Trump’s Proposal to Eliminate Social Security Taxes Could Save Seniors $3,000 a Year—But at What Cost?
Retiring solely on Social Security is challenging due to rising expenses and potential taxation on benefits.
While President Trump has proposed eliminating Social Security benefit taxes, Representative Thomas Massie has introduced a bill to make it a reality.
Currently, Social Security benefits can be taxed up to 85% based on provisional income, a threshold that hasn’t been adjusted for inflation.
This tax burden hits middle-income retirees hardest, as they may not have enough savings to offset it.
If eliminated, the typical senior household could save around $3,082 annually.
However, low-income retirees who already fall below the taxation threshold wouldn’t see immediate benefits.
While removing the tax would provide short-term relief, it could worsen Social Security’s long-term financial issues.
Social Security is already depleting its trust funds and may only be able to pay 83% of scheduled benefits by 2035 without intervention.
Eliminating benefit taxes would accelerate this problem, potentially forcing the government to raise payroll taxes or cut benefits.
Although no immediate decisions have been made, this issue will gain attention as insolvency nears, especially if Trump’s proposal gains traction.
In the meantime, retirees should explore ways to maximize their Social Security benefits to ensure financial stability.
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