Means Testing Social Security
I am interested in the extent to which Social Security is reduced by means testing, since I am a retired US government employee who also qualifies for Social Security because of years spent working in the private sector. Because of my government retirement, my Social Security is severely reduced, by something like 2/3 or 3/4. I get less than $50 per month, which every month when I get it seems more like a joke or an insult than social “security.” I will have to live a long time just to get back the money I have paid into Social Security, much less any “government money.”
So, what about older rich people like Warren Buffett or T. Boone Pickens? Do they face limits on the Social Security they can collect? The Arizona Republic says Buffett collects $32,000 per year, or about $2,600 more per month than I do. I presume the government has determined that he need the “security” more than I do. Rep. Ron Paul admitted on Morning Joe that he gets Social Security, although he did not say how much he gets; I think he probably gets more than I do. In 2007 Sen. John McCain reported that he collected $23,160 in Social Security, or about $1,900 per month more than I do. It is harder to find out what Boone Pickens collects from Social Security, but this article says he and fellow Texan Ross Perot do collect it.
The main means test that rich people face now seems to be that they have to pay income tax on their Social Security. Payments are also reduced if you continue to work after you start collecting Social Security, but the limits are reduced as you get older. So, there are probably no limits on Buffett or Pickens, who are both over 80.
One article in the Huffington Post makes the argument that instead of means testing Social Security payments, the government should remove the limit on the amount of income that is subject to the payroll tax for Social Security, currently $110,100. Since the payroll tax rate is almost as high as the capital gains tax that most rich people pay on their income, eliminating the limit would substantially increase the income of the Social Security trust fund and do a lot to make Social Security self-sustaining.
For me personally, however, the lesson is that as a retired US government employee, I am subject to a much stricted means test than the richest people in America. Once again the 1% gets welfare paid by the 99%.