Social Security

How much Social Security is enough?

The income replacement provided by Social Security is among the lowest in the world when  compared with other government programs. Someone with final earnings of $40,000 receives about 36% replacement ($55% including spouse benefit). With final earnings of $60,000 the replacement is about 31% (47.5% with spouse).

So the questions are:

how much is sufficient? How much should be funded by ones working life taxes? How much should be funded by other taxpayers? How much of retirement income should be an individual’s responsibility?

Should the Social Security formula be changed so that the replacement percentage for the lowest income individuals is nearer 100% replacement?

Bernie Sanders and others call for increased Social Security benefits. Can we first make Social Security sustainable and then add higher benefits?

How much more are you willing to pay in taxes to have a larger steady income in retirement?

When you sort out all the political rhetoric, these are the questions that must be answered.

But first, we need to fix Social Security as currently designed. 



12 replies »

  1. Social Security is probably the most popular government program in America. People really, really like it. Unfortunately, most have not taken the time to understand it. My guess is, when Congress finally winds up putting the program on a fiscally sustainable path, the Social Security payroll tax will go up by 30 to 40 %, from 6.25% of payroll paid by both the individual and his employer, to 8.25% to 9% payroll tax.


    • Actually it would take an in tease b about 2.96 % to accomplish that which is not bad split in half. Politicians don’t have guts to tell people the truth.


  2. Social Security was always designed to be a floor, a base of income to keep older Americans out of poverty. And, it has succeeded in achieving that objective!!!!!!!!!! Over 30% of age 65+ retirees used to have incomes below the federal poverty line in the 1960’s and 1970’s – today, that is < 10%!!!!!!!

    We need to get rid of politicians who use % of income replacement charts to argue that the US replacement is "low". Show me the same comparison of benefits in nominal dollars. Or, show me a comparison of the number of individuals age 65+ living in poverty in each of those countries.

    Don't waste your time responding to Bernie – all he wants are alternatives that allow him to buy votes with YOUR money.


  3. This one is easy. The individual is 100% responsible for their own retirement. No forced SS. No employer responsibility. No worries about “sustainability” of the program. If we want future generations to take care of the prior generations, then our kids/relatives/friends/charities will make it happen.


    • You are overly optimistic. Logic has no place in the actions of human beings. 😏we cannot ignore that many, many people cannot or will not adjust lifestyles to save for retirement and hence we must have some forms of mandatory savings be it via taxes or deferred compensation in the form of employer-based plans or both. The idea that families can or will take care of us disappeared in the 1930s if not before.

      We may not agree with or like the actions others take, but we end up paying for their actions one way or the other.


      • So the idea that the government must save us began in the 1930s.
        OMG….. how did humankind ever survive for 7+ Million years?!?!
        I know, I know, you’ll say we’re living longer now. But we are also earning longer.
        Where did the notion of “retirement” come from? We are born to work until we die. If you want to retire, that’s great. Save your dang money so you no longer have to work!


      • No I’m saying that people live beyond their means and don’t save adequately and unless society forces the issue society will pay later.


    • They do need to fix Social Security..not cut it…I dont mean to sound like a cruel person but I feel that we need to take care of our own..first…there are so many homeless people..esp women and children..and people who cannot even afford medical care…stop sending monies to other countries..they need to become self-reliant..not depend on us…Social security needs to be increased..not cut..ok?? and please leave medicare alone…politicians need to also take pay cuts..they live the life of luxury while american people…try to make it pay to pay..month to month


      • The truth is that the money we send abroad and the amount paid to Congress would probably pay SS benefits for about 30 minutes. Those amounts are insignificant in the scheme of things.


      • Linda, RD is only right to a point. The money that the government wastes out of the country on Defense and other programs do not add up to much each year. But over 60 years it would go a long way to making SS solvent.


    • 50 percent of workers make less than $30,000. I worked from 1971 to 2006 and only made $310,000 if I would of saved 10 % over the 35 years plus interest it might equal 80 to 100 thousand. Not enough to fund retirement. Let’s face it SS is a welfare program, it always has been. Fund it by raising the tax and be done with it.


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