The average monthly social security check for retired workers was $1,975.34 at the beginning of 2025. While this may not sound like a lot, what you may realize is that their Social Security income is their financial basis.
Over the past 23 years, national pollster Gallup has surveyed retirees to determine the importance of social security income to their financial well-being. In each poll, 80 to 90% of respondents pointed out that it is necessary to pay their fees in certain identities.
While supporting and strengthening the leading retirement plan in the United States should be a priority for our elected officials, the financial situation of Social Security has deteriorated for four decades. Reforms need to be made to improve the financial position of the program – which could include President Donald Trump’s breach of campaign commitments and proposing cuts to social security.
President Donald Trump delivered a speech. Image source: Official White House photo by the National Archives Shealah Craighead.
Before digging into the details of what might happen, it is important to understand why the financial foundation of Social Security collapsed.
Since the first Social Security Check was mailed in 1940, the Social Security Commission has released an annual report outlining the financial status of the program. It details where every dollar of income comes from and what traces of those dollars ultimately come from.
What is even more interesting is the trustee’s long-term (75-year) predictions about the solvency of the Social Security Trust Fund. Although the plan cannot go bankrupt or is insolvent in the way it is currently set, existing spending schedules, including cost-of-living adjustments (COLAS) may be unsustainable.
Since 1985, each year, trustee reports have warned of long-term financial obligations. In short, over the 75 years after the report is issued, the estimated expenditure (benefits and to a lesser extent administrative expenses) will exceed the income from the income. The 2024 Trustee Report brings the long-term shortage to just $23.2 trillion.
A more direct concern is predicting asset reserves for the Older and Survivor Insurance Trust (OASI) by 2033. If this excess cash is to be exhausted, the excess cash is exhausted, and the benefits can be cut by up to 21%, waiting for reservation. Workers and survivor beneficiaries.
The culprit of this financial vortex is the huge loss of social security, the ongoing convergence of demographic changes such as income inequality, low birth rates in the historic U.S. and a sharp decline in legal net immigration since 1998.
OASI’s asset reserves are exhausted by 2033.
Legislators who want to strengthen social security have three options: increase income, reduce spending, or complete some combination of the two. But, given that any changes in social security will cause some people to be worse than before, this is often a problem that lawmakers avoid.
The presidential candidate has no luxury to sweep key issues under the carpet. They are expected to provide specific ideas on how to improve obvious illness plans.
During the campaign, then-candidate Donald Trump made it clear that he would not touch social security. Through this situation, he means that no change will be changed, which will lead to cuts in benefits as some current and future retirees are concerned. This means that the increase to the full retirement age is gone.
But President Trump does open the door to efficiency-based social security cuts. In an interview in December 2024 See the mediahe answered a question from TV reporter Kristen Welker: “I told people that we don’t touch social security, except we make it more efficient. But people will get everything they get. ”
During Donald Trump’s first four years at the White House, his presidential budget proposal called for various efficiency-based cuts to social security. According to forecasts, these actions will reduce spending by accumulating:
$72 billion from fiscal year 2018 to fiscal year 2027 (fiscal year 30).
From fiscal 2019 to fiscal 2028, $64 billion.
From fiscal 2020 to fiscal 2029, USD 26 billion.
From fiscal 2021 to fiscal 2030, USD 24 billion.
For example, President Trump’s last budget proposal is intended to make the disability insurance trust more effective to cut retrospective benefits that disabled workers may receive from 12 to six months. That would account for more than half of the $24 billion forecast for 10-year cost savings.
While Donald Trump will not propose a massive social security benefit cut, all signs suggest he breaks his promise of “not touching social security” by proposing efficiency-based cuts.
Image source: Getty Images.
While the Trump administration’s efforts to reduce administration waste and increase efficiency in some ways is helpful, budget proposals related to Social Security during the president’s White House term will hardly put the program’s expanded cash into a difficult gap.
The hard fact is that strengthening social security will require bipartisan cooperation and some difficult decisions.
On social media message boards, commentators often call for the lifting of income tax restrictions as a means of addressing social security. In 2025, all incomes (wages and wages, but not investment income) are between $0.01 and $176,100, and are paid a payroll tax of 12.4%, the main means of funding for Social Security. Salary per dollar and wages above this income tax cap are not exempt from payroll taxes.
Based on a study conducted by the Social Security Bureau Actuary Office, the cap on payroll tax was completely removed and all earned income was exposed to this tax, which would expand the solvency of the Social Security Trust Fund “about 35 years” . Although this will make the can start. For decades, taxation itself has taxed all incomes and has not solved the long-term shortage of social security’s financial obligations.
Another common proposal is to gradually increase the entire retirement age from 67 to 69 or 70. Doing so will require future generations of retirees to wait longer to get 100% of their retired workers, or to accept a steeper permanent reduction to a steeper monthly spend if collected earlier. Regardless of the type of person a claimed retired worker chooses, their lifetime income will be reduced.
While this approach can effectively reduce the decades of social security domination, it does not help the expected depletion of OASI asset reserves in 2033.
While Democrats want to increase income by taxing wealthy people and Republicans want to lower long-term spending, these unilateral solutions will miss this goal. In the long run, the only way to existing payment schedules, including COLAS, including COLAS, is to cooperate with both parties.
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Prediction: President Donald Trump will break his Social Security promise and propose cuts – just the way you might think it was originally published by Motley Fool
