President Trump promised multiple times during his campaign that he would not cut Social Security benefits. Instead, he vowed to protect and strengthen the program by eliminating fraud. Trump also proposed ending taxes on Social Security benefits, a message that undoubtedly resonated with senior voters.

Importantly, Social Security has a serious financing problem that could result in benefit cuts within a decade. President Trump has set in motion several major changes since returning to Washington, but none have made a material impact on the problem.

Here's what retirees should know.

Image source: Trump-Official White House Photo by Joyce N. Boghosian.

Social Security has a serious funding problem

Social Security is struggling to support an aging population. The number of recipients that collect benefits is growing faster than the number of workers that pay taxes to support the program. Social Security costs have exceeded revenues since 2021, and the problem is only getting worse.

Social Security is expected to run cash deficits totaling $3 trillion over the next decade, and it faces a 75-year funding shortfall exceeding $23 trillion. Consequently, the Congressional Budget Office (CBO) says the Social Security Trust Fund -- the account that pays benefits -- will be exhausted by 2034. Importantly, that does not mean benefits will completely vanish.

Social Security is financed by payroll taxes, benefit taxes, and interest earned on trust fund assets. If the trust fund becomes insolvent in 2034, only the third funding source will disappear. At that point, the CBO estimates the revenue from the remaining funding sources would cover 77% of scheduled benefit payments.

Here's the bottom line: Without big changes, Social Security's financing problem could lead to substantial benefit cuts in 2035.

Social Security is changing under the Trump administration

President Trump promptly created the Department of Government Efficiency (DOGE) upon his return to the White House, making good on a campaign promise to eliminate wasteful spending and improve federal productivity. The DOGE agenda has led to major changes at the Social Security Administration (SSA):

• Reducing administrative expenses: In March, the SSA said it could save more than $800 million annually by cutting its workforce, cancelling nonessential IT contracts, terminating property leases, and making miscellaneous changes to printing, travel, and purchase card policies.
• Strengthening identity proofing: The SSA recently announced stronger identify proofing requirements to curb fraud. Effective April 14, benefit applications and direct deposit changes must be submitted online (through the my Social Security portal) or in person at a local field office. Requests will no longer be accepted by phone or paper.
• Recovering overpayments: Also in March, the SSA announced plans to raise the overpayment withholding rate to 100%. That means retired workers that receive more money from Social Security than they are supposed to will have all future benefits withheld until the balance is zeroed.

Importantly, less than 1% of Social Security benefits doled out between 2015 and 2022 qualified as improper payments, a category that includes overpayments and fraud. That means the SSA could save about $14 billion this year if it completely eliminated those errors. However, the agency estimates actual savings will total only $7 billion in the next decade.

While these changes are important, the cumulative savings in the best-case scenario would only offset a small fraction of the $3 trillion deficit the SSA is projected to run in the next decade. So, while Trump has so far kept his promise not to cut benefits, he has also failed to make a dent in Social Security's funding problem.