Darkwind
Diamond Member
- Jun 18, 2009
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I keep running across people who postulate that if we paid something like 5 million dollars, would there be a savings overall, would it make Social Security solvent?
The premise is, if you receive 5 million dollars from the Feds for retirement and then have to LEAVE the Social Security entitlement program.
Here is the Perplexity.ai Conversation.:
Question:
Given the current value of the dollar, how much would it cost taxpayers upfront to give every 63-year-old person in the United States $5 million in exchange for ending their participation in Social Security?
In addition, if every person 63 and older where to quit social security, how large a buffer would that be on social securities solvency?
Current trajectory without intervention:bipartisanpolicy+1
75-Year Outlook: The $1.41 trillion in annual savings would completely eliminate Social Security's projected 75-year deficit of $25.1 trillion in just 17.8 years—far faster than the 75-year projection window.crr.bc+1
Buffer Creation: Rather than facing insolvency in 2033, the trust fund would grow by approximately $1.35 trillion annually after accounting for the eliminated deficit, creating an unprecedented cushion for the program.ssa+1
Assumptions: This analysis assumes universal participation (all 63-year-olds accept), immediate exit of all 63+ beneficiaries, and stable benefit levels for remaining participants.
Unmodeled factors: The analysis doesn't account for how such an enormous wealth transfer would affect the broader economy, inflation, labor markets, or other government programs. The financing mechanism for $17.8 trillion remains unspecified.
Benefit equity: The $5 million payment may be substantially less than lifetime expected benefits for high earners who would have collected benefits into their 90s, while representing a windfall for lower earners with shorter life expectancies.smartasset+1
In summary, while paying every 63-year-old $5 million would cost taxpayers an immediate $17.82 trillion ($96,823 per taxpayer), eliminating everyone age 63 and older from Social Security would save approximately $1.41 trillion annually—creating a massive buffer that would not only prevent the system's projected 2033 insolvency but transform it into a structurally sound program within about 13 years.ssa+5
Thoughts?
The premise is, if you receive 5 million dollars from the Feds for retirement and then have to LEAVE the Social Security entitlement program.
Here is the Perplexity.ai Conversation.:
Question:
Given the current value of the dollar, how much would it cost taxpayers upfront to give every 63-year-old person in the United States $5 million in exchange for ending their participation in Social Security?
In addition, if every person 63 and older where to quit social security, how large a buffer would that be on social securities solvency?
Upfront Cost Analysis: Paying Every 63-Year-Old $5 Million
Based on current demographic and economic data, giving every 63-year-old American $5 million to exit Social Security would require an upfront investment of approximately $17.8 trillion.The Mathematics
In 1962, there were 4,167,362 births in the United States. Based on survival rate data, approximately 85.5% of that birth cohort is still alive today, translating to roughly 3.56 million people currently age 63 in 2025. At $5 million per person, the total cost would be:infoplease+2- Total upfront cost: $17.82 trillion
- Cost per taxpayer: $96,823 (based on 184 million workers paying payroll taxes)ssa
- As percentage of GDP: 61.4% of the estimated $29 trillion US GDP in 2025cnn+1
Financing Context
To put this in perspective, this represents approximately 71% of Social Security's entire 75-year actuarial deficit of $25.1 trillion. The upfront cost is massive—roughly 6.5 times larger than the current Social Security trust fund balance of $2.72 trillion.crfb+2Impact on Social Security's Solvency
If everyone age 63 and older stopped receiving Social Security benefits, the financial impact would be transformative and dramatic.Annual Savings Calculation
Currently, there are approximately 58.6 million Social Security beneficiaries age 63 and older, representing about 95% of all Social Security beneficiaries. This includes:ssa+1- Ages 63-69: 17.1 million beneficiaries
- Ages 70-84: 35.3 million beneficiaries
- Ages 85+: 6.2 million beneficiaries
Solvency Extension
This annual savings would have extraordinary effects on Social Security's finances:Current trajectory without intervention:bipartisanpolicy+1
- Annual deficit: $67 billion
- Trust fund depletion: 2033 (8 years away)
- Automatic benefit cut upon insolvency: 23%
- Annual savings: $1.41 trillion
- Transforms deficit to surplus: From -$67 billion to +$1.35 trillion annually
- Savings-to-deficit ratio: 21.1x the current annual deficit
- Insolvency risk: Eliminated indefinitely
Long-Term Financial Analysis
Payback Period: The upfront cost would be recovered through annual savings in approximately 12.6 years. After this break-even point, the system would generate massive annual surpluses.75-Year Outlook: The $1.41 trillion in annual savings would completely eliminate Social Security's projected 75-year deficit of $25.1 trillion in just 17.8 years—far faster than the 75-year projection window.crr.bc+1
Buffer Creation: Rather than facing insolvency in 2033, the trust fund would grow by approximately $1.35 trillion annually after accounting for the eliminated deficit, creating an unprecedented cushion for the program.ssa+1
Financial Trade-offs
This hypothetical policy presents a stark trade-off between short-term fiscal shock and long-term structural solvency:Year 1
- Cost: $17.82 trillion upfront payment
- Savings: $1.41 trillion from eliminated benefits
- Net impact: -$16.4 trillion
Years 2-13
- Continued annual savings of $1.41 trillion
- Cumulative savings approaching the initial investment
Year 13+
- Full recovery of upfront costs
- Ongoing annual surplus of approximately $1.35 trillion
- Social Security transformed from structurally insolvent to abundantly solvent
Economic Context
The scale of this proposal is historically unprecedented. The $17.8 trillion upfront cost represents more than half of annual US GDP and would require financing mechanisms far beyond normal federal budgeting—likely involving massive borrowing, asset sales, or money creation, each carrying significant economic consequences.bea+1Critical Considerations
Several important factors limit the precision of these estimates:Assumptions: This analysis assumes universal participation (all 63-year-olds accept), immediate exit of all 63+ beneficiaries, and stable benefit levels for remaining participants.
Unmodeled factors: The analysis doesn't account for how such an enormous wealth transfer would affect the broader economy, inflation, labor markets, or other government programs. The financing mechanism for $17.8 trillion remains unspecified.
Benefit equity: The $5 million payment may be substantially less than lifetime expected benefits for high earners who would have collected benefits into their 90s, while representing a windfall for lower earners with shorter life expectancies.smartasset+1
In summary, while paying every 63-year-old $5 million would cost taxpayers an immediate $17.82 trillion ($96,823 per taxpayer), eliminating everyone age 63 and older from Social Security would save approximately $1.41 trillion annually—creating a massive buffer that would not only prevent the system's projected 2033 insolvency but transform it into a structurally sound program within about 13 years.ssa+5
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Thoughts?
