California could be impacted by Social Security insolvency

(The Center Square) – The trusts that fund Social Security benefits for retired seniors, survivors and people with disabilities face insolvency in the next six years, according to a report from the U.S. Social Security Administration.

Those affected could include seniors and others in California.

The 2026 Old Age and Survivors and Disability Insurance Trustees Report shows that before reserves are depleted, 100% of Social Security benefits can be paid out. After reserves run out of cash in 2032, however, only 78% of those benefits can be paid, the report said.

That’s a 22% reduction in Social Security benefits to retirees and the disabled alike, according to financial information company SmartAsset.

“What that would mean is that if Congress does not act by 2032, there would be an immediate across-the-board 22% reduction in benefit payments,” Toby Nelson, a representative for SmartAsset, told The Center Square.

SmartAsset’s analysis of Social Security data found that Amador County is expected to be the most impacted county in California. Social Security payments make up 11.4% of local income in the Northern California county, which has approximately 12,280 beneficiaries, according to SmartAsset.

Los Angeles County, too, is expected to be one of the most impacted counties in California. More than 1.5 million people there receive Social Security. That's the highest number of any county in the country, SmartAsset said.

San Francisco County, on the other hand, will see the least impact by potential reductions in Social Security payments since benefits make up only about 1.9% of the total county income, the SmartAsset research found.

“In terms of California, what we found is that while California is not as economically exposed to the impacts of a potential Social Security cut as some states, there are areas that have a structural dependence on Social Security,” Nelson told The Center Square. “Those may feel a major hit.”

Nelson said SmartAsset analyzed Social Security payments in more than 3,000 counties across the United States to determine where benefits make up the largest share of local incomes. The findings from that research show that local economies will be hit the hardest if the 22% reduction actually occurs, Nelson said.

The Center Square reached out to state lawmakers on Tuesday, but did not hear back before publication time. However, the California Assembly Republican Caucus responded to The Center Square to say that the cost of living is already high enough in the state without the impact of Social Security cuts.

“California seniors are already being crushed by the cost of housing, groceries, gas and utilities,” George Andrews, press secretary for the caucus, told The Center Square. “A fixed income has no room for another hit, and any cut to Social Security would fall hardest on people who can least afford it. Seniors earned these benefits.”

For seniors in California’s aging counties, like Amador, a 22% cut in Social Security benefits could be a tough hit for those who rely mostly or entirely on that money, Amador County Supervisor Patrick Crew told The Center Square on Tuesday.

“We’re an aging population up here,” Crew told The Center Square. “I think we’re one of the older populations by county, so it would affect us more than the general population. It would put pressure on all the social services, both county and state.”

Retirees who normally use some of their Social Security money to pay for groceries and healthcare might have to go to food banks and let their health care go, Crew said.

“That’s a big hit,” Crew said. “Twenty-two percent of anything is a lot. The more you think about it, the worse you could envision, I think.”

The U.S. Social Security Administration did not respond to The Center Square's request for comment on Tuesday. The chair of the Los Angeles County Board of Supervisors, Hilda Solis, also could not be reached.