Congress Approves Bill Changing Descriptions for Social Security Claiming

A bill meant to adjust the Social Security Administration’s descriptions for the ages when retirees can start to claim benefits is awaiting approval from President Donald Trump after it was unanimously passed by the U.S. Senate Tuesday.

The Social Security Claiming Age Clarity Act, passed by the Senate without amendments, is intended to help retirees understand how the timing of when they choose to claim benefits will affect their monthly payments. The bill proposes that:

• “Early eligibility age” will be replaced with “minimum monthly benefit age”;
• “Full retirement age” and “normal retirement age” will be replaced with “standard monthly benefit age”; and
• “Delayed retirement credit” will be replaced with “maximum monthly benefit age.”

Currently, qualified people who retire and first claim at age 62 in 2026 will receive monthly payments of up to $2,969; those who retire and first claim at full retirement age will receive up to $4,152; and those who retire and first claim at age 70 in 2026 will receive up to $5,181 per month. Payment amounts are determined based on claimants’ work history.

Full retirement age is 67 for people born in 1960 and later.

The legislation was first introduced by Representative Lloyd Smucker, R-Pennsylvania, in September 2025 and was approved by the House of Representatives by a voice vote in December 2025.

“Americans who have worked their entire lives and earned Social Security benefits deserve clear, straightforward information as they make important decisions about their retirement,” Smucker said in a statement. “I’m grateful that Republicans and Democrats came together to advance this commonsense reform, and I look forward to seeing it signed into law.”

Social Security’s Actuary Shares Potential Changes

The bill comes as the Social Security Administration faces a projected 2032 depletion of its Old-Age and Survivors Insurance Trust Fund, estimated to result in an automatic 22% cut in benefits.

Earlier this month, the Congressional Budget Office projected that benefits cuts could be even higher following exhaustion of the trust fund, estimating that benefits would be reduced by 26% in 2033.

The Social Security Administration’s Office of the Chief Actuary published a booklet containing summaries of potential legislative steps that lawmakers could take in response, with fiscal calculations based on data from the “2026 Trustees Report.”

According to the report, Social Security will currently need an additional 4.42% of taxable payroll over the next 75 years, and the annual deficit in the 75th year would be 6.57% of payroll.

The report outlined eight main categories of alterations: reducing cost-of-living adjustments; changing monthly benefit formulas; raising retirement ages; altering family benefits; raising payroll taxes; expanding covered earnings or adding revenue sources; investing trust funds in equities; and taxation of benefits.

For example, the report estimated that reducing annual COLAs by 1 percentage point, beginning in 2027, would eliminate 46% of the program’s long-term shortfall; COLAs reduced by one-half of a percentage point would eliminate 24% of the shortfall.

If the agency replaces the current inflation formula with one linked to the Consumer Price Index, the report estimated that roughly 12% to 15% of the shortfall would be eliminated, depending on formula design.

Having future initial benefits grow with inflation instead of wage growth would eliminate 69% of the shortfall, but would greatly reduce benefits for future generations of retirees.

If lower-income workers keep current-law benefits, while higher earners receive slower benefit growth, the shortfall would be reduced by between 21% and 38%, depending on design.

Raising the full retirement age to 68 would cut roughly 11% to 13% of the shortfall, and a full retirement age of 69 would cut roughly 25% to 32%.

The report stated that provisions could potentially interact with each other and boost savings.

The House and Senate have introduced bills which would task separate commissions with proposing legislative solutions to help with Social Security’s solvency.

Making Up for Lost Benefits

As Congress considers Social Security’s solvency, Jack VanDerhei, director of retirement studies at the Morningstar Center for Retirement and Policy Studies, says lawmakers need to consider the ramifications of benefits cuts on retirees’ budgets.

In a recent post, VanDerhei wrote that preliminary research into the impact of across-the-board Social Security benefit cuts on 401(k) participants earning at least $25,000 found “that fewer than one in five could replace the lost benefit through additional saving without pushing their total contributions past a quarter of pay.”

He argued that policymakers should compare retirement outcomes against measures of burden before choosing a reform package.

“Solvency is only the first question,” VanDerhei wrote in an email to PLANADVISER. “Policymakers also need to understand which households would bear the burden of any combination of benefit reductions or additional revenues, and what those changes would mean for retirement adequacy, particularly for households that depend heavily on Social Security.”

VanDerhei quoted his previous 2010 analysis of hypothetical 24% cuts in Social Security benefits, saying that the projected increased percentage of households that could not cover basic living costs and healthcare costs in retirement increased from 0.3 percentage points among older Baby Boomers to 5.8 percentage points for Generation X households. Gen X households in the lowest quarter of income earnings saw a 7.2-percentage-point increase.

David Blanchett, Prudential Financial Inc.’s head of retirement research, does not think it is likely that current retirees will see sustained benefit cuts, but he agrees that younger generations will likely see higher benefit cuts. In an email to PLANADVISER, Blanchett wrote that a potential retirement planning option is to have those further from retirement factor in higher Social Security cuts.

“Benefits are more likely to affect those who haven’t retired yet, and those who are further from retirement have a greater ability to course correct,” Blanchett wrote. “The key really is going to be [individuals having] even more responsibility for [their own] retirement.”

If immediate benefit cuts of between 20% to 30% were to take place, Blanchett wrote they could lead to “a significant lifestyle cut for retirees,” given that many retirees use roughly 30% of their spending on discretionary items, and could remove the option of discretionary spending from lower-income retirees.