Skip to content
CRR logo
Submit Search
Join E-mail List | Contact Us
  • Topics
  • Publications
  • Initiatives
  • Data
  • Sponsors
  • Opportunities
  • About Us
  • Search

Trump’s Policies Are Undermining Retirement Security

April 7, 2025
Share
Mobile Share Email Facebook Bluesky Twitter LinkedIn

MarketWatch Blog by Alicia H. Munnell

Headshot of Alicia H. Munnell

Alicia H. Munnell is a columnist for MarketWatch and senior advisor of the Center for Retirement Research at Boston College.

Impulsive initiatives are putting Social Security, the stock market, and the economy itself at risk.

By attacking Social Security, crashing the stock market, and imposing unconscionable tariffs that will increase both unemployment and prices, Trump has taken aim at the retirement security of millions of American families.

The attack on Social Security is shameful.  The initial foray was justified by the widely debunked claim that 20 million dead people were receiving benefits.  Despite no evidence of widespread “waste, fraud, or abuse” and already-existing customer-service challenges, the agency has announced plans to cut 7,000 staff and close six regional offices; and more cuts may be on the way.  As a result, millions of Americans will find it really hard to access benefits that they have earned over a lifetime of work. 

Even more concerning, DOGE plans to rebuild Social Security computer’s code in months, where experts agree that rewriting that code safely would take years.  It’s true that Social Security’s system, like those of many government agencies, contains code written in COBOL, a programming language created in the 1950s.  It needs to be updated, but it’s hard to fix a bicycle while you’re riding it.  The agency could never get all of the resources it needed to construct a whole new system and then migrate the files.  Now might be the time to begin such an initiative, but take the time to do it properly.  A rushed job will produce cascading failures, with people getting wrong benefits, waiting ages to get their benefits, or getting no benefits at all.

Crashing Social Security’s computer systems would be catastrophic, with more than 13 million Americans almost totally reliant on Social Security for retirement income.  The fact that they might ultimately receive their promised amounts cannot compensate for the devastation that would be caused in the short run.

The damage to retirement security goes beyond the attack on the Social Security Administration.  Many private sector workers and most new retirees now rely on the assets in their 401(k) plans (and rollovers to Individual Retirement Accounts) to supplement their Social Security benefits.  The Federal Reserve’s Survey of Consumer Finances provides a comprehensive picture of the holdings in these accounts among households approaching retirement in 2022 – the most recent data available.  These balances are modest for all but the top income quintile.  Importantly, they are mostly invested in equities, and therefore very dependent on the performance of the stock market.  In the wake of Trump’s tariff announcement, the indices declined by more than 10 percent.  If the markets continue to tank, retirements will be at risk.

Table showing 2022 median 401(k)/IRA balances for working households with a 401(k), ages 55-64

Finally, Trump’s tariff policies have the potential to hurt the broader economy both by increasing layoffs and prices.  To the extent that workers lose their jobs, they will not be able to contribute to their 401(k) and may be forced to withdraw assets to support themselves.  And to the extent that tariffs lead to higher prices, even those who stay employed will find they need to spend more to maintain their standard of living, making them less able to save.  In addition, inflation will erode the value of existing assets.

The next update to the Center’s National Retirement Risk Index, which measures the percentage of today’s working households unable to maintain their standard of living in retirement, will be based on the Federal Reserve’s Survey of Consumer Finances for 2025.  In 2022, primarily due to the appreciation in house prices, the news was good (see Figure 1).  Only 39 percent of working households were projected to be at risk.  Based on the economy’s current trajectory, the results for 2025 may well show an increase that approaches levels seen during the Great Recession – with more than half of households at risk in retirement.

Bar graph showing the National Retirement Risk Index, 2004-2022 and Potential for 2025
President Trump signing legislation at his desk
President Trump signing legislation at his desk
Downloads
PDF Version
Related Content

Read on MarketWatch

Topics
Social Security
Financing Retirement
Publication Type
MarketWatch Blog
Related Articles
Laptop showing Social Security application form on a wooden table

How Much Have Social Security Claiming Ages Increased?

Issue Brief by Anqi Chen, Alicia H. Munnell, and Nilufer Gok

May 13, 2025
Senior Couple Sitting on Front Steps of Their House

This Is the Best Way to Help Older Homeowners

MarketWatch Blog by Alicia H. Munnell

April 29, 2025
Face to face of Benjamin Franklin and Mao Tse tung from US dollar and China Yuan banknote. It is symbol of economic tariffs trade war

Are Tariffs Worth the Risk to Our Retirement Security?

MarketWatch Blog by Alicia H. Munnell

April 23, 2025

Support timely research that informs real-world solutions.

About us
Contact
Join e-mail list
Facebook Bluesky Twitter LinkedIn Instagram YouTube RSS

© 2025 Trustees of Boston College, Center for Retirement Research|Terms of Use|Privacy Policy|Accessibility

This website uses cookies to improve your experience. We also use IP addresses, domain information and other access statistics to administer the site and analyze usage trends. If you prefer to opt out, you can select Update settings. Read our Privacy Policy. Accept
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT