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By Aliss Higham
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President Donald Trump has already enacted a flurry of changes during his first days in power. But are changes on the way for Social Security benefits?
Why It Matters
Social Security benefits are a vital source of income for tens of millions of Americans. An estimated 53 million retirees—roughly 16 percent of the population—were collecting monthly payments at the end of 2024.
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Which Social Security Changes Has Trump Suggested?
Trump's main policy agenda is nixing federal taxes levied on Social Security incomes.
"SENIORS SHOULD NOT PAY TAX ON SOCIAL SECURITY!" Trump wrote on July 31 on Truth Social.
Some 40 percent of benefit recipients currently pay federal income taxes on retirement, spousal and disability benefits—not including Supplemental Security Income (SSI), which is untaxed.
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Under current Internal Revenue Service (IRS) rules, beneficiaries who have an income between $25,000 and $34,000 per year are subject to taxes on up to 50 percent of their Social Security income. Earning more than this could mean as much as 85 percent of benefits provided by the Social Security Administration (SSA) could be taxed.
The Tax Foundation estimates that eliminating these taxes could increase after-tax income by as much as 1.1 percent for retirees earning above the tax thresholds, with an average increase of 0.6 percent. However, retirees with lower incomes—who are already exempt from benefit taxes—are unlikely to experience significant changes.
However, it could cause trouble for the SSA, as the tax revenue collected on benefits is allocated to the Social Security and Medicare trust funds. Eliminating this tax would reduce the funds available for the SSA to pay future beneficiaries.
The SSA's 2023 Trustees Report found that trust funds that shore up the country's largest benefit system is due to run out of funds in 2035. By then, recipients are projected to receive only 83 percent of their full benefits unless action is taken by Congress to ensure its solvency.
According to the Committee for a Responsible Federal Budget, exempting benefits from federal taxes would move the Social Security retirement trust fund's insolvency date forward by more than a year. The Tax Foundation, calling the policy "fiscally irresponsible," warned it could accelerate fund depletion by two years, leading to insolvency as early as 2033.
What Social Security Changes Were Enacted Under Biden?
The biggest change made to retirement benefits under former President Joe Biden was the repeal of the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO).
The WEP reduces Social Security benefits for individuals who receive pensions from public sector jobs—such as those held by state and federal employees—that did not require Social Security payroll tax contributions. This reduction applies even if these individuals contributed to Social Security through other employment and qualify for benefits. Some 2 million beneficiaries were affected by this provision.
The GPO reduces spousal or survivor benefits for retired federal, state, and local government workers who did not pay into Social Security funds through their payroll taxes. Approximately 800,000 retirees were impacted by this rule.
What People Are Saying
Neal Shah, CEO of health-tech and elderly care startup CareYaya, previously told Newsweek: "Removing taxes on Social Security income could offer relief to many retirees, potentially enhancing their quality of life and ability to access essential care and services. This change would mainly benefit retirees and those approaching retirement age by increasing their income right away."
Brandy Burch, CEO at benefitbay, told Newsweek: "Without a strategy to replenish or secure funding, these cuts might accelerate the need for reforms like reducing benefits, adjusting the retirement age, or increasing eligibility requirements."
What Happens Next
After signing a flurry of executive orders shortly after his inauguration on Monday, Trump is yet to signal how, when, and if his planned changes will take place.
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