Social Security provides benefits to seniors across a wide range of income levels. In fact, it’s possible to have a $3 million income in retirement but still collect Social Security.
But some lawmakers may be looking to change that by imposing a system of means testing for Social Security purposes. Here’s how that would work – and the impact it might have.
Social Security is facing a serious financial shortfall in the not-so-distant future. Recently, its Trustees projected that the program’s trust funds will be out of money by 2035. Once that happens, benefit cuts will be a distinct possibility unless lawmakers manage to find a way to pump more money into Social Security.
Social Security: The average couple gets $2,800 a month. Could you live off that?
How means testing works
One such option to achieve that goal is means testing. Means testing is the concept of distributing benefits to retirees based on need.
Now there are different ways means testing could play out. Lawmakers could decide that seniors above a certain income level might see their Social Security benefits reduced. Or, they might decide that higher-earning seniors can’t receive Social Security at all.
In a recent survey by the University of Maryland’s Program for Public Consultation, 81% of respondents favored reducing Social Security benefits for higher earners. And it’s worth noting that the idea received strong support from both respondents who identify as Republican and those who identify as Democrats….
