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Back in July, the White House issued a statement claiming that “88% of all seniors who receive Social Security — will pay NO TAX on their Social Security benefits” because of President Donald Trump’s new One Big Beautiful Bill Act (1).
The White House claimed this to be “the largest tax break in American history for our nation’s seniors.”
However, the White House cited the U.S. Council of Economic Advisers (2), a branch of the President’s office, as the source for this claim rather than an independent body.
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Experts at the Center for Budget and Policy Priorities (CBPP), meanwhile, have taken a closer look at the megabill’s impact on the Social Security program and found that the claims could be “false and exaggerated (3).”
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.
Targeted deductions
The White House’s calculations hinge on the megabill’s new and raised tax deductions for many seniors.
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.
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.
Eligibility isn’t based on age alone — modified adjusted gross income (MAGI) also matters.
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.
Meanwhile, older Americans who are barely getting by likely won’t have the income necessary to take advantage of the deduction. If your total allowable deductions already exceed your income, an extra $6,000 doesn’t do much.
It’s also worth noting that the White House’s 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.
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.
Getting a clear estimate of your Social Security benefits — and the taxes that could come with them — can make a huge difference in deciding when to start claiming.
A financial advisor can help you run the numbers and avoid costly mistakes when it’s time to file.
You can find a vetted FINRA/SEC-registered advisor near you through Advisor.com.
Just answer a few questions about your financial situation and future goals, and Advisor.com will match you with an advisor best suited to your needs.
Set up a free introductory call today to see if your match is the perfect fit.
Read More: Approaching retirement with no savings? Don’t panic, you’re not alone. Here are 6 easy ways you can catch up (and fast)
Reports of inaccuracy
The White House’s claims regarding eliminating taxes on social security has been challenged by many.
On July 14, 2025, 11 senators sent a letter to Frank Bisignano, the Commissioner of the Social Security Administration, pointing out how “wholly inaccurate” the claim made by the White House is (4).
“While the bill does provide a temporary income tax deduction for some older Americans, only about 46% of older adults would benefit from this deduction,” the letter says. “The SSA press release claimed the bill would eliminate taxes on Social Security for 90% of beneficiaries, but the truth is that about half of recipients will owe some amount of income tax on their benefits.”
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 doesn’t meet Trump’s campaign promise to eliminate all taxes on Social Security, and it also has second-order effects that could actually expose many seniors to lower benefits over the long term.
Temporary deductions, faster trust fund depletion
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.
At the same time, the cost of all the tax deductions and reductions in Trump’s megabill could reduce federal tax revenue from Social Security benefits by $30 billion annually, according to the CBPP.
“This 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’s trustees projected just last month,” the report stated.
“Upon insolvency in 2032, we estimate that Social Security beneficiaries would face an across-the-board benefit cut of around 24 percent — even deeper than the cuts scheduled under current law,” the CBPP report claimed.
And the CBPP isn’t alone in this assessment.
The Committee for a Responsible Budget also estimates that the SSA’s 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’s insolvency, that could mean a combined $18,400 reduction in benefits (5).
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.
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 (6).
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.
Other ways to save for retirement
Chances are, Social Security paychecks won’t be enough to cover your expenses during retirement. And if you don’t meet the income requirements outlined in the OBBBA, you are required to pay taxes on these government checks.
But there are other ways to boost your retirement savings without paying an arm and a leg in taxes. One option would be to invest in residential real estate.
Become a landlord with just $100
You can tap into this market by investing in shares of vacation homes or rental properties through Arrived.
Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in shares of vacation and rental properties, earning a passive income stream without the extra work that comes with being a landlord of your own rental property.
To get started, just browse through their selection of vetted properties, each chosen for their potential appreciation and income generation. Once you find a property you love, you can start investing with as little as $100.
Invest in institutional-grade real estate
If diversifying into multifamily rentals appeals to you, you could consider investing with Lightstone DIRECT, a new investing platform from the Lightstone Group, one of the largest private real estate companies in the country with over 25,000 multifamily units in its portfolio.
Since they eliminate intermediaries — brokers and crowdfunding middlemen — accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This streamlined model can help reduce fees while enhancing transparency and control.
And with Lightstone DIRECT, you invest in single-asset multifamily deals alongside Lightstone — a true partner — as Lightstone puts at least 20% of its own capital into every offering. All of Lightstone’s investment opportunities undergo a rigorous, multi-stage review before being approved by Lightstone’s Principals, including Founder David Lichtenstein.
How it works is simple: Just sign up with your email, and you can schedule a call with a capital formation expert to assess your investment opportunities. From here, all you have to do is verify your details to begin investing.
Founded in 1986, Lightstone has a proven track record of delivering strong risk-adjusted returns across market cycles with a 27.6% historical net IRR and 2.54x historical net equity multiple on realized investments since 2004. All told, Lightstone has $12 billion in assets under management — including in industrial and commercial real estate.
As such, even if multifamily rentals don’t appeal to you, Lightstone could still serve you well as an investment vehicle for other real estate verticals.
Get started today with Lightstone DIRECT and invest alongside experienced professionals with skin in the game.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
The White House (1), (2); Center on Budget and Policy Priorities (3); United States Senate (4); The Committee for a Responsible Budget (5); UC Berkeley Public Health (6)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.