AUTHOR: BenefitJack on 8/16/2025 FIRST: Neil Imus on 8/17/2025 | RECENT: BenefitJack on 1/31
Comments
Reinstitute one time, 10 year forward averaging of a lump sum distribution. That was possible in the past, after separation, but effectively eliminated for anyone born after 1935 by changes that were part of the Tax Reform Act of 1986. The process was "simple". You must take all taxable monies from the account (this was pre-Roth, but we did have after-tax 401(a) monies), divide taxable amount by ten, calculate the tax using the single filer rate, then multiply the calculated tax by 10. Those with substantial account balances still end up with higher marginal rates, and higher average/effective tax rates. Current 2026 single filer federal tax rates: Tax Rate Taxable Income Bracket
10% $0 to $12,400
12% $12,401 to $50,400
22% $50,401 to $105,700
24% $105,701 to $201,775
32% $201,776 to $256,225
35% $256,226 to $640,600
37% Over $640,600 So, someone with retirement assets of $124,000 would pay $12,400 in income taxes. Someone with $1,000,000, would pay ~$167,118. Someone with $10,000,000, would pay ~$3,261,792 I would require all taxable monies be rolled over to a single IRA. And, I would treat it much the same as a Roth conversion (but not apply the 5 year rule when/once the individual reaches age 59 1/2). I would give individuals the option of using their assets to pay the tax (waiving the 10% penalty tax) or access plan loans equal to the federal and state withholding taxes, per the rules for qualified plans under 72(p), without the $50,000 limit, giving the individual the choice of a 5 year (general) or 15 year (home purchase) repayment period. As Dick suggested earlier, all revenue would go toward retiring national debt.
Sounds a little like CATO's Universal Savings Accounts. OK by me. 2026 Transition: Reinstitute 10 year forward averaging at 2026 single marginal tax rates so individuals must convert all accumulated tax-deferred monies from pre-tax to after-tax (401k, 403b, 457, IRA, etc.) Give workers a choice of paying the tax with a taxable distribution without penalty taxes or a tax-free loan. Rollover assets to the universal savings account. This has the effect, to some extent, of allowing everyone to go back in time as if Roth had always been the only option. Additional tax revenues in 2026 used to pay down federal debt. Going Forward: Eliminate the link to employers as plan sponsors. Limit to Universal Savings Accounts. Individuals could effectuate contributions by splitting their net paycheck. Employer's could contribute on much the same basis as they do today for Health Savings Accounts (where the account is owned by the individual and all money is 100% vested first day). Employers could contribute a nominal amount, a match, or fully fund the account. You mentioned that "... Most important is an employer match which too would remain tax-free. ..." The employer match in a 403b, 401k, 457 or Simple IRA is not tax free today! However, we do now have Roth employer contributions after SECURE 2.0, so, you would limit the employer contribution to a Roth basis. You could choose the $10,000 per person amount suggested by CATO, or perhaps you prefer the Simple IRA maximum of $17,000. No catchup. No non-discrimination. Every wage earner eligible 1st day. Every account would have regular 72(p) plan loan provisions but without the $50,000 maximum (so that the "Bank of Quinn" could be used to buy a car, a home, fund college education, regardless of employment status) - loan repayment via electronic banking. No distributions prior to age 59 1/2. Distributions after 59 1/2 are tax free, a la Roth (but without regard to any 5 year rule). Exception for death, and perhaps disability. Standard set of Designated Investment Alternatives, probably 5 or 6 or 7 index investments, coupled with a capital preservation option (money market) and access to other investments via self-directed Directed Brokerage - where the investments are not limited to those available in an 401k, but those available in any/every IRA. FYI, this is a variant of a proposal submitted in an essay contest held by the Society of Actuaries in 2010. It didn't win any prize. Note: Dick, what would you do with regard to defined benefit and defined contribution pension plans? Talk about complex.
