Millions of Americans could see their Social Security benefits reduced by hundreds of dollars per month if Congress fails to address the program’s looming funding shortfall, according to a new analysis that warns benefit cuts would affect retirees in every state by 2032. The analysis, released by the Committee for a Responsible Federal Budget, estimates that Social Security beneficiaries would face an automatic 24% reduction in monthly payments if the program’s Old-Age and Survivors Insurance trust fund becomes insolvent at the end of 2032. The average retiree would lose roughly $500 per month in benefits under that scenario. The report found that “no state would be spared” from the cuts, which would affect between 10% and 23% of residents depending on the state. Among the largest are Connecticut, where beneficiaries would lose an average of $556, New Hampshire at $553, and Delaware at $549. Maryland retirees would see an average reduction of $541 per month.
The warnings come as Social Security faces growing financial pressure from an aging population and a shrinking ratio of workers paying into the system compared with beneficiaries drawing retirement benefits. Social Security has relied on trust fund reserves in recent years because benefit obligations have exceeded payroll tax revenue.
