Social Security--still the best retirement deal around

[exboyfil]

33. The benefit formula for the "high" earners is

already 15% versus 90% for the base amount (about $9-$10k). Also half of S.S. over a certain income level is already taxed.

Lets say you want to structure S.S. this way. Everyone gets a guaranteed $15K but 50% of every dollar of income over $15 is taken for taxes. What many individuals would do (me included) is quit working at 56 and draw down my 401(k) until I started collecting S.S. at 65/67. Already any years worked beyond 56 contribute little to the S.S. formula because of the 35 year max look back window. I am probably still making 60% more inflation adjusted than when I was at 21, but all that extra delta income will go into 15% formula.

I am not sure it is a good idea to build in further disincentives to save for retirement. A better solution would be to withhold from the higher earners at a lower percentage rate for that income over $105K.