Donald Trump is now the 47th president of the United States. This means that Social Security will be changing in big ways. Predictions that the Social Security retirement fund will run out by 2035 unless quick action is taken have been in the news lately.
Social Security is an important source of income for millions of Americans. Given that Trump was elected as president, this depletion may happen faster than expected.
Current state of Social Security
Social Security is a government-run program that helps retired people, disabled people, the families of workers who have died, and people who are going through other tough times in their lives by giving them money.
With most of its money coming from payroll taxes, Social Security makes sure that workers can keep up a basic standard of living after they stop working.
Its other goal is to help people who can not work because of a disability or who do not have access to any other resources get the money they need.
For the retirement program, it gives monthly benefits to people who are eligible. The amount depends on how much they have earned over their lifetime and when they start getting the benefits.
Many Americans, especially retirees, depend on Social Security. However, the program has been having problems for a long time because the population is getting older and there are fewer workers than beneficiaries.
Because of this, people have been talking about how to make it last longer and possible changes, like raising the retirement age or changing the payroll tax.
This is what financial experts say: by 2035, the retirement fund will be empty.
This does not mean that Social Security will end, but it does mean that future recipients will only get 83% of the benefits they are owed if nothing is done to change how payments are made now.
Either raising taxes on Social Security or cutting benefits have been suggested as ways to make the fund last longer and stop this from happening up until now.
Trump’s plans for Social Security
Trump promised not to cut Social Security payments as part of his campaign for office. A lot of voters were worried about this because they were stuck between a rock and a hard place.
Reducing payments would protect the fund’s integrity, but many, if not most, people who depend on Social Security for retirement can not afford to have their payments cut right now.
Trump also wants to lower the taxes that people pay into Social Security. The Congressional Budget Office (CBO), on the other hand, says that if these cuts and eliminations of Social Security taxes happen, they could mean a $950 billion drop in revenue by 2035.
This would put even more stress on the fund than it already is, which could cause it to run out sooner than planned.
Future of Social Security remains uncertain
It was Trump’s idea to cut Social Security taxes during his first term as president, but they were never put into law. But it is still not clear if he will be successful this time. Increasing the fund’s longevity is becoming more and more important.
However, in today’s economy, it is hard to imagine reducing payments or raising taxes on current beneficiaries as a way to deal with these problems.
Seniors depend on Social Security as their main and often only source of income. Any cut to benefits could make this vulnerable group even less financially secure. Similarly, raising payroll taxes would be hard on both workers and employers.
It might also slow down the economy or make people less able to afford things, which is especially important now that the COVID-19 pandemic is over.
