Social Security Cuts Could Hit These 15 States Hardest

Americans planning to retire within the next decade may want to brace for smaller Social Security checks than expected. Federal projections released this year suggest the program’s main trust fund is on a path toward running short of money in the early 2030s, and the resulting shortfall could translate into real reductions in monthly benefits for millions of retirees.

Why Benefits Are at Risk

The Social Security Board of Trustees reported this summer that the Old-Age and Survivors Insurance trust fund is expected to run out of reserves in the third quarter of 2032. At that point, incoming payroll tax revenue would only be sufficient to cover an estimated 78% of scheduled benefits. Budget analysts at the Committee for a Responsible Financial Budget have calculated that this shortfall would require an across-the-board reduction of roughly 22% starting in 2033 to keep the program’s spending in line with its income. For a typical dual-income retired couple, that could mean losing close to $17,000 in annual benefits.

States Projected to Lose the Most

Because benefit cuts are calculated as a percentage, states where retirees already collect higher-than-average Social Security payments stand to lose the most in dollar terms. An analysis from MoneyLion, cited by Yahoo Finance, found that Connecticut retirees could see the steepest monthly decline, followed closely by New Jersey and New Hampshire. Other states projected to see monthly losses exceeding $500 include Delaware, Maryland, Washington, Minnesota, and Massachusetts, with Michigan, Utah, Virginia, Kansas, Pennsylvania, Rhode Island, and Vermont rounding out the list of the 15 hardest-hit states.

Financial planners note that while lawmakers could still act to shore up the program before 2032, retirees and near-retirees may want to factor a potential benefit reduction into their long-term planning now rather than later.