Donald Trump’s pledge to deport millions of immigrants in his second term may have a significant economic ripple effect: jeopardizing Social Security funds that millions of retirees rely on. The plan, which aims to target immigrants living in the U.S. illegally, could result in a sharp reduction in payroll taxes that sustain Social Security and Medicare, creating additional challenges for an already strained system.
Social Security provides a financial lifeline for older Americans, with an average monthly check of $1,976. However, these payments are often insufficient to cover basic living expenses. If Trump’s mass deportation plan goes into effect, it could cut annual Social Security revenue by $20 billion, according to estimates from the Social Security Administration. This potential loss of funding could impact the benefits retirees depend on, exacerbating financial instability for millions of Americans.
The impact of deportations on Social Security and medicare funding
A significant portion of Social Security funding comes from payroll taxes, including contributions from immigrants living in the U.S. illegally. Although these workers, an estimated 8.3 million, pay taxes into the system, they are not eligible to claim Social Security or Medicare benefits themselves. According to the Institute on Taxation and Economic Policy, immigrants without legal status contributed $25.7 billion to Social Security and $6.4 billion to Medicare in 2022.
These contributions are vital to sustaining programs that serve an aging population. Social Security operates on a pay-as-you-go system, where taxes collected from today’s workers fund the benefits of current retirees. However, demographic shifts—such as lower birth rates and increased life expectancy—are straining the system. The pool of retirees is growing faster than the workforce, creating a funding shortfall that could deplete Social Security reserves by the mid-2030s.
Deporting millions of immigrants would further reduce the number of workers contributing to Social Security and Medicare. “Immigrants tend to be younger and have more children, which helps balance the system,” said Delia Furtado, an economics professor at the University of Connecticut. “When you remove a significant portion of these contributors, it accelerates the strain on the program.”
Trump’s immigration policies, including an executive order declaring a national emergency at the U.S.-Mexico border and attempts to end birthright citizenship, are likely to have far-reaching effects on the labor force. These measures could disrupt industries that rely on immigrant workers, further exacerbating economic challenges.
How retirees could feel the effects
The potential depletion of Social Security funds poses a significant risk to older Americans who depend on these benefits as their primary source of income. If the fund is drained sooner than anticipated, retirees could face reduced payments or a complete loss of benefits.
The consequences of mass deportations could also ripple through the healthcare and eldercare sectors. Immigrants play a critical role in these industries, with nearly 350,000 undocumented workers employed as personal care aides, nursing assistants, and home health aides, according to a 2021 report by the Center for American Progress. Deportations could lead to severe labor shortages, driving up the cost of eldercare and reducing its availability.
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“When employers don’t have enough workers to meet demand, they are forced to shut down,” said Cecilia Menjvar, a sociology professor at the University of California, Los Angeles. “This would not only impact the availability of eldercare but also the overall labor market.”
While Medicare has multiple funding sources, including premiums paid by beneficiaries, it too could feel the effects of reduced payroll tax revenue. For millions of retirees, any disruption to these programs could lead to financial hardship, making it even more challenging to afford essentials like housing, healthcare, and food.
As the U.S. grapples with an aging population and rising costs, the debate over immigration policy and its economic implications takes on new urgency. For retirees, the stakes could not be higher.
