President-elect Donald Trump will return to the Oval Office in just a few weeks. Whether you await that day with eagerness or trepidation, I think most can agree the transition will bring a host of changes that will affect all Americans personally and financially.

One of the biggest points of concern for retirees has been Trump’s plans for Social Security. On the campaign trail, he said he “will not cut one penny” from the program. In fact, he’s advocated for the elimination of Social Security benefit taxes, which cost many beneficiaries a portion of their checks.

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But like most political promises, the reality of the situation doesn’t fit nicely into a 30-second sound bite. To truly understand how Trump’s Social Security plans will affect retirees, you need to understand a little more about how the Social Security program works.

How Social Security gets its funding

Social Security has three funding sources right now:

• Social Security payroll taxes: All workers pay these on their first $176,100 in earnings in 2025. The tax is 12.4%, split evenly between employee and employer.
• Interest on Social Security trust funds: Excess Social Security income from years past remains in the trust funds where it’s invested in government-backed securities. The interest these funds earn helps pay for future benefits.
• Income taxes on Social Security benefits: This is a tax on the Social Security checks of beneficiaries whose provisional incomes — adjusted gross income (AGI), any tax-exempt interest from municipal bonds, and half their annual Social Security benefit — exceed certain thresholds for their marital status.

This system worked well for a while, but things changed when the baby boomers began to retire. The program found itself with more people claiming benefits than ever and fewer workers left behind to replace them.

The current tax income sources are no longer adequate, so the government has been relying upon the money in the trust funds to help them make up for the shortfall. However, that’s not going to be possible forever. Current projections estimate the trust funds will be depleted around 2034.

When that happens, Social Security will lose a critical source of retirement funding. It will rely entirely on the income it receives from Social Security payroll and benefit taxes. We know that won’t be enough to pay all benefits. If the government doesn’t take steps to resolve this funding crisis, it will have to cut benefits for all beneficiaries by around 23%.

Can Trump keep his promise?

Now that you understand a bit more about how the government funds Social Security benefits, it’s easy to spot the obvious problem with President-elect Trump’s plan to eliminate income taxes on Social Security benefits. Though this would benefit many seniors in the short term by giving them more after-tax money to spend, it would leave the program with only a single source of funding going forward. This would accelerate the timeline of the trust funds‘ depletion and could lead to more drastic benefit cuts sooner.

We likely wouldn’t feel these consequences during Trump’s presidency, so in a sense, he’s not wrong in saying that he may not personally cut Social Security at all. If he manages to eliminate these taxes, he may, in fact, increase benefits for seniors who are currently subject to benefit taxes. But his decisions during his second term will have consequences that will affect nearly all workers and retirees within the next decade.

This isn’t to say we’re doomed to benefit cuts. It’s unlikely the government would do nothing and allow seniors to lose a massive portion of their monthly benefits. But so far, the government has been unable to agree upon a solution to this funding crisis. The longer it takes, the fewer options we’ll have to remedy the issue.

Only Congress can change Social Security policy like this, so there isn’t a lot the average person can do about it. On the flip side, no president can single-handedly make major changes, like eliminating Social Security benefit taxes, either. So, no matter what Trump says about his plans, it only matters if his ideas gain enough support in Congress, and only time can answer that question.

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