The One Big Beautiful Bill Act, approved on July 3, 2025, is a major tax reform that not only reshapes the US tax system but also introduces significant changes for those who depend on Social Security.
With provisions that target both tax relief for retirees and attempts to sustain the program’s future, it promises long-term benefits, though not without controversy.
Key Changes for Social Security Beneficiaries
One of the most important changes introduced by the BBB is the $6,000 deduction for individuals aged 65 and older, effective until 2028.
This measure aims to benefit a significant portion of Social Security recipients, with 88 percent of the 51.4 million Social Security beneficiaries expected to benefit.
However, the deduction begins to phase out for individuals with incomes over $75,000 and for couples making over $150,000.
While this change offers some relief, it does not address other promises made by Trump, such as eliminating taxes on Social Security benefits entirely.
Furthermore, it does not resolve the projected insolvency of the Social Security Trust Fund, which is expected to be depleted by 2033.
Concerns Over the Impact on Social Security’s Future
Critics of the bill warn that the $6,000 deduction could worsen the financial health of the Social Security program.
By reducing tax revenues, the bill might accelerate the depletion of the fund, potentially bringing its insolvency date closer to 2032, which could impact an estimated 70 million beneficiaries.
Additionally, while the measure benefits many retirees, it does not provide relief for the poorest, leaving the most vulnerable unchanged.
Positive Changes for Retirees
Despite these concerns, the BBB also includes provisions that provide direct benefits for retirees. Over 20 million older individuals could see a net increase in their annual benefits by avoiding the tax burden on their Social Security payments.
Furthermore, the bill eliminates penalties for working after retirement, allowing retirees to earn more without the risk of their benefits being reduced.
In addition, the bill addresses long-standing issues with the cost-of-living adjustment (COLA) formula. Retirees have long complained that the previous COLA did not accurately reflect the real inflation they face.
The updated formula is expected to provide more accurate adjustments to match the cost increases that retirees encounter.
Controversial Aspects of the BBB
While the changes to Social Security have been met with mixed reactions, another controversial part of the bill is the introduction of a financial transactions tax.
This tax will apply only to transactions over one million dollars, and although it is targeted at large investors, critics argue it could have unintended consequences on the broader economy.
FAQs
What does the Big Beautiful Bill change for Social Security beneficiaries?
The Big Beautiful Bill introduces a $6,000 deduction for individuals over 65, offering tax relief to 88% of Social Security recipients. However, it does not eliminate taxes on benefits, as was promised, and does not resolve Social Security’s projected insolvency by 2033.
How does the Big Beautiful Bill affect the future of Social Security?
Critics warn that by reducing tax revenues, the bill could accelerate the depletion of the Social Security Trust Fund, potentially bringing its insolvency date closer to 2032. Despite this, the bill provides some relief for retirees, especially those in the middle and upper-income brackets.
Will retirees benefit from the Big Beautiful Bill?
Yes, retirees could see increases in their annual benefits by avoiding taxes on Social Security payments. Additionally, the bill removes penalties for working while receiving benefits, allowing retirees to earn more without losing their benefits.
I don’t even get but regular disability Social security disability checks but I don’t receive the extra every month cause I don’t have Advantage and will not get the bonus at the start and now the card every month cause I don’t have Advantage and I don’t think that is right most of the Advantage is for helping you buy or getting help fixing your home and I live in an apartment and it goes by what I get so I can’t get it and it won’t help me much ,I hope my Social Security Disability check will not be hurt now or my Medicaid at all cause my check is all I have to live on