Millions of Retirees in Support of Reducing Social Security Benefits Starting Now: It Makes Perfect Sense!
A recent poll found that most Americans would agree with cutting Social Security payments for millions of people to help fix the program’s problem of running out of money. People in the United States who are retired or have disabilities get Social Security payments every month.
The Social Security Administration’s finances will be in trouble as early as the mid-2030s because more baby boomers are retiring and fewer younger workers are contributing to the system. Unless big changes are made, there might not be enough money to pay all the benefits.
Under certain conditions, Americans would agree with lowering Social Security payments.
While most Americans oppose lowering Social Security benefits, a new study from the University of Maryland’s School of Public Policy’s Program for Public Consultation showed that most Americans would be okay with it in some situations.
The study included about 4,600 people, and 53% of those who answered said it was “acceptable” to cut monthly payments for the top 40% of earners. According to the paper, this would cut the coming Social Security gap by 23%. Alex Been, a teacher of financial literacy at the University of Tennessee, says that this change could still cause Americans to be very worried about their trust in Social Security.
When a program is having money problems, it’s easy to cut spending. But Beene told Newsweek that it would be stupid to cut payments for everyone on Social Security, even those with higher incomes. It’s unfair to people who get benefits but have also given, and it makes people who aren’t affected think that their benefits will soon be cut, too.
He also said that when cuts can be made to a small part of a bigger group, some leaders think they can do the same thing to a pool of receivers that keeps growing. People who filled out the poll were put in an online policymaking simulation to learn about different ideas for reforming Social Security and the pros and cons of each.
Most polls found that both Republicans and Democrats wanted to raise the payroll tax and include wages over $400,000 in the tax. At the moment, the highest wage due to this tax is $169,000. Raising this limit would give the SSA more money. In split states, almost 90% of both Republicans and Democrats agreed that the retirement age should be raised to fix the budget problems and close the 15% benefit gap.
Drew Powers, the head of the Powers Financial Group in Illinois, says that Americans were mostly in favor of cutting benefits when the terms “top 20” or “top 40 percent” were used. However, when the same policy was talked about differently, public opinion changed.
Powers told Newsweek that most of the answers were against cutting benefits for retirees with higher incomes if more specific language was used, like “middle class in high-cost areas” or “paying into Social Security with the promise of benefits.”
He also says this shows that Americans are ready to discuss and implement a more complicated system of means testing for Social Security. Most high earners wouldn’t miss the money that Social Security gives them in retirement because it’s such a small part of their overall retirement income.
Lastly, Kevin Thompson, president and CEO of 9i Capital Group and an expert in finance, recently said that cutting Social Security benefits in half would probably face strong resistance in the United States, even though most high-income earners don’t depend on them very much.
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Thompson also told Newsweek, “I don’t think it’s the right idea to cut benefits for people with high incomes based on their percentage of income.” However, a means test might be needed to keep Social Security payments going. Many people and their officials probably don’t want this kind of law passed.