If you have an issue with Social Security, then fix it. The regressive taxes to fund retirement benefits top out at about $117,000 in 2014. Why not simply raise that to $250,000 next year and $500,000 during the next 20 years. Congratulations, you just made Social Security solvent for the next century.
I was incorrect. Several sharp-eyed readers pointed out those numbers didn’t add up. That sent me back to a research report I was basing this on, and as it was, I had incorrectly read the data, conflating raising the cap with removing it entirely. As the Congressional Budget Office numbers show, making incomes up to $500,000 subject to the payroll-tax wouldn’t get the job done. Indeed, removing the cap would only cover about nine-tenths of the projected Social Security shortfall in the coming decades.
Any opportunity to correct myself when I make an error is an opportunity that is always appreciated. It happens to everyone all the time. But as Bridgewater Associate’s Ray Dalio has so eloquently argued, it is much better to own up to a mistake, rather than pretend it never happened, or simply hope no one notices or mentions it again in public. Bridgewater, the world’s largest hedge fund, makes this a key part of it culture and process. Some people deem this self-reflection cultish; it has also led to one of the most enviable long-term track records in investing.