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If Social Security benefits are cut, where you live matters

While every state would see cuts, they would be bigger in some states

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By:
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Mark Huffman
Reporter

Mark Huffman has covered consumer issues since 2004, with a special focus on protecting and empowering older adults. A former news correspondent for the Associated Press Radio Network, Westwood One, and ConsumerAffairs, Mark brings decades of journalistic experience to RetirementLiving.com. He is passionate about giving consumers a voice and helping them make informed decisions. Mark has also created educational content, including Senior Scam Alert, a video resource designed to help seniors recognize and avoid fraud. He holds a B.A. from the University of Kentucky and lives with his family in Richmond, Virginia.

Updated:

key insights:

  • A projected Social Security insolvency in 2032 would trigger an automatic 24% benefit cut under current law, reducing monthly retirement benefits by an average of about $500 nationwide.
  • Every state would be affected, with estimated average monthly benefit reductions ranging from $459 to $556.
  • Retirees in Connecticut, New Jersey, New Hampshire, Delaware, and Maryland would face the largest average monthly cuts.

Most Social Security recipients have probably heard that the fund that pays monthly Social Security benefits is running out of money. Currently, the fund is projected to be depleted by 2032.

Federal law stipulates that if Congress fails to add money to the trust fund by then, benefits would be reduced by 24%. But the decline in benefits would be larger for some recipients because of where they live.

A new report from the Committee for a Responsible Federal Budget (CRFB), No State Spared: Mapping the Impact of Social Security’s Insolvency, examines how a projected insolvency of the Social Security retirement trust fund in 2032 would affect beneficiaries across the country. 

CRFB estimates that the average monthly benefit cut would total about $500 nationwide. That’s significant because $500 exceeds what the average retired household spends on groceries in a month.

States where retirees would take the biggest hit

The projected reductions would vary by state, largely reflecting differences in benefit levels. According to the report, average monthly cuts would range from $459 to $556. 

Connecticut retirees would experience the largest average reduction at $556 per month, followed closely by New Jersey ($554), New Hampshire ($553), Delaware ($549), and Maryland ($541). 

Other states facing some of the largest average cuts include Washington, Minnesota, Massachusetts, Michigan, and Utah, each with estimated reductions exceeding $520 per month.

Social Security currently provides retirement benefits to roughly 63 million Americans and serves as a primary source of income for many older households. The report argues that the program’s financial challenges are no longer a distant concern, noting that less than seven years remain before projected insolvency.

Call to action

The CRFB, a nonpartisan fiscal policy organization, is urging Congress and the White House to act sooner rather than later. The group warns that delaying reforms could leave policymakers with fewer options and increase the likelihood of abrupt benefit reductions for current and future retirees. 

The report includes state-by-state estimates and interactive maps designed to illustrate how insolvency could affect beneficiaries and local economies nationwide. Its central conclusion is that the consequences would not be limited to a handful of states or regions.

“No state would be spared from the potentially devastating effects of insolvency,” the report concludes, adding that policymakers should enact changes “as quickly as possible” to avoid across-the-board benefit cuts.