"Right now, the trust fund is expected to run dry as soon as 2035, and if this happens, it would necessitate an automatic 17% cut to benefits. Since many retirees are already struggling to cover their essential costs with their current benefits, such a big cut would be absolutely devastating. There are many potential solutions to improve the stability of Social Security. One option on the table would require higher earners to pay more in Social Security tax without a corresponding increase in benefits."
"Right now, Social Security taxes are only collected on income up to the wage base limit, which is $176,100 in 2025 and which will go up to $184,500 in 2026. If people who earned above that amount paid Social Security taxes on some of their extra income without that income counting when benefits are calculated, this would provide more money to fund everyone's benefits."
Social Security faces a funding shortfall that could exhaust the trust fund by 2035, forcing an automatic 17% cut to benefits. Many retirees already struggle to cover essential costs, so a cut of that magnitude would be devastating. Potential solutions include collecting Social Security taxes on income above the current wage base without counting that income toward benefits, adjusting the full retirement age, raising payroll taxes across the board, or reducing benefits for higher-earning recipients. Specific wage base figures cited are $176,100 for 2025 and $184,500 for 2026. Policymakers will likely need a combination of measures to restore solvency.
Read at 24/7 Wall St.
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