President Trump’s administration has made changes to Social Security that could negatively impact retirees, especially in 2025 and beyond. The Social Security Administration announced plans to reduce its workforce by about 12%, which may mean fewer people available to assist retirees with their benefits. The administration also plans to end paper checks for the nearly half a million retirees who still receive them.
This will significantly impact many retirees, especially those in their 90s who may not have bank accounts or be able to easily set up direct deposits. Retirees now face tougher identification rules when making Social Security transactions. Many actions that could previously be done over the phone must now be done online via a “my Social Security” account with two-factor authentication or in person at an SSA office.
This will be inconvenient for those who are not technologically adept or live far from an SSA office. Although President Trump has frequently talked about eliminating taxes on Social Security benefits, this proposal has not been enacted.
Social Security policy changes
The revenue from these taxes is essential for the already-challenged program, and without it, the program’s surplus could deplete sooner than expected. There were reports that as many as 47 Social Security offices were being targeted for closure, but the SSA issued a notice stating that it has not permanently closed any local field offices this year. However, this status quo may change in the future.
The biggest threat to retirees is the depletion of Social Security’s surplus. The surplus is projected to run dry by 2034 if no action is taken to strengthen the program. Beginning around 2034, beneficiaries could only receive 81% of what they are due.
For example, with the average monthly retirement benefit of $2,002 in May, a 19% cut would reduce that benefit to $1,622, a $380 reduction. With Social Security’s future uncertain and various parties proposing significant changes, it’s critical for those nearing retirement to pay close attention to how these developments could impact their financial planning. Exploring ways to maximize your Social Security benefits could ensure a more secure and confident retirement.
