CRFB Proposes Capping Social Security COLAs for Top Earners as 2032 Trust Fund Depletion Looms
Updated
Updated · Yahoo Finance · Aug 22
CRFB Proposes Capping Social Security COLAs for Top Earners as 2032 Trust Fund Depletion Looms
3 articles · Updated · Yahoo Finance · Aug 22
Summary
A bipartisan budget group proposed limiting annual Social Security cost-of-living increases for the highest-income beneficiaries, arguing the change could shore up the program’s finances.
The push comes as the latest trustees report projects the retirement trust fund will exhaust reserves in the fourth quarter of 2032, leaving incoming revenue to cover only 78% of scheduled retirement benefits if Congress does nothing.
CRFB said the idea, outlined in an October white paper citing Urban Institute calculations, would be a faster and more progressive solvency fix than broader benefit cuts affecting all retirees.
The proposal would still reduce purchasing-power protection for affected seniors just as beneficiaries are headed toward another COLA, with AARP’s latest estimate at 3.5% and the official 2027 adjustment due in October.
The debate adds to a widening menu of Social Security fixes, including raising the full retirement age or lifting the payroll tax cap for higher earners, as lawmakers face a narrowing window before automatic cuts hit.