As they prepare for retirement, American workers frequently wrestle with concerns about their financial stability in later years.
Many worry about the rising costs of health care and the long-term viability of the federal Social Security program.
Although Medicare becomes available to Americans at age 65, it does not cover all medical expenses, requiring retirees to budget for additional costs.
Author and New York University professor Scott Galloway shares his perspective on the significance of Medicare and Social Security in shaping Americans’ retirement security.
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The Social Security Administration (SSA) explains that Social Security functions as a social insurance program that provides retirees with lifetime benefits, adjusted for inflation.
And Medicare is also a major source of stability for Americans preparing for retirement.
Traditional Medicare includes hospital insurance through Part A, though recipients must cover deductibles. Part B provides coverage for outpatient services and preventive care, with a monthly premium of $185 in 2025.
Seniors also have the option of Medicare Advantage, or Part C, which is managed by private insurers. This plan generally offers the same benefits as Parts A and B, plus additional coverage.
Medicare Part D is designed to help with prescription medication costs, which can vary widely depending on an individual’s health care requirements.
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However, Galloway argues that there is a fundamental flaw in the way some of these benefits are allocated.
He believes that some current recipients of Social Security may not actually require financial assistance but continue to receive it. In fact, Galloway notes that senior citizens today are the wealthiest generation in history.
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Scott Galloway sends a big message on Social Security
Galloway, who says he has an annual income of $16 million, believes that individuals with significant wealth, including himself, should not receive Social Security benefits.Â
He advocates for the implementation of means-testing to determine eligibility for monthly payments.
“Somewhere between 10% and 30% of people who get Social Security right now should not receive it because they don’t need it,” he said. “The wealthiest generation in the history of this planet are senior citizens.”
Means-testing is a process used to assess whether a person qualifies for financial assistance based on their income and assets. This evaluation aims to ensure that Social Security payments are directed toward those who need them most.
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Galloway highlights the fact that most recipients withdraw two to three times the amount they contribute through taxes. He argues that the wealthiest individuals should not automatically receive benefits solely because they have paid into the system.
He views Social Security taxes as a means of funding benefits and believes the money should be directed toward people who truly require financial assistance.
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Scott Galloway explains how Medicare taxes differ from Social Security
The Medicare tax rate stands at 2.9%, with the cost divided between employers and employees. Unlike Social Security, Medicare taxes have no income cap, meaning higher earners face an increased tax rate.
Scott Galloway highlights how Medicare’s tax structure differs, emphasizing that it continues to be applied across all income levels.
Many states also impose payroll taxes, though these tend to be relatively low and have defined limits. No matter the income bracket, payroll taxes remain unavoidable — even affecting wages funneled into a 401(k).
For self-employed individuals, the burden is even greater, as they must shoulder both the employer and employee portions, totaling over 15% on the first $160,000 of earnings.
On retirement savings in general, U.S. workers acknowledge the value of tools such as 401(k) plans and IRAs, even when economic conditions present challenges.
Contributing to an employer-sponsored 401(k) plan is an effective way to build retirement savings, particularly when employers provide matching contributions.
With automatic deductions taken directly from wages, this method promotes consistent saving without requiring additional effort, offering both simplicity and efficiency.
In 2025, the maximum contribution limit for 401(k) plans has risen to $23,500, an increase from $23,000 in 2024. Additionally, workers aged 60 to 63 can now make larger catch-up contributions of up to $11,250, compared to the $7,500 limit for those aged 50 to 59.
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