Social security, on its face (or in theory), is indeed supposed to serve as insurance for lower-income workers. However, in practice, it takes a larger bite out of the earnings of lower income workers and is therefore regressive in the sense of taking a bite out of their utility. While one could argue that lower-income folks get proportionately greater returns, any reasonable adjustment for longevity wipes out that advantage. (There is a strong positive correlation between income and age of death.) My comment reflects these realities. In short,
Increasing the FRA disadvantages the poor more than the rich because the former die earlier (on average).
Increasing the rate also disadvantages the poor because they lose a larger chunk of their income and every marginal dollar is worth more to them.
Increasing the cap would address both these concerns without imposing additional costs on the lower-income folks. All of the incremental costs accrue to folks making over $400K a year.
IMHO, increasing the FRA and/or the tax rate is counterproductive. I see it almost as taking more money from the poor to further enrich the well-to-do. As has been proposed elsewhere, removing the cap is a terrific idea that deals with the funding problem. (Implementation wise, it might be politically more saleable to start with a "donut-hole" till $400K and have it fill naturally over time.) Other incremental changes such as broadening the tax base will also help.
We are fortunate to have a wealth advisor as a part of my professional network. We periodically (around milestone events, mostly, every 3-5 years or so) chat to share where we are and to get a 30,000 ft overview on whether we are missing anything major. This way, the advisor is aware of our holdings/plans/values should anything happen to me. She thinks that, at that point, she might hook my wife / kids us up with a Vanguard personal advisor given the composition of our funds.
Comments
Social security, on its face (or in theory), is indeed supposed to serve as insurance for lower-income workers. However, in practice, it takes a larger bite out of the earnings of lower income workers and is therefore regressive in the sense of taking a bite out of their utility. While one could argue that lower-income folks get proportionately greater returns, any reasonable adjustment for longevity wipes out that advantage. (There is a strong positive correlation between income and age of death.) My comment reflects these realities. In short,
- Increasing the FRA disadvantages the poor more than the rich because the former die earlier (on average).
- Increasing the rate also disadvantages the poor because they lose a larger chunk of their income and every marginal dollar is worth more to them.
Increasing the cap would address both these concerns without imposing additional costs on the lower-income folks. All of the incremental costs accrue to folks making over $400K a year.Post: Fixing Social Security once and for all
Link to comment from April 17, 2026
IMHO, increasing the FRA and/or the tax rate is counterproductive. I see it almost as taking more money from the poor to further enrich the well-to-do. As has been proposed elsewhere, removing the cap is a terrific idea that deals with the funding problem. (Implementation wise, it might be politically more saleable to start with a "donut-hole" till $400K and have it fill naturally over time.) Other incremental changes such as broadening the tax base will also help.
Post: Fixing Social Security once and for all
Link to comment from April 16, 2026
Would you mind sharing the name for this outfit?
Post: Financial Planning
Link to comment from April 13, 2026
We are fortunate to have a wealth advisor as a part of my professional network. We periodically (around milestone events, mostly, every 3-5 years or so) chat to share where we are and to get a 30,000 ft overview on whether we are missing anything major. This way, the advisor is aware of our holdings/plans/values should anything happen to me. She thinks that, at that point, she might hook my wife / kids us up with a Vanguard personal advisor given the composition of our funds.
Post: Financial Planning
Link to comment from April 13, 2026