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Back on July 1, the White House issued a statement claiming that \u201c88% of all seniors who receive Social Security \u2014 will pay NO TAX on their Social Security benefits\u201d because of President Donald Trump\u2019s new One Big Beautiful Bill Act (1).<\/p>\n
However, the White House cited the U.S. Council of Economic Advisers, (2) a branch of the President\u2019s office, as the source for this claim rather than an independent body.<\/p>\n
Experts at the Center for Budget and Policy Priorities (CBPP), meanwhile, have taken a closer look at the megabill\u2019s impact on the Social Security program and found that the claims could be \u201cfalse and exaggerated\u201d (3).<\/p>\n
While the debate rages on, understanding why experts disagree with the Trump administration on this issue could help you and your loved ones figure out if the new bill will help your finances or hurt you instead.<\/p>\n
The White House\u2019s calculations hinge on the megabill\u2019s new and raised tax deductions for many seniors.<\/p>\n
Starting this year, seniors aged 65 and above can claim a new deduction of up to $6,000 per person. For couples filing jointly, that could mean up to $12,000 if both spouses qualify.<\/p>\n
These deductions reduce taxable income for older Americans. However, the White House acknowledged that about 64% of Social Security recipients already paid no federal tax on their benefits before the new law, thanks to existing deductions and exemptions.<\/p>\n
Eligibility isn\u2019t based on age alone \u2014 modified adjusted gross income (MAGI) also matters.<\/p>\n
Only Individuals earning $75,000 or less can claim the full deduction. After this, it phases out and vanishes completely at $175,000. For joint filers, it starts phasing out at $150,000 and disappears entirely at $250,000.<\/p>\n
Meanwhile, older Americans who are barely getting by likely won\u2019t have the income necessary to take advantage of the deduction. If your total allowable deductions already exceed your income, an extra $6,000 doesn\u2019t do much.<\/p>\n
It\u2019s also worth noting that the White House\u2019s figures consider only beneficiaries aged 65 and over, but Social Security can be claimed as early as 62, meaning a portion of the recipient population is excluded from their estimate.<\/p>\n
In total, fewer than 24% of all current Social Security recipients will see a reduction in taxable income directly due to the new law, according to the CBPP. This falls far short of Trump\u2019s campaign promise to eliminate all taxes on Social Security.<\/p>\n
Not only does this new deduction fall short of promises, but it also has second-order effects that could actually expose many seniors to lower benefits over the long term.<\/p>\n
If your household income exceeds this $175,000 threshold for single filers and $250,000 for joint filers, you might want to consider employing tax-planning strategies to find ways to reduce your tax bill at the end of the year.<\/p>\n
This is where white-glove advisorial services like Range<\/a> can come in. High earners who don\u2019t qualify for an OBBBA deduction can still get modern financial advice from experts through this all-in-one wealth management platform.<\/p>\n Range offers transparent flat-fee pricing for all services and 0% AUM fees<\/a> for advisory services \u2014 helping you access higher-level service at a fraction of the cost of traditional planners. What\u2019s more, Range\u2019s team of experts consists of fiduciaries, meaning they\u2019re legally required to act in your best interest.<\/p>\n And the best part? You can book a free demo with the Range team<\/a> to see if they\u2019re the right fit to potentially help amplify and secure your wealth.<\/p>\n Read more: Warren Buffett used 8 simple money rules to turn $9,800 into a stunning $150B<\/a> \u2014 start using them today to get rich (and then stay rich)<\/strong><\/p>\n The new senior deduction is temporary and only applies through 2028. Most older Americans who benefit from it will have just four years to take advantage of the savings.<\/p>\n At the same time, the cost of all the tax deductions and reductions in Trump\u2019s megabill could reduce federal tax revenue from Social Security benefits by $30 billion annually, according to the CBPP.<\/p>\n \u201cThis is enough to accelerate the insolvency of the Social Security retirement fund and Medicare Hospital Insurance fund to 2032, a year sooner than the program\u2019s trustees projected just last month,\u201d the report stated.<\/p>\n And the CBPP isn\u2019t alone in this assessment.<\/p>\n The Committee for a Responsible Budget (4) also estimates that the SSA\u2019s retirement trust fund will go broke in 2032 without intervention. If the fund goes bankrupt, the report states that all retirees will face an across-the-board benefit cut of 24%. For couples retiring after the fund\u2019s insolvency, that could mean a combined $18,400 reduction in benefits.<\/p>\n In other words, the new law likely offers short-term tax relief for some seniors, but at the expense of the long-term stability of Social Security and Medicare trust funds, which affects all beneficiaries.<\/p>\n The newly passed One Big Beautiful Bill Act also slashed Medicaid spending by roughly $1 trillion over the next decade. This could result in nearly 11.8 million Americans losing their health insurance by 2034, according to estimates from the Congressional Budget Office (5).<\/p>\n Taken together, this suggests that in the early 2030s, some older Americans could see their Social Security benefits crash while also losing their health insurance.<\/p>\n If you are retired or planning for retirement, it could be wise to consider making provisions for long-term care. Roughly 80% of older Americans, or nearly 34 million households, don\u2019t have enough resources to deal with serious illnesses or the need for long-term care, according to the National Council on Aging (6).