How much could retirees lose in Social Security benefits on average in 2032? Monthly loss projections
Amid warnings that the Social Security Administration (SSA) won’t have enough funds to pay out all benefits by the early 2030s, significant cuts to monthly retirement checks are being forecast.
When is Social Security predicted to be insolvent?
In a report released in June, the trustees of the Social Security and Medicare trust funds forecast that the SSA’s Old-Age and Survivors Insurance pot will only be able to meet the agency’s benefits bill until the fourth quarter of 2032.
Meanwhile, the Congressional Budget Office (CBO) is predicting that the retirement trust fund will actually become insolvent a few months earlier than that if Congress does not act to replenish it.
In a projection released in September, the CBO also forecast depletion by 2032, but predicted this would occur in the middle of the year.
How much could retirement benefits be cut by?
If the SSA experiences a funding shortfall in six years’ time, recipients of retirement benefits will be facing an average cut of around $500 in their monthly payment, per June projections by the Committee for a Responsible Federal Budget (CRFB).
“If Social Security becomes insolvent in 2032, as currently projected, retirement benefits would need to be cut by an estimated 24% in order to bring spending in line with revenues,” the CRFB says.
“Applying this projected reduction to current state-level data, we estimate an across-the-board monthly cut would range from $459 to $556 across the 50 states and the District of Columbia.”
The CRFB adds that benefits cuts would be above the $500 mark in 29 states, with Connecticut, New Jersey and New Hampshire the worst-affected. In all three states, the body forecasts average reductions of just over $550.
Biggest ave. benefit cuts, per CRFB:
- Connecticut: $556
- New Jersey: $554
- New Hampshire: $553
- Delaware: $549
- Maryland: $541
- Washington: $531
- Minnesota: $530
- Massachusetts: $527
- Michigan: $523
- Utah: $523
How much are Social Security retirement benefits?
A program with 57.9 million claimants across the U.S., Social Security retirement currently pays out benefits at an average of $2,034.54 per month, per a statistical snapshot published by the SSA in October.
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