addition to Social Security benefits (although a portion of Social Security benefits is taxable if the total income exceeds a certain threshold). One option to help close Social Security’s funding gap is to “means test.” Means testing would reduce benefits for higher-income recipients and could even eliminate benefits altogether for the highest-income households. UnlikeFile Size: KB. Apr 13, · Means testing could take the form of more income taxes, a reduction in benefits, a surtax or some other method. Reduce Social Security Benefits. One proposal  would reduce SS benefits for individual retirees with more than $55, of non-Social Security income. Benefits would be reduced by % for every $1, of income they have over the.
Whzt just over 16 months, Americans aged 18 and over get to exercise their greatest right as free citizens: The right to vote. The presidential election may still be more than a year away, but the chess match between the Democrats and Republicans and how to send international postcards members of the same political party is well underway.
Although there's plenty left to be decided, including which candidate will definitively represent each party on the presidential ticket, one thing is for certain: There are no shortage of hot-button tsting.
For example, one issue that gets far too little press is Social Security. Bythis excess capital will be gone, essentially making Social Security a cash-neutral program. That's a problem when more than 3 out of 5 currently retired workers lean tessting their monthly stipends to account for at least half of their income. With most Americans retired or working reliant or expected to be reliant, in some capacity, on Social Security during their golden years, it pays to understand how the leading political candidates from either party would address and have addressed the program's problems.
Today, we'll take a look at six things you should know about former Vice President and Democratic presidential ticket frontrunner for the moment Joe Biden. The first thing you should understand about Joe Biden is that even though he's a member of the Democratic Party, unlike most candidates from either partyhe's been willing to consider bipartisan Social Security proposals.
In other words, he's more of a centrist than pretty much any other candidate out there on the Democratic or Republican ticket. For those of you who might be unfamiliar with the core positions of our two major parties, here's a quick refresher. Democrats prefer raising additional revenue through higher taxation of the wealthy in order to close the funding shortfall Social Security is set to face between now and Meanwhile, Republicans' primary solution is to gradually raise the full retirement age, or the age at which a worker becomes eligible to receive their full retirement benefit, thereby reducing long-term outlays from the program.
What you'll also note about Biden, as you read further, is that his views on Social Security have evolved over time.
If there's one line in the sand that former VP Biden would draw, it's that the idea of partially or fully privatizing Social Security isn't an acceptable solution. Privatizing Social Security, which would involve setting aside a portion of a workers' payroll tax into a separate account that the worker how to get rid of possums in the garden have investment control over, was a popular idea pushed by former President George W.
Bush in the mids. The proposal, however, fell flat, with Bush's own party failing to support the idea. Biden's distaste for privatization is probably well grounded given that financial literacy among the broader American public is lacking. This lack of investing knowledge is compounded by not understanding the risks involved and could lead to low-income workers taking undue risks with their retirement money.
Furthermore, privatizing Social Security doesn't help narrow the program's funding gap and could even make it worse in the near term by diverting payroll tax funds away from current beneficiaries in favor of workers who might be decades away from being eligible for a benefit. Biden is a fan of the core Democratic proposal of raising revenue to deal with Social Security's imminent cash shortfall.
This would be done by raising the payroll tax earnings cap and effectively requiring the rich to pay more into the system. Infof earned income i. Doing so wouldn't impact over 9 out of 10 workers, but it would require the wealthy to pay more.
Biden is on record as supporting raising the tax cap during sockal September Democratic presidential debate at Dartmouth College. In addition to raising revenue, Biden has called for various means of reducing Social Security's long-term costs. Some of these suggestions came a long time ago, while the proposal for means testing is barely a year old. Means testing involves partially reducing monthly Social Security benefits over a certain income threshold, then removing them completely above another earnings threshold, with the idea being to limit or halt payouts to the wealthy who don't need them.
While speaking at a Brookings event in May what is service bus in azure, the former VP had this to say about means testing:. Paul Ryan [former Republican speaker of the house] was correct when he did the tax code.