As a volunteer assisting retired individuals with financial decision-making. I can feel their anxiety despite my repeated encouragement. I agree that fear of running out of money surfaces even among those who may never have worried in the past. One major change that is obvious to me from my personal and family experiences is that retirement is a relatively new phenomenon in America. My dad was born in 1916 and passed in 1969, at age 53. Mom was born in 1924, came to America in 1925, worked two jobs after dad died from 1970 - 1989, became disabled at age 64, lived an illness filled, mostly sedentary disability retirement, and passed in 2001, at age 76. One had no retirement, the other's "retirement" ... One reason for anxiety, the fear of running out of money among the old/retired, may arise from concerns from the exhaustion of what is often our most precious asset - the ability to earn a wage - where anxiety may arise from concerns about being unable to resume employment - whether due to ageism, physical ability, etc.
What benefits do you think young adults should pay the most attention to when choosing a job? Looking back, is there one benefit you ignored early in life that you now realize mattered more than you thought? I'm so old that my young adult years preceded 401k plans, Health Savings Accounts, PPO's, HMO's, Flexible Spending Accounts, Lifestyle Accounts, EAP's, concierge services, etc. However, I had the privilege, over the past 46 years, to manage the benefit plans for my various employers. Unfortunately for them, my two now-adult Millenial children suffered through those efforts. One "benefit" they received from my work experience was free, expert benefits counseling when they transitioned from school to wage earners. The outcome:
The oldest is on track to become a middle-class retirement savings millionaire before reaching age 50. The youngest is farther behind, having earned substantially lower wages at organizations that did not provide an employer-sponsored retirement savings plan.
Both have accumulated assets and are invested in Health Savings Accounts - because both had excellent health when entering the workforce, so, their out of pocket expenses were/are/continue to be minimal.
Neither needed life insurance at their initial hire (not married, no spouse), however the youngest has since married (no children) and has a modest amount of group term life insurance provided by her employer.
As far as I know, neither has made any benefit decision mistakes where they missed out on something valuable to them. For me? Back in 1992 (yes, 1992), I had conjured up a scheme to create a variant of what we know today as a Health Savings Account. It was unique enough such that I wouldn't proceed without asking the IRS for approval using what's called the private letter ruling process. I had investigated early Medical Savings Account concepts developed by the Golden Rule Insurance Company. My variant was closer to the predecessor of the Health FSA, what we called a ZEBRA, a zero based reimbursement account. It also had features that at times resembles today's Health Reimbursement Accounts. Today's HSA, once opened, also has some of those ZEBRA features. Unfortunately, my employer did not get out on the limb with me as I sawed furiously and refused to pursue that unique, innovative, "bleeding edge" design. One senior VP who rejected the proposal shared his thoughts widely with many other executives asserting my design was: "antithetical to small group health reform". Today, as nearly one in three workers with employer-sponsored health coverage are enrolled in HSA-capable coverage (29%) and as 43% of Americans with coverage in the public exchanges are in HSA-capable coverage, my 34 year old proposal remains in my missed opportunity personal file. That's a regret. I should have paid the fee out of my own pocket, run it through a law firm, and submitted it anyway - even though chances of IRS approval would likely have been less than 1 in 5.
