Projections Show These States Could Feel Social Security Cuts the Hardest

Millions of Americans depend on Social Security senior benefits every month, but unless Congress intervenes, those benefits may be cut in less than seven years. The Social Security Trustees project that the retirement trust fund may be depleted in 2032, and its depletion would trigger an automatic benefits cut.

The eventual insolvency of the trust fund isn't a remote possibility. It's the definite outcome if Congress doesn't intervene and take steps to preserve the program.

What happens if the trust fund is depleted

Once the trust fund is depleted, the Social Security program is not permitted to pay out more in benefits than what it receives in revenue. The depletion of the trust fund would result in an automatic 24% cut to benefits. Benefits would still be paid, but the cut could have a significant impact on beneficiaries.

The Committee for a Responsible Federal Budget estimates that an average 24% cut would total about $500 per month, which is more than what an average retiree household spends on groceries every month. Actual cuts could range from $459 to $556 per month across different states.

Who would be affected by the benefits cuts

A widespread cut to Social Security benefits has the potential to impact millions of people, including some of the most vulnerable. According to the Center on Budget and Policy Priorities, as of February 2024, about one-fifth of the population, or about 67 million people, received Social Security benefits. Older adults make up about four in five of Social Security recipients.

Social Security also plays an important role in lifting Americans out of poverty. Without those benefits, nearly four in 10 adults aged 65 and older would have incomes that fall below the poverty line. Social Security benefits help lift approximately 16.5 million older adults above the poverty line, and if those benefits were cut, those adults could lose the financial support they depend on.

Just how these individuals might be affected partially depends on where they live.

States that would see the largest dollar reductions per check

In 29 states, a 24% benefits cut could cause beneficiaries to lose more than $500 in benefits each month. Connecticut stands to see the greatest loss of an average monthly benefit cut of $556. New Jersey could lose $554 per month, and New Hampshire could lose $553. Delaware and Maryland round out the list with losses of $549 and $541 per month, respectively.

Washington, Minnesota, Massachusetts, Michigan, and Utah could all lose between $523 and $531 per month.

Such losses could take a financial toll. The Social Security Administration reports that for January 2026, the average Social Security retirement benefit was $2,071. A $500+ loss would quickly erode those benefits.

States that are most dependent on Social Security

Certain states have larger percentages of residents depending on Social Security benefits, and between 10% and 23% of each state's population could be affected by a benefits cut.

Maine has the highest dependence on Social Security, with 22.9% of its population being impacted. West Virginia follows closely behind with 22.4% of its population, while 22% of Vermont's population could be impacted. Additionally, 21.1% of Delaware's population could be impacted, while 21% of both Montana and New Hampshire's population could be affected.

The economic impact of a Social Security cut

The loss of Social Security benefits wouldn't just affect citizens, but could also impact states' economies. A 24% cut to benefits could amount to a $345 billion loss this year, equating to 1.1% of gross domestic product (GDP). That impact could range from 0.2% to 1.9% of GDP in various states.

West Virginia could see a loss of 1.9% GDP, while Mississippi and Vermont could lose 1.8% GDP. South Carolina and Maine could lose 1.7% GDP, and Michigan, Montana, Arkansas, and Alabama could lose 1.6% GDP.

How to prepare

The future of Social Security is uncertain, and Congress hasn't yet arrived at a definite solution. It's a good idea to take some steps to prepare just in case benefits are cut in 2032.

This is the perfect time to focus on building up your cash reserves by cutting unnecessary costs, potentially taking up a side hustle, and putting all of your spare cash into a high-yield savings account. If you have debt, focus on paying down the debts with the highest interest to improve your financial stability.

How to evaluate your retirement plan

Consider speaking with a financial advisor, too. Ask them to review your retirement plan and make suggestions to help you navigate a potential benefits cut. A financial professional could also explain how other income sources, like Required Minimum Distributions from your IRA, 401(k), or 403(b) could contribute to your retirement picture if your benefits shrink.

Bottom line

There is still time for Congress to intervene and identify a solution to preserve Social Security benefits, and this is currently a hot topic. Remember that if the trust fund is depleted, benefits won't end, but they may be immediately reduced.

Be sure to follow this topic closely, as both Democrats and Republicans are proposing potential solutions to avoid benefits cuts. While hopefully Congress implements a solution, be sure to review your retirement plan and prepare to navigate retirement with reduced benefits, just in case.