Social Security benefits are a vital lifeline for millions of Americans. In 2025, nearly 70 million people will receive a check, with benefits accounting for around one-third of income over age 65. However, the program is facing significant challenges.
The Trump administration’s policies have affected Social Security in various ways, including its trust funds. The trust funds are faltering due to a lack of revenue from payroll taxes. To cover the deficit, the Social Security Administration has been withdrawing money from the funds. When these funds run out, benefit cuts will be necessary.
Immigration policies can impact Social Security’s trust funds. Fewer workers mean less money flowing into the system, which could lead to more withdrawals from the trust funds and a sooner depletion of the funds. A recent report estimates that undocumented immigrants contribute around $25.7 billion in Social Security taxes annually.
The Trump administration’s proposal to eliminate federal taxes on Social Security benefits would further exacerbate the issue. If implemented, this change could result in larger benefit cuts for retirees.
Several proposals have been introduced to address Social Security’s cash shortage. One option is to tax higher-income earners, which would increase funding and allow more money to be paid out in benefits. Raising the full retirement age or reducing benefits for higher earners are other potential solutions.
However, it’s unclear what Congress plans to do about Social Security’s future. As the deadline approaches in 2035, lawmakers must work on a solution to avoid benefit cuts. Understanding how Social Security is faring can help retirees prepare for any potential changes.
Source: https://www.fool.com/retirement/2025/03/06/social-security-prediction-trump-hurt-retirees