Do billionaires collect Social Security? It's an interesting question, to be sure. They certainly don't need the money. And earning enough income can potentially reduce the size of their Social Security payments if they've already begun being paid anyway.
On the other hand, billionaires are tax-paying citizens too, and should have the same legal rights and privileges that everyone else does. Here's the skinny on the matter.
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How it works is how it works for everybody
Cutting straight to the chase, yes, billionaires can and do collect Social Security. But first things first.
As a refresher/reminder, Social Security is a government-managed taxpayer-funded program. Namely, it's funded by the FICA taxes you pay as an employee. The size of your future benefits payment is determined by the amount of taxes you paid into the program's fund while working; the more you put in, the more you get back when you retire.
There are limits. This year, for instance, Social Security doesn't tax any amount of personal wages above and beyond $176,100. That's because there'd be no additional benefit to you by doing so. That's because the program also caps its payouts. The most anyone can receive in Social Security retirement benefits this year is $5,108 per month. Most people are collecting considerably smaller checks, of course, because most people annually earned less than Social Security's maximum taxable income.
Whatever the case, even if billionaires earned most of their wealth in ways other than earning a traditional paycheck -- like dividends, capital gains, business ownership, inheritance, etc. -- as long as they earned at least an inflation-adjusted $1,810 in wages as an employee for 40 calendar quarters (or about 10 years' worth of work, and they don't even have to be continuous), they'll be able to claim benefits at the earliest-possible age of 62, or at any age thereafter. It may not be much money to them, but it will be something.
Now, there is one possible -- even likely -- scenario where billionaires might be temporarily disqualified from collecting Social Security. That is, earning work-based wages after you've initiated your benefits could potentially reduce the size of your payments. For 2025, every $2 earned above this year's annual limit of $23,400 will reduce Social Security payments by $1. Since there's a very good chance billionaires will be earning at least that much as an employee (including being self-employed), there's also a good chance they'll end up negating their benefits.
This still isn't a permanent reduction of these benefits though. Once that individual has reached their full retirement age of 66 or 67 -- depending on when they were born -- this reduction rule no longer applies. Affected people will even get credit for the amount of reduction they experienced, in the form of bigger future payments.
More to the point for curious investors, billionaires' wealth at the point in time they become eligible for Social Security retirement benefits plays no part in the matter. These benefits are strictly based on everyone's taxable income history.
Don't worry about what you can't control, worry about what you can
Fair? Not fair? Unnecessary payouts to people who don't actually need the money? And needlessly adding strain to a program that's already at risk of reducing its payments by more than 20% as soon as the early 2030s? Both sides of the table have valid arguments. It's not billionaires' fault that Social Security is inching its way toward insolvency, after all, but billionaires are still certainly in a position to help shore up the shortfall (which would indirectly help them by keeping the domestic economy going).
Just don't get so caught up in the fairness argument that you forget to do what you can do. That includes saving as much for retirement that you can on your own so you don't need to worry about the program's health. This might help dial back any distracting frustration you might have.
While they may not need the income, unlike most ordinary middle-class Americans, higher-earning individuals -- including billionaires -- won't qualify for the recently introduced deduction that makes most Social Security income exempt from income taxation. Any other kind of income they may collect is still taxed just like it ever was. That makes the fact that they collect the same benefits you do at least little easier to digest.
