Map Shows Worst Impacted States if Social Security Funding Runs Out
Millions of retirees could face substantial reductions to their Social Security payments within the next decade if Congress fails to address the program’s worsening financial position, with some newly retired couples potentially losing almost $17,000 a year.
A recent analysis from the Committee for a Responsible Federal Budget (CRFB), a nonpartisan think tank, estimated that a typical dual-income couple retiring in 2033 could see their annual benefits cut by about $16,900 if Social Security’s retirement trust fund runs out as projected.
The Old-Age and Survivors Insurance (OASI) trust fund, which pays retirement and survivor benefits, is expected to be depleted in the fourth quarter of 2032, according to the Social Security trustees annual report. At that point, payroll tax revenue would be sufficient to cover only about 78 percent of promised benefits, resulting in an estimated 22 percent reduction.
Last week, Senate President Pro Tempore and Finance Committee member Chuck Grassley, a Republican, drew attention to the trust fund depletion during a floor speech.
“I come to the floor today as a member of the Senate Finance Committee, which has jurisdiction over Social Security, and to remind everybody, because everybody knows, or better know, the Social Security primary trust fund will be depleted in just six years,” he said. “As a result, come late 2032, the program will only have enough income from the payroll taxes to pay 78 percent of benefits due.”
How Large Could the Cuts Be?
The CRFB examined how automatic benefit reductions could affect couples reaching retirement age around the time the fund is exhausted. People who are 61 years old today would be approaching their normal retirement age when the cuts could begin.
The size of the reduction would vary according to earnings. A low-income couple in which both partners worked could lose roughly $10,200 in annual benefits. A medium-income dual-earning couple could receive about $16,900 less each year, while a high-income couple could face an annual cut of as much as $22,300.
“While the absolute size of these cuts would be smaller for low-income couples than high-income couples, they would also be a larger share of total incomes for low-income retirees and hence more financially disruptive,” the CRFB’s report said.
“These cuts are projected to grow over time due to the rising gap between Social Security’s costs and dedicated revenues,” the report continues. “At the end of the century, annual benefit cuts are expected to reach 35 percent.”
Which States Are Worst Affected?
The projected cuts vary by state, both in their size and in the number of people affected. Nationally, retirees would face an average monthly reduction of $500, affecting 60.1 million people, or 17.7 percent of the U.S. population.
Connecticut would see the largest average monthly cut, at $556, followed by New Jersey at $554, New Hampshire at $553, Delaware at $549 and Maryland at $541. Smaller but still sizable reductions in monthly benefits would happen elsewhere. Mississippi would experience the smallest average reduction, at $459 a month, followed by Louisiana at $460, Arkansas at $469, and both Kentucky and New Mexico at $472.
The states with the largest numbers of people affected are generally the most populous. California leads with 6 million people impacted, followed by Florida with 4.6 million, Texas with 4.3 million, New York with 3.4 million and Pennsylvania with 2.6 million. Ohio would have 2.2 million people affected, while Illinois would have 2.1 million.
However, the largest affected populations do not always correspond to the highest population shares. Maine has the greatest proportion of residents impacted, at 22.9 percent, followed by West Virginia at 22.4 percent, Vermont at 22 percent, Delaware at 21.1 percent, and Montana and New Hampshire at 21 percent each. South Carolina and Wisconsin would also have more than one-fifth of their populations affected at 20.6 percent and 20.2 percent respectively.
The lowest state-level shares would be recorded in Utah, at 12.1 percent, Texas, at 13.6 percent, and Alaska, at 14.4 percent. California, despite having the largest number of people impacted, has a comparatively lower affected share of 15.2 percent.
Why Social Security Is Running Short
More than 70 million Americans receive Social Security, which remains the main source of retirement income for millions of households. Social Security is funded mainly through payroll taxes paid by workers and employers. When revenue exceeds benefit payments, the surplus is invested in U.S. Treasury securities and held in the program’s trust funds.
However, Social Security has recently been paying out more than it receives, requiring it to use those reserves to meet its obligations.
The trustees’ June report projected that Social Security’s combined retirement and disability trust funds would be unable to pay full scheduled benefits beginning in 2034. At that stage, continuing income would cover around 83 percent of promised payments.
Congress Faces Pressure To Act
This year, lawmakers have introduced bipartisan proposals intended to force Congress toward a long-term funding agreement.
The PROMISE Act of 2026, introduced on July 14 by Democratic Senator Dick Durbin and a bipartisan group of senators, would direct the Social Security Advisory Board to develop legislation capable of paying full scheduled benefits for at least 50 years. The proposal would then receive expedited consideration in Congress.
A separate measure, the Bipartisan Social Security Commission Act of 2026, was introduced on June 8 by Republican Representative Tom Cole and Democratic Representative Thomas Suozzi. It would establish a 13-member commission tasked with producing legislation to keep Social Security’s retirement and disability funds solvent for at least 75 years.
Both bills would create a process for reaching a solvency agreement, leaving lawmakers to decide whether the eventual solution should involve higher taxes, changes to benefits, a higher retirement age or a combination of measures.
“The longer Congress waits to act, the more likely it is that any solution to Social Security will lean heavily on debt financing to bridge the funding gap, and that’s how it’s tied to the entire national economy,” Grassley told the Senate.
“So, come 2032, the nation will already have outstanding debt larger than at any time in the nation’s history relative to the size of our economy. Flooding the bond market with trillions of dollars in new debt in short order then risks setting off a chain of events leading to a fiscal crisis.”
Contact Newsweek editors on this story: Ben Kelly and Tony Phillips