Social Security is designed to be a progressive program and, despite some nuances, it basically is. On the other hand, tax preferences for retirement saving are perceived as regressive, since the tax deferment on 401(k) contributions is more valuable to high-income individuals in higher tax brackets. How does it all play out?
Robert Verbruggen of Real Clear Policy looks at a new book by the Investment Company Institute’s Peter Brady, which analyzes Social Security and private retirement saving together. (Brady recent presented his results at an AEI forum.)
The results aren’t cut-and-dried, and we had some interesting debate at AEI. But Verbruggen’s write-up of Brady’s results provides and interesting foundation.
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