Benefits could drop to 77-81% without action: While Trump said at the State of the Union he'll "always protect Social Security," the retirement trust fund is projected to be depleted in 2033 — after that, Social Security could only pay about 77% of scheduled benefits from ongoing payroll taxes unless Congress acts.

Average benefit is $2,071 monthly: For retired workers, the average Social Security check in January 2026 was $2,071 per month (about $24,850 annually) after the 2.8% cost-of-living adjustment — but that amount varies widely, from $1,415 at age 62 to $2,248 for those who wait until age 70.

No concrete solutions yet: Despite proposals like a bipartisan investment fund from Senators Cassidy and Kaine, experts say the issue has been "kicked down the road for years" and will likely take "a few more presidential administrations" to fully address, with legislators avoiding the hard decisions needed to prevent benefit cuts.

The states: Colorado, Connecticut, Minnesota, Montana, New Mexico, Rhode Island, Utah, Vermont, and West Virginia all tax Social Security benefits — but each state has different rules, rates, and exemptions based on your age and income.

Age matters in some states: Colorado residents age 65+ pay no state tax on Social Security, while those 55-64 can deduct up to $24,000; Connecticut exempts singles with AGIs under $75,000 and joint filers under $100,000 from taxation, but may tax up to 25% above those thresholds.

Other states ignore age: Montana uses only your Adjusted Gross Income (total earnings minus deductions like retirement contributions) to calculate Social Security tax, regardless of how old you are — filing status and AGI determine your tax burden in most of these nine states.

2026 earnings limits: If you're under full retirement age all year, you lose $1 in benefits for every $2 earned over $24,480 annually ($2,040/month); if you reach FRA in 2026, you lose $1 for every $3 earned over $65,160 (until the month you hit FRA) — once you reach FRA, there's no earnings limit.

Good news: withheld benefits aren't lost forever: If benefits are withheld due to the earnings test, Social Security recalculates your benefit at full retirement age and credits those withheld months back, increasing your future payments — plus, working can replace low-earning years in your highest 35 years calculation.

Hidden consequences of working: Even if your benefits aren't withheld, extra income can trigger higher taxes on your Social Security and increased Medicare premiums through IRMAA surcharges — these consequences often show up later, making them hard to connect to earlier work decisions.