Trump’s Tax Plan for Seniors – How will it affect you?

Trump may give seniors a little breathing room. Is this your opportunity to get into gold?

As President-elect Donald Trump prepares to assume office in January 2025, several proposed tax changes could impact retirees: 

1. Elimination of Taxes on Social Security Benefits

Trump has advocated for making Social Security benefits entirely tax-free. Currently, beneficiaries with combined incomes above certain thresholds may have up to 85% of their benefits taxed. Removing this tax could increase retirees’ disposable income.  

2. Extension of the 2017 Tax Cuts

The 2017 Tax Cuts and Jobs Act (TCJA) introduced lower individual income tax rates and increased the standard deduction, among other provisions. Many of these measures are set to expire after 2025. Trump aims to make these tax cuts permanent, which could continue to benefit retirees by maintaining lower tax rates on retirement income and preserving higher standard deductions.  

3. Potential Reduction in Capital Gains Tax Rates

There is speculation that Trump may propose lowering the top long-term capital gains tax rate from the current 20% to 15%. This reduction would benefit retirees who rely on investment income, allowing them to retain more from the sale of appreciated assets.  

4. Elimination of Taxes on Tips and Overtime Pay

Trump has suggested making tips and overtime pay tax-free. While this change primarily affects working individuals, it could also benefit retirees who continue to work part-time jobs that include tips or overtime, increasing their take-home pay.  

5. Adjustments to Estate and Gift Tax Exemptions

The Tax Cuts and Jobs Act significantly increased the federal estate and gift tax exemption, which is set to revert to lower levels after 2025. Trump’s administration may seek to maintain or further increase these exemptions, benefiting retirees concerned about estate planning and wealth transfer to heirs.  

Considerations for Retirees 

While these proposed changes could offer financial benefits, they also raise concerns about the long-term sustainability of programs like Social Security and Medicare. For instance, eliminating taxes on Social Security benefits could reduce available funds for these programs, potentially leading to future benefit cuts.  

This presents a dilemma for seniors. You may have some short-term breathing room, but what if long term viability for social security is threatened? This could be a good time to solidify some gains by putting some funds into gold. 

On the other hand, many (including Trump himself, Elon Musk and others) are warning that all the changes they are planning in government could lead to short term pain. The economy could get worse before it gets better. 

Putting some money into gold could be a way around the haircut (or punch in the face) that many are expecting in stocks. Watch Kenny Michaels explain.  Short – Be A Chameleon 

If you haven’t added gold to your portfolio yet, give us a call and we will help you every step of the way.
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