Maya MacGuineas: No State Spared When Social Security Goes Insolvent

Maya MacGuineas is president of the Committee for a Responsible Federal Budget. She recently wrote an opinion piece for the Albany Times Union, an excerpt of which is below.

How much is $511 a month worth to your retired neighbors and parents? For the average retiree, that’s about their monthly grocery bill. For the average New York retiree, however, it also represents 24% of their Social Security benefits, which is how much they could lose if the retirement trust fund becomes insolvent.

The Social Security trustees project that the retirement trust fund will be exhausted in 2032, less than seven years away. Once that occurs, the program cannot legally pay out more benefits than it has in revenues, triggering an automatic 24% cut for every retiree, widow and dependent survivor, regardless of need. One in five Americans — 63 million altogether — would be impacted if Social Security became insolvent today. More than 40% of seniors rely on Social Security for the majority of their income.  

No state will be spared from the consequences of insolvency, but New York may be hit harder than most. It has the fourth-largest number of beneficiaries, and among its retirees, the average monthly benefit cut of $511 is above the national average. The Empire State’s 3.4 million Social Security retirees and survivors make up 16.9% of the state’s population. If insolvency occurred, the hit would be as large as 0.8% of the state’s economy, which would affect all New Yorkers. 

Read the entire piece here. 

Published works by members or staff of the Committee for a Responsible Federal Budget do not necessarily reflect the views of all members or staff of the Committee.