Senior officials discussing economic policy in a classic office setting.
Social Security faces potential insolvency within a decade, spurring the Committee for a Responsible Federal Budget (CRFB) to propose capping benefits for high-income retirees. The plan targets couples receiving over $100,000 annually and single retirees with over $50,000.
The CRFB’s Trust Fund Solutions Initiative explores options to bolster Social Security’s solvency. The Six Figure Limit (SFL) proposal would adjust benefit caps based on marital status and retirement age. For instance, a couple delaying benefits until age 70 could receive up to $124,000, while those starting at 62 would be capped at $70,000.
CRFB analysis, using models developed with Jason DeBacker of the Open Research Group, examined various indexing approaches, including inflation-indexed limits and fixed limits indexed to wage growth after 20 or 30 years. The inflation-indexed SFL could save $100 billion over 10 years, addressing 20% of Social Security’s 75-year shortfall.
According to CRFB, the SFL primarily affects the top 0.05% of couples with substantial retirement income and net worth in its initial years. Over time, its impact would broaden, affecting the top 1% of couples by 2030 with a 5% benefit reduction, and by 2060, a 24% reduction for the same group.
Senior advocacy groups, including AARP, have voiced concerns. Jenn Jones, AARP’s VP of financial security, urges bipartisan solutions to protect and strengthen Social Security without resorting to cuts.
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