The probability is growing for a “needs test” taking away part of well-to-do retirees Social Security benefits. In one possible scenario, a formula will be devised to take back part of Social Security benefits for those above certain thresholds of income or net worth.

New studies from two Ivy League schools Harvard and Dartmouth researchers concluded Social Security really is in worse shape than most originally thought. In looking at the Social Security Administration’s actuarial forecasts the Ivy League researchers found that these have been consistently overstating the financial health of the program’s trust funds since 2000.

If you are thinking a “needs test” is far-fetched, consider this. When I prepared my first income tax return in 1977, retirees’ Social Security were NOT taxed. However, in 1984 the US Government levied its first “needs test” by taxing 50% of retirees’ Social Security-thus taking away part of well-to-do taxpayers benefits through the income tax system. In 1993, the US Government increased the level to 85% on higher income retirees. In effect, two “needs tests” have been levied in an effort to remedy the distressed Social Security system. The probability is rising on a third.