Many Americans are focused on meeting the demands of covering everyday expenses, preparing for retirement, and factoring Social Security benefits into their financial planning.
Scott Galloway, New York University professor and author of The Algebra of Wealth, explains some thoughts on Social Security and a bold and thought-provoking approach to retirement wealth and financial security.
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Galloway states plainly his belief that people with large amounts of wealth are not taxed at a high enough rate to contribute their fair share toward sustaining the Social Security program.Â
He believes that the Social Security tax is regressive because an unfair burden is placed on lower-income earners while allowing for the wealthiest to pay proportionally less.Â
Galloway says he earns $16 million per year and shares that he pays $9,000 annually in Social Security taxes, which is the same amount paid by someone earning $160,000 per year.Â
The current Social Security tax caps the amount people pay at that income level, resulting in significantly wealthier individuals contributing a smaller percentage of their earnings compared to those making much less money.
Related: Dave Ramsey bluntly warns Americans about Social Security
Very wealthy people including himself, Galloway says, should not receive Social Security benefits at all. He supports a means-testing system to assess eligibility for the federal program’s monthly payments.
Means-testing is a process designed to evaluate a person’s financial status — taking into account their income and assets — to determine if they qualify for specific financial assistance or benefits.Â
This approach would direct Social Security payments to those who genuinely require them, ensuring the program’s resources are allocated more equitably to those in need.
Economic security in one’s retirement years, of course, involves much more than those monthly Social Security paychecks.Â
In his book, Galloway explains some intriguing thoughts about how people can achieve their financial goals.
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Scott Galloway discusses a Social Security problem and economic security
Galloway acknowledges that, without legislative intervention, Social Security’s trust funds are projected to be depleted by 2033, as stated in a 2024 Social Security Administration (SSA) report.Â
This would mean that recipients might receive only around 80% of their anticipated monthly benefits.Â
But Galloway remains confident that the program’s survival is not at risk. He reasons that the political influence of the aging population makes it highly unlikely that Social Security will, in fact, be compromised.
More on retirement:
- Scott Galloway offers bold opinion on Social Security
- Dave Ramsey has blunt words for Americans about retirement
- Tony Robbins sends strong message on 401(k)s
Galloway recalls the financial difficulties of his family as he was growing up and then places a huge emphasis on how people should dream big about economic security.
“The insecurity and shame present in my childhood home will always be there,” he wrote. “But that’s okay, as it was motivating. Your pursuit of wealth may be driven by something else. Perhaps validation, or a feeling of purpose. A passion for the good life, luxuries and experiences only money can bring. The desire to do something about the ills of the world.”Â
“In my experience,” he added, “noble intentions are a good motivation for hard work, and desire is also powerful — but fear bests them both.”
Related: Scott Galloway sends strong message on Social Security
Scott Galloway explains his view on the pursuit of wealth
Galloway points out the fact that there are only two ways to reach economic security.
“The smart way is to inherit it,” he wrote. “Most of us will have to go the hard way. It’s simple. Earn money by working hard. Save some. Invest it. If you maximize your income, minimize your spending, and invest the difference wisely, I can claim with reasonable certainty: You will achieve economic security.”Â
Galloway acknowledges that execution of the plan is more difficult than stating it.
“That goes beyond finance, beyond what you can capture on a spreadsheet,” he wrote. “Wealth is the product of a life well lived — hard work, frugality, wisdom. That doesn’t mean being a monk — there’s room for pleasure, for error, for life.”
“But it does mean hard work, and it does mean a certain amount of discipline. And it’s worth it.”
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