Friday, October 16, 2015

Means testing for current Social Security retirees? The idea won't go away, partly because rich people live longer than poor people

There is another desperate Letter to the Editor in the Washington Post this morning on Social Security, “Don’t reduce benefits for current retirees”, as a reaction to Douglas Elmendorf’s Oct. 12 op-ed, “A fairer approach to fiscal reform”, all links from here.
Indeed, Elmendorf seems to be back into means testing territory. He even recognizes, near the end, that most middle and upper income class people believe they “earned” their benefits through paying FICA (which their employers matched) and would have saved the same amounts privately if allowed to.

He, as have other observers (even Republican Governor Chris Christie of New Jersey) is also concerned that richer people live longer, and that raising the retirement age gradually (in expectation of longer lives) affects the poor more.  So are we back in the world or welfare, or “personal responsibility”?

One thing to note, seniors need better ways to extend their work careers than the shallow hucksterism that was pushed at me.
In the meantime, CNN Money has a column “What older workers don’t know about social security”, here. Note that if the Trust Fund is depleted, current retirees are guaranteed 75% of their current benefit indefinitely. Also, if retirees have benefits reduced because of the Annual Earnings Limit, they can recover what was withheld after reaching full retirement age.

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