Scott Galloway, a professor at New York University and podcaster, has strong opinions about Social Security benefits and the financial behavior of the baby boomer generation. Galloway says that Social Security is a counterproductive transfer of wealth from struggling young people to thriving baby boomers. He identifies what he believes is a significant flaw in the way the federal program distributes benefits.
Somewhere between 10% and 30% of people who get Social Security right now should not receive it because they don’t need it,” he said. “The wealthiest generation in the history of this planet is senior citizens.”
“The fact that every year we affect a $1.2 trillion transfer from young people, who are not doing as well as they have in past generations, to the wealthiest generation in history means something is wrong,” Galloway added, referring to baby boomers. Galloway has argued that Social Security should primarily serve as a safety net for seniors who are no longer working and genuinely need financial assistance.
From his perspective, people with substantial assets or passive income exceeding a certain threshold do not require Social Security benefits and ideally should not receive them. Galloway supports the implementation of means-testing as a way to assess eligibility, ensuring that Social Security primarily serves those who rely on it for financial stability in retirement. He outlines the disparity in contributions to the Social Security system, noting that the wealthy pay a proportionally smaller share into the system compared to middle-income earners.
Galloway concludes that serious reform is needed to ensure that Social Security benefits are directed to those who genuinely need them, rather than continuing a wealth transfer from younger generations to retiring boomers.
Social Security reform debates
However, it’s important to note that Social Security is not a need-based program or a welfare program.
Instead, it is something people who pay into the system are entitled to. There’s no reason to deny seniors Social Security just because they have a significant amount of wealth. To collect Social Security in retirement, you must pay taxes on your income and earn 40 work credits in your lifetime.
If you do that, you are eligible for benefits. The more you earn, up to a point, the larger a monthly retirement benefit you are entitled to. Earning millions of dollars a year during your working years or being a multi-millionaire in retirement doesn’t make you ineligible for benefits — nor should it.
While some lawmakers may push for means-testing, it’s highly unlikely that Social Security will be taken away from the wealthy. Means testing would change the whole premise of Social Security, and lawmakers will likely strive to preserve its nature. Anyone who pays into Social Security as required should be allowed to collect benefits once they are eligible, regardless of their wealth.
Image Credits: Photo by 2H Media on Unsplash
