No more taxes on Social Security benefits

When you first hear about this, it sounds like good news, right? This is even more true when we look at the analysis made by the Tax Foundation, which estimates that the average retiree could have their annual tax bill reduced by $623!

But we should also consider what experts are saying and don’t be blinded by the money. They say that even if Trump wants to help people get more money, this can have negative long-term implications.

The funds for Social Security and Medicare rely on the revenue generated by taxes. If this funding source disappears, insolvency might become a reality, and this means you will end up with reduced benefits. According to the Tax Foundation, the Social Security trust fund depletion date could move up from 2035 to 2033, while Medicare’s insolvency could occur six years earlier, in 2030.

Furthermore, some financial consultants warn that the removal of benefit taxes may encourage higher-income seniors to take more from their retirement funds, putting extra strain on the government’s budget.