No Social Security for the Rich?

No Social Security for the Rich?

Elon Musk Tesla TSLA

When Elon Musk turned 52 years old last month, he moved within a decade of qualifying for Social Security retirement benefits. This means that in 2033, the Tesla CEO will be eligible for a payment of up to $2,572 a month — the current maximum benefit if you retire at age 62. Chances are the maximum will be even higher in a decade because of inflation adjustments.

To put that number in perspective, consider this: With a net worth of about $245 billion, according to the latest Forbes estimate, Musk could retire now and have about $8.2 billion a year to live off for the next 30 years if he simply converted his wealth into interest-free cash. That translates into about $22.78 million a month. Add in his new Social Security payment, and suddenly he has $22.782572 million a month.

Some people figure the world’s richest person can squeak by without the Social Security check and want to enact policies that prevent the very wealthy from collecting Social Security. One of those people is former New Jersey governor and 2024 presidential candidate Chris Christie.

In a recent interview with “Fox News Sunday,” Christie reaffirmed his support of “means testing” that would exclude wealthy Americans from receiving Social Security benefits. As CNBC reported, this is a way for Christie to differentiate himself from other presidential candidates (including former President Donald Trump) who oppose any cuts to Social Security.

“Do the extraordinarily wealthy need to collect Social Security?” Christie asked. “Do we really need to have Warren Buffett and Mark Zuckerberg and Elon Musk collecting Social Security?”

This isn’t a new proposal from Christie, who also supports raising the full retirement age for Social Security benefits. As a presidential candidate in the 2016 election, Christie proposed reducing Social Security benefits for retirees earning more than $80,000 a year and eliminating them for those with annual incomes of $200,000 and up, according to a 2015 article in The Florida Times-Union.

Proposals to reform Social Security have become a major talking point in the 2024 election because of a looming funding shortfall tied to the program’s Old Age and Survivors Insurance (OASI) Trust Fund, which is expected to run out of money sometime within the next decade or so. When that happens, the program will be solely reliant on payroll taxes for funding — and those taxes only cover about 77% of current benefits.

To address the shortfall, many candidates have targeted the wealthy. As GOBankingRates previously reported, President Joe Biden has rolled out a four-point plan to boost Social Security that would mostly impact high earners and company executives, who tend to have much bigger retirement savings accounts than the typical American.

The Biden plan would raise the income threshold on wages subject to Social Security payroll taxes. Currently, all wages above $160,200 are not subject to the taxes. Among Biden’s proposals is to tax earned income above $400,000, leaving wages between $160,200 and $400,000 untaxed for this purpose.

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