Here are a couple of simple changes to SS.
First, make the tax compulsory only for those saving less than 7% (or whatever threshold you’d like to pick) of their income for retirement. For example, if you save 5% in a retirement account, then you pay a 2% SS tax. If you’re saving 7% or more, then you pay no SS tax.
Second, make it actual insurance that you buy, like life insurance. A life insurance company calculates your chances of dying based on your age, health and other factors when it sets its rate.
Perhaps a SS insurance company could calculate your chances of falling short of your nest egg based on your savings and retirement habits, then price a policy to make up the shortfall.
If your savings rate and investment choices are not good, you’d pay more for this insurance. It may even encourage you to figure out why you are paying so much and make changes to lower it.
If your savings rate and investment choices are more sound, your insurance rate would be minimal.
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