A new Cato Institute policy analysis titled “Rethinking Social Security from a Global Perspective” is being released today.

Authors Romina Boccia and Ivane Nachkebia argue that U.S. policymakers can learn from the experiences of other nations who have successfully reformed their pension systems and should consider transforming Social Security into a system that ensures seniors are protected from poverty when they can no longer work while enabling younger generations to save more on their own.

Today, a retiree with a maximum earnings history who claims at age 70 receives over $61,000 a year in benefits—more than four times the senior poverty threshold. Such large payments, which grow with inflation, significantly contribute to the program’s rising costs.

Yet many of the highest earners receiving Social Security are not financially dependent on it. Only 42 percent of retirees rely on Social Security for at least half of their income, and just 14 percent depend on it for 90 percent or more. IRS data show that in 2022, roughly 34 percent of Social Security benefits went to individuals with incomes above $100,000. Meanwhile, the median net worth of seniors aged 65–74 was $410,000 in 2022—three times that of workers aged 35–44, who fund these benefits.

According to the Congressional Budget Office, replacing the current earnings-related benefit structure with a flat Social Security benefit at 125 percent of the federal poverty level would fully eliminate the long-term funding shortfall. The consequences of delayed reform get worse the longer US legislators wait, as younger generations will experience higher taxes, lower benefits, and less opportunity, the authors warn.

You can read the full analysis here. If you would like to speak with Boccia, please contact pr@​cato.​org to set up an interview.