Social Security began back in 1935 when President Franklin Roosevelt signed the Act into law in August of that year. And while the Act has guaranteed at least some income for retired workers after they hit a certain age, how much income the program’s recipients receive has been a subject of debate seemingly ever since the program became law.
For instance, today the amount that workers receive is based on a variety of factors, such as income and the age they want to begin taking money out. In other words, if you opt to take benefits at 62, which is considered early retirement age, then you would receive about 30 percent less than you would if you began claiming at 66, which is considered full retirement age. Furthermore, higher-income earners would receive more from the program than lower-income ones, so there’s some variation there as well. The average amount that a retiree receives from Social Security is $1,500 a month.
Today, however, as funding for Social Security becomes a hot topic and some sort of reform looks to be increasingly necessary to continue to fund the program, some are openly wondering if part of this revamp will include changes to how benefits are paid out. For example, the concept of universal Social Security – where everyone receives the same amount regardless of income – has resurfaced. In this post, we’ll discuss universal Social Security benefits, the pros and cons of such, and how likely such a policy would be to take effect.
As the name implies, a universal Social Security policy would be defined as balancing benefits between high and low-income earners. Experts say it would likely provide much more financial security for those who live below the poverty line by leveling the playing field. If such a policy was enacted, things wouldn’t change overnight. It would likely be a gradual change where retirees would see gradual, yet consistent, changes to their Social Security payments over time until everyone got to the point where the payouts were the same. Experts say that leveling this playing field could ultimately take decades, however.
How likely is a universal plan to take effect sometime in the near future? The bigger question is how Social Security will continue to be funded. If a universal plan can help sustain the program that so many millions of Americans rely on today and many more will hope to rely on in the future, then it’s more likely to be considered as a viable option. As it stands now, some studies have Social Security depleting as soon as 2028.
What are your thoughts on a universal social security policy? A good idea? Or just another idea that will never sniff the light of day?