Will You Ever Retire? How Trump Administration's Decision on Social Security Impacts Future Homebuyers – Realtor.com
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By Dina Sartore-Bodo
June 15, 2026
It’s all anyone can talk about: Social Security and its crash course toward insolvency.
Social Security’s reserves for retirement benefits are just over six years away from depletion, according to the latest annual trustees report. Most agree the time is now to act.
The solution? On that point no one can agree, and the options on the table leave Americans divided.
The latest rumblings seem to suggest that the Trump administration is considering raising the retirement age, a rumor that spurred Democratic Sen. Elizabeth Warren to send a letter to President Donald Trump on Sunday night to clarify the administration’s stance.
If nothing is done, by 2032, the trust fund Social Security relies on to pay retirement benefits will run out, according to new projections in the report. So, in six years, only 78% of benefits will be payable to a generation who has been dutifully paying into the program.
Then again, as Warren, along with fellow Sens. Tammy Duckworth and Richard Blumenthal, point out, raising the retirement age would be an equally deep benefit cut.
“Republicans have a history of attempting to increase the retirement age, privatize Social Security, or otherwise cut Social Security benefits, and some congressional Republicans have called to raise the retirement age or means-test benefits as the ‘solution’ to this problem,” Warren wrote.
In specifically calling out the plan to increase the retirement age, an idea Speaker Mike Johnson recently admitted was under advisement, Warren laid out the math to show how detrimental that would be.
“In practice, raising the retirement age by two years would reduce the median retiree’s monthly benefits by $345 to $741–or by between 17 and 35%–effectively cutting tens of millions of Americans’ Social Security benefits and disproportionately falling on seniors at the lower end of the income distribution who rely on Social Security as one of their main sources of income,” Warren wrote.
“This reduction is roughly similar to the automatic cut that would go into effect should the trust fund become insolvent and only be able to fund 78% of scheduled benefits.”
The need for Social Security payments is especially important for homeowners.
In the last five years, the cost of homeownership has jumped 26% as hidden expenses continue to rise. As of now, Social Security alone is enough to cover the living expenses in only 10 states, according to the Realtor.com® analysis of median Social Security benefits by state and the Elder Economic Security Standard Index.
Everywhere else, retirees face shortfalls as great as thousands of dollars per year. And that’s before the benefit cuts.
A new estimate from The Senior Citizens League (TSCL) projects that the Social Security cost-of-living adjustment, or COLA, could reach 3.9% in 2027—up sharply from the 2.8% increase beneficiaries received in 2026 and potentially the largest adjustment since the 8.7% boost to 2023 benefits.
For the average retired worker, that would raise the typical benefit from $2,071 to roughly $2,152—an increase of about $81 per month. It’s a meaningful increase from earlier projections that suggested the 2027 COLA would hold steady at 2.8%, adding just $58 per month.
But again, with every increase, the reserve funds deplete further, so something must be done to make up the difference.
While raising the age of retirement isn’t ideal, neither is any of the solutions on the table. Warren points to some other proposals, such as privatizing Social Security. In other words, shifting part of Social Security from a guaranteed government benefit to individual investment accounts.
This is something Trump may be on course for considering, given that earlier this year he signed an executive order aimed at increasing retirement savings access for Americans not currently covered by a 401(k) or other workplace retirement plan.
But in this plan, and presumably with the privatization of Social Security as a whole, there’s a lot more volatility. Currently, Social Security isn’t tied to the stock market like 401(k)s; if privatized, you could see significant losses with your money
Another idea is to raise payroll taxes, a consideration vehemently opposed by today’s already cash strapped population. According to the Reagan Institute’s May Reagan National Economic Survey, the prospect of higher taxes was opposed by 80% of voters, while reducing Social Security benefits faced even stronger opposition, with 90% against the idea.
One idea floated by Warren—by way of a question to Trump directly in her letter—is supporting the removal of the cap on income that is taxable for purposes of Social Security.
Currently, the Social Security tax limit, or maximum taxable earnings, for 2026 is $184,500. Employees and employers each pay a 6.2% tax on earnings up to this limit. Workers earning more than this amount will not have additional Social Security taxes withheld once they hit the cap.
Research has found that eliminating the tax cap would significantly improve the solvency of the Social Security trust funds, decreasing the programs’ long-range funding shortfall by 73%. Providing a Social Security benefit credit for earnings above the current tax cap would eliminate 53% of the long-range shortfall.
The White House has yet to release a response to Warren’s letter or address her questions.
Dina Sartore-Bodo is the senior advice editor at Realtor.com covering real estate news, personal finance trends, and interior design. She previously served as the managing editor at HollywoodLife.com, the executive editor at PerezHilton.com, and the managing editor at The Hollywood Gossip. Her work has also appeared on MSN, Yahoo News, and BlogHer. She is a proud graduate of Emerson College in Boston and is originally from New Jersey.
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