Wait – some people get $100,000 a year in social security benefits?

[i]Photo above – found ‘em! Possible geezer retirees banking $100,000 a year in Social Security benefits.[/i]

Never in my wildest dreams did I think anyone was getting $100,000 a year in social security benefits. But that’s what some married retirees are pulling down. $50,000 each a year (see link below). If $50,000 sounds less scary than $100,000, let’s remember that the average social security benefit is only $2,000 a month.

The USA Today article below outlines 6 ways to fix the Social Security trust fund crisis. Without implementing some combination of these changes, benefits checks will soon plummet by 28%. Both for someone taking home $100,000, and the majority scraping by on just $2,000 a month.

Changing social security is the “3rd rail "of DC politics. Meaning if you touch it, you’re electrocuted, both metaphorically and politically. Every Social Security change devised has winners and losers. Most of the changes create losers, leading to angry geezers on election day.

Even a seemingly innocuous proposal – such as the $100,000 cap – has unanticipated downsides which the proponents fail to envision. The ONLY way you can score $50,000/$100,000 in annual benefits is if you delayed your retirement age to 70. Somebody with a pocket calculator is going to look at the new $100,000 rule, and quickly figure out it makes more sense to retire at 67. They will bank 3 years of additional benefits, albeit at a 20% lower payout. I don’t know enough math to figure out how many retirees are going to begin taking benefit years earlier, and what this could cost.

There is also a proposal – which I like – to extend workers’ social security payroll tax to ALL earned income, not just the $180,000 limit in place today. This alone would solve 70% of the trust fund insolvency problem. Sounds great, except some politicians and accountants are already fretting that this would “burden high earners”. High earners are the guys who have disposable cash to shower on election campaigns, so maybe this would be a problem. Moe of a problem in states like California and New York, but not in the fly-over, middle America states where only 1% of the population earns more than $180,000 a year.

Some other trust fund fixes range from the familiar to the absurd:

Keep raising the retirement age from 67 to 68, 69, 70 etc. as our lifespans increase. The problem with this is that America’s social security norm (67) is already years beyond the European average of 65. And they have even longer lifespans: places like Switzerland, Italy (!), Spain and the United Kingdom all have life expectancies well into the 80’s. Does anyone want to retire later AND die sooner in the USA?

The absurd: one of the trust fund proposals is to start taxing employer provided health benefits as if it was actual income. For example, if you’re an Amazon driver or picker, you could end up paying – out of pocket – anywhere from $20 (single worker) to $650 a month (family plan) for your health coverage. That means Amazon is subsidizing the difference – possibly $10,000 a year in health premiums, or more. Does anyone want to pay an extra $600-$1,000 a year in social security payroll tax just because their employer is forward thinking, and set up a nice health plan? I didn’t think so.

Proposals like the one below – from the “Committee for a Responsible Federal Budget” have been appearing for years. And they never gain traction. Because politicians always prefer to kick the can down the road. If some non-partisan committee of wonks thought clearly about this stuff, they’d understand why the Social Security trust fund is insolvent, and why America has a $39 trillion national debt. Because there’s no upside for any politician to either raise taxes or cut spending.

I’m just sayin’ . . .


A proposal would cap Social Security at $100,000. Will it fly?

https://www.msn.com/en-us/money/retirement/a-proposal-would-cap-social-security-at-100-000-will-it-fly/ar-AA22nGFF?ocid=msedgntp&pc=HCTS&cvid=69f9cad98473400bbb9ad2bb20afaa27&ei=23