Proposed $100,000 Cap on Social Security Benefits: What It Means for High Earners

The Proposal

In a new report, CBS cites the Committee for a Responsible Federal Budget, which suggests capping Social Security at $100,000 for couples and $50,000 for individuals at the top. If this cap is instituted, it’ll save an estimated $190 billion over the next decade and close about 20% of the program’s solvency gap, but truthfully that’s not enough on its own.

Who Are These $100k Collectors

Currently, about 1 million people are in this category, which is about 2% of the roughly 70 million Americans enrolled in the program. Couples who earned at least $184,500, the Social Security taxable maximum income, for a minimum of 35 years and waited to take their retirement until full retirement age will be the ones affected.

The average Social Security check for a retired worker is about $2,081, a stark contrast to the $8,416 these high-income recipients are collecting.

What It Means For You

Most Americans won’t fall into the category of individuals who will be capped in their monthly payments. On the other hand, most Americans will be negatively affected if the funds run out in 2032, as projected. If this happens, retirees will see a cut of up to 28%in their monthly benefits.

The most important thing, with the clock ticking toward the 2032 deadline, is that Congress takes aggressive action to ensure the program remains active. Find out what your representatives are doing to help save Social Security, and demand they make a decision soon.

As more people live longer, it’s important that the program we paid into throughout our working lives continues to support us all.