In terms of access or liquidity, you could also have mentioned plan loans, how a 401k plan with loan features, "done right", can serve as the "Bank of Bogdan": Contribute pre-tax,
Defer federal/state income taxes,
Get employer match (on deferred taxes too),
Invest,
Accumulate,
Borrow to meet immediate need,
Rebalance investments to treat the plan loan principal as the fixed income investment it is, earning the plan loan interest rate,
Continue contributing while repaying the loan,
Rebuild the account for a future, greater need. Repeat as often as necessary up to and throughout retirement. Of course, individuals wouldn't borrow from the plan where there was a better source of the needed funds. To minimize distributions from loan defaults at/after separation, some plans allow for electronic banking, so that not only can payments continue after separation, but the term vested and retired participants can initiate loans. For the past 18 years, plan loans that have been repaid (and ~90% of plan loans ARE repaid) have improved BOTH retirement preparation and household wealth. Here's how:
First, almost all plan loans were deemed by the borrower to be superior to other financing alternatives, such as where the plan loan interest rate is less than the interest rate that would have applied to a loan from a commercial source, and
Second, since 2008, almost all plan loan interest rates have been 5% - 7%, which far exceeds the return on all fixed income investments in the plan. So, again, if you remember to treat the plan loan principal as the fixed income investment it is, by rebalancing your account to your target allocation after taking the loan, the plan loan will generally improve BOTH your retirement preparation and your household wealth. Certainly worked for me. See this nearly 20 year old study from the New York Fed:
https://www.federalreserve.gov/econres/feds/new-evidence-on-401k-borrowing-and-household-balance-sheets.htm
Solid. Definitely agree people should consider intervivos strategies instead of waiting until wealth becomes a legacy. You may also want to discuss with your counsel (I suspect you may already have) in terms of how the gifts will be used beyond the obvious of a 529 (if that is a prioirity for you), and, what preparations you might make for the contingencies of life and death. Consider how you/parents might communicate the gifts as the child grows. Myself, I started down this path 40+ years ago with modest gifts, set aside, to my children. I called them Ben Franklin accounts - in light of Ben's long term gifts to Boston and Philadelphia. Myself, I'd like to see employers adjust your calculus by adding Trust Account deferrals to everyone's employee benefit package. We are still waiting on guidance from Treasury. However, once issued, this can become just one more consideration where there is a "change in status" - especially the birth of a child, and perhaps even a grandchild! https://401kspecialistmag.com/trump-is-no-franklin-but/ You've given us great guidance. Thanks.
I disagree with your suggestion to simply increase the current FICA/Medicare deductions to the 16.22% level - which would place 100% of the burden on future workers and their employers. Simply, that fails to allocate any of the burden to those who have retired - people who failed to contribute enough to ensure the program is sustainable. Such a decision also locks in Congressional decisions to improve benefits in the past without corresponding increases in taxes - buying votes and sending the bill to generations too young to vote and generations unborn. What's to stop Congress from more vote buying if they pay no price for their past deceptions? It does nothing to return the program to the original intent, to keep full career workers (35 year, 420 qualifying quarter) who retire out of poverty - which would help in our goal to make the program sustainable. . Long past time to rein in Congress' vote buying schemes, so we do not end up with additional, idiotic schemes such as the Social Security Fairness Act. I never agreed with GPO and WEP, but, once they were added 43 years ago, once expectations were set, it was stupid to remove them - an action that was an obvious public employee vote buying scheme among many who had already retired.
Unfortunately, I don't think so. The compexity seems to be needed in order to accomplish all three goals:
(1) A change prior to 2032,
(2) Promise/guarantee to make the system indefinitely sustainable, and
(3) Return Social Security to its original goal of avoiding poverty in old age. Would be happy to discuss simpler solutions - just don't know any. In fact, my own preferred solution is even more complex. The Trump "Savior" solution (identified above) is simplest and easiest to implement - as the D's will very much enjoy pinning BOTH the benefit cuts and the tax increases on Trump.
My proposed $100,000 cap on FICA wages for benefit calculation purposes may have a greater effect in improving funding than the CRFB's proposal to cap household Social Security benefits at $100,000 a year. Their proposal would leave the FICA wage base provisions unchanged, shifting the program into more of a welfare arrangement - disconnecting wages for tax purposes from wages for benefit calculation purposes. CRFB asserts that their proposal would close 55% of the 75 year funding shortfall. https://www.crfb.org/sixfigurelimit
I have my own ideas regarding Social Security reform - but because they require everyone to participate in the solution, including current retirees, either to pay more taxes or take less in benefits, I doubt anyone would ever approve such changes. Trump Recommendation With respect to an action the Trump Administration might take, here is what I think he should do. Once the Republican nominee for president is known, on or about September 1 2028, Trump could issue one of his infamous edicts and direct the Republicans in the Senate to filibuster the 2029 budget (upon threat of a veto) unless it included his Social Security "fix" - that would have four components:
A cap on FICA wages of $100,000, applied prospectively starting January 1, 2030,
A cap on earnings used in the benefit calculation of $100,000 per year, applied to all who commence Social Security benefits on or after January 1, 2030,
For all who commenced payout prior to January 1, 2030, effective January 1, 2030, recalculate their Social Security benefit as if the $100,000 FICA wage base applied in years prior to 2030 and suspend COLA increases on or after January 1, 2030 until such time as the recalculated monthly benefit includes the $100,000 wage base, and
A 4% increase (from 6.2% to 10.2%) in the EMPLOYER contribution to Social Security effective January 1, 2030 (total 16.4%).
