10 States Where Social Security Cuts Would Hit Retirees the Hardest

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Key Points

• If Congress fails to shore up Social Security, substantial benefit cuts are ahead.

• There are several possible ways to address the shortfall.

• Ideally, workers should also be building retirement savings to supplement Social Security.

Many people, particularly retirees, keep a close eye on Social Security's annual cost-of-living adjustment, or COLA. That is understandable, since many retirees depend on every dollar they receive and even a modest increase can make a difference. The projected increase for 2027 is 3.6%.

Still, a far bigger concern is the possibility of a sizable reduction in benefits, and the impact would likely vary by state.

Why a large cut could happen

Social Security is funded by taxes paid by workers, with those dollars used to pay current retirees. For many years, the program brought in more than it paid out, building up a surplus.

That picture has changed. Americans are living longer on average, and many are leaving the workforce earlier. As a result, Social Security is paying out more than it collects, which is steadily reducing the surplus.

The shrinking relationship between workers and beneficiaries is shown in the table below:

Data source: Social Security Administration. *projected, in the 2026 Social Security Trustees report

If lawmakers do nothing to strengthen the program, the trust funds' surplus is expected to run out within a few years. At that point, benefits would be cut to about 78% of what beneficiaries are due, which works out to a 22% reduction. That estimate has changed over time and could end up slightly higher or lower if the shortfall actually occurs. In the 2025 report from the Trustees of the Social Security and Medicare trust funds, the projected cut was 24%.

A 22% reduction would lower a $2,500 monthly benefit check to $1,950, a drop of $550 every month. That is the bad news. The good news is that Congress has several options available if it chooses to act, and a Democratic-majority Congress may decide to do so.

Which states would face the biggest cuts?

The Committee for a Responsible Federal Budget used projections from the 2025 Trustees of the Social Security and Medicare trust funds report and modeled a 24% cut across all 50 states. It found that retirees in the following 10 states would be hit the hardest:

Data source: Committee for a Responsible Federal Budget.

The average cut differs from state to state because average benefit checks also differ. In some places, retirees have lower incomes than in others. So a smaller dollar cut does not necessarily mean a better outcome; it may simply reflect a lower benefit to begin with.

The CRFB concluded its report by saying: "With insolvency projected to occur during the terms of the next elected Senators and President, candidates and policymakers must decide how they will secure a program vital to millions of Americans. That starts with putting forward a plan because if Social Security becomes insolvent – no state would be spared."

The bigger picture

This may sound alarming, but for many retirees Social Security is only one piece of retirement income. Most people should also be saving and investing to build a nest egg that can help support them later in life. The average monthly Social Security retirement benefit was $2,089 as of September, or about $25,000 per year.

That is why it is important to create a retirement plan that spells out how much income you will need and how you will get there. You may need to save and invest more, and you may want to work a few extra years before retiring.

It can also help to let your representatives in Washington know that you do not want to see Social Security benefits reduced.