A recent U.S. estimate suggests that if Congress fails to address the Social Security funding gap in the coming years, Social Security benefits could be automatically cut in 2032. Current estimates indicate an overall reduction of approximately 24%, meaning retirees would receive an average of about $500 less per month, resulting in a reduction of approximately $345 billion in national welfare spending annually.
The trust fund may be exhausted by 2032.
This estimate comes from the Committee on Responsible Federal Budget (CRFB), a U.S. fiscal oversight organization. The organization points out that the Social Security retirement trust fund is projected to be depleted by 2032. Under current rules, once the fund is exhausted, programs can only rely on payroll taxes and other special revenues to pay benefits, thus leading to uniform spending cuts.
The CRFB estimates that approximately 60.1 million Americans will be directly affected, representing about 17.7% of the total population. This includes approximately 54 million retired workers and about 9 million surviving family members and dependents.
Many states saw monthly reductions exceeding $500
By state, the average monthly decrease ranged from $459 to $556, with 29 states averaging over $500. Connecticut, New Jersey, and New Hampshire were among the top performers.
Measured by state economic size, the welfare losses for all 40 states will exceed 1% of their respective GDPs. West Virginia, Mississippi, and Vermont will be particularly hard hit. The absolute losses for populous states are also significant; for example, California could lose approximately $33.4 billion annually, Florida about $26.6 billion, and Texas about $23.7 billion.
The government will simultaneously adjust the retirement and social security systems.
Amid rising pressure on Social Security repayments, the Trump administration is also pushing for the so-called "Trump Account." This plan, spearheaded by Treasury Secretary Scott Bessant, aims to encourage more Americans, especially young people, to participate in stock market investment through tax-advantaged investment accounts.
Reports indicate that Bessant had suggested such accounts could supplement the existing retirement security system, but later emphasized that there would be no cuts to existing benefits for the elderly. Some Republican allies view these accounts as part of long-term Social Security reform.
In addition to the long-term funding gap, recent administrative adjustments by the U.S. Social Security Administration have also drawn attention. The report cites scholarly analysis stating that within the first few months of Trump's second term, the Social Security Administration has reduced more than 7,100 jobs, a reduction of over 13%, and closed six of its ten regional offices.
Meanwhile, more services are moving online, and the use of automation and AI tools in public telephone systems is expanding. The government claims call wait times have decreased by 73%, but research indicates that disability benefit application processing is facing higher barriers and slower progress. In the first half of 2025, disability benefit applications in the United States are projected to decline by 7% year-over-year.
