The United States faces an uncertain future when it comes to retirement planning, and one of the biggest sources of concern continues to be Social Security. While millions of citizens rely on this benefit to maintain their quality of life in retirement, voices such as that of Professor Scott Galloway warn of the urgent need for reform.
The New York University professor, also known for his role as a podcaster, has launched direct criticism of the current functioning of the system. According to Galloway, Social Security is not adequately fulfilling its purpose of providing a safety net for those who need it most.
Social Security has become a poorly designed transfer program
The growing fear of running out of savings, uncertainty about the markets, and the pressure of medical expenses are just some of the concerns facing retirees. But Galloway focuses on another point: the unequal distribution of Social Security benefits.
In his view, between 10% and 30% of those currently collecting Social Security should not be getting it, simply because they do not need it. “We are talking about the richest generation in history. And every year, $1.2 trillion is transferred from young people—who are not doing as well as previous generations—to them,” explains the professor.
For Galloway, this is a wake-up call. The system, he says, should be designed to support those who really need it. That is, elderly people who can no longer work and depend on Social Security to cover their most basic expenses, according to The Street.
Who should collect Social Security?
Galloway has been clear and direct: citizens with more than $1 million in assets or passive income exceeding $100,000 per year should not get Social Security benefits. He himself, with an annual income of $16 million, acknowledges that he would not need to receive such payments.
To fix the system, he proposes implementing a means-testing model, i.e., applying a means test to determine who actually qualifies for help. In other words, access to benefits would depend on the applicant’s financial situation, not simply on their age.
His criticism is also directed at the cap on contributions to Social Security. Currently, a worker earning $160,000 a year pays about $9,000 in taxes to the program. However, someone earning $10 million, like him, also pays the same amount. For Galloway, this represents a flaw in the system’s design.
“It’s a program that should keep seniors out of poverty. It should not continue to be a transfer of wealth from the young to the old, who, as a group, are already the wealthiest,” he says.
In his view, the time has come for profound changes. “We need serious reform. Costs must be reduced dramatically. It has been too politically dangerous an issue until now, but it must end. One-third of seniors should not be collecting Social Security.”
