About the author: Maya MacGuineas is the president of the Committee for a Responsible Federal Budget.
When he signed the Social Security Act in 1935, then-President Franklin Delano Roosevelt said the program was to provide “at least some measure of protection to the average citizen and his family…against poverty-ridden old age.” The first monthly Social Security payment was for $22.54, or roughly $400 in 2025 dollars.
Today, Social Security goes well beyond its original goal of providing a basic level of protection, paying out an average of more than $2,000 a month to Americans across the income spectrum. The highest-income couples, in which both spouses earned above Social Security’s taxable maximum—$184,500 in 2026—for at least 35 years, can now collect $100,000 in annual benefits.
The U.S. government spends $1.6 trillion a year on Social Security—well more than it collects in revenue—and those costs are rising. According to its trustees, Social Security’s trust fund will be insolvent in less than seven years. In service of saving the program, it is time to put limits on how much wealthy seniors can collect.
The federal budget and the broader economy are increasingly skewed toward high-income seniors, often at the expense of everyone else. Older Americans own one-third of all homes and roughly half of all wealth. Yet they receive two-thirds of government benefits, including from Social Security, Medicare, and various other retirement and income security programs. For every $1 it spends on a child, the federal government spends $6 or more on a retiree, despite the child poverty rate being more than double the senior poverty rate.
Even if the federal government had a healthy fiscal outlook, paying six-figure benefits to some of the wealthiest couples in the world is hard to justify. But these massive benefits are especially indefensible in light of Social Security’s dire fiscal straits.
Since 2010, Social Security’s costs have outpaced dedicated payroll tax revenue, forcing the program to draw down its trust fund. By 2032, the retirement fund’s reserves will be exhausted and the program will become insolvent. At that point, the law calls for an automatic benefit cut of about 24% in order to bring spending in line with revenue. For a current 60-year-old couple who retires in 2033, that is the equivalent of an $18,400 cut in their first year of retirement.
To protect those who truly count on Social Security from that drastic cut in income, the country needs to make tough choices, and quickly. Any realistic solution is going to require increasing tax revenue and slowing the growth of benefits.
An obvious start is a six-figure limit. Couples retiring at the full retirement age, 67, would face a $100,000 limit on their combined benefits. Single retirees would face a $50,000 limit, with the limit adjusted upward or downward based on claiming age. Those below that cap would continue to receive their scheduled benefits, just like they do today.
At first, the cap would only apply to the very richest seniors—the top 0.05% of retired couples, who hold an average of at least $65 million in wealth. Over time, as Social Security benefits grow in generosity, it will begin to limit benefits from growing above $100,000 for high-income seniors. That is still five times as high as the senior poverty threshold and two to three times as high as the maximum benefit offered in other wealthy countries, including Canada, Australia, and the Netherlands.
Depending on how the six-figure limit is indexed over time, it could close between one-fifth and one-half of Social Security’s 75-year solvency gap. With the limit indexed to inflation, 90% of those savings would come from the richest fifth of seniors by 2060, including 15% coming from the top 1%. The limit would have virtually no impact on the bottom 70% of households. In fact, 80% of households would enjoy a benefit increase relative to what is required under the law since the policy’s trust fund savings would reduce the looming 24% automatic benefit cut. All would benefit from the certainty of knowing the program is on a more sustainable path.
Special interests representing the wealthiest seniors will demonize this idea as a massive benefit cut. In reality, no one’s benefits will be meaningfully lower than today’s. Other critics claim this policy reduces an “earned” benefit. But Social Security isn’t a savings account. It is a government-transfer program, and the relationship between “contributions” and “benefits” is already weak, with most retirees getting more out than they paid in.
Because the program is 25% underfunded, Americans will either need to pay more or receive less than currently scheduled. The program’s current “rate of return” cannot be maintained. To be sure, a six-figure limit alone won’t save Social Security. Congress needs to consider additional reforms, such as lifting the taxable maximum, raising the retirement age, changing the cost-of-living adjustments, modifying the benefit formula, and broadening the payroll-tax base.
But with retirees facing a substantial benefit cut in less than seven years, saying no to $100,000+ benefits for wealthy retirees is a good place to start.
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