“Given the Social Safety program’s giant structural funding hole, it’s questionable whether or not this system must be distributing $100,000 a yr to among the wealthiest folks on the earth,” paper authors wrote. “As an revenue help program, there’s a good case that Social Safety ought to present a base of retirement revenue, not a windfall.”
The cap could be adjusted primarily based on marital standing and claiming age — a single retiree on the regular retirement age would face a $50,000 restrict, whereas a pair delaying advantages till age 70 may obtain as much as $124,000 because of delayed retirement credit.
Concentrating on the highest
At present, solely a tiny fraction of {couples} obtain six-figure advantages, requiring each spouses to have earned at or above Social Safety’s taxable most — $184,500 in 2025 — for not less than 35 years.
Nevertheless, the paper notes that such beneficiant payouts are projected to develop into more and more widespread over time as this system’s profit method mechanically will increase funds for new retirees.
The paper modeled three indexing choices.
A model pegged to inflation would save $100 billion over a decade, shut one-fifth of Social Safety’s 75-year solvency hole and eradicate greater than half of this system’s deficit within the seventy fifth yr.
If the cap have been frozen in nominal phrases for 20 to 30 years earlier than switching to wage indexing, financial savings would attain $190 billion over a decade and shut as much as half of the long-term shortfall, in accordance with researchers.
Progressive affect
The proposal is designed to be extremely progressive — with the burden falling virtually solely on high-income households.
Below an inflation-indexed model, the cap would reportedly minimize scheduled advantages by 24% for the highest 1% of earners by 2060 whereas having no affect on the underside 70% of beneficiaries.
Authors stated the plan would enhance payable advantages for many retirees after the belief fund turns into bancrupt, since present regulation limits spending to incoming income.
By 2060, the underside 80% of beneficiaries would see greater payable advantages beneath the cap, in accordance with the paper.
The paper additionally argues the six-figure restrict may enhance financial development by decreasing federal deficits and inspiring non-public financial savings.
“The Six Determine Restrict would enable Social Safety to proceed paying advantages adequate to make sure enough retirement safety for nearly all Individuals coated by this system whereas capping these advantages at $100,000 per couple — a cap greater than 5 instances the senior poverty threshold,” authors wrote.
