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Social Security COLAs at Risk for Millions — Here’s Who the New Proposal Protects (and Who It Doesn’t)

August 30, 2026 · Personal Finance
A woman in a sunroom looks at her phone next to a Social Security statement with the age 62 circled in yellow.
A woman reviews Social Security paperwork at home while weighing the decision to claim retirement benefits early.

Who Wins, Who Loses

CRFB frames the proposal as a progressive one — meaning the cost falls almost entirely on the retirees best equipped to absorb it, while protecting the benefits that lower- and middle-income retirees rely on most heavily.

According to the Urban Institute’s modeling, by 2065 the top fifth of earners would see their benefits reduced by about 19% relative to current law, with the top 5% of earners facing similar reductions. By contrast, the bottom fifth of earners would see only a 3% reduction. Looking at a nearer-term horizon, the analysis found that by 2055, benefits for the top quintile of earners would be roughly 6% lower than under current law, and 7% lower for the top 5% of earners specifically.

In terms of program-wide impact, CRFB estimates that setting the cap at the 75th percentile would generate about $115 billion in savings over ten years and close roughly one-tenth of Social Security’s long-term funding gap. Setting the cap higher, at the 90th percentile, or lower, at the 50th percentile, would close a smaller share of the gap — CRFB estimates as little as one-twentieth to as much as one-quarter of the shortfall depending on where the threshold is set.

Importantly, the group’s modeling also suggests the proposal wouldn’t just avoid hurting the bottom three-quintiles of earners — it could actually increase their payable benefits over time, since a more solvent trust fund reduces the risk of the across-the-board benefit cuts that would otherwise be triggered by insolvency.

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3 comments on “Social Security COLAs at Risk for Millions — Here’s Who the New Proposal Protects (and Who It Doesn’t)”

  1. Willie Jones says:
    September 6, 2026 at 2:08 am

    Very true, I don’t want to sound harsh but the funds were designed for the people that put their hard earned money into the system and not for those that decided to be irresponsible, next the system and do away with the freebies.

    Reply
  2. Bryan James Barry says:
    September 3, 2026 at 3:20 pm

    Social Security was and remains a non-optional retirement investment by workers. This has been raided by all kinds of social benefits instead of dedicated to the people who have invested in it for retirement. The problem is not people using the mandatory retirement funds, it is the people who have not invested “one dime” in the system and its multi-uses which it originally was never intended to support. Leave the retired alone and fix the raping of the system.

    Reply
  3. Rebecca Smelley says:
    September 2, 2026 at 11:28 pm

    Trust fund ? We trusted them with our money and they stole it !!!

    Reply
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