A new report from the Committee for a Responsible Federal Budget is sounding the alarm over the future of Social Security, warning that the program’s retirement trust fund is on track to run out of money in 2032. If Congress fails to intervene before then, beneficiaries could face an automatic 24% reduction in payments.

The analysis, released Wednesday, estimates that approximately 63 million Americans would be affected by the cuts, including retirees, surviving family members, spouses, and dependents. The group projects that the average recipient would lose roughly $500 per month in benefits.

According to the report, residents in 29 states would see average monthly reductions exceeding $500. Among the states facing the steepest declines are Connecticut, Delaware, Maryland, New Hampshire, and New Jersey.

The CRFB noted that Social Security’s retirement system has been spending more money than it collects through payroll taxes and other revenue sources for the past 16 years. To make up the difference, the program has relied on its trust fund reserves.

Once those reserves are depleted, however, federal law requires Social Security to limit payments to the amount of revenue it receives, preventing the program from paying full scheduled benefits.

The report estimates that more than 15% of residents in 47 states would be directly impacted by the reduction. The largest concentrations of affected individuals would be found in Maine, West Virginia, Vermont, Delaware, Montana, and New Hampshire.

Researchers also warned that the financial consequences would extend beyond retirees and their families. Nationwide, a 24% cut in Social Security payments would reduce benefit distributions by approximately $345 billion per year, an amount equal to about 1.1% of the nation’s gross domestic product.

The report found that 40 states would experience economic losses exceeding 1% of their respective GDPs. West Virginia, Mississippi, Vermont, South Carolina, and Maine are expected to be among the states most heavily affected.

Measured in total dollars lost, California would sustain the largest reduction, with residents collectively losing an estimated $33 billion annually. Florida would follow with roughly $27 billion in reduced benefits, while Texas, New York, and Pennsylvania would see losses of approximately $24 billion, $20 billion, and $16 billion, respectively.

The CRFB emphasized that the effects of insolvency would be felt nationwide, with no state insulated from the impact. The organization urged lawmakers to begin addressing the issue before the trust fund reaches exhaustion.

The report argued that restoring the program’s long-term financial health will likely require difficult policy decisions involving both taxes and benefit levels. However, it warned that postponing action only increases the likelihood of sudden, across-the-board cuts affecting beneficiaries regardless of their age or financial circumstances.

“With less than seven years until Social Security is projected to be insolvent, policymakers need to enact changes to the program as quickly as possible,” the report concluded.