Bernie Sanders

Millions of Americans could see their Social Security checks increase by at least $2,400 a year under a sweeping proposal backed by Senator Bernie Sanders.

But before retirees start counting on an extra $200 a month, there is a rather large catch: Experts are questioning whether its financial promises really add up.

Sanders, the independent senator from Vermont who caucuses with Democrats, wants to overhaul the program by making wealthy Americans pay more in taxes.

His proposal would increase annual benefits by at least $2,400, while keeping Social Security funded for the next 75 years.

The centerpiece is what Sanders calls 'scrapping the cap' – removing the limit on earnings subject to Social Security payroll taxes.

Currently, workers pay a combined 12.4 percent payroll tax on earnings up to $184,500 in 2026, with employers and employees generally splitting the bill.

That taxable earnings ceiling will rise to $192,300 in 2027, meaning income above that threshold is currently exempt from Social Security payroll taxes.

Sanders wants to subject earnings above $250,000 to the tax and also tax investment income – including dividends and capital gains.

Millions of Americans could see their Social Security checks increase by at least $2,400 a year under a sweeping proposal backed by Senator Bernie Sanders.

His proposal would increase annual benefits by at least $2,400, while keeping Social Security funded for the next 75 years

His argument is that America's wealthiest households should contribute more, generating enough additional revenue to strengthen the program and increase payments to retirees.

The proposal builds on Sanders' Social Security Expansion Act, introduced in 2023 alongside Democratic lawmakers including Senator Elizabeth Warren.

At the time, the Social Security Administration's chief actuary estimated that the legislation's proposed changes could keep the program solvent for 75 years, based on the economic and demographic assumptions then being used.

But the financial picture has since deteriorated, making the latest version of the promise more complicated.

According to the Social Security Administration's 2026 trustees report, the trust fund is projected to run out of reserves in the final quarter of 2032.

Without congressional intervention, incoming revenue would then cover just 78 percent of scheduled retirement benefits, potentially resulting in a 22 percent reduction.

Sanders has argued that his plan would prevent those cuts while delivering the additional $2,400 to beneficiaries.

However, Martin Mulyadi, an accounting professor at Shenandoah University's College of Business, said the underlying financing concept was plausible but the 75-year claim needed an updated actuarial assessment.

Romina Boccia, director of budget and entitlement policy at the Cato Institute, was more skeptical, arguing that eliminating the payroll tax cap alone would not cover benefits already promised, let alone an expansion.

Sanders has argued that his plan would prevent those cuts while delivering the additional $2,400 to beneficiaries.

According to the Social Security Administration's 2026 trustees report, the retirement trust fund is projected to run out of reserves in the final quarter of 2032

She said Sanders's broader proposal would involve substantial additional taxes on investment and business income, potentially discouraging the investment and economic growth needed to expand the economy.

There are political hurdles, too, with major legislation generally requiring 60 votes to advance in the Senate.

Republican Senator Bill Cassidy of Louisiana has also criticized the proposal, warning that higher payroll taxes could affect households that are far from being millionaires.

He pointed to the example of two married intensive care nurses, arguing that the 12.4 percent tax could hit working professionals as well as the super-rich.

Cassidy has instead floated an alternative involving a $1.5 trillion investment fund, which he says could cover up to 75 percent of Social Security's projected shortfall.

The debate has also spilled onto Reddit, where users were divided over whether older Americans should receive more financial support when younger generations face their own economic struggles.

One commenter argued: 'Young people deserve investment in their future too, not just a system that keeps prioritizing one generation over everyone else.'

Another pushed back against what they saw as ageism, writing: 'My dad fucking struggles on social security like you would not believe.'

Others argued that the issue should not be framed as a generational battle, with one user writing: 'It's not about age, or race, or gender, or any of the other infighting.'

For retirees hoping for a bigger monthly check, however, the immediate reality is that no increase has been approved.

Denise Brinkmeyer, president of Jump Technology Services, cautioned that people should not factor proposed government changes into their financial decisions until they actually become law.

Financial adviser Steve Azoury similarly urged retirees to take responsibility for their own retirement planning, including considering 401(k) and IRA savings alongside Social Security.

For now, Sanders's proposal offers a potentially significant lifeline to millions of Americans, but whether Congress can agree on how to pay for it remains the billion-dollar question.