WASHINGTON — The Committee for a Responsible Federal Budget projects the Social Security Old-Age and Survivors Insurance Trust Fund will become insolvent by the end of 2032. If Congress does not enact legislation to extend solvency, an automatic 24 percent reduction in monthly benefits would take effect upon trust fund depletion.
The projected reductions would affect approximately 63 million current beneficiaries, including 54 million retired workers and 9 million dependent or survivor beneficiaries. Monthly benefit reductions would average approximately $500 per recipient nationwide under the projected insolvency scenario. The Social Security Administration adjusted the Old-Age and Survivors Insurance Trust Fund depletion timeline from 2033 to 2032, citing the projected effect of the One Big Beautiful Bill Act on benefit taxation.
Following trust fund depletion, continued payroll tax collections would enable the program to pay between 77 and 80 percent of scheduled benefits. Between 10 percent and 23 percent of each state's population would be affected by the projected benefit reductions, with the national average of affected residents standing at 17.7 percent of the population.
Recipients in Connecticut would face the highest average monthly reduction at $556. Other states with high average reductions include New Jersey at $554, New Hampshire at $553, Delaware at $549, and Maryland at $541. Recipients in Washington state would face an average monthly reduction of $531, while those in Minnesota would see an average reduction of $530. Massachusetts recipients would face an average reduction of $527, and Michigan and Utah recipients would both experience a $523 average reduction. Recipients in Texas would face an average monthly reduction of $489.
The committee used 2024 Social Security Administration beneficiary data and 2024 gross domestic product figures from the Bureau of Economic Analysis for its analysis. Social Security benefit costs have exceeded program cash income for 16 consecutive years.
Proposals to eliminate the $184,500 cap on taxable income for payroll taxes have been suggested to address program funding shortfalls. U.S. Senator Sheldon Whitehouse stated, "We can do this. It's actually not all that hard or complicated. And the sooner we do it, the better off everyone will be."
A survey by the Senior Citizens League found that 73 percent of retirees rely on Social Security for more than half of their income, and 39 percent rely entirely on it. The committee said, "No state would be spared from the potentially devastating effects of insolvency. 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."