Harris, Trump And How Social Security Fits In Your Retirement

In a perfect America, everybody throws a little money each month into — for example — the five most-searched stocks in our Trackstar database. 

And, when there’s weakness, you buy more Nvidia (NVDA). Same goes for Tesla (TSLA), as we detailed in Tuesday’s Juice. 

For goodness sake, a mere $500 investment in NVDA at the beginning of 2024 is worth approximately $1,200 today. 

In TSLA, you would be sitting on a YTD loss of about $40. However, if you bought the stock at its mid-April low, you’re looking at something in the neighborhood of a $280 gain. These realities reaffirm the near- and long-term investing strategies we recommended in the two above-linked installments of this newsletter. 

But, as we discussed earlier this month, not everybody has the practical and psychological luxury of investing like this to build wealth and secure a sound retirement.  

However, quite a few people are entitled to Social Security benefits. 

In fact, according to the Social Security Administration, in 2024, 68 million Americans will receive a monthly check totaling approximately $1.5 trillion in benefits paid. Of these recipients, 51.2 million are retired workers (another 2.6 million are their dependents), who receive, on average, $1,918 a month. 

While that’s not making anybody rich, just shy of $2,000 a month is nothing to sneeze at, particularly if you have one or more the following: No or a low housing payment, an otherwise low cost of living or other cash flow sources, including from money you managed to save/invest over the years. 

If you’re unsure how Social Security can fit into and, possibly, supplement your retirement, it’s easy to find out. You can look at your current situation and simulate the future by creating an account at the Social Security website. You might be surprised to see how much you can expect to receive. 

While The Juice doesn’t think you should rely on Social Security, we don’t think you should ignore it either. Ideally, it’s gravy for you. But the reality is that, for some people, it’s a lifeline — it’s what keeps them out of poverty (at least, by official government standards) — and for others it puts them over the edge into a relatively comfortable retirement. 

Therefore, as we head towards an election, it’s important to know where the candidates stand on Social Security. 

While Kamala Harris often talks about the millions of Americans Social Security keeps out of poverty, she’s somewhat light on details about how she’ll handle the program. However, it’s not too difficult to speculate about what she’ll do. 

At the moment, income above $168,600 isn’t subject to the Social Security payroll tax. So, as you might expect, the Democrats would like to increase that number. For his part, Joe Biden has proposed charging the Social Security payroll tax on incomes higher than $400,000 to help extend the program’s solvency. 

On her website, Harris says she would strengthen Social Security “by making millionaires and billionaires pay their fair share in taxes.” The Juice can only assume she wants to do something similar to Biden’s idea.  

As for Donald Trump, he is equally as light on details. 

Earlier in his political career, he mentioned privatization or increasing the retirement age. He has since backed off of both stances. More recently, he has talked about protecting Social Security, but doesn’t offer specifics on how we would do this. Instead, it appears that he thinks overall economic growth will lift all ships. So, if the economy is humming, tax revenues would increase and, in turn, so would the amount of Social Security payroll taxes the government collects. 

It’s ultimately difficult to know with confidence exactly where Trump stands, as, during his presidency, he did propose budget cuts to Social Security. 

The Bottom Line: Do you sense a theme here? The Juice does. And it’s a sad one, really. 

No matter where you fall politically, it’s easy to agree that the candidates are light on clear and specific details. They go back and forth a ton, often depending on who they’re talking to at the moment. And they’re more prone to buzzwords, one-liners and personal attacks than outlining concrete and substantive policy. 

Do they think we’re all just a bunch of dummies? 

All of this said, The Juice thinks there would be widespread outrage if any politician took a hatchet to Social Security, particularly given that many older Americans rely on the income (or are about to). These folks represent a large voting bloc that no candidate can afford to alienate. 

While we think Harris’s anticipated approach of making the relatively well-off pay more makes sense, we also don’t think Republicans will have much success gutting the program, which is a big fear of Social Security’s proponents.

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