Close Close
ThinkAdvisor

Retirement Planning > Social Security > Social Security Funding

Jeffrey Levine Taps His Followers for Social Security Fixes

X
Your article was successfully shared with the contacts you provided.

What You Need to Know

  • Advisors put in their ideas on how to fix Social Security.
  • Raising payroll taxes and the retirement age were two ideas.
  • One person said to put all the money in the S&P 500.

Last week the long-awaited Social Security Trustees Report came out, with findings that the Old-Age and Survivors Insurance Trust Fund — the one that pays out benefits to retirees — will be depleted by 2033, a year earlier than last year’s projection.

The predictions actually gave some experts hope that the COVID-19 pandemic hasn’t hurt Social Security as much as expected, though some observers expect more damage to show up in next year’s report.

In a recent tweet, Jeffrey Levine, chief planning officer of Buckingham Strategic Wealth, asked the question: If you were in charge, what would you do to “fix” Social Security?

The response was fast and furious. Here are some of those person-on-the-street ideas:

Take a vote. 

“Not sure if there’s a process, but get it on the ballot for an upcoming national election. Have folks vote. Either raise tax revenue to fully fund promised benefits, or just have the benefits be variable, based on that year’s receipts.” — John Stoj (@StojBoj)

Levine responded that although the idea was interesting, “I can’t imagine how hard it would be for those living mostly off Social Security to plan in an environment like that though.”

Enforce the laws.

“How about stepping up compliance on payment of [self-employment] tax? A [U.S. Treasury Inspector General for Tax Administration] report from a few years ago found $12 billion in discrepancies on 1099-Ks that were not investigated at all.” — Liz Farr (@liz_farr)

When Levine cheered her on by using facts, she responded: “Sometimes the simplest solution is just to enforce what’s already law, not to craft additional laws.”

Leave it alone.

“Nothing. No need to ‘fix’ it. Currency issuer can always pay its bills. The real question is, will we have the resources to provide for growing senior population?” — Dan Jamieson (@dvjamieson)

Levine responded: “I understand you’re making [a Modern Monetary Theory] argument, but even if you fully embrace MMT, that doesn’t fix the problem by itself. MMT says it CAN be paid for via deficit spending, not that it must be. In essence, [your] ‘fix’ is “pay the benefits and increase/ignore the resulting debt.”

Cut COLAs.

“Reduce COL adjustments by 1%.” — Rabuck (@JackRabuck)

Levine responded with a gif of an angry mob of minions.

Tax higher wages. 

“Tax a far greater range of wage income for Social Security benefits. A wage cap of $137,700 is far too low.” — @cFiresim

Increase retirement age for those under 40.

“Short of a tax increase, which I think will be a hard sell, I say increase the retirement age for all those under 40. Gives plenty of heads up. Wouldn’t solve the short term issue, but if they would have done it 10-20 yrs ago things wouldn’t be as bad as they are now.” — Chris Keegan (@cKeegan)

CPA Karl Strube (@KJSaccount) agreed: “This is my preferred solution as well. Decade band the age eligibility increases. If you need it earlier, the disability option is available. It’s hard to qualify for, but I think it s/b, to discourage fraudulent claims.”

Stop marital bias. 

“If married folks don’t pay more, they shouldn’t get to choose the highest check after a death or get spousal benefits (even if divorced) after 10 yrs of marriage.” — @Pupster_2000

Raise payroll taxes.

“Raise payroll tax by 50 bp and raise the Social Security wage limit. I think a balanced combo of those two closes the gap by a fair amount, IIRC. Would NOT cut benefits or raise FRA. SS is a huge social benefit for anyone earning <$100k so no need to punish them w/ cuts.” — Robert Stoll (@rdstoll)

Give taxpayers an out.

“Allow everyone to opt out of future benefits, and incentivize them by giving them back every penny they paid in (without interest).” — George Burdell (@GeorgePBurdell)

The dozens of responses included many good (and bad) ideas, but one was especially out there and dead on arrival: Put all the money into the S&P 500 index.

(Pictured: Jeffrey Levine)