Millions of Americans rely on Social Security to support their retirement expenses, including housing, healthcare, groceries, utilities and other everyday costs. However, the program’s long-term financial outlook has raised questions about whether future beneficiaries could receive smaller monthly payments. New state-level estimates suggest that retirees in 15 states could face average monthly reductions exceeding $515 if Social Security benefits were cut under a projected funding shortfall scenario.
Connecticut ranks first, with an estimated average monthly reduction of $556. New Jersey follows at $554, while New Hampshire ranks third at $553. The figures come from the Committee for a Responsible Federal Budget (CRFB), which examined how a 24% reduction in retirement benefits could affect beneficiaries across the country.
The estimates come as the 2026 Social Security Trustees Report projects that the Old-Age and Survivors Insurance (OASI) Trust Fund could exhaust its reserves in the fourth quarter of 2032. After that, continuing program income would cover approximately 78% of scheduled retirement and survivor benefits under current law. Although this does not mean Social Security payments would stop, beneficiaries could receive less than their scheduled amounts if policymakers do not address the funding gap.
Rankings
According to CRFB’s report, No State Spared: Mapping the Impact of Social Security’s Insolvency, 29 states could experience average monthly benefit reductions exceeding $500 under the 24% reduction scenario.
Connecticut has the highest estimated dollar reduction, followed by New Jersey and New Hampshire. Vermont ranks 15th among the states with the largest projected monthly losses.
The estimates are based on average state-level benefit payments. They do not mean every retiree living in these states would lose the same amount. Individual reductions would depend on existing Social Security benefits.
The national average monthly reduction in CRFB’s analysis is approximately $500. The figures are intended to illustrate how a potential nationwide benefit adjustment could affect retirees differently depending on their current payment levels.
Funding
The potential reductions are linked to the financial condition of the OASI Trust Fund, which finances Social Security retirement and survivor benefits.
The fund receives most of its revenue through payroll taxes paid by employees and employers. These contributions help finance monthly payments to retired workers, eligible family members and survivors.
According to the Social Security Administration’s 2026 Trustees Report, the OASI Trust Fund could run out of accumulated reserves in the fourth quarter of 2032.
Once those reserves are depleted, Social Security would continue receiving payroll tax revenue and other income. However, that money would not be sufficient to cover all scheduled benefits.
The latest projection indicates that approximately 78% of scheduled retirement and survivor benefits could remain payable. This creates an estimated funding shortfall of around 22%.
For example, a retiree scheduled to receive $2,000 per month could receive approximately $1,560 if payments were reduced by 22% and no legislative changes were made.
The actual outcome would depend on future economic conditions and decisions made by Congress.
Differences
Monthly Social Security benefits vary across states because beneficiaries have different earnings histories, retirement ages and work records.
CRFB used 2024 state-level beneficiary data to estimate the potential impact of a 24% reduction on current retirees. Its analysis found that average monthly losses could range from $459 to $556 across the 50 states and Washington, D.C.
This difference is important because a percentage-based reduction produces larger dollar losses for people receiving higher monthly benefits.
For instance, a 24% reduction in a $2,300 monthly payment would equal $552. By comparison, the same reduction in a $1,900 payment would amount to $456.
Both beneficiaries would experience the same percentage reduction, but the person receiving the larger benefit would lose more money in dollar terms.
The Social Security Administration’s benefit information provides details about retirement payments, eligibility and the factors that determine individual benefits.
Economy
The potential impact of Social Security reductions extends beyond individual retirement accounts and household budgets.
CRFB estimates that an across-the-board 24% reduction in benefits would lower annual Social Security payments by approximately $345 billion nationwide. This represents around 1.1% of US gross domestic product.
However, the economic impact would vary considerably between states.
West Virginia could experience the largest reduction relative to its economy, with lost Social Security payments equivalent to approximately 1.9% of state GDP. Mississippi and Vermont follow, with estimated reductions equivalent to 1.8% each.
These differences reflect how important Social Security income is to local economies.
Retirees often use their monthly payments to cover essential expenses and support local businesses. A reduction could lead some households to limit discretionary spending, delay purchases or adjust their healthcare and housing budgets.
Communities with a larger proportion of residents depending on Social Security could therefore experience wider economic effects.
Forecasts
One important detail in the CRFB analysis is that its state-level estimates use the 24% reduction scenario from the 2025 Social Security Trustees Report.
The 2026 Trustees Report has since updated the program’s financial outlook. It estimates that continuing income would cover approximately 78% of scheduled retirement and survivor benefits after the OASI Trust Fund exhausts its reserves.
That figure implies a potential reduction of approximately 22%, rather than the 24% used in CRFB’s state-level calculations.
The state estimates have not been recalculated using the newer projection. Therefore, the reported monthly losses should not be treated as precise forecasts of what retirees will actually receive in 2032.
For additional information about the program’s financial condition, beneficiaries can review the Social Security Administration’s Office of the Chief Actuary resources, which publish trust fund projections and other financial assessments.
Planning
Although the projected trust fund depletion date is several years away, the financial outlook makes retirement planning an important consideration for current and future beneficiaries.
People approaching retirement may benefit from reviewing their estimated Social Security payments and considering how those payments fit into their overall financial plans.
Building additional retirement income through savings, pensions or other suitable investments may help households manage unexpected changes in monthly benefits.
It is also important to understand that trust fund depletion does not mean Social Security will disappear. Payroll taxes and other continuing income would still support a substantial portion of scheduled payments.
The projected shortfall is a financial challenge that lawmakers may address through changes to program revenue, benefits or other policy measures.
For retirees in Connecticut, New Jersey, New Hampshire and other states with relatively high projected dollar reductions, the estimates provide an indication of the possible financial impact. However, the final outcome will depend on future legislation, economic conditions and the Social Security program’s financial position.
