List of Changes Retirees Collecting Social Security Checks Must Make in 2025

According to Lagradaonline , Every presidential transition brings a new set of policies and priorities, but the potential changes under a Trump presidency could be more far-reaching, particularly for vital programs like Social Security. President-elect Trump has emphasized the need for cutting government spending and created the Department of Government Efficiency to scrutinize federal expenditures, aiming to reduce costs and achieve a net surplus.

However, unlike businesses, governments can’t simply trim costs without consequences, and for individuals reliant on Social Security, the impacts of these cuts could be severe. Many could face financial hardship, but there are steps you can take now to mitigate potential future changes.

Jasmin Smoots, vice president of operations at PensionBee, has expressed concerns about Social Security’s long-term viability, noting that Trump’s proposed budget cuts could exacerbate these issues. “Trump has recently floated a bold proposal to eliminate federal income taxes, some of which fund Social Security,” she told GoBankingRates. “Replacing this income source would be challenging, especially given the administration’s preference for broad tax cuts. Tariffs might be considered as a replacement, but the level of tariffs needed to replace the income from federal taxes could be as high as 75%, far exceeding the proposed 25-35% range. Without a credible replacement for lost tax revenue, Social Security could become a casualty of campaign promises.”

Given these uncertainties, it’s crucial for beneficiaries to take proactive steps now to secure their financial future.

1. Build Up Your IRA

Individual Retirement Accounts (IRAs) are a key tool for supplementing Social Security and ensuring a stable income during retirement. Contributing to an IRA while you can will help increase your retirement savings and provide additional financial support. As Smoots notes, “Diversifying your income sources and supplementing Social Security through an IRA can significantly boost your financial security and peace of mind. IRAs are a powerful tool for retirement savings, yet less than a third of households have a traditional IRA.”

2. Contribute to Your HSA

Healthcare costs tend to rise as we age, and retirees often face higher medical expenses. One way to prepare for these costs is by contributing to a Health Savings Account (HSA), which can provide a tax-advantaged way to save for healthcare needs. Smoots advises, “Retirees should consider supplemental insurance, HSAs, and long-term care insurance. These financial tools can help cover potential gaps in coverage and ensure long-term financial security.”

Also Read – SNAP Benefits in Oregon: How to Get Replacements After Severe Weather in 2024

3. Capitalize on Lower Taxes by Saving Now

With tax cuts expected under the Trump administration, there may be a window of opportunity to take advantage of lower taxes in the short term. According to Chuck Czajka, a certified Social Security claiming strategist, “Trump’s election win presents a great opportunity to optimize your retirement planning. The Tax Cuts and Jobs Act (TCJA) is expected to remain in place at least until 2025, which means taxes will be lower for a few more years. This creates an opportunity to convert taxable retirement plans to tax-free accounts. When combined with strategies for tax-free Social Security benefits, this could help fully fund your retirement.”

4. Ensure You Have Enough Savings

While it’s tempting to focus on growing your wealth, securing enough savings to protect your financial stability is more important than ever in retirement. Czajka cautions, “Owning your number is key. Knowing the exact amount you need to retire comfortably is crucial. In retirement, losses can hurt more than gains can help, so it’s important to preserve your wealth and avoid unnecessary risks.”

In conclusion, while the Trump administration’s proposed changes to Social Security and government spending could pose challenges, there are proactive steps you can take to safeguard your financial future. Building your IRA, contributing to your HSA, capitalizing on tax cuts, and ensuring your retirement savings are sufficient are all essential strategies to navigate potential changes and protect your financial well-being.