Social Security beneficiaries — including millions of New Yorkers — could see their monthly benefits reduced by an average of about $500 if the program’s trust fund is depleted as projected, according to a new analysis.
What the report says
For the past 16 years, Social Security’s retirement program has paid out more in benefits than it has collected through payroll taxes, forcing the agency to draw from its trust fund reserves to cover the gap.
As a result, the Social Security Trustees project the retirement trust fund will be exhausted in 2032. If that occurs and Congress does not act, benefits would automatically be reduced to match incoming revenue.
The Committee for a Responsible Federal Budget estimates beneficiaries would face a 24% across-the-board reduction. Nationwide, that would amount to an average cut of about $500 per month per retiree — more than many households spend on groceries each month. Total annual retirement benefits would fall by an estimated $345 billion, or about 1.1% of U.S. gross domestic product, according to the report.
“No state would be spared from the potentially devastating effects of insolvency,” the committee said.
How many people would be affected?
Nearly 70 million Americans — about 1 in 5 people nationwide — receive Social Security benefits, including retirees, surviving spouses and dependents.
According to the report, between 10% and 23% of residents in every state would be affected by a reduction in benefits.
What it could mean for New York
In New York, nearly 3.35 million residents — about 17% of the state’s population — receive Social Security benefits and could be affected by a potential reduction, according to the report.
The committee estimates the average New York retiree would lose about $511 per month. Statewide, the reduction would equal roughly 0.8% of New York’s economy.
The report found that the economic impact would range from 0.2% to 1.9% of state GDP nationwide, with cuts exceeding 1% of GDP in 40 states. States with older populations and lower per-capita incomes would generally face the largest economic effects.
States projected to see the largest benefit cuts
Average monthly reductions would range from $459 to $556 across the 50 states and Washington, D.C. Beneficiaries in 29 states would see average cuts exceeding $500 per month, according to the committee.
The 10 states projected to see the largest average monthly reductions are:
Contributing: USA Today Network
This article originally appeared on Rochester Democrat and Chronicle: Social Security cuts could cost New York retirees $511 a month, report finds
Reporting by Victoria E. Freile, New York Connect Team / Rochester Democrat and Chronicle
USA TODAY Network via Reuters Connect
By Victoria E. Freile, New York Connect Team | USA TODAY Network
