A recent survey has revealed that a majority of Americans are open to reducing Social Security payments for some recipients to help address the program’s looming financial crisis.
Social Security provides monthly payments to retirees and people living with disabilities across the U.S. However, the program is facing a potential insolvency crisis by the mid-2030s.
As more Baby Boomers retire and fewer younger workers pay into the system, full benefit payments may become unsustainable without significant reforms.
While proposals to cut Social Security benefits have typically been unpopular, a new report from the University of Maryland’s School of Public Policy found that many Americans would support reducing benefits—but only under specific conditions.
Cutting Payments for High Earners
In the survey of about 4,600 adults, 53% said they would find it “acceptable” to reduce monthly benefits for the top 40% of earners. This change could potentially reduce the Social Security shortfall by 23%.
However, not everyone agrees with this approach. Alex Beene, a financial literacy instructor at the University of Tennessee, cautioned that cutting benefits could erode trust in the Social Security system.
“Lowering benefits, even for higher-income recipients, isn’t a good idea,” Beene explained. “It’s unfair to those who’ve paid into the system and could make others worry their benefits might also be slashed.”
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Raising Taxes and the Retirement Age
Along with benefit reductions for high earners, other proposed reforms include increasing the payroll tax and applying it to wages over $400,000. Right now, the payroll tax is capped at $169,000. Raising the cap could provide more funding for the program.
Additionally, nearly 90% of Republicans and Democrats in swing states said they would support raising the retirement age to help address the funding crisis. This change alone could solve 15% of the benefit shortfall.
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Public Opinion Shifts with the Details
Interestingly, Americans’ opinions on benefit cuts shifted depending on how the policies were presented. When terms like “top 20%” or “top 40%” were used, most people were in favor of the cuts.
But when descriptions such as “middle class in high cost of living areas” or “paying into Social Security on the promise of benefits” were added, support for cutting benefits dropped.
Drew Powers, founder of Powers Financial Group, said this shows Americans are open to complex discussions around means-testing for Social Security.
“For top earners, Social Security benefits make up a small part of their retirement income, so they may not miss the money,” Powers said.
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A Controversial Solution
While many agree that reforms are needed, some experts believe cutting benefits for high-income earners isn’t the best solution.
Kevin Thompson, founder and CEO of 9i Capital Group, argues that a means test might be necessary, but simply reducing benefits based on income could face significant opposition.
“Many individuals and their representatives would likely push back against such a measure,” Thompson said.
The debate over how to keep Social Security sustainable continues, but one thing is clear—any changes will need to carefully balance fairness and practicality.