Jeff, then I'll listen to your brilliant ideas.
It wouldn’t do anything meaningful to make the program solvent, and further undermine its popularity among higher earners. But I‘m guessing that’s actually exactly what the (extremely ignorant or disingenuous) author wants.
Sure I’m all for it…until “richest seniors” gets defined as anyone making $100k or more.
Or- and this is crazy talk- they could raise the cap on higher earners from $184,500 to $200,000.
Sorry granny. We’re gonna need to take that social security money from you. There’s a war going on dontcha know, and ammunition aint cheap.
How you do define 'couple'? Are we going down the path of SSI?
Make it simple: cap max social security retirement at $4k per month and remove the cap on income subject to tax. Boom.
Ugh! I hope not!
My wife and I are close to that $100,000 figure. (About $96,000) But, from that is deducted the Medicare Premium and surcharge of $689.90 per month each ($16,557.60 total) and we still pay tax on 85% of what we receive at our marginal rate of 37%. That costs another $30,000. So my $96,000 in SS benefits actually puts $50,000 in my pocket.
Yes, we can easily afford a cut in our benefits in the future, which would hit the cap next year or the year after with just the COLA.
But the question is whether or not that would be fair.
What is fair is, as an old Poli Sci Professor once explained, always comes down to who's ox is being gored.
So, everyone who wasn’t fortunate enough to earn enough to fund a 401k has to live on $48000 a year? In Trump’s hyperinflated economy, no less? Tell me you’re a moron without telling me you’re a moron.
Whatever you say, Leland!
There’s also the fact that your income wouldn’t even allow for a basic standard of living along much of the east coast, while also being too high to qualify for public assistance.
@ 6:30 AM. Exactly! Have the super high earners pay into Social Security for all of their earnings.
Interesting but unlikely to cost as much as The Social Security Fairness Act which eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO), increasing Social Security benefits for certain public-sector workers and their spouses. Those provisions were enacted for very valid reasons. Look it up. The greed and lobbying of public unions overwhelmed that reasoning. Greed remains perhaps the most grievous of human faults.
Not to mention the fact that Congress has no idea how the formula works or why we had WEP and GPO. We truly live in the dumbest country in the world!
I side with Bernie Sanders. Remove the FICA cap but keep it for benefit calculations. Make Bozo Bezos and the rest of the wealthy to pay their fair share to restore solvency to the Trust Funds!
When I worked for the agency, most employees didn’t know how WEP worked. So how do you expect anyone else to know.
As usual politicians and bureaucrats including many folks commenting here, continue to talk about changing computations and taxation rates. That's a dead end that's been tried and failed.
The real problem continues to be ignored -- DEMOGRAPHICS! Our population pyramid is becoming increasingly inverted. Too few folks at the bottom WORKING and PAYING into a system designed to support those not in the work force.
The solution -- have more babies who grow up to be wage earners. Immigration in its current form is not doing it and never will.
Why is having more babies the solution? Have you taken into consideration AI and humans being replaced for many jobs? An SSA benefit cut across the board of 24% is coming fast so it’s best to prepare.
Ok you really think Bezos gets a salary ?
Just maybe he gets dividends or profit sharing, he will escape FICA!
Sounds good to get votes!
For a couple to make $100k a year retiring at full retirement age, they'd each have to have a Primary Insurance Amount (PIA) of $4,166. I have taken retirement claims for 10 years and I very, very rarely see this number.
What a nothingburger of a recommendation.
So tax their income at a higher rate and use that money for solvency. Are you really this dense?
The benefits are a direct formulaic result of what was paid into the program over a very long period of time don't forget. This was meant , in part, to be a forced retirement savings plan NOT welfare.
Means testing is means testing. SSA is an "entitlement" meaning you are entitled to it because you paid the premiums, and regardless of whether you "need" it or not, it's something you earned. Means testing is what you do with benefits that you are eligible for, but not entitled to. SSA was never welfare and means testing, for any form of eligibility, is antithetical to the programs roots. And the beginning of the end because once you means test, that door is open for more means testing.
So a couple receiving over $100k should be prevented? Great, they'll just do a "grey divorce" so they each have a $50k benefit but are still effectively a couple with a benefit over $100k.
BTW, while whining about these high beneficiaries, remember (a) they paid into the system at a high rate, (b) payer are only credited 15% for their high contributions, but everyone else received a 90% at the low end - yep, they were penalized already, (c) these people are charged IRMAA when paid, and (d) their SS benefit is also taxed.
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