New Social Security plan would increase benefits by $2,400 each year — if it can pass. Here’s what that money could mean for your retirement
Since President Trump returned to office, there’s been plenty of uncertainty revolving around Social Security.
While he campaigned on the promise that he wouldn’t make cuts to Social Security benefits, Trump and Elon Musk — the leader of the newly-created Department of Government Efficiency (DOGE) — are investigating what they’ve described as “shocking levels of incompetence and probable fraud” within the Social Security system.
We don’t really know what Trump is planning with Social Security, but one thing we do know is that, without a new plan in place, the program is expected to run out of funding in 2035.
“Any potential benefit reduction event has been pushed off from 2034 to 2035,” said Social Security Commissioner Martin O’Malley in a statement. And while there’s a measure of good news in O’Malley’s statement, cuts to Social Security benefits appear to be just a decade away.
That’s why several members of congress have put forward a new law that aims to keep the program funded for the next 75 years.
“Our job is not to cut Social Security, as many of our Republican colleagues in Congress want to do,” said independent Senator Bernie Sanders in a statement on the new bill. “Our job is to expand Social Security and extend its solvency so that everyone in America can retire with the respect that they have earned and deserve after a lifetime of hard work.”
“That’s what the Social Security Expansion Act is all about.”
The Social Security Expansion Act was introduced by Sanders and Democratic Senator Elizabeth Warren, as well as Democratic Representatives Jan Schakowsky and Val Hoyle. Nine other Democratic senators and 17 house members have also co-sponsored the bill.
The new bill aims to ensure that Social Security is replete with funding through a tax on American households that earn $250,000 or more per year.
“Today, because of the earnings cap on Social Security taxes, a CEO making $20 million a year pays the same amount of money into Social Security as someone who makes $160,200 a year,” said Sanders in his statement.
“This legislation would lift this cap and subject all income above $250,000 to the Social Security payroll tax. Under this bill, over 93 percent of households would not see their taxes go up by one penny.”
The extra tax charged to wealthier households would then be used to stabilize Social Security’s finances, making the program solvent for the next 75 years while raising annual benefits by $2,400 per year.
“Currently, workers have 12.4 percent taken out of each paycheck and contributed to the Social Security trust fund, half paid by the employer and half by the worker,” read Sanders’ statement.
“This bill would require the wealthy pay the same 12.4 percent on their investment and business income, by increasing the net investment income tax by 12.4 percent and applying it to certain business income not already covered by payroll taxes.”
Since the average monthly Social Security benefit in 2025 is $1,976, increasing benefits by $2,400 a year would be a big deal. It could help seniors withdraw less from their retirement savings accounts, which will help them stretch their savings a little further. This would allow for a more stable retirement over the long term for many older Americans.
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Unfortunately for anyone hoping for a larger Social Security benefit check, it’s unlikely that this legislation is going to pass.
This bill had already been introduced during the Biden administration and it failed to advance legislatively even when the Democrats were in power. The Republicans now control the White House, the Senate and the House — and neither of the three are expected to support this bill.
While President Trump has promised he wouldn’t cut Social Security benefits — along with expressing a desire to eliminate taxes on them — there has been no discussion of expanding benefits and taxing the wealthy to fund such an expansion. And since Republicans seem to be more focused on cutting spending and passing tax cuts, the chances of the GOP raising taxes to expand benefits aren’t great.
Retirees probably shouldn’t hold their breath in anticipation of a benefits increase under the Trump administration — though if Trump follows through on his plan to eliminate taxes on benefits, some retirees will get to keep more of their money.
Since a benefits increase isn’t likely any time soon, seniors will need to keep budgeting their money based on the benefit checks they are currently receiving. They should also keep an eye on anything Trump may do with Social Security and be alert for signs of potential benefit cuts.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
Jill Bates is a writer on the Modernist Podcast. She writes politics, health, business and finance. She also has a passion for photography, travel and food.
