In my 30+ years of serving retirees and pre-retirees, one question comes up again and again:
“Will Social Security still be there for me?”
You may have seen headlines about Social Security reform and claims that Social Security will “run out of money” around 2032–2034. What’s really happening is that, under current projections of cash coming in and going out, the system will not be able to pay full promised benefits forever without changes.
The good news: Social Security could be fixed today to last another 75 years. The Brookings Institution has created a blueprint with 17 provisions designed to restore full solvency. Here are several key ideas – and what they might mean for you.
Is Social Security Reform Really in Trouble?
Under current law, Social Security’s trust funds are projected to be depleted in the early 2030s. At that point, payroll taxes would still cover most benefits, but not 100% of what has been promised.
The last time Congress passed major Social Security legislation was in 1983, when the system was nearly broke, and that fix has lasted about 50 years. Congress is likely to act before across-the-board benefit cuts occur.
1. Higher Taxable Wage Base
Right now, Social Security payroll tax applies only up to a maximum wage base of $184,500. Earnings above that amount are not subject to Social Security tax.
Under the Brookings blueprint, that maximum would gradually increase so that Social Security covers 90% of total wages instead of about 82.5% by 2039. For higher-income workers, that means more of their wages would be taxed to help strengthen the system.
2. New Rules for Pass-Through Business Owners
The proposed change would treat all payments to active pass-through business owners who meet the “material participation” standard as subject to self-employment tax, up to the earnings cap.
For example, if an owner earned $100,000 in wages and $500,000 in distributions, and the earnings cap was $300,000, they would be assessed payroll tax on all $100,000 of wages and the first $200,000 of distributions.
3. Slight Increase in Payroll Tax Rate
Today’s Social Security payroll tax is 12.4% of covered wages, split evenly between employer and employee at 6.2% each.
The Brookings plan calls for a small increase in the total rate to 12.6%. If this is allocated evenly, it would be 6.3% for the employee and 6.3% for the employer – a 0.1% increase per side.
4. Taxing All Social Security Benefits for High Earners
Currently, up to 85% of Social Security benefits may be subject to federal income tax, depending on your other income.
Under the proposed change, all Social Security benefits would be subject to federal income tax for individuals with income over $100,000 and married couples with income over $125,000. These thresholds would be adjusted annually for inflation.
5. Higher Full Retirement Age for High Earners
Another proposal targets high earners by gradually raising their full retirement age to 70.
This would apply to the top 40% of earners and phase in beginning in 2037. Higher earners tend to live longer and often delay benefits, so asking them to wait longer for full benefits helps reduce long-term strain on the system and is a key part of Social Security reform.
6. Changes to Spousal Benefits for Higher-Income Households
Under current rules, a lower-earning or non-working spouse may qualify for a spousal benefit of up to half of the higher earner’s benefit.
The Brookings blueprint recommends ending spousal benefits for spouses of new retirees in the top earnings quartile, with exceptions for disabled spouses and widows or widowers. Spouses with their own earnings record could still receive benefits based on that record.
7. Where the Money Goes and Who Is Covered
Another set of proposals focuses on where Social Security taxes go and who pays them:
- All proceeds from Social Security-related taxation would go into the Old Age Security (OAS) and Disability Insurance (DI) trust funds, not Medicare’s Hospital Insurance fund.
- All newly hired state and local government employees would be covered by Social Security starting in 2032, broadening the base of workers and employers paying into the system.
8. Adjusting Benefit Calculations and Early Disability Option
Today, Social Security calculates your benefit using your highest 35 years of indexed earnings. The proposal would increase that to 40 years, which may change benefit amounts depending on your work history.
For higher earners, benefits could be based on the highest 40 years of earnings without counting zero-earning years.
In addition, the blueprint includes a new early retirement disability benefit at age 58 for workers who do not qualify for standard Disability Income but meet most of the criteria.
What These Changes Could Mean for You
Taken together, these Social Security reform proposals would raise more revenue, broaden participation, and focus many benefit changes on higher-income households. If Congress acts, changes would likely be phased in over time, with higher-income taxpayers feeling the biggest impact through higher Social Security taxes and broader taxation of benefits.
How We Can Help You Plan Ahead
April is Social Security Month, which makes this a good time to review how potential Social Security reform could affect your retirement income. If Social Security is an important part of your retirement plan, I invite you to join me for a free workshop in Boise.
Maximize Your Social Security Benefits
When: Wednesday, April 29, 2026, from 6–7 PM
Where: Library! at Bown Crossing, Boise, Idaho
How to join: Register on Eventbrite
In this educational, no-cost session, you’ll:
- Know when to file to increase lifetime benefits
- See how your choices affect a spouse’s income
- Learn how work and taxes can reduce your checks
This workshop is part of a three-part retirement planning series at Library! at Bown Crossing. You’re welcome to attend just this session or view the full series here.
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Disclaimer
Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Boise Retirement Coach and Cambridge are not affiliated.
