On Point | Podcast Trump promised tax-free Social Security. Is it too good to be true?
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Nov 26, 2024 
Alicia Munnell, Director of the Center for Retirement Research at Boston College, dives into the complexities of Social Security and its historical evolution. She discusses the implications of tax-free benefits promised by Trump – more money for individuals but potential risks for the Social Security fund. The conversation highlights the program's origins during the Great Depression and the challenges it faces today, emphasizing the need for sustainable solutions to protect future retirees.
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Taxing Social Security Benefits
- Roughly 40% of Social Security recipients pay federal income tax on their benefits.
- This is because they have other substantial retirement income sources.
Trump's Proposal
- President-elect Trump proposes eliminating the tax on social security benefits.
- He suggests offsetting the lost revenue by cutting government waste.
Social Security Tax Thresholds
- The tax threshold for Social Security benefits is based on total income, not just benefits.
- These thresholds aren't adjusted for inflation, so more people are paying taxes over time.