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By Suzanne Blake
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A Social Security expert is sounding the alarm that some of President Donald Trump's tax policies could harm Social Security beneficiaries in the long run.
During Trump's recent State of the Union address, the president mentioned ending federal taxes on Social Security. While in the short term, this could lead to more benefits for recipients, it risks the entire fund the Social Security Administration relies on, which is already set to become insolvent in the early 2030s.
Martha Shedden, the president and a co-founder of the National Association of Registered Social Security Analysts, told Fortune that Trump's tax change would "further increase the time that we're going to need to cut benefits."
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Why It Matters
More than 70 million Americans rely on Social Security benefits each month—including survivor and disability recipients, who also often depend on the social safety net program for the bulk of their income. While retirees spent their working lives paying into the trust, ending taxes could threaten the very fund that is supplying their monthly payments.
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What To Know
Shedden cautioned Americans that Trump's fiscal policies were potentially making a dent in their benefits and could lead to cuts in the long term.
She told Fortune that the One Big Beautiful Bill Act "did not help Social Security," and the ratio of workers to beneficiaries is becoming increasingly alarming, now at two or three workers for each beneficiary.
As more baby boomers retire with not as many U.S. workers keeping the Social Security program afloat, the SSA's trust funds will likely be depleted by the end of 2032.
At that point, if nothing changes, the SSA would have enough money to pay out roughly 80 percent of promised benefits.
Still, Shedden said Americans should not panic.
"I'm an optimist. I have studied Social Security now for over 15 years, and I know it is so complicated, but the advantage of that is there are so many rules and calculations that there are many, many little tweaks that can be made," Shedden said.
Still, while the One Big Beautiful Bill Act gave high earning Americans greater tax benefits, those at the middle or bottom income levels could see limited pros, especially as Social Security funds are set to be depleted in mere years.
"Given the affordability crisis many seniors are experiencing, the reduction of federal taxation on Social Security benefits initially appeared to be a big win. Allowing seniors to keep more of their benefits check to help counteract continued inflationary pressures seemed like the right thing to do," Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
"However, the solvency of Social Security still remains a massive forthcoming problem Congress will have to resolve, and lower taxes equates to less money being reallocated to the trust fund for benefits."
Because the Social Security Board of Trustees uses 75-year projections to evaluate the trust fund, Trump ending taxes on Social Security would change the math for the program quickly, said Kevin Thompson, a finance expert and the founder of 9i Capital Group.
If those taxes disappear, that's $50 billion annually no longer replenishing the fund, which would accelerate the timeline for benefit reductions, he added.
"The actuarial math would need to be redone, and future benefits would likely be reduced," Thompson told Newsweek. "We've already seen changes like the removal of GPO and WEP and enhanced senior deductions altering the flow of money tied to the program."
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "The short-term help could turn into a long-term nightmare unless a strategy is reached to bring in additional revenue to keep Social Security solvent. There's a genuine belief Congress will reach a solution, but as the expected date of trust fund depletion comes near, it's easy to see why many Americans are growing concerned."
Kevin Thompson, a finance expert and the founder of 9i Capital Group, told Newsweek: "If more revenue sources disappear, the social contract around Social Security changes. Americans should plan with the assumption that future benefits may be smaller than currently projected."
What Happens Next
As the countdown nears for the SSA's funds to become insolvent, Congress will likely step in to fix the matter, experts say.
"This is a 90-year-old program," Shedden said. "It's the backbone of most Americans' retirement security. It's not going away. It can't go bankrupt."
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