How Trump’s plans for Social Security will impact you in 2025 and beyond
Big changes are coming to Social Security, and they might hit your wallet sooner than you think.
From eliminating taxes on benefits to major staffing cuts at the Social Security Administration, President Donald Trump’s proposals could impact the benefits you’ve earned.
In 2025, you might see some relief if Social Security benefits become tax-free, but that short-term gain could come with long-term consequences.
Meanwhile, efforts to root out “fraud and waste” within the agency have already led to job losses and office closures, making it harder for people to access Social Security services, apply for benefits and resolve issues. If these cuts continue, long wait times and service disruptions are expected to grow.
What does all this mean for you? Whether you’re collecting benefits now or expect to in the future, Trump’s Social Security agenda could reshape how the program functions — and how much you ultimately receive.
Here’s what you need to know.
3 of Trump’s big plans for Social Security and how they’ll impact you
1. No tax on Social Security income
Trump has promised, both on the campaign trail and since returning to the White House in January, to eliminate income taxes on Social Security benefits.
“I’m calling for no tax on tips, no tax on overtime and no tax on Social Security benefits for our great seniors,” Trump said in an address to a joint session of Congress on March 4.
More beneficiaries are getting taxed on their benefits than ever before
Social Security is primarily funded by payroll taxes, but the program also collects revenue by taxing the monthly benefits of an estimated 40 percent of retirement beneficiaries.
The number of people who owe taxes on their benefits is rising. While Social Security benefits adjust for inflation, the income thresholds for taxation on those benefits haven’t changed since 1993, pulling more and more people into taxation over time.
In 1983, for example, about 10 percent of beneficiaries were subject to the tax. By 1993, it grew to 18 percent. And in 2025, it’s now 40 percent, with some estimates as high as 50 percent.
While shielding seniors on fixed incomes from taxes sounds appealing, in reality, eliminating the tax could expedite benefit cuts down the road.
What the Social Security income tax pays for
Fears of Social Security “running out of money” have been mounting for years. According to Bankrate’s latest Social Security Survey, 73 percent of Americans are concerned that promised Social Security benefits won’t be paid to them upon retirement age.
The worry stems from a real funding crisis facing the two trust funds tasked with paying out Social Security and disability benefits to recipients.
Beneficiaries could see their benefits drop by 17 percent as soon as 2035 if Congress fails to address the $2.8 trillion shortfall, according to estimates in the 2024 Old-Age and Survivors Insurance Trust Fund trustee report.
Numerous solutions have been floated in recent years to prevent Social Security from going broke. None of them involve eliminating income tax on benefits.
Multiple factors have contributed to the shrinking funding pool, including a “gray wave” of baby boomers now drawing down benefits alongside a slowing birth rate and therefore fewer working Americans paying into the system. And as one SSA research note from 2001 points out, “Most beneficiaries receive far more in benefits than either they and/or their employers contributed to the system.”
Levying income tax on a portion of Social Security benefits grew from a different funding crisis in the early 1980s. The 1983 law first implementing the tax specifically didn’t adjust thresholds for inflation or income growth so that more revenue would flow in over time, keeping Social Security operational for future generations.
About $50.7 billion in Social Security income tax revenue was credited to the Social Security trust funds in 2023, or 3.8 percent of the funds’ total income, according to the Congressional Research Service.
So taxing Social Security benefits doesn’t significantly contribute to the trust funds, but eliminating it completely — as Trump has proposed — could speed along its insolvency.
“Trump’s proposal to eliminate taxes on benefits — which would largely benefit higher income earners — is not paid for,” adds Max Richtman, president and CEO of the National Committee to Preserve Social Security and Medicare, an advocacy group.
Meaning, while Trump is in favor of cutting the tax, he hasn’t proposed where money to fund future benefits will come from instead.
Need expert guidance when it comes to managing your investments or planning for retirement?
Bankrate’s AdvisorMatch can connect you to a CFP® professional to help you achieve your financial goals.
2. Eliminating ‘fraud’ and ‘waste’ in the Social Security Administration
Shortly after taking office, President Trump appointed Tesla CEO Elon Musk to lead the Department of Government Efficiency (DOGE), an agency focused on cutting federal spending. After making headlines for dramatic cost-cutting efforts, DOGE is now setting its sights on Social Security.
