As President Donald Trump begins his second term, hot-button topics like immigration and tariffs have been in the spotlight. Retirement planning, not so much. But several issues will likely come into focus that could affect your retirement savings. Trump has called for extending the Tax Cuts and Jobs Act, which passed in 2017, and massive new tax cuts, including an end to taxes on Social Security benefits. There’s been speculation that Trump policies could broaden access to cryptocurrency and pave the way for private equity investments in 401(k)s and other retirement accounts. As the Social Security and Medicare trust funds inch toward depletion, lawmakers are under pressure to enact changes to address both programs’ solvency.Read on to learn how the new Trump administration could impact your retirement planning in 2025 and beyond.Tax cuts’ impact on retirement savingsThe Tax Cuts and Jobs Act lowered tax rates for most taxpayers and nearly doubled the standard deduction. Most provisions of the law are set to expire at the end of 2025, but the Republican-controlled Congress is expected to extend most parts of the law.Whether you’re working or retired, lower income tax brackets mean you get to keep more money in your pocket. Putting current tax savings toward a retirement account is a smart way to build up your nest egg for later.But the question of how the administration will pay for these tax cuts lingers. Trump has proposed replacing income taxes with tariffs, along with enormous cuts in spending — both of which have drawn skepticism from some economists and policy analysts. Some experts warn, though, that Trump’s policies could lead to higher inflation and stock market volatility.Social Security solvencyTrump has pledged additional tax cuts, including an end to taxes on tips and Social Security benefits. Social Security has been paying out more than it collects through payroll taxes since 2021. The Old Age and Survivors Insurance trust fund, which pays benefits to retired workers and their survivors, currently has enough money to pay out full benefits through 2033, according to the latest projections. After that, the trust has only enough to pay 79% of scheduled Social Security benefits unless Congress takes action.Trump’s campaign platform said he would “fight for and protect Social Security and Medicare with no cuts” and opposes increasing the full retirement age, currently 67 for anyone born after 1959. The Committee for a Responsible Budget estimates that Trump’s plans to end taxes on Social Security benefits, overtime and tips, impose tariffs, and pursue large-scale deportations would create a $2.3 trillion deficit for Social Security over the next 10 years. The nonpartisan think tank projects that these plans would lead the OASI to run dry three years earlier, by 2031 instead of 2034.Eliminating the Social Security tax would benefit current retirees, letting them keep more money. However, the president hasn’t offered any specific pla
Sab. Feb 1st, 2025
