Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
Tens of millions of Americans could face an automatic benefit cut when the Social Security trust fund runs out by 2032, and result in a 22% benefit cut, according to the Social Security Board of Trustees (1). This crisis can be averted — but only if Congress acts to reform the system.
Sen. Bernie Sanders (I-Vt.) has been trying to rally his colleagues toward a solution, and he seems ready to revisit it after the blue tsunami that swept the Nov. 3 midterms.
Top Picks
-
Jeff Bezos backs a platform that lets anyone invest in rental homes for as little as $100 — 6 ways to build wealth like a landlord without actually being one
-
A single line on your car insurance policy could be inflating your premium by up to 30% — here’s what to change
-
Gold has overtaken U.S. Treasuries as central banks’ top reserve asset. Get Goldco’s 2026 Precious Metals IRA Playbook for free
“A top priority will be to expand Social Security benefits by at least $2,400 a year & extend Social Security’s solvency for generations,” Sanders, who expects to be the next chair of the Social Security subcommittee, wrote in a post on X (2).
“How? By scrapping the cap & demanding that the wealthy pay their fair share of taxes,” he continued.
This proposal, S.770, was introduced in 2025 (3), but Sanders returned to it in the months leading up to the midterms.
On Aug. 3, Sanders penned a letter stressing this change could avert the funding cliff and help “increase benefits by $2,400 a year and expand Cost-of-Living Adjustments,” in an open letter to his Democratic colleagues (4). That’s an additional $200 a month in average benefits.
“At a time when the wealthiest people in America are becoming much wealthier, asking them to pay the same percentage of their income into Social Security as teachers, nurses, firefighters, and construction workers is not a radical idea,” he wrote. “It is common sense. It is what the American people want.”
Sanders also took aim at Elon Musk specifically in his letter.
“It means that Elon Musk — the wealthiest man in the world, worth an estimated $690 billion — pays the same amount into Social Security as someone earning $184,500 a year,” Sanders wrote.
Since August, Musk’s net worth has increased to nearly $900B, according to a Forbes live tracker of billionaire wealth (5).
In the wake of the Democrats’ recent midterm success and Sanders’ expected appointment as chair of the Social Security subcommittee, it appears this proposal might get a shot at becoming reality.
Social Security Expansion Act
Originally reintroduced in February 2025, the Social Security Expansion Act would add additional revenue to the program by extending payroll taxes on wages, salaries and self-employment earnings to income above $250,000. It would also include capital gains and dividends.
In 2026, the maximum amount of annual earnings that are subject to payroll taxes is $184,500.
“That [cap] means if you’re a nurse or you’re a construction worker, you’re paying Social Security on 100% of your income,” Sen. Elizabeth Warren (D-Mass) said during a congressional hearing (6) 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 (7) by the Peter G. Peterson Foundation, would address roughly 73% of the Social Security program’s long-run funding shortfall. In other words, almost three-quarters of the gap can be filled by simply imposing the same payroll tax rate on high-income earners as ordinary Americans.
As for the “Bernie Bump” itself, Sanders’ office states only 7% of households would see an increase in their taxes (8).
But even if Democratic lawmakers align and decide to push forward the proposal, there’s still a risk the change won’t materialize. Or, if it does, it may be substantively different than what was proposed. After all, Sanders’ proposal would still need to pass in the House, clear a 60-vote Senate threshold and receive executive approval.
This is one reason why preparing your finances to survive independently of Social Security benefits can be a good idea.
Subscribe to Moneywise: Get Warren Buffett’s best investing lessons in 1 free guide
How to protect your retirement
With the social safety net still at risk, it may be time to focus on your personal safety net.
Defining what exactly that is requires a bit of math. The median household income in the U.S. was $87,460 in 2025, according to the St. Louis Fed (9). The median monthly Social Security payment, based on a Boldin analysis of Social Security data (10), was about $1,990 per month during that same year. Sanders’ proposal would take that to $2,190, or $26,280 per year for the middle band of Americans.
That means making up a difference of $61,180 if you want to maintain your quality of life.
