Some of the Most (and Least) Appealing Ways to Save Social Security

If news regarding the current state of the Social Security trust funds makes you nervous, take heart. While the idea of reduced benefits is scary, this is not the first time the U.S. has found itself in this position. In 1983, Social Security was just three months from being unable to pay full benefits when bipartisan legislation was enacted to shore up the program.

While it's clear that changes must again be enacted to avoid widespread pain, some options are easier to swallow than others. Here, I'll rate proposals currently on the table.

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The most palatable

The following represent ideas that would likely preserve full Social Security benefits and be easiest for Americans to handle.

Raise or eliminate the cap on payroll taxes

As of 2026, Social Security taxes are levied only on earnings up to $184,500. In other words, people making more than that -- even much, much more than that -- pay the same amount in Social Security taxes as a person earning $184,500 annually.

Raising or eliminating the cap would generate substantial revenue for Social Security while impacting only high earners. Because this plan would mean recipients would experience no reduction in benefits, this is likely to be one of the most popular proposals under consideration.

Expand the tax base

Currently, a sizable segment of state and local government workers do not participate in Social Security. Rather, they participate in public sector retirement plans. This proposal would pour more money into Social Security coffers by including state and local workers in the Social Security system.

Gradually increase payroll tax rates

By modestly raising the payroll tax rate (currently 6.2% for employees) and spreading the increase over many years, the fund would be shored up, and workers would have time to adjust.

Invest a portion of the fund in equities

One proposal is to invest part of the Social Security trust fund in index funds rather than relying solely on Treasury bonds. The plan could work well if it generates higher returns, though there's no guarantee stocks will always go up.

The least palatable

While it's impossible to predict human behavior, the following proposals are unlikely to be popular.

Reduce or eliminate COLAs

Cutting the cost-of-living adjustment (COLA) would save money. However, it would also cause benefits to lose purchasing power as inflation erodes the value of a dollar.

Raise the early retirement age

Today, age 62 is the earliest a person can claim Social Security benefits. Raising the age might save Social Security money, but it would create a hardship for those who need the money early, including those with health problems or who can't keep working for some reason.

More aggressive means testing

Although Social Security benefits are considered a right owed to those who paid into the system, this proposal would restructure the program so that anyone with a higher income and/or assets would be ineligible for benefits. While the public may accept tighter means testing for the very rich, research from the Center for Economic and Policy Research (CEPR) has found that the only way for means testing to produce meaningful savings is to take benefits away from both the rich and middle class.

If Congress is to come up with a workable, nonpartisan solution, it's likely to involve multiple changes. In the meantime, it may be a good idea to take steps to maximize the Social Security benefits you're owed and prepare for changes to the system.

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