Social Security’s current benefit formula is progressive, where beneficiaries with lower lifetime earnings receive higher benefits compared to their earnings than those with higher life-time earnings. There are a number of options to adjust the benefit formulas to slow growth in upper income benefits, while maintaining current benefit growth for lower income beneficiaries. We propose a gradual phase in of a reform to slow the growth of benefits for those with higher incomes (about 30% of beneficiaries) and maintains current law benefits for lower income beneficiaries. It would not apply to current beneficiaries, but only those higher income beneficiaries reaching retirement age in 2026. The reform would save $40 billion over the next 10 years.
SPENDING REFORM