President Donald Trump’s immigration policies could hurt retirees’ wallets and make it harder for them to access healthcare.
Trump said his immigration crackdown would improve the economy and boost American jobs. However, some economists and financial researchers told Business Insider that dramatically reducing the immigrant workforce could drain Social Security and Medicare tax funding, spike housing costs, and contribute to broader inflation.
This comes as America’s 65-and-older population is growing, and the birthrate isn’t keeping up, meaning that the number of working-age taxpayers may not be able to support the growing demand for retirement benefits without population increases from continued immigration.
Trump’s mass deportation plan aims to remove millions of immigrants living in the US illegally. On January 20, Trump declared a national emergency, allowing him to use Pentagon resources for the deportation efforts. He also has begun efforts to limit immigration at the US-Mexico border, and the federal government is reportedly planning to carry out deportation raids this week in major cities.
Trump’s press team did not respond for comment by the time of publication.
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Mass deportations could strain Social Security and Medicare funding
Millions of Americans who rely on Social Security checks — which average $1,976 monthly — may face lower payments in the next decade if the Trump administration carries out large-scale deportations. Some economists told BI deportations could reduce Social Security funding because immigrants living in the US illegally pay the payroll taxes that fund Social Security while being ineligible to receive benefits.
Deportations could reduce the program’s cash flow by $20 billion annually, per an actuarial estimate provided to BI by the Social Security Administration. While a small part of the roughly $1 trillion in benefits paid out a year, this could exacerbate an already dwindling Social Security fund set to dry up by the mid-2030s.
The left-leaning Institute on Taxation and Economic Policy determined immigrants living in the US illegally paid $25.7 billion in Social Security taxes in 2022. Additionally, the same group paid $6.4 billion in Medicare taxes that year but is not eligible for the benefits.
Deportations are likely to reduce healthcare options
Deportations could disrupt healthcare operations nationwide and drive up costs, and this would heavily impact older Americans.
Using 2021 Census Bureau data, the think tank Migration Policy Institute calculated that around 30% of the nearly 2.8 million immigrant workers in healthcare are not naturalized citizens, which includes legal permanent residents, people with temporary status, and those living in the US illegally.
A reduction in staff could come when the US needs more people in the field. The National Center for Health Workforce projected in November that demand for direct care workers — such as home health aides — and long-term care nurses could rise by 39% between 2022 and 2037, or nearly a million workers. Growth in demand for these roles is driven by the aging population and increasing longevity.
Older Americans would be disproportionately affected by rising healthcare prices. 2023 data from the Consumer Expenditure Surveys shows Americans 65 and older spent an average of about $8,027 per household on healthcare in 2023, more than any other age group, per 2023 data from the Consumer Expenditure Surveys.
To be sure, some conservative think tanks have argued that deportations could save the US money on reduced services for immigrants, such as welfare for older Americans.
Deportations could ding older Americans’ budgets
Beyond impacting the retirement system, mass deportations could make everyday costs more expensive, especially for older Americans. Baby boomers were among the hardest hit by inflation in 2023, thanks to the generation’s higher spending on healthcare and insurance, per a December report by Wells Fargo.
The housing market could also be rocked by deportations. Nearly a quarter of the construction labor force is living in the US illegally, per an analysis of 2018 and 2019 Census data from the Center for American Progress. For older adults, a reduction in the number of construction workers could make it more costly to repair their existing homes or downsize into smaller retirement housing. This comes as many baby boomers who own homes can’t afford rising home repair costs, insurance premiums, and property taxes.
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