Look to the facts before leaping

Social Security 8 comments

There is no reason and no valid justification for raising the Social Security retirement age, especially under the guise of saving Social Security‼️

While it is true that life expectancy overall has increased since the adoption of Social Security, that is not true across all racial and ethnic groups. Also, the richest American men live 15 years longer than the poorest men, while the richest American women live 10 years longer than the poorest women.

If you want to reduce spending on Social Security, look at things like equal full benefits for multiple divorced spouses.

Consider changing the COLA rules so that those retiring and initially receiving the maximum monthly SS benefit are not eligible for a COLA or at least not every year. At that income level a retiree should have had plenty of opportunity to fund their own COLA in retirement.

8 comments

  1. System needs a complete overhaul but politicians and certain other folks will resist. These folks like power and and giving it up and the campaign contributions that flow along with it are tough to dislodge.

    Sweden and Australia have reworked the retirement systems–nationally the Galveston Plan has worked very well through thick and thin.

    Just recently the investment head of the California Teachers retirement system retired–that organization provides benefits for over 1 million recipients , both working and retired. For 20-years ending 06/30/23 the portfolio returned 8% annualized a smidgen better than 7.87% for the average pension fund.

    All of these above mix a government contribution (state/federal)–local contribution, and of course worker contribution.

    Like overseas pensions it takes time to change the system–older folks would not be effected–younger folks would see the change and have more control over their assets. I could even see the feds using the TSP portfolios and setting up a retirement plan for people that is an image of what they have currently.

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  2. What about ending payments to minors of individuals receiving
    Social Security Retirement benefits. I have no problem with minor children receiving benefits when a parent dies but in this case, the parent is alive, and should be able to support them.

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  3. Eliminating or skipping COLAs for those receiving the maximum SS benefit is just another form of means testing in my opinion. In another post recently you made clear that you believe that should be off the table and I agree.

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    1. In a way it is but even the current benefit formula is a form of means testing because the multiplier is decreased as average earning increase. And keep in mind the COLA was not paid for through payroll taxes. What I suggest here doesn’t take away, but just not give more. To start SS at normal retirement age means working income had to be about double the median working household income. Now if the SS tax were applied say above $400,000 in earnings I say some credit and higher benefits should apply for that contribution.

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      1. I hear you, but I guess I don’t agree with the approach. Yes, COLA was not paid for with payroll taxes, but really neither is all of social security, as most will receive far more than what was paid in — and as you point out, lower income earners already benefit more. Whether the formula is changed further, there is a specific means test, the tax were applied to higher income levels than it is currently or COLAs are eliminated for higher earners, the effect is essentially the same. It’s just that in one case it costs more up front and in another the value erodes over time. Anyway, for the record, I don’t expect to be eligible for the maximum SS, and I agree with you completely that something needs to be done to ensure the viability of SS for the long term, I just don’t see that further reducing current benefits for high income earners, whether initially or through erosion from inflation is necessarily the best way to accomplish that.

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      2. “…and as you point out, lower income earners already benefit more.”

        Not necessarily. Richard also pointed out that the highest income earners (men) also live 15 years longer than lowest income. Several studies show that, for this and other reasons, SS is not progressive or redistributive at all, or very little.

        Whether that’s a good thing is debatable as well.

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