“We’re also identifying shocking levels of incompetence and probable fraud in the Social Security program for our seniors,” Trump told members of Congress on March 4.
Are millions of dead people receiving Social Security benefits?
A frequent talking point for Trump and Musk is the alleged millions of deceased beneficiaries still collecting Social Security checks.
The concern isn’t baseless — there have been cases of improper payments in the past, even to dead people. However, Trump’s claims of widespread fraud are overstated.
A 2023 report from the Office of the Inspector General identified nearly 19 million individuals over 100 years old without death records in the Social Security system, largely due to outdated database controls deemed too costly to fix.
However, the internal audit found only a tiny fraction of these individuals, about 2 percent, are still receiving benefits.
Proposals to solve the problem
The Inspector General’s report made three recommendations on how the SSA could fix the reporting issues, including incorporating death information from Medicare and developing a new system to note the deaths of millions of people identified as lacking proper death information.
However, the SSA rebutted, emphasizing that most of the records in the report pertain to people who don’t receive benefits, and so correcting those records would divert critical resources needed to administer programs for current beneficiaries.
SSA also determined that updating death information for nearly 19 million people “would have limited or no benefit to the administration of SSA programs and would be costly to implement.”
The Trump administration has not specified how it intends to solve the alleged proliferation of dead Social Security recipients.
“We are searching right now,” the president said during his March 4 Congressional address.
3. Staff cuts and office closures
As Musk and Trump rehash claims about millions of dead beneficiaries, real changes are taking place at the Social Security Administration that could impact everyday Americans.
More than 7,000 Social Security employees laid off
On Feb. 28, the SSA announced plans to cut 7,000 jobs — 12 percent of its 57,000-employee workforce — in order to comply with Trump’s executive order to reduce federal bloat.
The SSA has also offered all employees incentives to exit the agency, either through early retirement or voluntary separation incentives.
“The Trump administration’s plans to radically shrink the SSA workforce will seriously damage SSA’s ability to serve customers,” says Richman.
Other cuts to the administration are vividly detailed on the DOGE website.
As of March 6, the Social Security Administration ranked eighth on an “Agency Efficiency Leaderboard,” which orders agencies by total contract, grant and lease cancellations.
Under the heading “Wall of Receipts,” entries for contacts and services eliminated within the Social Security Administration as of March 6 include:
- Contractor support services for the Next Generation Telephony Project, an initiative to improve telephone customer service. A May 2023 audit by the Inspector General described the project as “merging SSA’s three telephone systems into a single platform designed to be more efficient, stable and functional.”
- Implementation of a cybersecurity risk management program.
- A service that helps make critical purchasing decisions for a range of agency hardware, including laptops, network equipment and servers.
Dozens of Social Security offices slated to close
The real pullback is taking place at local field offices. The DOGE site lists lease terminations of 47 Social Security branch locations across the country as of March 6.
Offices have been closed or are in the process of closing in 24 states. Georgia leads the way with five office lease terminations, followed by Arkansas, North Carolina and Alabama at four each.
These field offices are the primary points of contact for in-person interactions with the public and perform essential functions for the SSA, like processing applications for benefits and verifying required documentation.
An estimated 119,128 people visited Social Security branch locations across the country in 2023, according to SSA data.
Some locations that have already closed, such as the Columbus, Ohio, and Las Vegas offices, relocated to nearby federal buildings. Others, like the office in Grand Junction, Colorado, came with this note on the DOGE website: “Termination details are still being finalized…The strategy is under development.”
But for many other cities and small towns, Social Security offices have simply shuttered, tagged with “True Termination” on the DOGE website.
Multiple branches were closed in rural areas like Montana, which is set to lose two of its seven offices.
That would leave some residents in remote areas more than 100 miles away from their nearest Social Security office. If the branch in Missoula, Montana, closes, for example, the next closest office in Butte is 126 miles away — a nearly two-hour drive.
The Social Security Administration has struggled with long wait times for years, and staffing is already at a 50-year low. From 2013 to 2023, Social Security beneficiaries increased 25 percent while SSA’s operating budgets decreased 17 percent, according to the American Federation of Government Employees, the union representing SSA field office workers.
Experts warn that more job cuts and branch closures will further gum up operations for everyday Americans.
“A reduced workforce will only exacerbate the long hold times on the agency’s 1-800 phone line and directly hurt beneficiaries and claimants who need access to one-on-one help,” says Richman.