So, instead of an employer contribution of $3,100 for someone with $50,000 of earnings in 2030 or $6,200 for someone with $100,000 in FICA wages in 2030, the new amounts would be $5,100, $10,200. Those who have been paying FICA taxes on income > $100,000, every year since 2008, would have their benefits limited in the benefits calculation - for all who commence after January 1, 2030, and gradually, for all who commenced prior to January 1, 2030. For most workers, the increase in taxes would be indirect, likely in the form of reduced wage increases in 2030 and 2031. For higher paid workers, they would see net pay increase (while Social Security benefits would decline). For retired higher paid workers, their Social Security benefits would be frozen for a period of time - shortest for those who only infrequently had FICA wages in excess of the wage base. Trump would be able to claim he saved Social Security for all future generations (and just in time for the 2028 General election), while everyone else, especially Democrats would be able to blame him for increased FICA taxes, a la George H. W. Bush “read my lips no new taxes.” ... while Trump will leave office January 20, 2029 before the new taxes take effect. A la Shakespeare: "The evil that men do lives after them; The good is oft interred with their bones. So let it be with 'Trump'." That would return Social Security, over the next few decades, to a program designed to minimize poverty in old age. Or, if we do another iteration similar to the 1983 changes: I would temporarily raise the tax rate in 2032 (creating a specific link between new taxes and benefit payments, confirming that we failed to properly fund the trust and that trust assets have been exhausted) so that inadequate revenue did not require a benefit cut - spread equally between worker and employer. The "surtax" would be recalculated every year and announced in November. To match life expectancy, I would change the Normal Retirement Age from 67 to 70. Here is how: To change the Normal Retirement Age, 67 for people born after 1960, I would add three months per year, starting in 2028 (67 and 3 months for people born in 1961), and three months for every subsequent year until fully phased in of age 70 for those born in 1972. I would also change the benefit formula to reflect the higher "normal" retirement age of 70, anticipating more years with wages. I would gradually change the number of years of earnings in the denominator from 35 to 50. Here is how. I would add one year to the denominator of the benefit calculation for each year starting in 2028, for 15 years, fully phased in at 50 years in 2042. And, I would extend the 8% per year bump for delaying commencement from age 70 to age 75, so, an individual who would receive $1,000 a month at age 70 could delay and commence at 75 in the amount of $1,470. And, to sell it, I would highlight just how little the worker paid in FICA taxes (relative to the benefits received). For all who retire in the future, I would change the taxation so that a worker receives his/her contributions, dollar for dollar, or penny for penny, tax free first. Then, once the employee contributions had been "refunded" (exhausted), I would confirm that and then take the same action regarding the employer contribution, taxable (as if it were a pension). And, then, once every dollar paid in on the worker’s behalf has been received (exhausted), the worker would receive a confirmation of that fact, and, that they are now being funded by other people’s contributions or earnings on trust assets.