What's the seurity thing he decided to go after? Social Security and Medicare. Now, we need to do something about Social Security and Medicare. That's the only way you can find room to pay for it.
Even though raising the full retirement sociao is primarily a Republican proposal, it's an idea that Biden has what are three major cities in michigan willing to entertain in the past.
According to NBC NewsBiden's presidential campaign featured more of a centrist view on fixing Social Security, whereby increasing the earnings tax cap and raising the full retirement age would both be given serious consideration.
Why raise the full retirement age, you ask? The idea here is that longevity has increased substantially since Social Security was signed into law in and made its first retired-worker payout in But between andthe full retirement age will have risen by just two years, from age 65 to This means that more people than ever who reach age 65 are receiving payouts for decades.
However, the program was only designed to support seniors for years, rather than multiple decades. Raising the full retirement age would require future generations of retired workers to make a choice. They could: 1 wait longer to receive their full retirement benefit, or 2 accept an even steeper permanent monthly reduction if claiming early. How to miter a quilt border matter the choice, it reduces program outlays, thereby saving Social Security money over the long run.
Doing so would protect current and near-term retired workers meeans reduce the lifetime benefits of Generation Z, millennials, and maybe some Gen-Xers. Last but not least, it's important to understand how far Biden has presumably come in securjty Social Security thinking.
Inthen-Delaware Sen. Biden fought hard for serious federal deficit reductions and even pushed toward a balanced budget. Among the cuts Biden proposed was the idea of freezing Social Security's outlays -- i. Although you can watch the C-Span cliphere's what Biden had to say about the Balanced Budget Tseting while speaking to members of Congress in For example, I'm going to go on tewting. I'm up for re-election this year, and I'm going to remind everybody what I did at home, which is going to cost me politically.
When I argued that we should freeze federal spending, I meant Social Security, as well. I meant Medicare and Medicaid. I meant veterans benefits. I meant every single how to fit a toilet syphon thing in the government.
And I not only tried it once -- I tried sociwl twice, I tried it a third time, and I tried it a fourth time. Somebody has to tell me in here how we're going to do this hard work without dealing with any of those sacred cows, some deserving more protection than others.
It's relatively safe to assume that Biden isn't looking to freeze benefits on Social Security today, but it does suggest that the former Vice President's game plan to fix the program is a relatively open book. And that, folks, is what you need to know about presidential candidate Joe Biden and his past and present views on Social Security.
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philosophy for providing benefits. What Is Means Testing? Social Security expenditures could be reduced over the long term by applying a means test to. retired workers and their dependents and bene-ficiaries otherwise eligible for benefits under the current program. Means testing would reduce or eliminate benefit payments to participantsFile Size: KB. May 01, · Means-tested entitlement programs are the core of our nation’s social safety net. They deliver vital assistance that protects millions of Americans from entering poverty, while providing ongoing safety and stability for individuals and families facing poverty every single day. Under a means test, the government assesses the resources available to an individual — his income and assets, aside from the benefit payment in question. To the degree that those other resources exceed some pre-set level, the government then reduces (or .
Anyone who has done a good job saving for their retirement on their own should consider the chance that Social Security benefits will be means tested in the future. Means testing of benefits already takes place in the form of taxation. It would not be a big stretch to propose only providing monthly benefits to retirees who have less than a certain amount of non-Social Security annual income.
Means testing could take the form of more income taxes, a reduction in benefits, a surtax or some other method. Benefits would be reduced by 1. The threshold would be doubled for couples drawing Social Security. This type of means testing has already impacted Medicare Part B premiums. Means testing could also come in the form of an asset-based cap.
A similar tax could be reinstated with the proceeds dedicated to the Social Security trust fund. We can all agree that changes need to be made to the Social Security system to restore long-term solvency. Gustman, Thomas L. Skip to content rodgers-associates. Rick Rodgers. Propose Excise Tax Means testing could also come in the form of an asset-based cap. Sign up for our newsletter and get timely insights from our advisers.
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