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How To Make Sure Social Security Will Last Another 90 Years

Social Security could run out of funding if Congress doesn't act. Here's what experts say lawmakers should do.

Kirk Sides / Houston Chronicle via Getty Images

Key Takeaways

• Some economists and policy experts are concerned about Social Security's ability to keep paying millions of Americans the benefits they've earned.
• Experts said the program should raise the earning cap, increase payroll taxes, and implement an automatic rebalancing system to remain sustainable and avoid cutting benefits.
• If these things are done, experts said the program might be able to survive for another 90 years.

Social Security might want to ask for a major overhaul for its 90th birthday.

Some economists and policy experts are concerned about the program's ability to continue doing what it has for nine decades: pay millions of Americans the benefits they've earned.

Social Security's spending has exceeded its revenue since 2021, because the number of beneficiaries is growing faster than the pool of younger workers who pay into the program.1 If Congress doesn't act to make changes, the trust fund covering the funding gap is estimated to run out by 2034. Without intervention, recipients will only receive 81% of their expected benefits at that time.

The program, which provides income for retirees, people with disabilities, their dependents, and survivors, hasn't been significantly reformed since the 1980s, when it faced similar challenges.

However, the same conversations are happening 42 years later: What can be done to ensure these benefits are available for future generations?

"Since 1983, we've been operating on half the tumor and telling the patient to come back later, come back later," said economist Laurence Kotlikoff about the issues with Social Security. "At some point, the patient doesn't come back because he's dead."

Investopedia asked a range of economists and policy experts what they think should be done to ensure the program and its benefits are sustainable. Here is what they suggested.

Raise the Earning Cap

Many experts agree that raising the earnings cap is one of the simplest ways to increase the money in the Social Security trust funds. The earnings cap, or the wage base, is the maximum amount of an individual's earnings subject to the Social Security tax each year.

In 2025, the earnings cap is $176,100. Anything made over the amount isn't taxed for Social Security, and experts believe this is where a lot of ground can be made up.

Labor Economist Teresa Ghilarducci suggests that increasing the cap even just to $200,000 would be helpful, "so the wealthy and the highest paid workers pay the same rate as everyone else."

She also said she advocates expanding the revenue base to include some capital gains and interest income.

Richard Johnson, senior fellow at the economic and social policy think tank Urban Institute, previously told Investopedia the cap should increase closer to $300,000. He said his work suggests that about 25% of Social Security's shortfall is due to increased earnings inequality, since the Social Security payroll tax now covers less income than it did before.

Increase Payroll Taxes

While Americans might shudder at the idea of an increase in taxes, many experts believe a gradual increase of 1% (from 6.2% to 7.2%) could help balance the funds. 

In reality, more people are for increasing taxes than reducing benefits. A National Academy of Social Insurance survey found that just 15% of people are against raising taxes on all Americans, even if it means reduced benefits.2 The remaining respondents said they want to ensure benefits are not reduced, even if it means raising taxes on some or all Americans.

"Since 1990, the employer and employee share of the Social Security tax contribution has been 6.2%," said Martha Shedden, president of the National Association of Registered Social Security Analysts.

That means the payroll taxes have remained the same for 35 years. In practice, raising the payroll tax rate 1% would mean that a worker with an annual salary of $50,000 would contribute an additional $42 per month.

Implement a System That Automatically Adjusts

Another way to restore the health of the Social Security program now and ensure its healthy future, is to give the program a mechanism so that it automatically adjusts revenues or benefits when a shortfall emerges, said Andrew Eschtruth, the director of the Center for Retirement Research at Boston College.

The system should make these changes without requiring policymakers to vote. 

"If things get out of whack, instead of waiting until the very last minute for a scramble by the policy process to make a change, there would be an automatic adjustment built into the system to keep Social Security's finances in balance," said Eschtruth. "It would take away the rush that policymakers often employ during a crisis situation, and do it well before the crisis starts."

Indeed, a rebalancing trigger would prevent Social Security from getting to the point of near-depletion, which is where it is now. It isn't a new idea; Canada has a similar system. 

However, this system would need to be implemented after the Social Security program gets back on track—assuming it does.

Act Swiftly

Though experts may have different ideas about how to secure Social Security for future generations, they agree that something must be done to save it, and fast.

"In a perfect world, policymakers would not wait until the last minute to develop and pass a reform package," Eschtruth said.

He said that the best-case scenario would be for policymakers to take action in the next one to three years. He also said that he won't be surprised if nothing happens until much closer to the projected depletion date.

The faster Congress intervenes, the better the chance the program will stick around for another 90 years. 

"We need this program, but we need it to be one that isn't expropriating the next generation," Kotlikoff said.

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