Comments
Reinstitute one time, 10 year forward averaging of a lump sum distribution. That was possible in the past, after separation, but effectively eliminated for anyone born after 1935 by changes that were part of the Tax Reform Act of 1986. The process was "simple". You must take all taxable monies from the account (this was pre-Roth, but we did have after-tax 401(a) monies), divide taxable amount by ten, calculate the tax using the single filer rate, then multiply the calculated tax by 10. Those with substantial account balances still end up with higher marginal rates, and higher average/effective tax rates. Current 2026 single filer federal tax rates: Tax Rate Taxable Income Bracket 10% $0 to $12,400 12% $12,401 to $50,400 22% $50,401 to $105,700 24% $105,701 to $201,775 32% $201,776 to $256,225 35% $256,226 to $640,600 37% Over $640,600 So, someone with retirement assets of $124,000 would pay $12,400 in income taxes. Someone with $1,000,000, would pay ~$167,118. Someone with $10,000,000, would pay ~$3,261,792 I would require all taxable monies be rolled over to a single IRA. And, I would treat it much the same as a Roth conversion (but not apply the 5 year rule when/once the individual reaches age 59 1/2). I would give individuals the option of using their assets to pay the tax (waiving the 10% penalty tax) or access plan loans equal to the federal and state withholding taxes, per the rules for qualified plans under 72(p), without the $50,000 limit, giving the individual the choice of a 5 year (general) or 15 year (home purchase) repayment period. As Dick suggested earlier, all revenue would go toward retiring national debt.
Post: Should Retirees Get a Temporary Flat Tax Window on IRA and 401(k) Withdrawals?
Link to comment from May 23, 2026
Sounds a little like CATO's Universal Savings Accounts. OK by me. 2026 Transition: Reinstitute 10 year forward averaging at 2026 single marginal tax rates so individuals must convert all accumulated tax-deferred monies from pre-tax to after-tax (401k, 403b, 457, IRA, etc.) Give workers a choice of paying the tax with a taxable distribution without penalty taxes or a tax-free loan. Rollover assets to the universal savings account. This has the effect, to some extent, of allowing everyone to go back in time as if Roth had always been the only option. Additional tax revenues in 2026 used to pay down federal debt. Going Forward: Eliminate the link to employers as plan sponsors. Limit to Universal Savings Accounts. Individuals could effectuate contributions by splitting their net paycheck. Employer's could contribute on much the same basis as they do today for Health Savings Accounts (where the account is owned by the individual and all money is 100% vested first day). Employers could contribute a nominal amount, a match, or fully fund the account. You mentioned that "... Most important is an employer match which too would remain tax-free. ..." The employer match in a 403b, 401k, 457 or Simple IRA is not tax free today! However, we do now have Roth employer contributions after SECURE 2.0, so, you would limit the employer contribution to a Roth basis. You could choose the $10,000 per person amount suggested by CATO, or perhaps you prefer the Simple IRA maximum of $17,000. No catchup. No non-discrimination. Every wage earner eligible 1st day. Every account would have regular 72(p) plan loan provisions but without the $50,000 maximum (so that the "Bank of Quinn" could be used to buy a car, a home, fund college education, regardless of employment status) - loan repayment via electronic banking. No distributions prior to age 59 1/2. Distributions after 59 1/2 are tax free, a la Roth (but without regard to any 5 year rule). Exception for death, and perhaps disability. Standard set of Designated Investment Alternatives, probably 5 or 6 or 7 index investments, coupled with a capital preservation option (money market) and access to other investments via self-directed Directed Brokerage - where the investments are not limited to those available in an 401k, but those available in any/every IRA. FYI, this is a variant of a proposal submitted in an essay contest held by the Society of Actuaries in 2010. It didn't win any prize. Note: Dick, what would you do with regard to defined benefit and defined contribution pension plans? Talk about complex.
