Former President Donald Trump has said many times that he won’t touch Social Security benefits. But at the same time, he’s made some big promises that may weaken the program, especially for future retirees.
Trump has proposed removing federal income tax on Social Security benefits, overtime pay, and tips. These taxes currently help fund Social Security. If these are removed, it could lead to faster depletion of the Social Security Trust Fund, which is already in trouble.
Let’s break this down in a simple way.
The Social Security Fund Might Run Out by 2035
Since 2021, the Social Security program has been spending more money than it brings in. This means it’s running a deficit every year. If nothing is done, experts say the Social Security Trust Fund will be empty by 2035.
The Congressional Budget Office (CBO) predicts that once the fund is depleted, Social Security will only be able to pay 77% of the promised benefits using just tax revenue. That’s a 23% cut in payments to retired workers unless lawmakers step in and fix the issue.
Now, this doesn’t mean the whole system will shut down. Social Security gets money from three main sources:
- Payroll taxes (91%)
- Taxes on Social Security benefits (4%)
- Interest earned from Treasury bonds held in the trust fund (5%)
But when the trust fund runs out, the 5% from interest will disappear. That’s about $70 billion in 2025. The program would then rely only on the remaining 95% of revenue.
How Trump’s Tax Plan Could Make Things Worse?
Trump’s plan to stop taxing Social Security benefits, overtime, and tips sounds good on paper, but it comes at a cost.
A study by the Penn Wharton Budget Model (from an Ivy League business school) shows that just ending taxes on Social Security benefits could cut $1.5 trillion from revenue over 10 years. That alone could make the trust fund run out two years earlier.
Add in the plan to stop taxing overtime and tips, and experts from the Committee for a Responsible Federal Budget (CRFB) say the trust fund could be gone by 2032 instead of 2035.
Worse, this could lead to benefit cuts of up to 33% by 2035. That’s 10% more than what would happen under the current law.
Could Congress Step In and Fix It?
Yes, it’s possible. In the past, Congress has found ways to avoid letting the trust fund run dry. Many expect that lawmakers will act again.
But here’s the problem—if the program loses even more revenue because of Trump’s tax cuts, any fix that Congress brings may include some kind of benefit cuts. That’s the most likely way to balance things.
For millions of retirees who depend on Social Security for most or all of their income, that could be a big blow.
Bottom Line
Trump’s promises not to touch Social Security might sound reassuring, but if his tax proposals become law, they could put more pressure on the system.
This means:
- The trust fund could run out faster
- Benefit cuts could be bigger
- And retired workers could suffer more in the long run
If you’re close to retirement or already retired, it’s important to stay updated on this issue. What looks like a tax break now could turn into smaller checks later.
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