A recent survey reveals that many Americans are open to the idea of reducing Social Security payments as a way to address the funding challenges facing the program in the coming years.
Social Security provides monthly payments to seniors and individuals with disabilities, but the program is projected to face insolvency by the mid-2030s. This is largely due to the increasing number of retirees from the Baby Boomer generation and a declining ratio of younger workers contributing to the system. Without significant changes, full payments may not be sustainable.
Traditionally, Americans have been skeptical of proposals to cut benefits, but a new report from the Program for Public Consultation at the University of Maryland points to a shift in perspective under certain conditions.
VALERIE MACON/AFP via Getty Images
In a survey of around 4,600 adults, over half (53%) found it “acceptable” to lower benefits for the top 40% of earners. This adjustment could potentially reduce the Social Security shortfall by 23%.
Alex Beene, a financial literacy educator at the University of Tennessee at Martin, cautioned that such cuts could undermine public confidence in the Social Security system. He noted, “When cuts can affect one subgroup, it risks setting a precedent for further reductions elsewhere.”
The survey required participants to engage in an online simulation where they explored various reform options for Social Security, weighing their pros and cons.
Additionally, there was significant bipartisan support for increasing payroll taxes, particularly by extending the tax to incomes over $400,000. Currently, the payroll tax applies only up to $169,000, so raising that threshold could enhance funding for the Social Security program.
A large majority—almost 90%—of respondents from both parties in key swing states also endorsed raising the retirement age, a change that could address 15% of the benefit shortfall.
Americans appeared more amenable to benefit cuts when framed in terms like “top 20%” or “top 40%,” but reactions were different when the language changed, as noted by Drew Powers from Powers Financial Group. “This indicates a willingness to discuss a nuanced approach to means testing for Social Security,” he explained, pointing out that high earners typically do not rely heavily on these benefits.
Nonetheless, Kevin Thompson, finance expert and CEO of 9i Capital Group, warned that even modest cuts for higher income earners could provoke strong opposition among the public. The complexity of Social Security reform continues to spark debate, emphasizing the need for thoughtful consideration of potential impacts on all beneficiaries.