could be worse though, like australia's age pension where if your net worth is above 1$M AUD (not counting your house) then you get phased out of it entirely
though i don't think they have a direct tax for that like SS tax, and i don't think it changes based on how much you earned
when i calculate SS in my retirement planning i usually set it at %75 of the expected amount because who knows what'll happen to it in the 2030s when payouts exceed funding. i expect SS tax to go up to compensate but i wouldn't put some form of rewrite to do means testing past them.
What you are doing regarding the 75% assumption is actually a good idea. However, it will probably be worse than that in reality.
What a lot of people don't realize is that the majority of workers (most especially higher income ones, due to the Social Security wage cap) draw out every penny of tax money they ever paid into Social Security in their lifetime within about 6 years of electing to begin benefits. Within 12 years, they've drawn out everything they paid in taxes plus every dollar of payroll tax their employer(s) ever paid. And, this doesn't even consider disability benefits plus benefits to wives, children, or widows (who don't necessarily pay taxes for benefits). Thus, future taxpayers are on the hook for supporting beneficiaries for the rest of their lives after that point. And, once the system starts to go bankrupt, all current Social Security tax revenue will have to go towards paying current benefits, costing Congress all that extra money they waste on their favorite pastimes (you know, useless wars, military waste, etc) which will necessitate huge tax increases.
The system as it was originally designed depended on future beneficiaries paying in to support current beneficiaries. However, there aren't enough futures beneficiaries paying in now to support current beneficiaries. I won't call it a ponzi scheme (it wasn't intended to be one), but it shares certain characteristics with one.
At this point, the only way to save Social Security is to essentially reform it to the point of converting it to a means-tested welfare system (like your example of Australia) which is the equivalent of doing away with it, or to kick the can down the road by letting large numbers of immigrants in to work and support the current system (leaving them holding the bag in the long term).
my grandpa got hit by this - took a local government job in the last 1/3 of his low-paying career
he didn't know about WEP until he retired and it ended up wiping out almost all the government pension. he was counting on that money and was so ticked off when he learned about it.
a lot of the problem came from his days living off a small business which wasn't exactly a cash cow. his CPA only cared about minimizing income for tax purposes, and she never gave a thought to the impact on SS.
so many years he filed with almost 0$ income, or very low - certainly less than the %25 cutoff. this made the impact of WEP much bigger than it would've been if she had counted those years.
though honestly most of those earning years were before 1983 when WEP became a thing. this is why i wouldn't be surprised if some new SS rules pass in the 2030s and retroactively screws a decent number of people.
My mother is affected in the same way. Further, she can't receive widow's benefits from my father due to the associated GPO law (which is far more draconian than the WEP and began back in the early 70's).
You wouldn't believe the number of self-employed people or people with incorporated businesses of decent sizes (most of whom weren't even subject to WEP) I had that exact miserable conversation with over the years. They simply couldn't conceive of the fact that their CPA's goal of minimizing their taxes was diametrically opposed to maximizing Social Security benefits.
I always used to tell people I had contact with to start contacting SSA and getting estimates to begin planning at least 20 years out from retirement. Now, you can run the estimates yourself on SSA's website (which does warn users it can't compute an accurate estimate when you receive a non-covered government pension). In the end, few people paid attention, and even less were paying attention when I retired two years ago...
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