CRFB proposes capping Social Security COLAs for highest earners
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The Committee for a Responsible Federal Budget proposed limiting Social Security cost-of-living adjustments for the highest-income earners. The proposal aims to restore solvency as the retirement trust fund faces depletion in the fourth quarter of 2032. The change could reduce purchasing power for some beneficiaries even as a 3.5% COLA is expected in October.
Key Facts
- The Committee for a Responsible Federal Budget proposed limiting Social Security COLAs for the highest-income earners.
- The Social Security retirement trust fund is projected to run out of reserves in the fourth quarter of 2032.
- If Congress does nothing, incoming revenue would cover 78% of scheduled retirement benefits after 2032.
- AARP estimates the next COLA at 3.5%, with the official adjustment expected in October.
Proposal Details
The Committee for a Responsible Federal Budget, a bipartisan nonprofit, proposed limiting cost-of-living adjustments for the highest-income earners. The proposal cites calculations by the Urban Institute and describes the change as a rapid, thoughtful, and progressive way to restore solvency. The proposal remains a proposal, but the timing is becoming more urgent.
Trust Fund Depletion
The latest Social Security Trustees Report, released in June 2026, projects the retirement trust fund will run out of reserves in the fourth quarter of 2032. If Congress does nothing, incoming revenue would then be enough to pay just 78% of scheduled retirement benefits. The combined retirement and disability trust funds are projected to last until 2034, with 83% of scheduled benefits payable after reserves are depleted.
COLA Impact
If implemented, this shift could make it difficult for some beneficiaries to sustain their purchasing power later in retirement. Social Security recipients are about to get another COLA, with AARP's latest estimate at 3.5%. The official adjustment is expected in October, after September's inflation data is released.
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CRFB proposes capping Social Security COLAs for highest earners
