Issue explainer

Social Security

Social Security pays monthly benefits to retirees, people with disabilities and survivors, and it is paid for mostly by payroll taxes. Its retirement trust fund is projected to run short in late 2032, when benefits would be cut automatically unless Congress acts. The fixes debated include raising taxes, trimming future benefits, or a mix.

The basics

Social Security is funded mainly by a payroll tax: 6.2% paid by workers and 6.2% paid by employers, on wages up to a yearly cap¹. In 2026 that cap, called the taxable maximum, is $184,500¹.

Benefits rise each year with inflation. The cost-of-living adjustment (COLA) for 2026 is 2.8%². The full retirement age is 67 for anyone born in 1960 or later, and people can start reduced benefits as early as 62³.

The program's trustees reported in 2026 that the retirement trust fund (OASI) can pay full benefits until the fourth quarter of 2032⁴. After that, incoming taxes would cover about 78% of scheduled benefits⁴. If the retirement and disability funds were combined, they could pay full benefits until the third quarter of 2034, and about 83% after that⁴.

The trustees put the long-term shortfall at 4.42% of taxable payroll over 75 years⁴. Researchers at Boston College's Center for Retirement Research say the outlook got worse than in 2025 partly because of lower expected birth rates, lower immigration and revenue lost under the 2025 tax law⁵.

On January 5, 2025, the Social Security Fairness Act was signed into law⁶. It ended two rules, known as WEP and GPO, that had reduced benefits for over 2.8 million people who also get a pension from a job that did not pay into Social Security⁶.

Key terms

Trust fund: Reserves built up in years when Social Security took in more than it paid out. They are now being drawn down, and the retirement fund is projected to run out in late 2032⁴.
Taxable maximum (payroll tax cap): The most wages taxed for Social Security each year: $184,500 in 2026. A worker earning that much or more pays $11,439 in Social Security tax for 2026¹.
Full retirement age: The age when you can collect your full benefit: 67 for people born in 1960 or later³.
COLA: The yearly cost-of-living raise in benefits, based on inflation. It is 2.8% for 2026².
Personal accounts: Proposals, sometimes called privatization, to let younger workers put part of their payroll taxes into individual investment accounts instead of the traditional system.

In Texas

About 4.8 million Texans were receiving Social Security benefits in December 2024⁷. Texas has no say over benefit levels or payroll taxes, so any fix must come from Congress and the President.

The choices matter for Texans of every age. Changes to the retirement age or benefit formula would mostly hit today's younger workers, while changes to the payroll tax cap would affect higher-paid workers now. If Congress does nothing, retirees and survivors would face an automatic cut of about 22% when the retirement fund runs out⁴.

How people see it

The strongest case for each view, in terms its supporters would recognize. We don't pick a side.

Personal investment accounts for younger workers

Supporters say younger workers could build real savings they own and can pass on to their families by investing part of their payroll taxes. Because the money would belong to workers, Congress could not cut it later. They would phase this in gradually while protecting current retirees.

Raise the retirement age for younger workers

Supporters say people live longer than when the program began, so benefits are paid out for more years. Gradually raising the full retirement age for people far from retirement is, in their view, a fair way to keep the program solvent without raising taxes.

A mix of changes, with no cuts for current retirees

Supporters say the gap is too big for any single fix. A blend of modest tax changes and slower benefit growth for higher earners, while protecting current and near retirees, spreads the cost and is more likely to win votes from both parties.

Raise the payroll tax cap; no benefit cuts

Supporters say it is unfair that wages above the yearly cap pay no Social Security tax while most workers pay on every dollar they earn. Applying the tax to higher wages, they argue, could close much of the gap without cutting benefits people planned their lives around.

Expand benefits and tax the wealthy to pay for it

Supporters say many seniors rely on Social Security for most of their income and benefits are modest. They would raise benefits, especially for lower-income retirees, and pay for it with new taxes on the highest earners and their investment income.

Who decides

U.S. Congress: Sets payroll taxes, benefit formulas and the retirement age. Only Congress can prevent the automatic cut when the trust fund runs out.
President: Signs or vetoes Social Security changes and can propose reforms.
Social Security Administration: Runs the program and pays benefits. It cannot change taxes or benefit rules on its own.
Social Security Board of Trustees: Reports each year on the trust funds' finances and when they are projected to run out.

Questions to ask a candidate

The retirement trust fund is projected to run short in 2032. What specific changes would you vote for to stop the automatic benefit cut?
Would you support raising or removing the cap on wages that are taxed for Social Security?
Would you support raising the full retirement age for younger workers? If so, to what age?
Can you promise no benefit cuts for current retirees, and how would you pay for that promise?

Last reviewed 2026-09-26. Spotted something wrong? Every claim links to its source so you can check it yourself.

Sources

Contribution and Benefit BaseSocial Security Administration
2026 Cost-of-Living Adjustment (COLA) Fact SheetSocial Security Administration
Retirement age and benefit reductionSocial Security Administration
A Summary of the 2026 Annual Reports (Trustees Report Summary)Social Security and Medicare Boards of Trustees
Social Security's Financial Outlook: The 2026 Update in PerspectiveCenter for Retirement Research at Boston College
Social Security Fairness Act: Windfall Elimination Provision (WEP) and Government Pension Offset (GPO) updateSocial Security Administration
Congressional Statistics, December 2024: TexasSocial Security Administration