2023 Social Security Tax Limit Increase Replenishes Trust Fund, Experts Say

Experts say increasing the 2023 Social Security tax limit will replenish the program’s trust fund reserves. In this article, read and find out more possible solutions to keep Social Security running in the next 10 years and more!

Social Security beneficiaries may experience a decrease in their monthly benefits by 25% in the future if no action is done to maintain the program’s funds. This is because the Social Security’s trust fund reserves are projected to be exhausted within the next 10 years. Therefore, some experts suggested that increasing the 2023 Social Security tax limit may help solve the problem.

According to Gariepy, to date, employees pay 6.2% of their salary to the Social Security and employers match this amount of contribution. Any income that exceeds the Social Security tax limit of $160,200 will be exempted from taxes. Unfortunately, only around 6% of the income earners reach this income limit.

READ ALSO: 3 Common Social Security Scams And How To Avoid Them

Increasing the 2023 Social Security Tax Limit

According to Kuffel, increasing the 2023 Social Security tax limit to $250,000 or more or totally eliminating the taxes may replenish the trust fund reserves. This may keep the Social Security program running for the next 10 years or more. This may also shift some of the difficulty of funding the Social Security from the average earners to the highest ones.

Nonetheless, apart from the increase in the Social Security tax limit, experts say that there are also other solutions that are proposed to maintain the program. These proposals include increasing the full retirement age to 70 from 66-67 and increasing the payroll tax rate to 15.6% from 12.4%. In addition, allowing contributions to be invested in private assets and imposing taxes on businesses and invest incomes may also be solutions.

READ ALSO: Newsbreak: How To Boost Your Social Security Check In 2023 And Secure Your Retirement