Social Security under Trump is shaped by two things pulling in opposite directions: an active push to end federal income taxes on benefits for most retirees, and a trust fund shortfall that current policy proposals do nothing to close. The president has pledged not to cut benefits and opposes raising the retirement age, but the program’s retirement trust fund is still projected to run short in 2033, at which point incoming payroll taxes would cover only about 77 cents on the dollar unless Congress acts.1Social Security Administration. Social Security Board of Trustees: Projection for Combined Trust Funds One Year Sooner than Last Year
Ending Federal Income Tax on Benefits
The centerpiece of the administration’s Social Security agenda is the One Big Beautiful Bill’s tax relief for retirees. According to the White House, the bill’s combination of provisions would result in 88 percent of seniors who receive Social Security paying no federal income tax on those benefits.2The White House. No Tax on Social Security Is a Reality in the One Big Beautiful Bill Rather than repealing Section 86 of the Internal Revenue Code, which governs benefit taxation, the bill works through offsetting provisions.3Office of the Law Revision Counsel. 26 USC 86 – Social Security and Tier 1 Railroad Retirement Benefits A separate standalone bill, H.R. 904, would exclude Social Security benefits from gross income entirely, but it has not advanced past committee referral.4Congress.gov. H.R.904 – No Tax on Social Security
Under current law, retirees pay income tax on a portion of their checks once “combined income” (adjusted gross income plus nontaxable interest plus half of Social Security benefits) crosses fixed thresholds. Single filers between $25,000 and $34,000 owe tax on up to 50 percent of benefits, and above $34,000 on up to 85 percent. For married couples filing jointly, those thresholds are $32,000 and $44,000.5Internal Revenue Service. IRS Reminds Taxpayers Their Social Security Benefits May Be Taxable Those dollar figures haven’t moved since Congress created them (the 50-percent tier in 1983, the 85-percent tier in 1993), and they aren’t indexed to inflation, so more retirees cross them each year.6Social Security Administration. Income Taxes on Social Security Benefits
Who Actually Sees a Difference
The average monthly retirement benefit in January 2026 is $2,071, or roughly $24,850 per year.7Social Security Administration. Frequently Asked Questions A single filer whose only income is that average benefit already falls below the taxable threshold and sees no change. The relief concentrates on retirees with additional income from pensions, 401(k) withdrawals, or part-time work that pushes them above $25,000 single or $32,000 joint. For those currently taxed on 85 percent of their benefits, savings could reach into the low thousands per year depending on tax bracket. Lower-income seniors notice nothing.
What It Costs the Trust Fund
Revenue from taxing benefits flows partly back into the trust funds. Eliminating that revenue would reduce federal collections by an estimated $1.45 trillion over ten years and could pull the combined trust fund depletion date forward from 2034 to roughly 2032. That is the core tension in the current agenda: more take-home pay for retirees today, less runway before the trust funds run dry.
The Trust Fund Shortfall
The 2025 Trustees Report projects the Old-Age and Survivors Insurance (OASI) Trust Fund will be depleted in 2033, with incoming payroll taxes covering 77 percent of scheduled benefits at that point. Combined with the disability fund, depletion moves to 2034 with 81 percent payable, one year sooner than last year’s report.8Social Security Administration. A Summary of the 2025 Annual Reports1Social Security Administration. Social Security Board of Trustees: Projection for Combined Trust Funds One Year Sooner than Last Year
Depletion isn’t disappearance. Social Security draws most of its funding from a 12.4 percent payroll tax on earnings up to $184,500 in 2026, split evenly between you and your employer, and that revenue keeps flowing.9Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates10Social Security Administration. Contribution and Benefit Base Once reserves run out, though, benefits would have to shrink to match incoming revenue absent legislation. A roughly 23-percent across-the-board cut is the default scenario for retirement benefits.
The administration’s stated approach relies on economic growth: more jobs and higher wages producing more payroll tax revenue, with tariffs and deregulation cited as tools to boost domestic employment. The picture is complicated. Tariffs tend to raise consumer prices, which triggers higher cost-of-living adjustments and increases the program’s outgo. If tariffs slow growth or trigger layoffs, payroll tax revenue could decline. Reduced immigration cuts the pool of working-age contributors, and the Congressional Budget Office and private analysts have generally found that lower immigration weakens Social Security’s finances on net. No enacted plan currently closes the gap.
