Economists Float 401(k) and IRA Changes to Fund Looming Social Security Shortfall

Social Security faces a major funding shortfall by 2034, requiring a 20% cut to benefits if not addressed.

Economists proposed eliminating 401(k) and IRA tax advantages to generate $185B per year to fund Social Security.

They argue the tax breaks don't increase retirement savings as intended and disproportionately benefit high earners.

As a compromise, they suggest capping annual tax-advantaged retirement contributions or eliminating breaks once totals exceed $500k-$1M.

Many ideas are being discussed to balance Social Security's funding, including payroll tax changes, retirement age increases, COLA reductions, and high earner benefit cuts.