According to the Committee for a Responsible Federal Budget (CRFB), millions of Americans who rely on Social Security could face an average monthly benefit cut of about $500 if the program's retirement trust fund becomes insolvent — a scenario currently projected to occur by the end of 2032.
Under federal law, the Social Security retirement program cannot pay out more in benefits than it receives in revenue once its trust fund is exhausted. As a result, all retirees are projected to face an immediate 24% benefit cut upon the trust fund's exhaustion.
The Social Security trust fund fills the gap between what the program takes in and what it owes in benefits — a gap that has grown as more baby boomers retire and the number of beneficiaries rises. If the fund runs out of money, benefits would be cut automatically unless Congress steps in.
The analysis found those cuts would affect 10% to 23% of residents in each state.
"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," the report said.
But even if the program's trust fund becomes insolvent, that doesn't mean benefits would disappear entirely. Social Security would still collect payroll taxes and continue paying benefits, though at a reduced level once the trust fund's reserves are exhausted.
The CRFB provided an estimate of how each state would be affected by insolvency in 2032. According to the report, in 29 states, the cut would exceed $500, with retirees in Connecticut, Delaware, Maryland, New Hampshire and New Jersey facing the largest monthly reductions.
Here is how Texans could be affected, according to information from the CRFB interactive map.
Population impact
- Share of Texans affected: 13.6%
- Total number of Texans affected: 4,258,226
Household impact
- Average retiree's monthly cut: $489
Statewide impact
- As a share of the state economy: 0.8%
- Total amount of benefits lost: $23.7 billion