The hidden cost of tax-free Social Security benefits
Everybody is excited about the tax elimination on Social Security benefits because, let’s be real, who doesn’t want to keep more of their retirement money? But there is a problem. This major change Trump wants to make can seriously impact the future of retirement programs in America.
Right now, retirees pay taxes, but it is not like this money just disappears. No. The money goes straight into special accounts called “trust funds” that help pay for Social Security and Medicare programs. This is how all retirement programs are running. They all need money from somewhere, and generally, the money comes from taxes.
Another thing Trump suggested is eliminating the tax on tips. This will surely help workers in the service industry, but at the same time less money will go into trust funds, and this will speed up the depletion even more.
According to Chris Orestis, president of Retirement Genius, “It takes money out of the tax coffers.” While tax-free benefits may feel nice in the near term, they might jeopardize the long-term viability of Social Security and Medicare.
It’s easy to see that Trump’s second term brings with it real changes to the lives of American retirees. A lot of great opportunities, but also a lot of challenges. The only thing that remains true is that we should adapt to the new landscape and make the most of it.
Also, there is this important question that many people ask themselves: Is the financial future of retirees safe? What do you think about this? Tell us in the comments section! Are these changes good?
If you need a protector for your Social Security card, you can try this: 6 Pack Social Security Card Holder, Social Security Card Protector Sleeve
You should also read: 7 Ways to Reduce Taxes on Your Withdrawals
8 Responses
I have always been under the impression that the next generations taxes are what pays for this generation of retirees so if thats true then the current retirees now should not be paying taxes.
Also why should they be paying taxes on the money thats already been taxed that is owed to them for paying into the system with their taxes for all those years prior with their money that they earned and was taxed already ?
I sure hope that he doesn’t take away income from our retirement or Social Security! With food prices and Heath care expenses so high the people of The USA are already having a difficult time with just buying food! I’m going through rough times right now with losing my husband of 39 years and my income I go without food . This country needs more Not Less. I don’t think Trump has ever gone HUNGRY! SO Mr. PRESIDENT Donald TRUMP please think about it before you take our retirement income down! We need an increase.
What does this article accomplish? It does not answer the question it asks. Instead, it just gives one more worry and questions. Not informative. Just confusing.
Easy Seniors Club fear mongering against Trump agenda.
I am a 65 year old person on a fixed SSDI income and don’t get enough money already from Social Security to live on and I do Not have any penchant for a job retirement I just get 22K a year a year from Soc Sec. and that’s all I get plus $45.00 in food stamps EBT a month I he cuts benefits I don’t know what I will do.
I DO NOT AGREE with POS idea to change Social Security. Reasons; how is this going to affect people who are on Physical Disabilities???? Mental Health Disabilities???? There are SO MANY PEOPLE who are Mentally AND Physically Disabled!!!
How does (DUMB ASS) propose to do this??? I am retiring in a couple of days. I am looking forward to NOT HAVING TO WORK!!! Unless, I chose to!!!
This POS DOES NOT CARE about ANYONE, but itself!!!! And, wanting to RUN this Country INTO the GROUND!!
The ONE thing it cares about IS MONEY and NOT EVER paying FOR ANYTHING!!! And, being king…😡
Or, hand it over to its Butt Buddy; putin????? it IS A DISGRACE to the United States of America!!!
It should have been CONVICTED of its CRIMES and PUT IN JAIL!; when it tried to OVER THROUGH the GOVERNMENT on JANUARY 6th!!!!!
Let”s see the issues in what Trump wants to make happen before we see all the maybe bad this that could happen.
any money drawed out that has not paid tax on should b taxable. There is to many loop holes to avoid paying taxes. They only help the rich not the poor. Cost of living raises should be the same for everyone, not a % of everyones benifiet. again this only helps the rich (who dosen’t need it) and the poor keep geting poorer.