<\/p>\n Opting for long-term care insurance with GoldenCare<\/a> can give you peace of mind during your golden years.<\/p>\n GoldenCare offers several options for you to choose from<\/a> \u2014 including hybrid life or annuity with long-term care benefits, short-term care, extended care, home health care, assisted living and traditional long-term care insurance.<\/p>\n You can get quotes for the best coverage options<\/a> that fit your needs and budget with GoldenCare by contacting their Long Term Care Specialists.<\/p>\n Chances are, Social Security paychecks won\u2019t be enough to cover your expenses during retirement. And if you don\u2019t meet the income requirements outlined in the OBBBA, you are required to pay taxes on these government checks.<\/p>\n But there are other ways to boost your retirement nest egg without paying an arm and a leg in taxes.<\/p>\n For instance, commercial real estate investments can help you lower your tax liability by deferring capital gains tax through a 1031 exchange, otherwise known as swapping one property for another \u201clike-kind\u201d property.<\/p>\n Plus, income generated from commercial properties is typically considered passive income \u2014 and might be eligible for passive activity losses to offset income. What\u2019s more, you could access long-term capital gains rates on passive income generated from real estate, which might be lower than your marginal tax rate.<\/p>\n But buying commercial real estate isn\u2019t cheap \u2014 and it comes with its fair share of headaches, like the hassles of property upkeep and tenant management.<\/p>\n Instead, accredited investors could invest in shares of grocery-anchored commercial properties through First National Realty Partners (FNRP)<\/a> \u2014 without taking on the responsibilities of being a landlord.<\/p>\n FNRP leases its properties to national brands like Walmart, Kroger, CVS and Whole Foods<\/a>, which provide essential goods to communities. The firm signs triple-net leases with its tenants, allowing investors with capital on hand to invest in these properties without worrying about tenant costs cutting into potential returns.<\/p>\n Getting started is easy. Simply answer a few simple questions, including how much you\u2019d like to invest, to start browsing their full list of available properties<\/a>.<\/p>\n Investing in commercial real estate can come with solid tax advantages, but the rules can be tricky. Another option would be to invest in residential real estate.<\/p>\n Here, like with commercial real estate, the quality of the property and the tenant are important. This is where mogul can help you access fractional ownership of blue-chip rental properties<\/a>, which gives investors monthly rental income, real-time appreciation and tax benefits \u2014 without the need for a hefty down payment or midnight maintenance calls.<\/p>\n Founded by former Goldman Sachs real estate investors, mogul hand-picks the top 1%<\/a> of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.<\/p>\n Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10% to 12% annually. Offerings often sell out in under three hours<\/a>, with investments typically ranging between $15,000 and $40,000 per property.<\/p>\n Getting started is a quick and easy process. You can sign up for an account and then browse available properties<\/a>. Once you verify your information with their team, you can invest like a mogul in just a few clicks.<\/p>\n Whatever you choose, real estate can be a complex vehicle for building your wealth for retirement \u2014 see the 1031 exchange. To understand your choices better, it could be worthwhile talking to a financial advisor to see if it\u2019s the right move for you.<\/p>\n You can find a vetted FINRA\/SEC-registered advisor near you through Advisor.com<\/a>. Here\u2019s how it works: Answer a few questions about your financial situation and future goals, and Advisor.com will scan through their network of fiduciaries to match you with someone best suited for your needs.<\/p>\n Remember, a good financial advisor can turn into a lifelong financial commitment. That is why Advisor.com lets you set up a free introductory call with no obligation to hire<\/a> to see whether your match is the perfect fit.<\/p>\n Join 200,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n The White House (1<\/a>), (2<\/a>); Center on Budget and Policy Priorities (3<\/a>); The Committee for a Responsible Budget (4<\/a>); UC Berkeley Public Health (5<\/a>); National Council on Aging (6<\/a>)<\/p>\n This article originally appeared on Moneywise.com<\/a> under the title: Trump says 88% of US retirees will now pay zero taxes on Social Security, but can the One Big Beautiful Bill hurt you?<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Saul Loeb \/ Getty Images Moneywise and Yahoo Finance LLC may earn commission or revenue through links in…\n","protected":false},"author":3,"featured_media":364675,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[64,7780,176628,33030,255,5005,711,35073,67,132,68,5223],"class_list":{"0":"post-364674","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-dave-ramsey","10":"tag-deductions","11":"tag-older-americans","12":"tag-personal-finance","13":"tag-president-donald-trump","14":"tag-social-security","15":"tag-taxable-income","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us","19":"tag-white-house"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115514486443451353","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/364674","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=364674"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/364674\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/364675"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=364674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=364674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=364674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}