Politicians like to talk about “fixing Social Security” to that it will be financially health for the long term, 75-100 years from now. However, no particular solution has emerged. One possible solution might be to increase Social Security benefits for the wealthy. In this report, Social security expert Brian Doherty explains why his strange-sounding suggestion makes great sense.
Doherty points out that one presidential candidate has proposed means testing for Social Security benefits as a means of improving the system. Under this plan, people who made over a certain amount would receive lower benefits, and those who made a lot of money would get no benefits at all. The theory, of course, is that wealthy people don’t need the money.
Doherty says this is a bad idea for two reasons. One is that Social Security works so well because everyone who pays into the system gets benefits back when they retire. There is no discrimination. The bigger problem, Doherty says, is that this approach has almost no effect on the long-term funding problems that concern so many people.
Doherty suggests that one approach to fixing Social Security funding would be to eliminate the FICA tax earning cap. The FICA tax is what funds Social Security. The current FICA tax earning cap is $118,500. All earnings above that amount are exempt from the tax. Doherty notes that only about 6% of Americans fall into that group.
Doherty says that eliminating the cap would resolve “80 to 90 percent of long-term funding problems.” This simple step would fix Social Security without requiring any benefit cuts. The people who fall into that 6% group would probably be unhappy about paying more FICA taxes. However, they would probably be very happy when it came time to claim their benefits because the benefits would be much larger. Doherty’s reaction: “I think that’s a good thing.”
Brian Doherty is the author of a new book “Getting Paid To Act Now,” which reveals his groundbreaking strategy on how to maximize Social Security benefits. He is a nationally-recognized expert on Social Security claiming strategies and a top-rated speaker and media commentator on this topic. He began his career as a financial advisor with Dean Witter. He is President of Filtech, a consulting company specializing in Social Security claiming strategies. The Legal Broadcast Network is a featured network of the Sequence Media Group.