THE Social Security Administration has spoken out on an impending landmark change that will provide a massive tax break for many retirees who rely on the social program.
The federal agency commended the passage of President Donald Trump‘s One Big Beautiful Bill and the subsequent tax relief that the country’s seniors will see.
Congress passed President Donald Trump’s One Big Beautiful Bill Act on Thursday[/caption]
The Social Security Administration spoke out on how the One Big Beautiful Bill’s passage would impact seniors[/caption]
Millions of seniors will see a tax break on their Social Security income under the One Big Beautiful Bill[/caption]
The One Big Beautiful Bill Act, the president’s budget reconciliation legislation, focuses on significant tax and spending policies.
The legislation permanently extends individual tax rates from the 2017 law, increases funding for border security and deportations, and introduces new deductions for things such as tips.
Republicans in Congress have worked tirelessly to pass the bill ahead of the self-imposed deadline on Friday.
The One Big Beautiful Bill was passed in the Senate on Tuesday, and was sent for a final House vote on Thursday, where it was passed with a 218-214 vote.
In order to become official law, it awaits Trump’s signature in a White House ceremony on Friday.
The SSA praised the act in a blog post, calling it “landmark” legislation that will offer “long-awaited tax relief to millions of older Americans.”
The impending legislation exempts nearly 90% of Social Security beneficiaries from having to pay income taxes on their benefits, per the SSA.
“This is a historic step forward for America’s seniors,” said Social Security commissioner Frank Bisignano in a news release. “For nearly 90 years, Social Security has been a cornerstone of economic security for older Americans.
“By significantly reducing the tax burden on benefits, this legislation reaffirms President Trump’s promise to protect Social Security and helps ensure that seniors can better enjoy the retirement they’ve earned.”
MONEY BACK IN YOUR POCKET
The One Big Beautiful Bill will implement a $6,000 tax deduction for Americans 65 or older with an income under $75,000, or a $12,000 break for married couples making under $150,000.
The deduction phases out for Americans with an income above these caps, entirely phasing out for individuals making $175,000 or more and couples with an income of $250,000 or greater.
“I think when you go over the bill, it was very easy to get them to a ‘yes.’ … Biggest tax cut in history,” said Trump in Iowa on Thursday following the One Big Beautiful Bill’s passage.
The president is scheduled to sign the bill into law in the Oval Office at 5 pm ET on Friday.
The new Social Security tax breaks would start in the 2026 tax year and last through 2028 when Trump leaves office.
HOW TO SUPPLEMENT YOUR SOCIAL SECURITY
Here’s how to supplement your Social Security:
Given the uncertainty surrounding Social Security’s long-term future, it’s essential for workers to consider ways to supplement their retirement income.
Senior Citizens League executive director, Shannon Benton recommends starting early with savings and investing in retirement accounts like 401(k)s or IRAs.
- 401(k) Plans
- A 401(k) is a retirement account offered through employers, where contributions are tax-deferred.
- Many employers also match employee contributions, typically between 2% and 4% of salary, making it a valuable tool for building retirement savings.
- Maxing out your 401(k) contributions, especially if your employer offers a match, should be a priority.
- IRAs
- An Individual Retirement Account (IRA) offers another avenue for retirement savings.
- Unlike a 401(k), an IRA isn’t tied to your employer, giving you more flexibility in your investment choices.
- Contributions to traditional IRAs are tax-deductible, and the funds grow tax-free until they are withdrawn, at which point they are taxed as income.
VARYING BENEFITS
Under the One Big Beautiful Bill’s provisions, 51.4 million seniors, or 88% of all retirees receiving Social Security benefits, would not pay taxes on their monthly checks, the White House shared on Monday via X.
Roughly 64% of seniors already do not owe taxes on their benefits due to their income being too low, per an analysis by the White House.
The bill would not benefit the millions of seniors who live in poverty or high-income retirees above the phase-out thresholds.
On the other hand, the One Big Beautiful Bill would offer financial leverage to upper-middle class Americans who pay taxes on their retirement benefits.
This is a “substantial tax break,” Marc Goldwein, senior policy director for the Committee for a Responsible Federal Budget, told Axios.
“As a whole seniors in this country are the wealthiest cohort in the history of the known universe,” he said, noting that their assets have soared in value over the past couple of years.
When Trump signs the One Big Beautiful Bill into law and approves the Social Security tax deductions, these retirees will get to keep a little bit extra of their monthly benefits.
Aside from protecting certain Americans’ Social Security benefits, the impending bill could cost taxpayers tens of millions of dollars after a “payment error” linked to SNAP benefits.
Plus, the bill proposed an instant $1,000 bonus for families – you may have unknowingly qualified.
Upper-middle class Americans will benefit the most from the tax deductions on Social Security income[/caption]
President Donald Trump attended a rally at the Iowa State Fairgrounds on Thursday where he discussed the recent passage of his One Big Beautiful Bill[/caption]
