Social Security is facing a huge financial challenge. Experts estimate that its trust funds could run out in less than ten years. If nothing changes, benefits might be cut by about 25%. While that worst-case scenario is unlikely, the government still needs a solution. Let’s explore what 6 Social Security changes Americans want to see.
For years, lawmakers have discussed ways to fix Social Security’s funding problem, but no major changes have been made. A recent survey by the National Academy of Social Insurance (NASI) asked Americans what changes they would support. The results showed six key proposals that could fix the shortfall and improve the program. Let’s take a look at them.
Summary of 6 Social Security Changes
| Proposal | What It Means |
| Tax earnings over $400,000 | Social Security taxes would apply to high earners. |
| Raise payroll tax to 7.2% | Workers and employers would pay slightly more. |
| Use CPI-E for COLAs | Benefits would increase based on retiree spending. |
| Give caregivers credit | Parents staying home to care for kids wouldn’t lose benefits. |
| Help workers in physical jobs | Early retirement penalties would be reduced. |
| Cut benefits for high-income retirees | Those earning over $60K ($120K for couples) would get lower benefits. |
Social Security reforms could also affect other retirement benefits. For example, if the Trump administration eliminates federal taxes on Social Security benefits, it could provide relief to retirees at all income levels.
Taxing Income Over $400,000
Right now, Social Security taxes apply only to earnings up to $176,100 (as of 2025). Income above that isn’t taxed for Social Security and doesn’t count toward benefits.
A popular proposal suggests keeping the current limit but adding a new tax on income above $400,000. Over time, as the cap increases with inflation, this gap would close, likely around 2048. While this change wouldn’t impact most workers, high earners might not be happy about paying more without getting extra benefits.
Raising the Payroll Tax Slightly
Another idea is to gradually raise the payroll tax from 6.2% to 7.2% for both workers and employers. Right now, workers and employers split a 12.4% tax. A 1% increase would mean someone earning $50,000 a year would pay about $42 more per month.
Although no one likes paying more taxes, this increase would be small and spread out over time. Many believe it’s a fair way to strengthen Social Security.
Changing How COLAs Are Calculated
Each year, Social Security benefits increase based on the cost-of-living adjustment (COLA). However, COLAs are currently based on the spending patterns of urban workers, not retirees.
Many Americans support switching to the Consumer Price Index for the Elderly (CPI-E), which better reflects senior expenses like healthcare. This change would likely result in higher benefit increases in most years but would also raise costs for the program.
Giving Caregivers Credit
Social Security benefits are based on your highest-earning 35 years. If you don’t work for a period, those years count as zero income, reducing your benefits. This often affects parents—especially mothers—who take time off to care for young children.
A proposed solution is to provide caregiving credits to parents who leave the workforce to care for kids under six. While details aren’t finalized, this would help caregivers avoid major reductions in their Social Security payments.
Helping Older Workers with Physical Jobs
Many people with physically demanding jobs retire early because they can’t keep up with the work. However, claiming Social Security before full retirement age (66–67 for most) means a permanent reduction in benefits.
A proposed fix would reduce the early claiming penalty for workers with physically demanding careers. This would let them retire earlier without losing as much of their monthly benefit.
Reducing Benefits for Wealthier Retirees
One of the more controversial ideas is cutting benefits for retirees with higher incomes. Under this plan, individuals making over $60,000 a year (excluding Social Security) and couples earning over $120,000 would receive lower benefits.
While some believe this is fair since wealthier retirees may not need Social Security as much, others worry it could affect middle-income Americans.
Changes to Social Security could affect millions, including those who rely on benefits the most. With millions of retirees set to receive higher Social Security benefits, it’s crucial to stay informed about what’s coming next.
FAQs on 6 Social Security Changes
1. Will Social Security benefits really run out?
Not exactly. If nothing changes, the trust funds could be depleted in less than a decade. However, payroll taxes would still cover most benefits, but payments could be reduced by about 25%.
2. Will raising the payroll tax affect everyone?
Yes, but only slightly. A 1% increase means a worker earning $50,000 a year would pay around $42 more per month.
3. How soon could these changes take effect?
It depends on Congress. If lawmakers agree on a plan soon, changes could start within a few years, but some proposals may take decades to fully implement.