I recently read a survey showing that most Americans would prefer to solve Social Security\u2019s financial problems by reducing benefits for affluent retirees rather than raising taxes on themselves or imposing across-the-board benefit cuts. My reaction was simple.<\/p>\n
I\u2019m not shocked. Not even a little.<\/p>\n
If you\u2019ve spent any time paying attention to politics or public policy, this result was entirely predictable. When people are presented with a choice between paying more themselves and asking someone else to pay more, they usually choose the second option.<\/p>\n
The reality is that Social Security has a math problem. The system is projected to face significant funding shortfalls in the coming years, and policymakers eventually will have to make difficult choices involving taxes, benefits, retirement ages, or some combination of all three. Doing nothing isn\u2019t a solution because doing nothing eventually leads to automatic benefit reductions.<\/p>\n
What I found interesting about the survey was not that Americans want affluent retirees to absorb more of the burden. It was that even many higher-income respondents supported that approach.<\/p>\n
Of course, the phrase \u201cwealthy retiree\u201d means different things to different people. To some people, it means a billionaire. To others, it means someone who worked for forty years, paid maximum Social Security taxes, saved diligently, and accumulated a comfortable retirement. That\u2019s where these discussions become politically complicated.<\/p>\n
As someone who spends his professional life dealing with retirement issues, I think the bigger problem is that Americans continue to believe there is a painless solution. There isn\u2019t.<\/p>\n
Every proposal involves winners and losers. Raise taxes and workers pay more. Raise the retirement age and future retirees work longer. Reduce benefits and retirees receive less. Means-testing shifts more of the burden to higher-income retirees. None of these options are politically pleasant.<\/p>\n
The survey results don\u2019t surprise me because Americans are behaving exactly as people always do. They want Social Security fixed. They just prefer that somebody else absorb most of the pain.<\/p>\n
Unfortunately, Social Security\u2019s finances don\u2019t care about politics. Eventually, the math wins.<\/p>\n
<\/span><\/p>","protected":false},"excerpt":{"rendered":" I recently read a survey showing that most Americans would prefer to solve Social Security\u2019s financial problems by reducing benefits for affluent retirees rather than raising taxes on themselves or imposing across-the-board benefit cuts. My reaction was simple. I\u2019m not … Continue reading