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There's a proposal to pay Social Security benefits at a flat rate. Here's how it would work

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How Social Security works

Universal Social Security coverage has been debated for as long as Social Security has existed. 

Giving everyone who's eligible the exact same check every month regardless of how much they made throughout their working career would be a pretty big departure from the way things work now. 

The average retired worker receives about $1,500 a month from Social Security, and the maximum benefit for someone at full retirement age is just over $3,000

Benefits are based on your income, the year you were born and the age you decide to start taking money out. This means higher income workers receive more in benefits than lower income workers. 

However, those higher income earners do receive less proportionally because of the way the benefit formula works. Therefore, workers with lower lifetime income generally receive higher replacement rates from Social Security.

How universal Social Security would work

Experts argue that leveling out benefits would ultimately provide more for people who live below the poverty line.

But a change like this wouldn't happen overnight.

"There are proposals that call for reducing the growth rate of benefits more for higher income workers, relative to lower income workers," said Gopi Shah Goda, senior fellow and deputy director of the Stanford Institute for Economic Policy Research. 

In theory, over time, those who are middle and upper income would gradually see their benefits reduced, and after a few decades, you would get to a point where you have the same benefit for everybody.

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Calculating the maximum check you can get from Social Security

One plan to make benefits universal

The Heritage Foundation, a conservative think tank, put together its own universal benefit plan. The organization says one big advantage of their proposal is that it would actually include a Social Security tax cut.

Social Security is financed through a dedicated payroll tax. In 2021, every working American pays 6.2% of their wages to the government on everything they earn up to $142,800. Employers match that amount, or if you're self-employed, you pay 12.4% into the Social Security trust fund. 

"We estimate that you could reduce the 12.4% tax down to 10%," said Rachel Greszler, a research fellow at the Washington-based foundation. 

"A median household ($68,700 per year) would have an extra $1,580 income each year to spend or save as best for them."

However, it is important to keep in mind that while this would put extra cash in your pocket today, the onus would be on the individual to actually invest that money wisely.  

Retiring without Social Security

This plan, of course, also assumes that Social Security will still be there when you retire.

Data from the Wharton School at the University of Pennsylvania estimates the funds could run out as soon as 2032. The Bipartisan Policy Center, another Washington think tank, says the reserves could be depleted by 2028.

This doesn't mean that Social Security will run out of money completely, but it does mean it would only be able to pay out a portion of promised benefits.

Doug Boneparth, president of Bone Fide Wealth in New York, told CNBC his millennial clients are trying to plan for a world in which they do not receive Social Security benefits in retirement.

"Millennials are a generation that faced more uncertainty than any other generation before them. So it's no wonder they're asking whether or not Social Security will be there for them," said Boneparth. 

"While we don't have an answer as to how things will look 40 or 50-plus years down the line, we can plan around that level of uncertainty by showing them a number of scenarios as to whether or not there will be Social Security."

Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns.

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How Social Security benefits are calculated