Map Shows States to Be Hit Hardest by Social Security Funding Shortfall

A major Social Security trust fund is set to be depleted faster than expected, a report released Tuesday showed, raising new concerns that states with larger aging populations will be hit harder.

The report highlighted the rapid depletion of the Old-Age and Survivors Insurance (OASI) trust fund, which helps fund retirement benefits and could run dry within the next decade unless Congress steps in.

The worsening outlook for the fund comes after the Trump administration introduced new tax rules in 2025, which reduced the amount seniors pay on their Social Security income, cutting revenue.

According to the report, effects of the OASI’s depletion would be felt nationwide, but analysts say the pain would be concentrated in older, lower-income, and rural states.

“Washington is sleepwalking into a retirement crisis, allowing our nation's most important trust funds to go insolvent at the expense of over 70 million beneficiaries who count on these programs,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget, said in a statement shared with Newsweek.

“In just six years – during the next Senate class's term – Social Security's retirement fund will run out of money. Medicare will run out just half a year later. Today's youngest retirees will be turning 68 when Social Security runs dry and 69 when Medicare does. Yet our leaders have no plan to prevent the abrupt 22% benefit cut or 11% payment cut that would ensue.”

What Is the OASI Trust Fund?

The OASI Trust Fund is the primary source of funding for Social Security retirement and survivor benefits. It pays monthly checks to retired workers, their dependents, and families of deceased workers.

The fund is financed mainly through payroll taxes paid by current workers and employers, with any surplus invested in U.S. Treasury securities. Those reserves have long helped cover the gap when benefit payments exceed incoming tax revenue.

But in recent years, Social Security has been paying out more than it collects, forcing the fund to draw down its reserves-a trend that is central to the program's long-term financing challenge.

What Did the Projection Show?

According to the 2026 Social Security Trustees Report, the outlook for the OASI Trust Fund has worsened.

The report projects that the fund will be depleted in 2032, one year earlier than previously expected. At that point, incoming payroll tax revenue would only be enough to cover about three-quarters of scheduled benefits, resulting in across-the-board reductions if no legislative changes are made.

The broader Social Security system-including disability benefits-is projected to remain solvent slightly longer, but would still face shortfalls soon after, with the combined trust funds projected to run out by 2034.

The projections reflect a mix of long-term demographic pressures, including an aging population, lower birth rates, and slower workforce growth, all of which reduce the ratio of workers paying into the system relative to retirees drawing benefits.

Which Areas of the Country Could Be Hit Hardest?

While the funding shortfall is a national issue, its effects are expected to be uneven.

This state-by-state analysis is based on U.S. Census data on population age and widely cited measures of how heavily seniors rely on Social Security for income. Because the federal government does not publish a unified dataset ranking states by exposure to Social Security shortfalls, the figures were modeled using demographic and income-dependency indicators commonly used in retirement security research.

States with older populations, including parts of the South, Midwest, and Northeast, are likely to face the greatest exposure. These areas tend to have larger shares of residents receiving Social Security benefits, meaning any reduction would ripple more broadly through local economies.

Similarly, rural counties and regions with lower average incomes-including parts of Appalachia and the Deep South-are more dependent on Social Security as a source of income. In these areas, benefits often make up a larger portion of total personal income compared with wealthier or more urban states.

By contrast, states with younger populations and higher household incomes, particularly in parts of the West and Northeast metro areas, may be somewhat less immediately exposed, though still affected.

How Many People Rely on Social Security Benefits?

The scale of the program underscores the stakes of any future cuts.

The Trustees report shows that Social Security currently provides benefits to around 70 million Americans, including tens of millions of retirees, as well as disabled workers and survivors.

For many recipients, the program is a primary source of income. In some regions of the country-particularly in rural areas and communities with older populations-Social Security accounts for a significant share of total household income.

That reliance means even modest reductions in benefits could have outsized effects, particularly among lower-income households that have fewer savings or alternative income streams.

When Could the Trust Fund Be Depleted?

The timeline outlined in the report is increasingly tight:

• The OASI Trust Fund is projected to be depleted in 2032
• The combined Social Security trust funds could be exhausted by 2034

Once the OASI fund is depleted, benefits would not disappear entirely. Instead, payments would be automatically reduced to match incoming revenue. This is estimated at roughly 75–80 percent of scheduled benefits at that point.

The longer policymakers wait to act, the steeper those changes are likely to be, according to the report.

“Under the Trump Administration, we are committed to protecting and strengthening Social Security. This year, we have made historic improvements in providing best-in-class service for the more than 330 million Americans we serve. We are eliminating waste, fraud, abuse and ensuring program integrity," Frank J. Bisignano, Commissioner of Social Security, said in a press release Tuesday.

"To protect the promise of Social Security, it is important for lawmakers and the Social Security Administration to work together to ensure the trust funds continue to provide financial stability now and for future generations."

2026 NEWSWEEK DIGITAL LLC.

This story was originally published June 9, 2026 at 1:39 PM.