Post: Time to scrap IRAs, 401k, 403b and all the rest
Link to comment from May 23, 2026
As a volunteer assisting retired individuals with financial decision-making. I can feel their anxiety despite my repeated encouragement. I agree that fear of running out of money surfaces even among those who may never have worried in the past. One major change that is obvious to me from my personal and family experiences is that retirement is a relatively new phenomenon in America. My dad was born in 1916 and passed in 1969, at age 53. Mom was born in 1924, came to America in 1925, worked two jobs after dad died from 1970 - 1989, became disabled at age 64, lived an illness filled, mostly sedentary disability retirement, and passed in 2001, at age 76. One had no retirement, the other's "retirement" ... One reason for anxiety, the fear of running out of money among the old/retired, may arise from concerns from the exhaustion of what is often our most precious asset - the ability to earn a wage - where anxiety may arise from concerns about being unable to resume employment - whether due to ageism, physical ability, etc.
Post: Deeply Rooted
Link to comment from May 23, 2026
What benefits do you think young adults should pay the most attention to when choosing a job? Looking back, is there one benefit you ignored early in life that you now realize mattered more than you thought? I'm so old that my young adult years preceded 401k plans, Health Savings Accounts, PPO's, HMO's, Flexible Spending Accounts, Lifestyle Accounts, EAP's, concierge services, etc. However, I had the privilege, over the past 46 years, to manage the benefit plans for my various employers. Unfortunately for them, my two now-adult Millenial children suffered through those efforts. One "benefit" they received from my work experience was free, expert benefits counseling when they transitioned from school to wage earners. The outcome:
- The oldest is on track to become a middle-class retirement savings millionaire before reaching age 50. The youngest is farther behind, having earned substantially lower wages at organizations that did not provide an employer-sponsored retirement savings plan.
- Both have accumulated assets and are invested in Health Savings Accounts - because both had excellent health when entering the workforce, so, their out of pocket expenses were/are/continue to be minimal.
- Neither needed life insurance at their initial hire (not married, no spouse), however the youngest has since married (no children) and has a modest amount of group term life insurance provided by her employer.
As far as I know, neither has made any benefit decision mistakes where they missed out on something valuable to them. For me? Back in 1992 (yes, 1992), I had conjured up a scheme to create a variant of what we know today as a Health Savings Account. It was unique enough such that I wouldn't proceed without asking the IRS for approval using what's called the private letter ruling process. I had investigated early Medical Savings Account concepts developed by the Golden Rule Insurance Company. My variant was closer to the predecessor of the Health FSA, what we called a ZEBRA, a zero based reimbursement account. It also had features that at times resembles today's Health Reimbursement Accounts. Today's HSA, once opened, also has some of those ZEBRA features. Unfortunately, my employer did not get out on the limb with me as I sawed furiously and refused to pursue that unique, innovative, "bleeding edge" design. One senior VP who rejected the proposal shared his thoughts widely with many other executives asserting my design was: "antithetical to small group health reform". Today, as nearly one in three workers with employer-sponsored health coverage are enrolled in HSA-capable coverage (29%) and as 43% of Americans with coverage in the public exchanges are in HSA-capable coverage, my 34 year old proposal remains in my missed opportunity personal file. That's a regret. I should have paid the fee out of my own pocket, run it through a law firm, and submitted it anyway - even though chances of IRS approval would likely have been less than 1 in 5.Post: Benefits Young Adults Should Look at Before Taking a Job
Link to comment from May 16, 2026
