How to Ensure Social Security Survives for 90 More Years, Experts Say

Concerns Over Social Security's Future

Social Security, a cornerstone of financial support for millions of Americans, is facing significant challenges that could threaten its long-term sustainability. Experts and economists are increasingly concerned about the program’s ability to continue providing the benefits that retirees, people with disabilities, their dependents, and survivors have come to rely on.

The program has been in operation for nearly a century, but it hasn’t undergone major reforms since the 1980s when similar issues arose. Today, the situation is once again pressing as spending has exceeded revenue since 2021. This imbalance is due to the growing number of beneficiaries compared to the shrinking pool of younger workers contributing to the system. If no action is taken, the trust fund that covers this gap is expected to be depleted by 2034. At that point, recipients may only receive 81% of their expected benefits.

Key Recommendations for Reform

To ensure the program remains viable for future generations, experts suggest several key changes. These include raising the earnings cap, increasing payroll taxes, and implementing an automatic rebalancing system. Each of these measures aims to address the growing financial strain on the program.

Raise the Earnings Cap

One of the most straightforward solutions proposed is to increase the earnings cap, which is the maximum amount of income subject to the Social Security tax. In 2025, this cap stands at $176,100. Any income above this amount is not taxed for Social Security. Experts believe that raising this cap could significantly boost the funds available to the program.

Labor economist Teresa Ghilarducci suggests increasing the cap to $200,000, arguing that this would ensure the wealthiest individuals pay the same rate as others. She also advocates for including capital gains and interest income in the revenue base. Richard Johnson of the Urban Institute recommends raising the cap closer to $300,000, noting that increased earnings inequality contributes to the program’s shortfall.

Increase Payroll Taxes

Another proposed solution is to gradually increase the payroll tax rate. While many Americans may resist the idea of higher taxes, experts argue that a modest increase of 1% (from 6.2% to 7.2%) could help balance the funds. A National Academy of Social Insurance survey found that a majority of people support raising taxes if it means preserving benefits.

Martha Shedden of the National Association of Registered Social Security Analysts notes that the current payroll tax rate has remained unchanged for 35 years. A 1% increase would mean an additional $42 per month for a worker earning $50,000 annually.

Implement an Automatic Rebalancing System

Experts also recommend creating an automatic system that adjusts revenues or benefits when needed without requiring legislative action. Andrew Eschtruth of the Center for Retirement Research at Boston College suggests such a mechanism would prevent the program from reaching a crisis point.

This system would allow for timely adjustments before the trust fund is depleted, reducing the need for last-minute policy changes. Canada already has a similar system in place, and experts believe it could serve as a model for the U.S.

The Need for Immediate Action

Despite differing opinions on the best approach, experts agree that swift action is essential. The longer Congress delays, the more difficult it will be to secure the program’s future. Eschtruth emphasizes that the ideal scenario would involve taking action within the next one to three years. However, he warns that inaction until closer to the depletion date is a real possibility.

“We need this program, but we need it to be one that isn’t expropriating the next generation,” said economist Laurence Kotlikoff. The goal is to ensure that Social Security remains a reliable source of support for decades to come.