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>> The problem with this is it would disincentives saving even more. "You, mean if I don't save anything for retirement, the government will cover me, but if I save some, they won't give me anything? I'm buying that big screen HDTV LCD then!" <<

Agreed completely. This is why a phaseout of SS benefits should not be set at *too* low a threshold, and why the phaseout should be gradual as income increases.

For example, we might reduce benefits by 10% for every $5,000 in annual income over $50,000 (adjusted for inflation) such that there would be complete elimination over $100,000. That's enough to reduce the burden and the payouts to the very wealthy, but the phaseout is gradual enough that it doesn't become a strong disincentive to saving.

I'm not dogmatically against means-testing, but I am against doing it so drastically that it discourages private retirement saving.

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