I’m a Retiree: 4 Reasons I’m Worried About the Future of Social Security If Trump Wins the Election
Written by
J. Arky
Edited by
Rebekah Evans
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Sixty-seven million Americans rely on Social Security benefits to help pay their bills, particularly if they are retired and the monthly checks are part of their fixed income. Recently, in a campaign speech, former President Donald Trump promised to not tax the program, among other possible changes, were he to regain the White House for a second term.
“Seniors should not pay taxes on Social Security and they won’t,” Trump told a crowd at a rally this summer in Harrisburg, Pennsylvania.
According to CBS News, “Such a pledge could be a potent campaign plank at a time when poverty among seniors is on the rise, according to the National Council on Aging. And the U.S. Government Accountability Office has found millions of older workers are nearing retirement without a penny in savings. Currently, about 40% of Social Security recipients pay federal income taxes on their benefits, according to the agency.”
Were Social Security income suddenly immune to being taxed or drastically reduced, it could potentially have the disadvantage of hurting the program by eliminating the funding source right at the heart of it. This could potentially hasten the insolvency of its trust funds, experts told CBS MoneyWatch. Should that move happen, the Social Security Administration might be pushed into a corner where they need to make significant benefit cuts almost a year earlier than originally predicted.
GOBankingRates asked retirees about reasons they are worried for the future of Social Security if Trump wins the election. Here is what they had to say.
Benefits for Future Generations
“Trump’s promise to eliminate federal taxes on Social Security income sounds like a good deal for retirees but it’s not, at least not a good deal for us younger retirees likely to live into the 2030s, 40s, or 50s,” said 66-year-old Michael Montgomery, political scientist in training and part-time teacher in the department of health and human services at The University of Michigan-Dearborn. He plans to begin drawing his own benefits in mid-2025.
While it is unknown if Trump has a proposed alternative for funding the program, if there is no replacement for funding, this could pose an issue to the future of Social Security.
“Federal taxes paid on Social Security income go back into Social Security and are a significant factor in keeping the program able to pay full benefits,” Montgomery said. “If enacted, the Trump proposal would move forward when Social Security benefits must be cut by a year or more from the current 2035 crisis point.”
Financial Instability
“Many clients cannot work past 65 due to health issues,” said Marty Burbank, estate planning and elder law expert.
“Raising the retirement age ignores this reality and threatens their basic financial security,” Burbank explained. “Smaller cost-of-living increases mean choosing between food, housing or medication for those already struggling.”
Trouble Paying Medical Bills
Burbank shared that his firm assists clients who qualify for benefits like Medi-Cal to relieve financial strain. Reducing Social Security could leave many unable to afford care altogether.
“While reducing spending has merit, it should not threaten lifelines for the vulnerable,” Burbank said.
“There are ways to curb waste without denying healthcare or income to those who paid into these systems for decades,” Burbank explained. “Leaders must protect citizens who rely on these programs to survive. Drastic cuts risk lives and betray the social contract between citizens and government.”
Privatizing Social Security
Moving Social Security from the hands of the government into corporate control is top of the mind for many retirees, with concerns about what would happen if the public program went private.
“Their biggest reason for wanting to privatize Social Security is simple,” explained David DiSalvo, 70-year-old retiree from Nevada. “Currently as a government agency, the rules and regulations for collecting and allocating Social Security and Medicare are established.
“If you privatize it, the new system will go out to bid and execute to insurance companies, stock brokerages and other entities,” he said. “This allows the new entities to lobby with contributions to our lawmakers.”
The Potential Future of Social Security
The Trump administration’s declaration to implement tax cuts might offer some relief to the working-class in the short-term, but the overall Social Security trust funds could be irrevocably damaged and hurt retirees who depend on their benefits to make ends meet. Overall, retirees could see delayed payments, lower benefits and increased anxiety about how they will be able to pay their bills with the financial future of Social Security in flux under Trump.
While the Republican candidate on the ballot has been murky with his exact plans to cut Social Security, Trump’s first term came with budget proposals that could affect benefits tangentially, including new calculations of benefit dispersal or cost of living adjustments (COLAs) that retirees are already concerned about. These small changes can impact retirees’ finances in a big way, leading many of them to be wary of anything Trump has in mind for Social Security if he should regain the White House.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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