Every month, almost 69 million Americans receive a Social Security check. But what if those payments suddenly stopped?
Treasury Secretary Howard Lutnick has a provocative answer. He believes withholding the checks could help flush out fraudulent claimants.
“Let’s say Social Security didn’t send out their checks this month, my mother-in-law — who’s 94 — she wouldn’t call and complain,” Lutnick said on the business and tech podcast All-In. “She’d just think something I messed up and she’d get it next month. A fraudster always makes the loudest noise, screaming, yelling and complaining.”
For the Trump administration, tracking down fraud within Social Security is a growing focus.
“We need to get to so the people who are getting that free money, stealing the money, inappropriately getting the money, have an inside person who’s routing the money,” Lutnick said. “They are going to yell and scream, but real America is going to be rewarded.”
Lutnick’s comments sparked immediate backlash. Senator Bernie Sanders was quick to respond:
“Secretary Lutnick: You are a billionaire. Maybe your mother-in-law wouldn’t complain if she didn’t get her Social Security check, but tens of millions of seniors struggling to survive would. They’re not fraudsters. They earned it,” he wrote on X.
“How out of touch are you not to realize that?”
Senate Majority Leader Chuck Schumer was even more blunt:
“Howard Lutnick does not understand what a missed Social Security check means to a senior on a fixed income. He’s clueless or heartless.”
Read more: Are you rich enough to join the top 1%? Here’s the net worth you need to rank among America’s wealthiest — plus 2 ways to build that first-class portfolio
With an estimated net worth of $2.2 billion, Lutnick may not grasp how vital Social Security is for everyday retirees.
According to the Social Security Administration, 39% of men and 44% of women aged 65 and older rely on Social Security for at least half of their income. Even more striking: 12% of men and 15% of women depend on it for 90% or more of their income.
For them, skipping even one payment could have devastating consequences.
Lutnick isn’t making bold statements for shock value. His aim is to cut wasteful government spending, and few programs are under more financial pressure than Social Security.
According to the program’s annual trustees report, the program will be able to pay 100% of scheduled benefits until 2035. After that, reserves will be depleted, and the program will only be able to cover 83% of scheduled benefits.
The average monthly benefit for retired workers was $1,975 as of December 2024, which may not be sufficient to cover essential expenses for many seniors today.
Any future reductions could have a serious impact on retirees’ financial well-being.
That’s why building additional income streams — especially passive ones — can be a game-changer for retirement security.
Below are two options to consider to earn passive income, but keep in mind that experts advise maintaining a diversified portfolio, including many asset types like stocks and bonds, with an asset allocation that suits your investment horizon and risk tolerance.
Speaking to a financial adviser can help you plan your investing to fit your own financial goals.
Real estate has long been touted as a popular way to generate passive income. The process goes something like this: You borrow money from a bank, buy a property, and the tenant pays off your mortgage and then some. Once you accumulate more equity, you repeat the process, buy more properties, scale up … and boom! You are a real estate mogul.
But the reality is different.
You need to find reliable tenants, collect rent and cover the cost of maintenance and repairs. And that’s if you can afford the down payment and get a mortgage to buy the property in the first place.
The good news? These days, you don’t need to buy a property outright to reap the benefits of real estate investing. [Crowdfunding platforms] allow everyday investors to [own shares in rental properties] without the large down payments or management headaches traditionally associated with real estate ownership.
Alternatively, [real estate investment trusts (REITs)] provide another avenue for those looking to gain exposure to this asset class.
Whether you’re nearing retirement or already retired, high-yield savings accounts offer a low-risk way to generate passive income while keeping your funds accessible.
These accounts typically offer [much higher interest rates] than traditional savings accounts, allowing your money to grow without needing to lock it away in long-term investments. This option is ideal for those who want a secure, liquid source of passive income with minimal effort or risk.
These days, some banks and financial institutions are offering high-yield savings accounts that pay [up to 4.5%].
In the U.S., most savings accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per depositor, per insured bank. This insurance provides protection to depositors in the event that the bank fails, ensuring that their funds are safe and accessible.
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
