The issue of Social Security comes as high-profile former U.S. President Donald Trump makes many people talk. Social Security is a program that offers protection and benefits to people when they retire or are unable to work and disabled; for the families of workers who died.
Still, many wonder what would happen to this lifeline if Trump were to win a second term as President.
Donald Trump Views on Social Security
During his first term, Trump made plenty of significant policy decisions. He also shared his ideas about such matters as taxes and spending by the government.
| Article Title | Donald Trump Views on Social Security |
| Organization | SSDI |
| Official Website | ssa.gov |
| Country | USA |
| Article Type | News |
However, now that he is looking to win his second term, people are interested in knowing how his thoughts might impact Social Security. Young people in particular should be aware of how this could shape their future.
This article examines the kind of reforms he may usher to Social Security. We shall outline the thoughts he and his officials have been considering. Why are these reforms relevant, even to individuals far away from retirement? Here’s what you need to know.
1. What Is Social Security?
Social Security is a program through which money is transferred to individuals when they retire, become disabled or otherwise lose a breadwinner in their family. Working people support the system through taxes, meaning that a portion of each pay-check goes into it. Once an individual reaches the age of 62 or older, they can collect some of these benefits.
Even the area of Social Security is quite far from teenagers’ daily life and interests and thus is hard to understand, due to the complexity of the whole system.
Yet this program really provides indispensable financial security for many Americans, and it has helped millions avoid falling into poverty in old age or when they lose the capacity to work. So any change to this program will have an impact on a tremendous number of people.
Even though the young may not feel it makes a difference, Social Security does make a difference to society. Changes that are designed to weaken the program in the future make it less possible to rely on this safety net and support families properly in the future. Therefore, understanding the changes proposed is a very important matter.
2. What Does Trump Have to Say About Social Security?
During the campaign years, Donald Trump has had many different statements about Social Security. Throughout his first term in office, he said many times that he would preserve the program. He promised to ensure that seniors and those who need it will continue to receive their benefits but then talked about big government expenses and how to manage the nation’s debt.
One of his priorities has been keeping taxes as low as possible for Americans. But taxes help finance Social Security, so there is a tension over balancing those competing priorities. A lot of people are nervous that the tax cuts are having to go too far to put pressure on programs like Social Security. He’s also spoken about reforming how benefits are calculated to save dollars.
Although he didn’t say directly that he’ll reduce benefits, there is skepticism. People want to know whether his financial plans will affect the system. Others are anticipating whether he might bring new reforms to make Social Security more efficient.
3. Why Are People Afraid of Social Security’s Future?
The new president inherits some of the concerns that have befallen Social Security in the past. According to experts, if enhancements are not enforced, the program may not be able to provide full benefits in the future.
This is because the rate of retiring individuals has been rising greatly, whereas the number of contributing workers hasn’t increased at a similar rate. If such a scenario continues, Social Security will face possible melting of its fund supplies for all that it promised to deliver by the mid-2030s.
This is the reason why many in the country are keen on listening to what politicians say about Social Security, even those like Trump. For example, their fear is that to solve the problems mentioned above, the benefits might be reduced, or the retirement age raised.
Such changes might make it hard for those retiring individuals to receive the support they need at times of retirement. This means that when young people retire, their plans might look somewhat different. Understanding the risks of that is important for people’s plans in later life.
4. Trump’s Taxation Plans on Social Security
Donald Trump is known to believe in reducing taxes. In his first term, he passed gargantuan tax cuts and, as such, led to bringing down the revenue collection of the government.
Taxes are one source through which funds are raised for running programs like Social Security, and hence, a reduction of taxes suggests a corresponding reduction of the amount of money that would be available for such programs.
One notion Trump floated in his first term was reducing the payroll tax. The payroll tax is what’s taken out of workers’ paychecks to fund Social Security. It would mean taking in less money into the system if this tax were reduced or eliminated. That might be great news for people wanting to keep more of their pay-check, but it’s bad news for Social Security.
5. What Would Benefit Cuts Look Like?
Something else to worry about is that cuts are made to Social Security because for this reason: benefits might be trimmed down. Retirement money might be reduced. Youth must be aware of what this will mean for their future possibilities since they will have to work decades, pay taxes, and then face the reality that they will likely get fewer dollars than the previous generations.
Although Trump has not threatened to cut benefits, some of his policies will squeeze Social Security. For example, to save money and meet its debt, it may cut Social Security benefits. Others call for changing the formula for the computation of the current benefits so that those who get them over time get less and less.
6. Increase Retirement Age
Another thing people often talk about is raising the retirement age. Currently, citizens may start receiving some Social Security once they reach the age of 62, but these are only partial benefits. If the retirement age is increased, a citizen will have to work longer before they receive their full benefits.
This is because people are living longer today. Because people live for more years in retirement, Social Security has to pay out more money. Some lawmakers believe raising the retirement age would help save money and make the program last longer.
7. What About Privatizing Social Security?
Another privatization idea was floated during the elections. The term seems to refer to allowing people to invest their money rather than contributing to some government program.
Proponents argue that this allows people to have more control over their retirement savings and potentially allows them to earn more money. People in the Trump circle have advocated for such a position in the past.
This risky approach will come about with privatizing Social Security: investments are unpredictable. If the stock market plummets, then people may lose their retirement savings. Currently, their system provides a steady source of income, regardless of the state of the economy. This is one of the greatest reasons why many are against privatizing Social Security.
8. Why Young People Care About Social Security
Social Security only seems to affect old people. So, the fact is that young people also should care about it. Of course, choices made today regarding Social Security will affect young people because the way the program views their retirement will probably be dramatically different than at present.
Not only that, Social Security is not only a program for retired people. It also helps the disabled and those who have lost a loved one. These young people may one day be part of an unexpected incident and this program could be the one to get them out of the most desperate situation. Thus, paying attention to suggested changes and what they entail is important.
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Conclusion
Donald Trump’s proposals regarding the future of Social Security are but a point in a much bigger conversation. Programs like lowering taxes, raising the retirement age, and even privatizing could touch millions of lives of American citizens. Young adults should be aware of these issues because they will inherit the system one day.
PV Martinez holds an MBA in Finance from the University of Michigan. When not analyzing numbers, PV enjoys playing football and spending time singing his favorite tunes.