A Senator Wants to Boost Social Security Benefits by $2,400 a Year - Here's How

Senator Bernie Sanders is pushing to expand Social Security benefits, which are essential to many Americans' retirement plans. In a recent "Dear Colleague" letter, Sanders called on Democrats to ensure that Social Security benefit cuts never happen and, instead, to take steps to expand Social Security by scrapping the payroll tax cap.

With the future of Social Security uncertain at the moment, here's what you should know about what's happening to the program, what Sanders' proposal might accomplish, and how it might affect your financial fitness.

The Social Security insolvency problem

In his letter, Sanders outlines the issue of Social Security's approaching trust fund insolvency. The Social Security Administration's 2026 report found that by 2032, the Social Security Trust Fund may become depleted. At that time, the program could cover just 78% of the benefits required for the more than 70 million Americans who depend on them.

If the trust fund becomes depleted, Social Security benefits might be cut by 22%, leaving retirees to get by on less. A 22% cut could reduce the average monthly benefits from $2,083 to $1,625.

The payroll tax cap and how it might help

The Social Security program is partially funded by payroll taxes. In 2026, workers and employers each pay a 6.2% tax on earnings, but the tax is capped on the first $184,500 an individual earns each year. Any income above that threshold isn't taxed, so high earners aren't paying Social Security payroll taxes on their full income.

In his letter, Sanders points out the fact that Elon Musk, who is worth an estimated $690 billion, pays the same taxes to Social Security as someone who earns $184,500 a year. "That is grossly unfair," writes Sanders. "That has got to change."

How Sanders wants to change the payroll tax cap

Sanders proposes lifting the payroll tax cap and applying the tax to all income above $250,000 per year, including investment income. Since the bottom 91% of Americans earn less than $250,000 per year, Sanders argues that this change would not increase taxes for most.

According to Sanders, the Chief Actuary of the Social Security Administration found in 2023 that applying the payroll tax to all income above $250,000 per year could extend the Social Security program's life for 75 years. Doing so would also allow for the increase of benefits by $2,400 per year, while helping lift millions of seniors out of poverty and expanding the cost-of-living adjustments (COLAs).

Who would be affected

Under Sanders' proposal, most current and future Social Security beneficiaries would see higher benefit payments without experiencing a tax increase. High earners making more than $250,000 per year would pay more in payroll taxes.

Increased benefits could potentially have a tremendous effect on some of the poorest individuals in the country. According to Sanders, more than 20% of American seniors are trying to survive on less than $15,000 a year, while nearly half try to survive on less than $30,000 annually. A benefits boost could help the most vulnerable Americans.

What Sanders thinks of the PROMISE Act

Sanders also takes aim at the PROMISE Act, a proposal to require the Social Security Advisory Board to create a proposal to make Social Security solvent for 50 years. Sanders criticizes the lack of transparency, accountability, and meaningful public input.

He also highlights that the PROMISE Act would require Congress to vote on the proposal during the lame-duck session after November elections. At that time, Republicans would still control the Senate and the House. "In other words, Members of Congress who have been defeated at the polls or who have chosen to retire could determine the future of Social Security for the next half century," writes Sanders.

What experts say about Sanders' plan

Sanders' plan is not without its drawbacks. Analysts say that while lifting the cap is a feasible option, doing so won't solve Social Security's insolvency by itself. Instead, lifting the cap would need to be combined with other solutions, though the idea is a step in the right direction.

Additionally, while Sanders' idea would benefit many Americans, it would likely face steep political odds because Republicans consistently oppose ideas that increase payroll taxes on high earners. Sanders has previously introduced similar legislation that hasn't advanced through Congress, so it's unlikely that this idea would be successful.

Bottom line

Sanders' "Dear Colleague" letter urges Democrats to take a public stand, but at this point, his idea would likely face steep opposition. Congress remains divided about how to address Social Security's insolvency issue, and any change would need to pass both chambers and receive a presidential signature.

Since Social Security's future is uncertain, this is a good time to stress-test your retirement budget to see how you would fare if your Social Security benefits were reduced. Doing so may help you gauge whether you're on track for retirement or if you may need to make some adjustments to your budget.

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