The Retirement Age Question
The full retirement age is 67 for anyone born in 1960 or later. You can claim as early as 62, but doing so permanently reduces your monthly benefit by up to 30 percent.11Social Security Administration. Early or Late Retirement12Social Security Administration. Retirement Age and Benefit Reduction
The Republican Study Committee’s 2026 budget proposes raising the full retirement age from 67 to 69, phased in by three months per year starting with workers who turn 62 in 2026, reaching 69 for those who turn 62 in 2033. Anyone who already turned 62 by 2025 would be exempt. Trump has publicly opposed the increase, calling it unfair to workers who planned careers around the current rules. Raising the full retirement age functions as a benefit cut: at 69, a worker claiming at 62 would face a reduction steeper than today’s 30 percent, and everyone would need to work two additional years for the same full benefit.
Pressure on Disability Benefits
Disability programs have been a target for savings in both Trump terms, even alongside the “no cuts” pledge for retirement benefits. The first administration’s fiscal year 2020 budget proposed over $84 billion in cuts to Social Security and SSI over ten years, with at least $72 billion targeting disability programs. Those proposals included shortening retroactive disability payments from twelve months to six, changing SSI calculations for families with multiple recipients, and limiting bankruptcy discharge of Social Security overpayment debts.7Social Security Administration. Frequently Asked Questions
A 2019 proposed rule would have added a fourth category to the continuing disability review system, requiring reviews every two years and reclassifying more than four million recipients into more frequent schedules. SSA projected $2.6 billion in savings over a decade through benefit terminations. The rule was withdrawn in 2021.13Social Security Administration. Recent Regulatory Actions Whether a similar rule reemerges this term is an open question. If you receive SSDI or SSI, or plan to apply, watch SSA rulemaking rather than only legislation, because eligibility and review changes reduce program outlays without touching the monthly benefit formula.
Staffing and Service at SSA
From January 2025 to February 2026, SSA’s workforce shrank meaningfully. By February 2026, the agency had approximately 49,683 total staff on duty, down thousands from the prior year, with much of the decline concentrated in public-facing roles like contact representatives and field office claims specialists.14Congress.gov. Social Security Administration Staffing Levels: Data Brief
Phone service improved on paper: the national 800 number went from a 26-minute average hold with a 46 percent answer rate in February 2025 to an 8-minute hold with a 77 percent answer rate by February 2026. Field office visits with appointments averaged about 6 minutes of wait time, and walk-ins averaged 26 minutes.15Social Security Administration. Social Security Performance The agency also stopped publishing some of the detailed monthly metrics it had shared previously. Disability hearing appeals, already a bottleneck, saw pending cases rise sharply in early 2025. If you’re waiting on a disability determination or appeal, your timeline depends heavily on which office handles your case.
The 2026 COLA
The 2026 cost-of-living adjustment is 2.8 percent, lower than the post-pandemic increases of recent years.16Social Security Administration. Latest Cost-of-Living Adjustment COLAs are calculated automatically from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W); neither the president nor Congress sets the figure directly. The administration has not proposed changing the index. Tariff-driven price increases would show up in the CPI-W and produce larger future COLAs, which also means faster trust fund spending.
Executive Actions and Benefit Eligibility
In April 2025, a presidential memorandum directed agencies to prevent undocumented immigrants from receiving Social Security Act benefits. In August 2025, a proclamation marking the program’s 90th anniversary reaffirmed a commitment to protecting benefits.17The White House. 90th Anniversary of the Social Security Act These actions are largely procedural or symbolic and do not alter benefit formulas or the trust fund outlook.
What About the Social Security Fairness Act
One major recent change is already law but predates this term: the Social Security Fairness Act was signed on January 5, 2025, repealing the Windfall Elimination Provision and the Government Pension Offset. Those provisions had reduced benefits for public-sector workers with pensions from jobs not covered by Social Security, affecting more than 2.8 million people. By July 2025, SSA had issued over 3.1 million payments totaling $17 billion in retroactive benefits, finishing five months ahead of schedule, with benefits retroactive to January 2024.18Social Security Administration. Social Security Fairness Act: Windfall Elimination Provision and Government Pension Offset Update If you’re a public-sector retiree who hasn’t received an adjustment, contact SSA directly.
Planning Around What Is and Isn’t Settled
If you’re receiving or approaching Social Security benefits, three things are worth separating. What is settled: the 2026 COLA of 2.8 percent, the 2026 taxable earnings cap of $184,500, the full retirement age of 67 for those born in 1960 or later, and the Fairness Act repeal of WEP and GPO. What is moving through Congress: the tax-relief provisions in the One Big Beautiful Bill and standalone proposals that would exempt benefits from income tax more broadly. What is not resolved: the trust fund shortfall in 2033–2034, potential changes to disability eligibility rules, and the effect of tariffs, immigration policy, and SSA staffing on long-term program finances. Plan around what’s law, and track what’s pending rather than what’s promised.