The Social Security debate has never suffered from a shortage of proposed solutions. Raise the retirement age. Raise taxes. Cut benefits. Protect benefits. Eliminate the taxable maximum. Change the cost-of-living adjustment. Somewhere within that familiar collection of arguments, there is usually a promise that Social Security can be secured for another generation if Congress would simply pull the correct lever.
The Social Security Administration has supplied something considerably less convenient than a slogan: arithmetic.
In a September 2026 compilation, the Office of the Chief Actuary calculated the financial effects of dozens of potential changes to the Social Security program. The options range from relatively modest adjustments to fundamental changes in how Americans would pay into the system and how benefits would be calculated once they retire.
The document is not an administration proposal, nor is it a recommendation that Congress adopt any particular policy. It is better understood as an actuarial menu. Change this provision and SSA’s actuaries estimate this much money comes in. Change another and this much goes out. Adjust benefits, taxes or retirement ages and the agency calculates how much of Social Security’s projected financing gap disappears.
That menu provides an unusually useful measure of just how large the problem has become.
Under the intermediate assumptions contained in the 2026 Social Security Trustees Report, the program faces a 75-year actuarial deficit equal to 4.42 percent of taxable payroll. By the final year of that 75-year projection, the annual deficit grows to 6.57 percent of taxable payroll.
Those two numbers may sound like slightly different ways of describing the same problem. They are not, and the distinction becomes important when politicians begin talking about making Social Security “solvent for 75 years.”
The first number represents the average actuarial imbalance over the entire projection period. The second describes the imbalance that exists at the far end of it. Consequently, a proposal can collect enough additional money, reduce enough benefits, or do some combination of both to eliminate the average 75-year deficit while still leaving Social Security spending considerably higher than income when the projection period ends.
SSA’s own numbers provide a remarkably clean example.
Employees and employers currently each pay 6.2 percent of covered wages into Social Security, producing a combined payroll tax rate of 12.4 percent. SSA modeled what would happen if that combined rate increased to 17 percent beginning in 2027.
The result is about as close as the document comes to demonstrating the sheer scale of the financing problem in a single calculation. Increasing the combined payroll tax by 4.6 percentage points would improve the 75-year actuarial balance by 4.47 percent of taxable payroll. That is enough to eliminate 101 percent of the currently projected 75-year shortfall.
On paper, Social Security has been fixed. At the end of the projection, however, it has not.
In the 75th year, that same tax increase eliminates only about 71 percent of the annual deficit. Social Security would therefore have satisfied the 75-year actuarial measurement while arriving at the end of those 75 years with expenditures still substantially exceeding income.
That is more than an actuarial footnote. It is a useful qualification whenever a future legislative proposal is described as having made Social Security solvent for another 75 years. The phrase can be technically correct without meaning that the program has reached a stable financial position at the end of that period.
The size of the hypothetical payroll tax increase also deserves some attention. Closing the current long-range deficit through this mechanism would require moving the combined payroll tax from 12.4 percent to 17 percent. If the increase continued to be divided evenly between employers and employees, the familiar 6.2 percent contribution on each side of the paycheck would become 8.5 percent.
There are other ways to find enormous sums of money in the Social Security system. They simply require enormous changes somewhere else.
Consider cost-of-living adjustments. In its 2026 estimates for COLA changes, SSA modeled a reduction of one percentage point in the annual COLA beginning in December 2027. That single change would eliminate an estimated 46 percent of the 75-year actuarial deficit. Cutting the COLA by half a percentage point would eliminate roughly 24 percent.
A percentage point can look small on paper, particularly when compared with something as conspicuous as a payroll tax rising from 12.4 to 17 percent. Its effect becomes much larger when the reduction is applied year after year to benefits received by millions of people. Each year’s lower adjustment becomes part of the base upon which subsequent adjustments are calculated, allowing a seemingly modest annual change to compound across decades.
The formula used to determine initial benefits offers another demonstration.
SSA modeled full “price indexing” for people becoming newly eligible for benefits beginning in 2033. Under current law, the formula used to determine initial benefits is tied substantially to wage growth. Moving toward price indexing would cause scheduled initial benefits to grow more slowly over time than they would under the current formula.
