Millions of Texans could see Social Security benefits cut by $489 a month if the trust fund is depleted in 2032, a new report says.
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Millions of Texans could see their Social Security benefits reduced by nearly $500 a month, if the trust fund Social Security relies on is depleted by 2032 as predicted.
The Committee for a Responsible Federal Budget —a nonprofit, nonpartisan organization — released a report Wednesday that looked at Social Security benefits changes for each state should the fund run out.
Here is what to know about the situation.
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What is Social Security insolvency?
Social Security provides retirement, disability and survivors benefits to more than 60 million Americans, according to the federal administration that oversees it. The average monthly retirement payment is $2,071.
Congress can take action to ensure that the trust is funded. But if Congress fails to act, the Social Security program can still pay about 80% of benefits, according to the administration. Continued payroll taxes would continue to provide some benefits on a pay-as-you-go system.
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When could the insolvency happen?
An estimated 63 million Americans receive Social Security benefits, according to the report.
“We have known for 42 years that, without changes, Social Security would become insolvent,” according to the report. “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 report says the retirement fund will run out in 2032. The date could be pushed to 2034 if combined with the disability program, according to the report.
The Social Security Administration’s annual Trustees Report will be released in coming weeks and will give a better estimate of when the fund could run out, as reported by CBS News.
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The 2025 Trustees Report gave an insolvency date of 2033.
How will retirees be affected?
Should the Social Security trust fund become insolvent in 2032, retirement benefits would need to be cut by an estimated 24%.
“Applying this projected reduction to current state-level data, we estimate an across-the-board monthly cut would range from $459 to $556 across the 50 states and the District of Columbia,” the report said.
Connecticut would have the largest cut at $556 a month, followed by New Jersey, New Hampshire, Delaware, Maryland, Washington, Minnesota, Massachusetts, Michigan and Utah.
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The impact to Texans?
Approximately 13% of Texans, 4.3 million retirees, would have their monthly benefit cut by an average of $489, if the fund is depleted, according to the report.
What options could prevent cuts?
The committee says the success of the fund is in the hands of U.S. policymakers.
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Options to halt the insolvency include raising the retirement age, raising taxes or capping benefits for higher earners, as reported by Yahoo Finance.
“Policymakers have options to restore solvency,” according to the report. “However, they must act quickly to prevent deep, abrupt benefit cuts that would affect all beneficiaries, regardless of age or need.”