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Tens of millions of Americans could face an automatic benefit cut when the Social Security trust fund runs out by 2032, according to the Social Security Board of Trustees (1). This crisis can be averted but only if Congress acts to reform the system.
Senator Bernie Sanders has proposed a reform that could not only avert the funding cliff but also help “increase benefits by $2,400 a year and expand Cost-of-Living Adjustments,” according to a recent open letter (2) to his Democratic colleagues. That’s an additional $200 a month in average benefits instead of the 22% cut forecasted by the Trustees if Congress doesn’t act.
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Here’s a closer look at Sanders’ Social Security Expansion Act and how it could potentially end the program’s funding crisis.
Social Security Expansion Act
Originally proposed in February 2025, the Social Security Expansion Act (3) would add additional revenue to the program by simply extending payroll taxes on wages, salaries and self-employment earnings to income above $250,000.
In 2026, the maximum amount of annual earnings that are subject to payroll taxes is $184,500, according to the Social Security Administration (4). “That [cap] means if you’re a nurse or you’re a construction worker, you’re paying Social Security on 100% of your income,” Elizabeth Warren said (5) during a Congressional hearing on Social Security solvency in August. “But if you’re a corporate lawyer raking in millions, you’re only paying Social Security on a tiny little fraction of your income. That is not right.”
Eliminating this tax cap, according to an estimate by the Peter G. Peterson Foundation (6), would address roughly 73% of the Social Security program’s long-run funding shortfall. In other words, three-quarters of the gap can be filled by simply imposing the same payroll tax rate on high-income earners as ordinary Americans.
Unfortunately, Sanders’ solution has 0% chances of passing under the current Republican-controlled Congress, according to GovTrack (7). With the path to Social Security reform as uncertain as ever, now is the time to prepare your finances for any future changes to the program.
How to protect your retirement
With the social safety net at risk, it may be time to focus on your personal safety net.
Investing in assets that offer either passive income, tax advantages or some long-term inflation protection could be a good idea.
Traditionally, gold has served as a safe haven for long-term investors worried about inflation. But platforms like Priority Gold allow you to combine those features with some additional tax benefits.
Their Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, combining the tax advantages of an IRA with the protective benefits of investing in gold and making it an attractive option for those looking to hedge their retirement funds against economic uncertainty.
To learn more, you can get a free information guide that includes details on how to get up to $10,000 in free silver on qualifying purchases.
Another instrument worth considering is Certificates of Deposit, or CDs.
These are fixed-income accounts that lock your money up for the medium term with reliable interest rates. That means you can create a stream of passive cash flow for anywhere from three months to five years — filling some of the potential gap from benefit cuts.
CD Valet can help you find higher-yield options that work for you, whether you’re saving for something soon or building a cushion for the long haul. CD Valet tracks over 40,000 verified rates from FDIC-insured banks and NCUA-insured credit unions nationwide. Unlike other websites, they show every publicly available rate, ensuring you have a comprehensive view of the market.
Plus, their CD rates are updated continuously, so you can shop, compare and open CDs with ease.
Finally, if you’re worried about tax or retirement planning with all the lingering uncertainty about Social Security, a professional could help you navigate. Get connected with a verified financial expert at Advisor.com, a network that comprises fiduciaries who are legally required to act in your best interests.
Just enter a few details about your finances and goals and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation, with no obligation to hire, to see if they’re the right fit for you.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Social Security Administration (1), (4); U.S. Senator Bernie Sanders (2); Congress.gov (3); YouTube (5); The Peter G. Peterson Foundation (6); GovTrack.us (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
