Americans preparing for retirement generally understand the existence of two federal programs designed to support them in their post-employment years: Social Security, which provides monthly benefits to help cover daily expenses, and Medicare, which assists with healthcare costs.
Scott Galloway, host of the Prof G Show podcast, discusses his views on the long-term viability of Social Security and Medicare. He offers some candid opinions on how these federal safety net programs should be funded.
Many U.S. workers recognize that Social Security was never intended to fully fund all retirement expenses. The average monthly Social Security benefit, approximately $1,900, is not sufficient to cover necessities such as housing, transportation, groceries, and other bills. A growing concern is the projected insolvency of Social Security, which could become a reality within the next decade without legislative action.
Medicare’s complexity and cost are also major concerns for those planning for retirement. Many are unsure about the implications of their healthcare decisions, particularly when choosing between Original Medicare and the increasingly popular Medicare Advantage plans offered by private companies. Like Social Security, the long-term sustainability of Medicare and potential changes to its benefits cause stress among current and future beneficiaries.
Galloway has openly shared his opinions on the future of these programs, suggesting potential solutions to address their limitations.
Galloway, noting recent reports that both programs’ funds may be depleted in the coming years (Social Security by 2033 and Medicare by 2036), expressed a lack of serious concern about their long-term viability. He outlined his understanding of the current administration’s stance on Social Security—one of the government’s largest budget items—and Medicare, and then proposed a controversial path forward.
Before his first term, Donald Trump promised to maintain both Medicare and Social Security without making cuts or changing the retirement age. Galloway remarked that without changes, options might be limited to incurring deficits, which he termed as taxes on younger generations, or implementing means-testing for Social Security.
Means-testing would consider an individual’s wealth in determining whether to reduce or eliminate benefits. Thus, if a person’s income or assets exceed a certain threshold, they might lose some or all of their monthly Social Security payments. Galloway also conveyed his belief that he does not require Social Security, referencing the notion that many taxes paid do not directly translate into perceived benefits.
Galloway, who earns $16 million annually, shared that he pays the same $9,000 in Social Security taxes as an individual earning $160,000. He questioned why the wealthy are not contributing more to support seniors and criticized the idea of a regressive tax system impacting young people.
Further, Galloway argued for means-testing to determine eligibility for Social Security benefits, proposing that individuals with over a million dollars in assets or $100,000 in passive income might not need these benefits. He noted that most Social Security recipients draw out significantly more than they contribute over their lifetimes, challenging the notion of entitlement to these benefits.
Galloway suggested implementing a safety net specifically for seniors who are no longer working and genuinely in need of financial support, advocating for fiscal responsibility in the management of these federal programs.