Social Security beneficiaries will lose an average of $500 per month in benefits if the program’s trust fund is depleted in less than seven years, as predicted, according to a new analysis.
For the last 16 years, the cost of Social Security’s retirement program has exceeded the amount it receives from taxes collected from paychecks, forcing it to dip into its trust fund reserves to cover the shortfall. Without any changes, that retirement trust fund will be exhausted in 2032, according to the Social Security Trustees.
At that point, everyone’s benefits could see a 24% decline, the Committee for a Responsible Budget estimates. Nationally, that equals a $500 average monthly loss — more than what the average retired household spends on groceries each month. Households with a person over 65 spent an average of $5,251 on food at home in 2024, or $438 per month, according to the 2024 Consumer Expenditure Survey. Adjusted for inflation, this figure would equal $461 in 2026, CRFB said.
“No state would be spared from the potentially devastating effects of insolvency,” CRFB warned in its report.
How Many People Would Be Affected?
Nearly 70 million Americans — about one in five people — receive Social Security benefits, including retirees, surviving spouses, and dependents.
Between 10% and 23% of each state’s population would be affected, CRFB estimates.
Which States Would See the Largest Benefit Cuts?
Beneficiaries in 29 states would see a reduction even deeper than the $500 average, CRFB said. The top 10 states with the largest per-beneficiary losses are:
- Connecticut: $556
- New Jersey: $554
- New Hampshire: $553
- Delaware: $549
- Maryland: $541
- Washington: $531
- Minnesota: $530
- Massachusetts: $527
- Michigan: $523
- Utah: $523
Which States Would Have the Most Residents Affected?
States with the highest percentage of residents facing benefits reductions are:
- Maine: 22.9%
- West Virginia: 22.4%
- Vermont: 22.0%
- Delaware: 21.1%
- Montana: 21.0%
- New Hampshire: 21.0%
- South Carolina: 20.6%
- Wisconsin: 20.2%
- Michigan: 19.8%
- Pennsylvania: 19.8%
How Would State Economies Be Affected?
If Social Security benefits were cut by 24% today, it would amount to $345 billion this year, or 1.1% of gross domestic product (GDP), CRFB estimates. Individual state impacts range from 0.2% to 1.9% of GDP, with cuts exceeding 1% of GDP in 40 states. States with older populations and lower per-person incomes would be hit the hardest.
The top 10 states most affected by GDP impact are:
- West Virginia: 1.9%
- Mississippi: 1.8%
- Vermont: 1.8%
- South Carolina: 1.7%
- Maine: 1.7%
- Michigan: 1.6%
- Montana: 1.6%
- Arkansas: 1.6%
- Alabama: 1.6%
- Idaho: 1.5%
“With less than seven years until Social Security is projected to be insolvent, policymakers need to enact changes to the program as quickly as possible to protect against these scenarios,” CRFB said.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY.
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