In terms of access or liquidity, you could also have mentioned plan loans, how a 401k plan with loan features, "done right", can serve as the "Bank of Bogdan": Contribute pre-tax, Defer federal/state income taxes, Get employer match (on deferred taxes too), Invest, Accumulate, Borrow to meet immediate need, Rebalance investments to treat the plan loan principal as the fixed income investment it is, earning the plan loan interest rate, Continue contributing while repaying the loan, Rebuild the account for a future, greater need. Repeat as often as necessary up to and throughout retirement. Of course, individuals wouldn't borrow from the plan where there was a better source of the needed funds. To minimize distributions from loan defaults at/after separation, some plans allow for electronic banking, so that not only can payments continue after separation, but the term vested and retired participants can initiate loans. For the past 18 years, plan loans that have been repaid (and ~90% of plan loans ARE repaid) have improved BOTH retirement preparation and household wealth. Here's how: First, almost all plan loans were deemed by the borrower to be superior to other financing alternatives, such as where the plan loan interest rate is less than the interest rate that would have applied to a loan from a commercial source, and Second, since 2008, almost all plan loan interest rates have been 5% - 7%, which far exceeds the return on all fixed income investments in the plan. So, again, if you remember to treat the plan loan principal as the fixed income investment it is, by rebalancing your account to your target allocation after taking the loan, the plan loan will generally improve BOTH your retirement preparation and your household wealth. Certainly worked for me. See this nearly 20 year old study from the New York Fed: https://www.federalreserve.gov/econres/feds/new-evidence-on-401k-borrowing-and-household-balance-sheets.htm
Post: Retirement Accounts
Link to comment from May 16, 2026
Solid. Definitely agree people should consider intervivos strategies instead of waiting until wealth becomes a legacy. You may also want to discuss with your counsel (I suspect you may already have) in terms of how the gifts will be used beyond the obvious of a 529 (if that is a prioirity for you), and, what preparations you might make for the contingencies of life and death. Consider how you/parents might communicate the gifts as the child grows. Myself, I started down this path 40+ years ago with modest gifts, set aside, to my children. I called them Ben Franklin accounts - in light of Ben's long term gifts to Boston and Philadelphia. Myself, I'd like to see employers adjust your calculus by adding Trust Account deferrals to everyone's employee benefit package. We are still waiting on guidance from Treasury. However, once issued, this can become just one more consideration where there is a "change in status" - especially the birth of a child, and perhaps even a grandchild! https://401kspecialistmag.com/trump-is-no-franklin-but/ You've given us great guidance. Thanks.
Post: Saving for Grandchildren
Link to comment from May 2, 2026
I disagree with your suggestion to simply increase the current FICA/Medicare deductions to the 16.22% level - which would place 100% of the burden on future workers and their employers. Simply, that fails to allocate any of the burden to those who have retired - people who failed to contribute enough to ensure the program is sustainable. Such a decision also locks in Congressional decisions to improve benefits in the past without corresponding increases in taxes - buying votes and sending the bill to generations too young to vote and generations unborn. What's to stop Congress from more vote buying if they pay no price for their past deceptions? It does nothing to return the program to the original intent, to keep full career workers (35 year, 420 qualifying quarter) who retire out of poverty - which would help in our goal to make the program sustainable. . Long past time to rein in Congress' vote buying schemes, so we do not end up with additional, idiotic schemes such as the Social Security Fairness Act. I never agreed with GPO and WEP, but, once they were added 43 years ago, once expectations were set, it was stupid to remove them - an action that was an obvious public employee vote buying scheme among many who had already retired.
Post: Fixing Social Security once and for all
Link to comment from April 22, 2026
Unfortunately, I don't think so. The compexity seems to be needed in order to accomplish all three goals: (1) A change prior to 2032, (2) Promise/guarantee to make the system indefinitely sustainable, and (3) Return Social Security to its original goal of avoiding poverty in old age. Would be happy to discuss simpler solutions - just don't know any. In fact, my own preferred solution is even more complex. The Trump "Savior" solution (identified above) is simplest and easiest to implement - as the D's will very much enjoy pinning BOTH the benefit cuts and the tax increases on Trump.
