Net worth thresholds could replace across-the-board Social Security cuts

Retirement and survivor benefits would be cut by 24 percent to 28 percent if the Social Security Trust Fund is exhausted in 2032 and Congress fails to act. The cuts are required by law to balance outgoing payments with incoming revenues. This outcome is driven by the projected exhaustion of the Trust Fund in 2032. A means test based on individual net worth, modeled on the Australian general pension plan, provides an alternative to across-the-board cuts. Under this proposal, cuts would be restricted to non-disabled beneficiaries ages 62 to 74. Beneficiaries with individual net worths greater than $470,400 would receive partial cuts, while those with individual net worths greater than $785,400 would receive complete cuts. These thresholds would be sufficient to balance the Social Security system in 2032.