President-elect Donald Trump has ambitious goals for his second term, from mass deportations to tax cuts and new tariffs. However, his plans for Social Security are of particular interest to retirees. While he has pledged not to cut benefits, there are concerns about the long-term solvency of the program.
What Trump Won’t Do to Social Security
Trump has made it clear that, during his second term, he will not allow any cuts to Social Security benefits. Unlike some Republican proposals, he opposes raising the full retirement age (FRA). He also rejects the idea of raising payroll taxes or eliminating the income cap on earnings subject to Social Security taxes, as some Democrats have suggested.
The Biggest Concern: Social Security’s Solvency
While Trump has promised no benefit cuts, there is a more pressing issue: the future solvency of Social Security. According to the latest report from the Social Security Trustees, the program’s combined trust funds will be exhausted by 2035. If nothing is done, this could lead to significant benefit reductions.
Some of Trump’s policies could accelerate Social Security’s financial troubles. His proposal to eliminate federal taxes on overtime, tips, and Social Security benefits would reduce the revenue flowing into the system. His plans for mass deportations could also harm Social Security, as many undocumented immigrants contribute to the program through payroll taxes.
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A Potential Solution: Oil and Gas Revenue
Trump briefly suggested during his campaign that increasing domestic oil and gas drilling could help address Social Security’s fiscal problems. However, experts agree that the revenue generated from these sources would not be enough to fix the program’s deficit. The Committee for a Responsible Federal Budget found that oil and gas revenue would need to be 27 times greater than it is now to cover Social Security’s shortfall.
What Could Fix Social Security?
To avoid future benefit cuts, experts suggest addressing the program’s revenue shortfall through measures Trump opposes. Gradually raising the FRA or increasing payroll taxes would boost revenue. While these options would reduce benefits for future retirees or reduce their take-home pay, they could help keep the program solvent.
Major reforms are essential to prevent Social Security from running out of funds in the next decade. The longer these changes are delayed, the more difficult and painful they will be.
A Hidden Social Security Bonus Most Retirees Overlook
For retirees looking to maximize their Social Security benefits, there are strategies that can boost your retirement income. One often-overlooked strategy could provide up to $22,924 more each year. Learn how to take advantage of these lesser-known opportunities to enhance your retirement security.
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