Social Security Will Be Depleted in 6 Years — Here Are 3 Ideas to Fix It
Social Security’s Old-Age and Survivors Insurance (OASI) Trust Fund, which supports retirees, their survivors, and their dependents, will be depleted in 2032, according to the Social Security Administration and Congressional Budget Office. That means that unless lawmakers act now, retirees will face an automatic 24-percent benefit cut in just six years. While the deadline is approaching fast, the good news is there are many policy solutions available. Through its Trust Fund Solutions Initiative, the nonpartisan Committee for a Responsible Federal Budget (CRFB) has assessed a range of reforms that could address the program’s shortfalls long term and prevent significant benefit cuts.
CRFB’s latest reports outline three options Congress could enact to close the funding gap:
1. A Six-Figure Limit
Social Security benefits have grown to surpass $100,000 for the wealthiest couples. Capping benefits at $100,000 per couple would slow benefit growth for higher-income retirees to ensure continued support for all Americans.
2. An Employer Compensation Tax
Social Security’s trust funds are financed by employees and employers each paying a 6.2 percent payroll tax, applied only on the first $184,500 of annual wages in 2026. With a flat employer compensation tax, employers would instead pay taxes on total compensation, with no cap.
3. A Cost-of-Living Adjustment (COLA) Cap
To keep up with inflation, Social Security increases benefits annually through a COLA. A COLA cap would slow the growth of benefits, especially for retirees with the largest benefits and highest lifetime incomes, generating savings for the program.
The depletion date for Social Security's retirement fund is fast approaching. CRFB’s recent white papers offer three policy options to meaningfully close the funding gap — and researchers have identified many more ways to raise revenues, adjust benefits, and ultimately secure Social Security for future generations. While none of these options alone bridge the gap entirely, they highlight the benefits of a balanced approach with a combination of reforms to gradually restore solvency.
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Further Reading
Social Security’s Funding Gap is 1.3% of GDP — Here’s How We Can Close It
Social Security is an integral part of the nation’s fiscal picture and a vital economic lifeline for millions of recipients.
Lawmakers are Running Out of Time to Fix Social Security
Without reform, Social Security could be depleted as early as 2032, with automatic cuts for beneficiaries.
Budget Basics: How Does Social Security Work?
Social Security is the largest single program in the federal budget and typically makes up one-fifth of total federal spending.