An Effective, Unpopular Way to Help Fix Social Security: $100K Cap

To cap or not to cap? That is the question. 

Social Security faces benefit cuts of about 24% in 2032 unless Congress intervenes, which has sparked a healthy debate about how to fix the shortfall, with ideas ranging from tax hikes to raising the full retirement age. A new proposal from the Center for a Responsible Federal Budget suggests a different approach: capping annual benefits at $50,000 for singles and $100,000 for married couples. Doing so would plug a fifth of the solvency gap without affecting many current retirees, the group says. The idea isn’t universally loved, however, and survey data show most seniors prefer raising revenues over capping or cutting benefits. Still, the six-figure limit remains a (relatively) palatable option for policymakers. 

By the Numbers 

The average Social Security benefit in 2026 is $2,024.77, according to data from the Senior Citizens League, meaning a couple with average benefits would collect about $49,000 each year. Only a small fraction of the highest-earning couples collect $100,000 or more, per the Center for a Responsible Federal Budget, namely those who both earned at least the maximum taxable wage (currently $184,500) for at least 35 years and claim benefits after the full retirement age. 

Benefits grow as workers earn higher incomes, so a six-figure limit would generate small savings immediately that grow over time:

• An inflation-indexed $100,000 initial limit would save $100 billion over 10 years and close over half of the program’s projected shortfall in the 75th year. 
• If frozen for 20 to 30 years, this limit would save $190 billion over 10 years and eliminate up to 60% of the 75th-year funding gap. 

The limit alone would not delay insolvency, the proposal acknowledges. But it could help in combination with other reforms, such as the group’s proposal for an employer compensation tax. Specifically, adding a 30-year fixed $100,000 limit to the employer compensation tax would permanently restore solvency. Other groups have proposed caps or flat benefits, including the Cato Institute, which has promoted a universal flat benefit. There are also skeptics, including Shannon Benton, executive director of the Senior Citizens League. 

“Rather than taking away benefits from people who have paid into the system their entire working lives, we should focus on strengthening America’s pension system,” Benton said. “Instead of [capping benefits], most seniors would have the government eliminate the cap on Social Security contributions. Americans currently do not pay taxes into Social Security on income above $184,500.” 

Party Lines. About 77% of seniors support eliminating the limit, Benton said, with majorities among Democrats, Republicans and independents alike. “This would extend Social Security’s insolvency through at least 2090 without any benefit cuts,” she noted. “That’s even longer than what the six-figure limit proposal would accomplish.”