The Future of Social Security

Photo by Barbara Burgess on Unsplash

Between DOGE and the recent Medicaid cuts, I’ve been getting a lot of questions about whether retirees can really depend on Social Security to be around in a few years.

While I am all for making conservative planning assumptions, I also think it is important to be realistic and recognize that Social Security is not going away.

First, Social Security is essential. It keeps about 20 million older Americans and one million children out of poverty.

Second, while it is true that Social Security would be forced to reduce benefit payments by approximately 20% in 2035 if no changes are made, numerous minor adjustments will likely be implemented beforehand, allowing payments to remain at or above their current levels in the decades ahead.

If you are looking for a detailed solution, the Brookings Institution offers a comprehensive roadmap. If you want the short version, below are a few bullet points of changes I would expect to see over the next few years:

• Increase the income on which Social Security taxes apply. Currently, workers stop paying Social Security taxes on earnings above $176,100.

• Applying the Social Security tax to some types of pass-through income.

• Increasing the payroll tax from 12.4% to 12.6%.

• Slowly increasing full retirement age above 67.

• Increasing the tax on Social Security benefits for high earners.

There are other options as well, and I have no idea which ones the politicians in DC will ultimately go with. Still, I am confident that the Social Security system will continue to exist regardless of which party is in office.

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Interesting Gold Update - Fusion Energy Start-up Claims to Have Cracked Alchemy

Photo by Scottsdale Mint on Unsplash

Gold investors often cite the yellow metal’s limited supply to explain why it is an eternal store of value. But what if humans could create gold in the same way we can now create diamonds?

In a recent academic paper published by San Francisco-based Marathon Fusion, the researchers explain how the same nuclear fusion process used to generate power could convert mercury into approximately 5,000 kg of gold per year, per gigawatt of electricity generation, without reducing the power output or tritium-breeding capacity of the system.

I certainly don’t know enough about nuclear science to fact-check that claim, and I don’t suspect we’ll be manufacturing stable gold isotopes anytime soon, but it is a fun thought experiment and a good reminder that betting against human ingenuity is rarely a good idea.

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My boys’ last hurrah of the summer was to try to catch a marlin. They succeeded.