This node is part of the 13 challenges for the 13th generation.
As the baby boomers retire, the U.S. will no longer be able to afford to pay out Social Security benefits without drastically raising taxes on younger workers.
Reinvent Social Security now in a way that is fair to all generations – and protects today’s at-risk seniors.
Currently, we’re bringing in enough money to finance Social Security, but the U.S. Social Security Administration projects that Social Security could be broke by 2020. Even their most optimistic scenario projects insolvency no later than 2029.
Today’s Social Security system is unfair and heading for collapse. While it worked for older generations, it is certain to penalize most in our generation (we’ll be lucky to get any return on what we pay in).
We’ve got to adopt a new standard for federal assistance: take only what you need, not what you want or think you deserve. Although many government programs give you benefits only if you need them, including food stamps, child nutrition, and student loans - this is not so for programs targeted at the elderly.
No matter how rich you are, you are entitled to Social Security and Medicare. That means Johny Carson and Leona Helmsley are both entitled to a federal check. Talk about welfare for the well-off.
To fix this, we need an ‘affluence’ test for all recipients of federal benefits, where everyone earning more than $40,000 a year – working or retired – would get fewer benefits. A family earning $45,000 would lose only about $260 in benefits, one earning over $75,000 would lose $4,500; and one earning over $200,000 would still get 25 percent of benefits. That’s fair.
An affluence test on the well-off, however, is only a stopgap measure for Social Security, not a long-term solution. Ultimately, we will have to shift to federally backed private pension system, which would let people opt out of Social Security and save privately for their retirement.