The cost of living has recently reached an all-time high, with payments due on cornerstone expenses such as rent, food, and healthcare all increasing. Social Security beneficiaries are some of the most sensitive to these increases. Many recipients rely solely on the Social Security Administration (SSA) to support them. These benefits not only support retirees, but the SSA also provides an income to those who can no longer work due to a disability, as well as to those with very little resources and/or income as well and to survivors. However, their benefits may see an increase.
Social Security longevity concerns
SSA benefits are an essential source of livelihood and income for its 69 million beneficiaries. However, the program is currently under much scrutiny due to concerns over its longevity. As it currently stands, the fund is set to be depleted by the start of the 2030s. While this does not mean that Social Security will cease to exist, it does mean that unless change is enacted to prevent the insolvency of the fund, future beneficiaries are facing a reality where their benefits are severely reduced.
As it currently stands, the two strategies that have been identified to prevent the insolvency of the fund are as follows:
- Increase Social Security taxes
- Decrease current beneficiaries’ payments now
The fund has previously faced longevity concerns, which prompted the full retirement age (FRA) to claim benefits to be increased from 65 to 67 in 1983. However, President Donald Trump has previously stated that he does not intend to do either of these preventative measures. Instead, beneficiaries may to receiving the opposite from the Trump administration
$4,000 payments for this group by the Trump Administration
A new bill is currently under review, produced by the House of Republicans, which aims to introduce tax reductions for Social Security recipients and extend the federal debt ceiling. Dubbed the “One, Big, Beautiful Bill,” the new piece of legislation aims to ease the tax burden on senior citizens. Nearly half of retirees in the US are still paying federal income tax on their Social Security benefits, where the average payment is just under $2,000.
The new bill would introduce a significant tax break for senior citizens where if you are over the age of 65, for the upcoming tax years between 2025 through to 2028, seniors would be entitled to an additional $4,000 tax deduction on their Social Security benefits. However, this deduction would only be open to individuals who earn below $75,000 with a decrease in the tax break amount in increments of four percent if you earn above this amount.
Easing the tax burden on senior citizens
While not quite the promise President Donald Trump had previously stated, the bill would be a milestone piece of legislation if passed. For years, Social Security recipients have advocated for decreased taxes on their benefits. The tax thresholds for Social Security income have not been updated in nearly 50 years, highlighting a drastic need for reform.
“Too many seniors are being forced to stretch their retirement savings further than ever before. After a lifetime of hard work and paying taxes, they deserve to keep more of their Social Security and retirement income without Uncle Sam reaching into their pockets again,” said Rep. Malliotakis stated in a recent release.
However, the new bill does come in opposition to concerns over Social Security’s longevity. A new bill that would decrease the current taxes may not be the best time for the fund. On the other hand, however, senior citizens are struggling to keep up with their tax obligations and living expenses. To consult the full information about this proposed increase, you can check The One, Big, Beautiful Bill from the Republicans in the United States House Committee, Subtitle C, Part 1, Section 112201 (page 29).