This is where retirement accounts like 401(k)s, IRAs and Roth IRAs are used to make up the difference. But there are two other strategies to consider: income-producing assets and wealth preservation tools with baked-in tax advantages.
Get guaranteed income for life
Withdrawing from your investment accounts, usually using the 4% rule, is an annual ritual for many retirees. However, there are ways to boost your income a bit during retirement.
If you’ve got time before you retire, one option is to get into annuities. These provide you with income after a fixed contribution period, sometimes for life depending on the contract.
One option you may want to consider is an income annuity through Ethos, which can help you convert your savings into predictable income. In exchange for a lump sum, you can get guaranteed income for life, backed by the issuing insurer’s claims-paying ability. This guarantee requires annuitizing your funds and is subject to the specific contract’s terms, including any applicable surrender charges.
You can lock in predictable income you can count on every month and customize your payout schedule to fit your budget. If you need the money now, you can turn a lump sum into income that starts right away.
An income annuity can also help you diversify your retirement income strategy and provide another source of income alongside Social Security, pensions and other savings, with lifetime guaranteed income for those 59 and older, backed by the issuing insurer’s claims-paying ability and subject to annuitization, rider elections and contract terms including surrender charges.
If you’re considering an income annuity, book a free consultation with a licensed Ethos insurance agent to explore your options. No purchase is required.
But passive income is only part of your portfolio’s strength going into retirement.
Hold onto your wealth
Another consideration is keeping what you’ve got. One of the worst scenarios for a retiree is for the market to tank just as you’re preparing to withdraw money from your investment accounts. This is called a sequence of returns risk.
If you want to give yourself some insulation against a coordinated drop, a small balance of alternative assets can help you draw from a different source during a down year. The logic goes that alternative assets tend to move out of sync with the market, at least partially. This means that they can hold their value more effectively during a downturn.
A popular option, and one often cited as a “safe haven” investment, is gold.
Long seen as the ultimate safe haven, gold isn’t tied to any single country, currency or economy. It can’t be created at will by central banks like fiat money, and in times of economic turmoil, market turbulence or geopolitical uncertainty, investors tend to pile in — driving up its value.
Over the past five years, as inflation continued to chip away at the purchasing power of the dollar, gold has climbed about 120% (11).
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of American Hartford Gold.
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, making it an option for those looking to potentially hedge their retirement funds against economic uncertainties.
Even better, you can often roll over existing 401(k) or IRA accounts into a gold IRA without tax-related penalties. American Hartford Gold also helps keep startup costs down with free account setup, free insured shipping and up to five years of free storage. To learn more, get your free information guide on investing in precious metals.
If you change your mind, you can cancel within seven days for a full refund on eligible assets. With their price protection guarantee, if prices drop within seven days of your purchase, your order is repriced to reflect the lower price. Qualifying purchases can also receive up to $25,000 in free silver.
Just keep in mind that gold is typically best used as one part of an otherwise well-diversified portfolio.
Start planning for a potential $2,400 bonus
It might also be a good idea to speak with a financial professional — regardless of whether you’re worried about a 2032 benefit cut or excited about a potential $200 a month increase.
After all, a good financial advisor can help you dial in your tax or retirement planning. They can also dispel some of the uncertainty around what you may need to do to keep your quality of life into retirement, or put you on the path to getting there.
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.
What To Read Next
-
The tax breaks in Trump’s ‘big beautiful bill’ expire after 2028. Here are 4 moves to make before the window closes
-
Vanguard reveals what’s coming for U.S. stocks — and it could be bad news for this group of investors
-
Robert Kiyosaki issued grim warning for baby boomers. Many could be ‘wiped out’ and homeless ‘all over’ the country. How to protect yourself now
-
Dave Ramsey says this 1 indulgent purchase stops Americans from becoming wealthy. Here’s what he recommends instead
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Social Security Administration (1); @SenSanders/ X (2); Congress.gov (3); Senator Bernie Sanders (4), (8); Forbes (5); YouTube (6); The Peter G. Peterson Foundation (7); Federal Reserve Economic Data (9); Boldin (10); Gold Price (11)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
