Lifeline Amid Financial Worry: Households Rely on Social Security Benefits

Austin, Texas – More than 71 million Americans rely on Social Security benefits, nearly 54 million of whom are 65 or older. As of June, the average retired worker receives a monthly payment of $1,837 — and, for many, benefits are more of a lifeline than a check.

Among older Americans, 37% of men and 42% of women count on Social Security for at least 50% of their income. About 12% of men and 15% of women rely on their benefits for at least nine dollars out of every 10 that come in.

The program is on pace to deplete the trusts that fund it by 2034, leaving the SSA able to pay just 77% of scheduled benefits in roughly 10 years. To prevent that outcome, Congress will have to alter the program by increasing the retirement age, raising taxes, slashing delayed retirement credits or even by cutting benefits.

Although Social Security is a federal program and your location doesn’t determine your benefits, where you live might have a lot to do with how you fare. Here are the states in the best position to survive a benefit reduction with the least amount of pain.

James Allen, a certified financial education instructor, CPA and founder of, thinks residents of Utah, Alaska and Texas are best suited to endure potential cuts to Social Security. These states have a younger demographic profile, with fewer folks age 67 and up, and also have a lower percentage of their population receiving Social Security benefits. Additionally, these states have robust state-based aid programs for seniors, providing a safety net in case of potential Social Security cuts.

In addition, a handful of states offer a different kind of hedge by exempting retirement income from taxation, allowing retirees to keep more of their nest egg if their Social Security benefits take a hit.

Most states don’t levy state taxes on Social Security. However, nine states exclude not just Social Security and retirement funds, but all income from state taxation. These factors are important to consider, especially as Social Security may face changes in the future and impact millions of Americans.