CRFB Proposes $45,000 Social Security COLA Cap as Trust Fund Nears 2032 Shortfall
Updated
Updated · SmartAsset · Jun 16
CRFB Proposes $45,000 Social Security COLA Cap as Trust Fund Nears 2032 Shortfall
3 articles · Updated · SmartAsset · Jun 16
Summary
The Committee for a Responsible Federal Budget proposed capping Social Security cost-of-living increases for retirees receiving more than $45,000 a year, while leaving lower annual benefits unchanged.
The plan responds to mounting financing pressure after the 2026 trustees report projected the retirement trust fund would exhaust reserves by late 2032, leaving the program able to pay about 78% of scheduled benefits.
Under CRFB’s example, a 2% COLA in 2035 would be capped at $900, so a retiree collecting $50,000 annually would receive $100 less than under current law.
CRFB estimates the cap would reduce lifetime benefits by 6% for the top quintile of recipients and by 7% for the top 5%, as smaller annual increases compound over time.
The proposal reflects a broader push to shift more of Social Security’s adjustment burden onto higher earners as policymakers weigh options such as raising the retirement age or lifting the payroll tax cap.