The effect on Social Security’s finances is substantial. According to the Office of the Chief Actuary’s compilation, full price indexing would improve the 75-year actuarial balance by 3.05 percent of taxable payroll, equivalent to approximately 69 percent of the current long-range deficit. By the 75th year, the effect of the change would exceed the entire projected annual shortfall.
The reason is much the same as with COLAs. A formula change that may initially appear incremental becomes considerably larger as successive generations enter retirement under the revised calculation.
Raising retirement ages is another frequently discussed solution, although SSA’s retirement-age calculations show that it is far from a complete one.
Depending on the particular configuration, the retirement-age changes examined by SSA eliminate roughly 9 percent to 32 percent of the long-range actuarial deficit. One modeled approach eventually increases the normal retirement age to 69 and then continues adjusting it according to longevity. Even that change eliminates only about 32 percent of the projected 75-year shortfall.
That does not make raising the retirement age financially insignificant. It does demonstrate that even a substantial change to when Americans qualify for full retirement benefits leaves most of the financing problem untouched.
Changing the amount of earnings subject to Social Security payroll taxes produces larger effects.
Under current law, Social Security taxes apply to earnings only up to an annually adjusted taxable maximum. Earnings above that threshold are not subject to the Social Security portion of the payroll tax. SSA modeled several alternatives, including restoring taxation on approximately 90 percent of covered earnings, applying payroll taxes again above specified high-income thresholds, and eliminating the taxable maximum altogether.
The latter would close roughly half of the long-range actuarial deficit under some of the assumptions modeled by SSA. It is a substantial improvement, but once again the arithmetic refuses to produce a painless solution. Even subjecting all covered earnings to Social Security payroll taxes does not, by itself, eliminate the entire long-range financing gap.
There are dozens of smaller adjustments scattered throughout SSA’s analysis involving spouse benefits, survivor benefits, children, disabled adult children and other components of the system. Some improve the financial outlook. Others make it worse because they expand benefits. Individually, many move the actuarial needle only slightly.
Taken together, however, the options produce a remarkably straightforward picture. The Social Security financing debate does not suffer from a lack of possible solutions. It suffers from the magnitude of the changes required for those solutions to matter.
A sufficiently large payroll-tax increase can eliminate the 75-year actuarial deficit. Substantially slowing the growth of future benefits can eliminate much of it. Expanding the amount of earnings subject to Social Security taxes can eliminate much of it. Raising retirement ages can eliminate some of it. Various combinations can reach similar actuarial destinations, although SSA cautions that individual estimates cannot necessarily be stacked together like building blocks because provisions can interact with one another.
The arithmetic eventually leaves the actuarial office and arrives squarely in Congress.
Someone can pay more into the system. Someone can receive less than currently scheduled. Americans can work longer before receiving full benefits. Congress can combine pieces of all three approaches. There are countless variations available, but SSA’s calculations provide little evidence that there is a small adjustment capable of making a large problem disappear.
There is, however, another portion of SSA’s actuarial menu that opens a substantially different discussion.
The agency did not limit its calculations to familiar arguments over payroll taxes, retirement ages and benefit formulas. Its actuaries also modeled what would happen if Social Security began receiving money from sources traditionally outside its payroll-tax base, including investment income, certain business income, employer-sponsored health insurance, and estate and gift taxes.
SSA even calculated what could happen if Social Security trust-fund reserves were invested in equities rather than relying almost exclusively on Treasury securities.
Those options deserve separate attention because they raise a different question. Once the discussion moves beyond adjusting the existing payroll-tax and benefit structure, the issue is no longer simply how much money Social Security needs. It becomes a question of how far policymakers would be willing to change the financing architecture of the program in order to obtain it.
That is a discussion for another article.
For now, the conventional options already tell us plenty.
The Social Security Administration’s actuaries have run much of the arithmetic that policymakers will eventually have to confront. The numbers demonstrate that Social Security’s projected financing gap can, mathematically, be closed.
The difficult part was never proving that the books could be made to balance. It was deciding who gets the bill.
