Baby Boomer Retirees: 7 Financial Policies We Want Under a Trump Administration
Written by
G. Brian Davis
Edited by
Ashley Barnett
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With poverty among seniors on the rise, many older adults approaching or in retirement want clear policy stances from both presidential candidates.
As the election draws closer, many of Donald Trump’s Baby Boomer supporters want to see the following changes under a second Trump Administration.
1. Eliminate Income Taxes on Social Security Benefits
At several campaign rallies and on his social media platform Truth Social, Trump has called for eliminating income taxes on Social Security benefits. That would boost the net income actually received by retirees.
But that proposal comes at a cost. The Social Security Board of Trustees reports that around 4% of Social Security’s funding — around $50 billion annually — comes from income taxes on benefits paid out to seniors.
That raises the core question for many retirees: How does the government prevent Social Security’s looming insolvency?
2. A Clear Plan for Social Security Solvency
Currently, the Social Security Administration projects that the Old Age and Survivors Insurance (OASI) Trust Fund can pay full benefits until 2033.
Devin Carroll, the founder and lead financial advisor at the Carroll Advisory Group, says he and his retired clients want clarity from a second Trump Administration above all else. “What retirees are hoping for most under a Trump Administration is a clear plan to fix Social Security’s upcoming shortfall. So far, we’ve only heard vague promises and reassurances that there won’t be any cuts. But if no real action is taken, a cut is assured.
“This uncertainty is making retirees nervous, and many are rushing to file for Social Security now. I hear retirees say things like, ‘I’m going to get what I can while I can.'” That leads many retirees to regret taking Social Security benefits early, and settling for lower benefit payments for life.
“Without a clear plan to secure Social Security’s future, this anxiety is only going to get worse.”
But what concrete changes might Trump implement to fix (at least prolong) Social Security’s solvency?
3. Raise the Wage Base Limit of Social Security
Thomas Brock is a CFA, CPA, and expert contributor for Annuity.org who works with retirees day in and day out. He proposes a simple solution: “Raise the Social Security wage base limit for wealthy individuals from $168,600 to a higher level.”
Brock refers to the cap on paying FICA taxes, which fund Social Security. Higher-income taxpayers pay FICA taxes on their first $168,600 in 2024, but not above it. This reflects the maximum benefit that they’re eligible to receive in retirement.
However, Brock points out that the current structure isn’t written in stone and could be revised to allow FICA taxes on higher-income earners, perhaps in combination with some plan for eligibility for higher benefits. “This could be implemented for individuals that earn over $1,000,000 annually. This would further reduce the prospect of depleting the program’s reserves, and it would have no effect on the vast majority of the population.”
4. Allow Social Security to Invest Beyond Treasuries
Brock further notes that the Social Security Trust Fund only invests in US Treasury bonds — notorious for their low returns.
“Allow the program to invest in securities other than U.S. Treasuries. A measured allocation to other types of investment-grade debt securities and, potentially, U.S. equities would provide much stronger risk-adjusted returns for the program. That would significantly reduce the possibility of future benefits payments depleting the program’s reserves.”
5. Keep the Standard Deduction High
Arguably Trump’s signature legislation from his term in office, the Tax Cuts and Jobs Act of 2017 (TCJA), doubled the standard deduction. This reduced many families’ net income taxes and simplified their tax returns, allowing them to take the standard deduction rather than itemizing cost by cost.
However the TCJA is scheduled to expire at the end of 2025, which would cut the current standard deduction in half starting in 2026. If Trump sees a second term, retirees who support him want to see the higher standard deduction extended indefinitely.
6. Extend Bonus Depreciation
Another tax change from the TCJA is that many retired investors in small businesses and real estate enjoy bonus depreciation.
Bonus depreciation allows these investors to write off a large portion of depreciable expenses immediately rather than spreading the deductions out over the useful life of the item. It’s proven especially popular among real estate investors, who get to accelerate their depreciation deductions.
The House of Representatives passed a bill (the Tax Relief for American Families and Workers Act) earlier this year extending bonus depreciation. However, the Senate has yet to bring it to the floor for a vote. Analysts expect Trump to push for bonus depreciation and all other tax changes from the TCJA to be extended should he win the Oval Office.
7. Don’t Cut the Gift & Inheritance Tax Exemption
Another tax change from the TCJA that remains popular among Boomers is the doubling of the gift and inheritance tax exemption. It allows older adults to pass more assets to their heirs tax-free.
Many older Trump supporters would love to see this policy extended, to keep as much of their wealth in the family as possible.
Final Thoughts
Expect plenty of promises from both Donald Trump and Kamala Harris on the campaign trail this year — and fewer of them to actually become policy in the years to come.
You can’t count on any one tax policy becoming law. You can focus on your own spending, investing, and retirement planning, both before and during retirement.
Focus on the fundamentals and keep your household solvent, regardless of what occurs in Washington, D.C.
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. For more coverage on this topic, please check out What a Kamala Harris Election Would Mean for the Economy Across the U.S.
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