Should Your 401(k) Be Eliminated to Save Social Security Benefits?
- Thread starter ajacobson
- Start date
401K has nothing to do with Social Security. You can have both a 401K and Social Security benefits because you are putting monies in both. If there was no 401K, how will that save Social Security? Actually, you will be worst off. For one thing, the 401K shields your monies from taxes until you take required minimum distributions at age 72 now. If there was no 401K, you would be paying higher taxes on those monies going to a 401K if it was all taxable. Still, it will not be going to the Social Security Trust Fund. Of course, you probably, would have salted those monies away in an Individual Retirement Account (IRA) if there was no 401K.
But I'm not sure if that particular case applies to the article you posted. Here's a brief summary of Fleming vs. Nestor, courtesy of Google's Gemini:
In the 1960 case of Flemming v. Nestor, the Supreme Court addressed the question of whether Social Security benefits constituted a contractual right. Nestor, the beneficiary, had his benefits terminated after being deported. He argued that since he had contributed for many years, taking away his benefits amounted to a breach of contract.
The Court ruled against Nestor in a 5-4 decision. They determined that Social Security is a social insurance program, not a contractual agreement. Therefore, Congress has the right to modify the benefits schedule as needed. The Court also said that Social Security payments are not a protected property interest under the Fifth Amendment's Takings Clause. However, they did acknowledge that due process still applies. This means the government's actions must be reasonable, not "patently arbitrary."
The Court ruled against Nestor in a 5-4 decision. They determined that Social Security is a social insurance program, not a contractual agreement. Therefore, Congress has the right to modify the benefits schedule as needed. The Court also said that Social Security payments are not a protected property interest under the Fifth Amendment's Takings Clause. However, they did acknowledge that due process still applies. This means the government's actions must be reasonable, not "patently arbitrary."
The Court ruled against Nestor in a 5-4 decision. They determined that Social Security is a social insurance program, not a contractual agreement. Therefore, Congress has the right to modify the benefits schedule as needed. The Court also said that Social Security payments are not a protected property interest under the Fifth Amendment's Takings Clause. However, they did acknowledge that due process still applies. This means the government's actions must be reasonable, not "patently arbitrary."
