Here's What Warren Buffett Has Said About Social Security Over the Past 20 Years

Key Points

• He believes that Social Security is salvageable as long as Congress acts.

• The legendary investor underscores the importance of avoiding benefit cuts.

• Solutions exist, but the clock is ticking on how long Congress has to take action.

• The $23,760 Social Security bonus most retirees completely overlook ›

Warren Buffett has built a reputation for studying the landscape and spotting financial issues before others realize there's a problem. Twenty years ago, at a 2005 Berkshire Hathaway meeting, Buffett was blunt: "I basically believe that anything that would take Social Security payments below their present guaranteed level is a mistake."

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The problem has been brewing

Based on any retirement planning you've done, you'll probably not be surprised that the Social Security trust is in serious danger of running dry. The program collects payroll taxes under the Federal Insurance Contributions Act (FICA). Both employees and employers contribute 6.2% of the employees' wages, up to the annual wage base limit of $176,100.

The money collected today goes toward paying Social Security benefits to current beneficiaries. When the Social Security Administration (SSA) collects more than it pays out, the remaining money goes into the Old-Age and Survivors Insurance Trust Fund (OASI) and is invested in Treasury securities. When the SSA collects less in Social Security payroll taxes than it pays out, the SSA must dip into the trust fund for the money it needs to pay the benefits earned.

According to the SSA's 2024 Trustees Report, the OASI trust fund is projected to become depleted in 2033, unless Congress intervenes to shore up the program. While several factors have played a role in draining the fund, demographics may be the most critical. In 1960, there were 5.1 workers for every Social Security recipient. Today, that number is just 2.8 and expected to continue falling.

The SSA cannot pay full Social Security benefits once the money invested in Treasury securities is gone. At that point, the Trustees say that Social Security benefits would be reduced by 23%.

Buffett's proposals to get Social Security back on solid ground

Buffett has been consistent about recommending moderate changes to the program, including:

Remove the taxable earnings cap

As of 2025, Social Security taxes only apply to incomes up to $176,100. For example, a person who earns $400,000 annually only pays Social Security taxes on the first $176,100. No Social Security taxes are collected on the remaining $223,900.

Buffett believes that the U.S. should eliminate this cap so that higher earners can contribute more to the program. This approach would boost Social Security revenue significantly and is unlikely to affect the financial stability of wealthier taxpayers.

Slightly increase payroll taxes

No one enjoys a tax hike, which may help explain why politicians have been so hesitant to suggest them. Politicians want to be seen as the people who cut taxes. There's only one problem with that: Cutting taxes isn't always good for the long term. For example, President Donald Trump's "Big, Beautiful Bill" expanded the standard deduction for seniors and lowered how much can be collected in taxes on benefits.

Add that to the Social Security Fairness Act signed into law by President Joe Biden in early January 2025. The Social Security Fairness Act eliminated the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) rules. These two programs decreased the amount that over 3.2 million people -- including teachers, police officers, firefighters, and federal employees -- were eligible to receive in Social Security benefits.

While each tax break may have come as welcome news to most, the Committee for a Responsible Federal Budget (CRFB) found that they shaved a full year off the expected solvency timeline, meaning money is being drained from the Social Security trust fund at a faster rate than believed just last year.

Buffett suggests a slight boost in Social Security payroll taxes, saying even a modest hike would generate additional funds over time. In addition, a small tax hike would help secure the program's financial stability without unfairly burdening workers or employers.

Raise the full retirement age (FRA)

In 1960, American men could expect to live to age 66.6 on average, and American women to age 73.1. Today, American men can expect to live to 77.2 on average, and American women to age 82.1. This increase in life expectancy means more years in retirement, and more Social Security benefits paid out. The SSA could stretch the Social Security trust fund further by raising the FRA.

Reduce Social Security benefits for wealthy retirees

Buffett, who once famously pointed out that his secretary paid a "far higher tax rate" than Buffett himself, believes that the wealthiest retirees will do fine if their benefits are scaled back. According to Buffett, adjusting payments for high earners allows the SSA to direct more resources to those retirees who depend on their monthly benefits the most.

Given the number of Americans who collect Social Security, it's fair to assume that many have done everything they can to maximize benefits and don't want to see their benefits slashed. Warren Buffett has spent the past two decades offering potential fixes to the issue. Now, if Congress can get on board, a solution may be found.

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Dana George has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Berkshire Hathaway. The Motley Fool has a disclosure policy.