This is the reason why Social Security could run out of money by 2033 and why boomers aren’t the ones to blame

The Trustees of Social Security have been warning that without action, the national retirement fund for American workers could become insolvent. The date for when the program could run out of money was moved up last year to 2033.

The board said that it was due to three factors and none of them were due to the “silver tsunami” of Baby Boomers retiring. Former Secretary of Labor Robert Reich concurred, saying that a surge in Boomers retiring had be anticipated decades ago but something else hadn’t, a surge in inequality.

“It’s not because of too many Boomers retiring… It’s because of inequality”

The U.S. is currently in the “Peak 65” surge with over 11,000 Baby Boomers, those born between 1946 and 1964, hitting age 65, considered a benchmark for retirement, daily. This is expected to continue through 2027.

Reich shared a video on social media in which he explained that back in 1983 the Social Security program was amended to gradually increase the age at which a retiree could claim full benefits from 65 to 67. This was done to help ensure the solvency of the national retirement benefits program taking into account the coming “silver tsunami” of Boomers.

However, what the Trustees didn’t anticipate was that income inequality would explode over the ensuing decades. In the video, he displays a graph which shows that the top 1% have seen their share of the national income skyrocket 206% more by 2021 compared to 1979 versus just 28% more to the bottom 90%.

At the same time though the cap on income taxable by Social Security has only changed with inflation based on the Cost-of-Living-Adjustment established each year. In 2026, the maximum income subject to Social Security taxes is $184,000.

This has cost the Social Security system roughly $1.4 trillion since 1983 explains Reich. “The solution is clear. It’s time to scrap the cap and make the rich pay more in Social Security taxes,” he says.

Plan to keep Social Security solvent for the next 75 years

There are only a few ways to ensure the solvency of the program, either cuts need to be made, revenues must be increased, or a combination of both. If nothing is done before 2033, Social Security will only be able to pay out roughly 77% of benefits in the subsequent years.

Plans have been floated by both sides of the aisle in Congress. One of those Reich shares in the video would keep Social Security solvent for the next 75 years without raising taxes on 93% of American households. It involves eliminating the cap on earnings over $250,000 and also subject investment income over $200,000 to Social Security taxes.

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