Post: Fixing Social Security once and for all
Link to comment from April 19, 2026
My proposed $100,000 cap on FICA wages for benefit calculation purposes may have a greater effect in improving funding than the CRFB's proposal to cap household Social Security benefits at $100,000 a year. Their proposal would leave the FICA wage base provisions unchanged, shifting the program into more of a welfare arrangement - disconnecting wages for tax purposes from wages for benefit calculation purposes. CRFB asserts that their proposal would close 55% of the 75 year funding shortfall. https://www.crfb.org/sixfigurelimit
Post: Fixing Social Security once and for all
Link to comment from April 18, 2026
I have my own ideas regarding Social Security reform - but because they require everyone to participate in the solution, including current retirees, either to pay more taxes or take less in benefits, I doubt anyone would ever approve such changes. Trump Recommendation With respect to an action the Trump Administration might take, here is what I think he should do. Once the Republican nominee for president is known, on or about September 1 2028, Trump could issue one of his infamous edicts and direct the Republicans in the Senate to filibuster the 2029 budget (upon threat of a veto) unless it included his Social Security "fix" - that would have four components:
- A cap on FICA wages of $100,000, applied prospectively starting January 1, 2030,
- A cap on earnings used in the benefit calculation of $100,000 per year, applied to all who commence Social Security benefits on or after January 1, 2030,
- For all who commenced payout prior to January 1, 2030, effective January 1, 2030, recalculate their Social Security benefit as if the $100,000 FICA wage base applied in years prior to 2030 and suspend COLA increases on or after January 1, 2030 until such time as the recalculated monthly benefit includes the $100,000 wage base, and
- A 4% increase (from 6.2% to 10.2%) in the EMPLOYER contribution to Social Security effective January 1, 2030 (total 16.4%).
So, instead of an employer contribution of $3,100 for someone with $50,000 of earnings in 2030 or $6,200 for someone with $100,000 in FICA wages in 2030, the new amounts would be $5,100, $10,200. Those who have been paying FICA taxes on income > $100,000, every year since 2008, would have their benefits limited in the benefits calculation - for all who commence after January 1, 2030, and gradually, for all who commenced prior to January 1, 2030. For most workers, the increase in taxes would be indirect, likely in the form of reduced wage increases in 2030 and 2031. For higher paid workers, they would see net pay increase (while Social Security benefits would decline). For retired higher paid workers, their Social Security benefits would be frozen for a period of time - shortest for those who only infrequently had FICA wages in excess of the wage base. Trump would be able to claim he saved Social Security for all future generations (and just in time for the 2028 General election), while everyone else, especially Democrats would be able to blame him for increased FICA taxes, a la George H. W. Bush “read my lips no new taxes.” ... while Trump will leave office January 20, 2029 before the new taxes take effect. A la Shakespeare: "The evil that men do lives after them; The good is oft interred with their bones. So let it be with 'Trump'." That would return Social Security, over the next few decades, to a program designed to minimize poverty in old age. Or, if we do another iteration similar to the 1983 changes: I would temporarily raise the tax rate in 2032 (creating a specific link between new taxes and benefit payments, confirming that we failed to properly fund the trust and that trust assets have been exhausted) so that inadequate revenue did not require a benefit cut - spread equally between worker and employer. The "surtax" would be recalculated every year and announced in November. To match life expectancy, I would change the Normal Retirement Age from 67 to 70. Here is how: To change the Normal Retirement Age, 67 for people born after 1960, I would add three months per year, starting in 2028 (67 and 3 months for people born in 1961), and three months for every subsequent year until fully phased in of age 70 for those born in 1972. I would also change the benefit formula to reflect the higher "normal" retirement age of 70, anticipating more years with wages. I would gradually change the number of years of earnings in the denominator from 35 to 50. Here is how. I would add one year to the denominator of the benefit calculation for each year starting in 2028, for 15 years, fully phased in at 50 years in 2042. And, I would extend the 8% per year bump for delaying commencement from age 70 to age 75, so, an individual who would receive $1,000 a month at age 70 could delay and commence at 75 in the amount of $1,470. And, to sell it, I would highlight just how little the worker paid in FICA taxes (relative to the benefits received). For all who retire in the future, I would change the taxation so that a worker receives his/her contributions, dollar for dollar, or penny for penny, tax free first. Then, once the employee contributions had been "refunded" (exhausted), I would confirm that and then take the same action regarding the employer contribution, taxable (as if it were a pension). And, then, once every dollar paid in on the worker’s behalf has been received (exhausted), the worker would receive a confirmation of that fact, and, that they are now being funded by other people’s contributions or earnings on trust assets.Post: Fixing Social Security once and for all
Link to comment from April 18, 2026