The Trustees of the Social Security and Medicare trust funds now project that after 2032 there will not be enough money to continue paying full Social Security benefits. At that time, the Social Security fund’s reserves are expected to have been depleted and continuing program income from ongoing Social Security payroll taxes will be sufficient to pay only 76% of total scheduled benefits, resulting in cuts to the benefits paid to Social Security recipients.
According to a report from the Committee for a Responsible Federal Budget (CRFB), unless something changes Social Security recipients in all states will see the amounts they receive cut by at least 24%. The CRFB is a nonprofit, nonpartisan organization that studies public issues with significant fiscal policy impact. Its leadership includes some of the nation’s leading budget experts, including many past heads of the House and Senate Budget Committees, the Congressional Budget Office, the Office of Management and Budget, and the Government Accountability Office.
The CRFB points out that Social Security’s retirement program provides benefits for 63 million Americans, including retirees, spouses, and dependents and that for 42 years it has been known that without changes Social Security would become insolvent. For the last 16 years, the cost of Social Security’s retirement program has exceeded its cash income, forcing it to pay benefits in part by using its trust fund reserves.
The CRFB reports that after the trust fund reserves run out late in 2032 all retirees are projected to be subject to the immediate 24% benefit cut. The estimated monthly benefit cut would be from $459 to $556 depending on where the person lives. In 29 states, the average monthly benefit cut would be at least $500.
Residents of Connecticut would be hardest hit according to the CRFB. The average retiree’s monthly benefit cut would be $556, the highest average dollar amount in the nation. There would be 657,408 Connecticut residents affected, with an estimated annual loss of $4.2 billion.
In New York state, CRFB estimates that 3,357,460 retirees would see their monthly Social Security benefits cut by an average of $511. The annual loss would be $19.7 billion.
“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,” CRFB said.
CRFB has what it calls the “Tell the Truth” project about Social Security, designed to raise awareness and disseminate the facts about the state of Social Security’s finances, countering common myths and misperceptions, and showing there are achievable options for saving the program.
“Our goal is to encourage action that saves Social Security well in advance of program insolvency – rescuing it for generations to come, helping to secure our nation’s fiscal future, and providing peace of mind and security to those who rely on the program,” CRFB said.
