Some high-earning married couples may now receive about $100,000 per year or more in Social Security retirement benefits, but a new proposal suggests capping those payments to help shore up the program’s looming funding shortfall.
According to research from the Committee for a Responsible Federal Budget, a Washington, D.C., think tank, policymakers could opt to cap benefits at $100,000 for married couples or $50,000 per individual.
This six-figure limit would target the growth of payments to the wealthiest retirees as the system’s trust funds face depletion in the next decade.
The trust fund devoted to retirement benefits is currently projected to run out in 2032. At that point, there would be a 24% cut to those benefits, according to latest projections from the Social Security Administration.
“There’s basically a trust fund crisis in the near horizon,” Marc Goldwein, senior vice president and senior policy director at the CRFB told CNBC.
“An income security program designed to keep seniors out of poverty, designed to ensure an adequate level of retirement income, shouldn’t be paying six figures. And it particularly shouldn’t be paying six figures when it can’t afford to pay most people their scheduled benefits.”
Today, a “tiny fraction” of couples receive such high amounts.
These are typically highest-income couples where both individuals earned the taxable maximum for at least 35 years and delayed benefits until full retirement age.
In 2026, the taxable maximum limit is $184,500, the Social Security Administration data shows.
About 1 million beneficiaries currently receive individual benefits of $50,000 or more annually, according to the CRFB.
The proposed cap would be adjusted based on the age at which a beneficiary begins collecting.
For example, a couple waiting until age 70 would see a limit of $124,000 to reflect delayed retirement credits, while those claiming at age 62 would see a reduced limit of $70,000, the Committee for a Responsible Federal Budget reports.
The proposal offers three indexing methods for the cap:
- Indexing the limit to inflation.
- Freezing the limit at $100,000 for 20 years before indexing to wage growth.
- Freezing it for 30 years before indexing to wage growth.
The CRFB estimates that indexing a $100,000 cap to inflation would save approximately $100 billion over 10 years and close one-fifth of Social Security’s 75-year solvency gap.
While the plan focuses on high earners, advocates express concern that such caps could lead to broader cuts.
Nancy Altman, president of Social Security Works, told CNBC that $50,000 is not a generous amount for an individual in a high-cost area like New York.
“It’s younger people who really would be hurt by that proposal, because gradually it would hit more and more people and go to lower and lower levels,” Altman said.