Social Security, a vital program that supports nearly 68 million Americans every month, is facing a funding crisis that could come to a head within the next decade. As the 2024 presidential election approaches, both major candidates—Republican Donald Trump and Democrat Kamala Harris—will need to address the looming issue of Social Security’s solvency. The program, which provides benefits to retirees, disabled individuals, and survivors of beneficiaries, has been the bedrock of financial security for millions of Americans. However, without significant changes, the retirement trust fund that supports Social Security is projected to be depleted by 2033. At that point, the program would only be able to pay out 79% of promised benefits, leaving retirees with less income and creating serious financial uncertainty for millions of people.
So what does this mean for the future of Social Security, and how might the next president tackle this issue? Here’s a breakdown of the challenges ahead and how Trump and Harris are expected to approach the problem.
Why Social Security Is in Trouble
One of the main reasons Social Security is facing such a dire situation is simple math: more Americans are reaching retirement age, but there aren’t enough workers contributing to the program to make up for the increase in benefits being paid out. As of now, over 11,200 people are turning 65 every day, which puts a strain on the Social Security system. As these individuals begin claiming benefits, fewer workers are left to support the system through payroll taxes. In the past, Social Security has been able to rely on its trust fund to help bridge the gap, but that trust fund is projected to run out in 2033. After that, beneficiaries may face a 20% cut in their monthly checks.
For the average retired worker, this would mean losing about $403 from their current monthly benefit of $1,920—a significant reduction for those relying on Social Security to cover essential expenses like housing, groceries, and medical bills.
Trump’s Approach: No Taxes on Social Security Benefits
Donald Trump has made it clear that he intends to protect Social Security benefits, but his approach focuses on letting retirees keep more of their income by eliminating taxes on Social Security benefits. Currently, retirees can pay federal income taxes on up to 85% of their benefits, depending on their total income. For many, this means a portion of their Social Security payments is lost to taxes.
Trump has promised that if reelected, he would fight to end these taxes. On social media, he’s stated, “Seniors should not pay tax on Social Security.” The idea is popular—an ABC News/Ipsos poll found that 85% of voters support ending taxes on Social Security benefits. While this move could put more money directly into retirees’ pockets, it also presents a challenge: eliminating these taxes could push Social Security’s insolvency date even closer.
According to the Committee for a Responsible Federal Budget, ending taxes on Social Security benefits would cause the trust fund to run out a year earlier. And while some retirees might see a small boost in their income, many experts point out that the majority of households—especially those with incomes below $50,000—already pay little to no taxes on their Social Security benefits. The proposed tax cuts would primarily benefit those with higher incomes, but the program as a whole would still be left in financial jeopardy.
Harris’ Approach: Higher Taxes for the Wealthy
Kamala Harris has taken a different approach to addressing Social Security’s funding crisis. Rather than cutting taxes, Harris wants to shore up the program by asking the wealthiest Americans to pay more into it. Under her plan, high earners and large corporations would be required to contribute more through increased payroll taxes.
Currently, workers and employers each contribute 6.2% of wages to Social Security, but there is a cap on the amount of income that is subject to the tax. In 2024, only wages up to $168,600 are subject to the Social Security payroll tax, meaning that someone earning millions of dollars annually stops paying into Social Security after they reach that cap early in the year. Harris, along with other Democrats, has proposed lifting this cap for high-income earners, so those making over $400,000 would continue to contribute a larger share of their earnings.
This approach would significantly improve Social Security’s solvency while preserving the current benefits structure. Harris’ plan would also likely include raising taxes on investment income, another way to fund the program without cutting benefits. Her platform emphasizes that making the wealthiest Americans “pay their fair share” is key to keeping Social Security solvent for future generations.
The Impact of Social Security Reform on Older Americans
For those already nearing or in retirement, changes to Social Security can feel unsettling. Older Americans, particularly those over 55, typically aren’t affected by reforms like raising the retirement age, which is a common solution for extending the program’s life. But with the insolvency date just nine years away, experts warn that it may not be possible to exclude older workers from changes this time around. Jason Fichtner, chief economist at the Bipartisan Policy Center, notes that people over 55 may feel the effects of any reform, especially if cuts or tax hikes are implemented to save the program.
At the same time, the longer lawmakers wait to address the problem, the more drastic the changes will need to be. If nothing is done soon, Congress may be forced to pass deeper benefit cuts or more significant tax increases to keep the program afloat as the insolvency date approaches.
Will There Be a Solution Before It’s Too Late?
No matter who wins the 2024 presidential election, addressing Social Security’s funding crisis will be one of the biggest challenges they face. With a divided Congress and high political stakes, finding a solution will require cooperation from both parties—something that’s been in short supply in Washington lately. Social Security reform requires 60 votes in the Senate, meaning any changes will need bipartisan support to pass.
Experts warn that the closer we get to 2033, the harder it will be to fix the problem. Delaying reform will only make the necessary changes more painful, both in terms of benefit cuts and tax increases. Yet many believe lawmakers will wait until the last minute, as they have in the past, before making any significant moves.
In the meantime, millions of Americans are left wondering how their retirement income will be affected by the decisions made in the coming years. While both Trump and Harris have vowed to protect Social Security, only time will tell if the next president can deliver on that promise and ensure the program’s solvency for future generations.