Question of the Week: do you support means-testing benefits?

Every week, we’ll be asking The Seniors Center supporters what they think about the latest Social Security and issues affecting American retirees. Because when it comes to advocating for seniors, the best policy is listening and learning from the REAL experts: YOU.

Your responses will help us understand how seniors truly feel about today’s most important retirement issues. And when you’re finished, be sure to keep an eye out for when we share our results–you just may see your response in our next blog post!

Means-testing is a potential Social Security insolvency fix that has come up again and again. It would be a totally new way of calculating the amount of a retiree’s Social Security benefits each year.

In a nutshell, means-testing is a strategy meant to limit the amount high-earning beneficiaries can collect each year while making sure lower earners are the ones collecting the most in benefits. Looking at a retiree’s total income for the previous year would determine whether or not that retiree would receive the same benefits, reduced benefits, or possibly no benefits at all in the current year.

Decreasing the amount in Social Security benefits a wealthier person can claim will extend solvency by reducing the demand on the Trust Fund. And like raising the earnings cap, it’s a strategy attempting to limit the risk on lower earners by impacting higher earners less likely to be dramatically affected by reduced benefits.

If you think about it, means-testing looks a lot like raising the payroll cap, but in reverse. Instead of asking the wealthy to contribute more in payroll taxes, it’s asking the wealthy to accept less or completely forgo receiving benefits for the good of the program.

But, like raising the payroll cap, this again creates a situation that isn’t entirely fair to those higher earners. Critics of this proposal say means-testing punishes workers for being successful. And to be sure, even if these high-earners get reduced or no benefits due to exceeding a year’s earnings income, they aren’t being asked to stop paying FICA payroll taxes.

So yet again it’s a proposal that seems, at face value, to make a lot of sense. But the reality is it’s another proposal asking wealthy Americans to carry the burden of Social Security’s financial woes. And when we do that, as we’ve discussed before, we risk losing the original DNA of the Social Security program. Asking the wealthy to over-give and under-receive isn’t earned insurance for them or for those who aren’t wealthy.

What is your take on means-testing? Do you feel this is a commonsense proposal to look out for our most vulnerable? Or do you agree with those who would say this places an unfair load on those who are financially successful?