Fast Facts & Figures About Social Security, 2006
Did You Know That...
- SSA paid benefits to more than 53 million people in 2005
- About 16 percent of the total U.S. population and 91 percent of the population aged 65 or older received Social Security benefits in 2004
- Social Security provided at least half the income for 66 percent of the aged in 2004
- Social Security benefits were awarded to nearly 4.7 million people in 2005
- Women accounted for 56 percent of adult Social Security beneficiaries in 2005
- The average age of disabled-worker beneficiaries was 51.8 in 2005
- Eighty-three percent of SSI recipients received payments because of disability or blindness in 2005
Abbreviations
- AIME
- average indexed monthly earnings
- DI
- Disability Insurance
- FRA
- full retirement age
- HI
- Hospital Insurance
- OASDI
- Old-Age, Survivors, and Disability Insurance
- OASI
- Old-Age and Survivors Insurance
- PIA
- primary insurance amount
- SSA
- Social Security Administration
- SSI
- Supplemental Security Income
General Information, 2006
Cost-of-living adjustment
Tax rates
Program | Employer and employee, each |
Self-employed |
---|---|---|
Total | 7.65 | 15.30 |
OASI | 5.30 | 10.60 |
DI | 0.90 | 1.80 |
HI | 1.45 | 2.90 |
Average wage index
Year | Dollars | Increase from previous year (in percent) |
---|---|---|
2004 | 35,648.55 | 4.6 |
2005 (estimated) | 37,197.43 | 4.3 |
2006 (estimated) | 38,695.99 | 4.0 |
Maximum earnings subject to Social Security taxes
Program | Amount |
---|---|
OASDI | 94,200 |
HI | No limit |
Taxes payable
Type of earner | Total | OASI | DI | HI |
---|---|---|---|---|
Average earner | 2,960 | 2,051 | 348 | 561 |
Maximum earner | 5,841 | 4,993 | 848 | No limit |
Self-employed maximum earner | 11,681 | 9,985 | 1,696 | No limit |
Work credits
- $970 in earnings equals 1 credit
- $3,880 is the maximum earnings needed for 4 credits in a given year
Retirement earnings test
Period | Annually | Monthly |
---|---|---|
Ages 62–64 ($1 for $2 withholding rate) | 12,480 | 1,040 |
Calendar year attaining full retirement age ($1 for $3 withholding rate) a | 33,240 | 2,770 |
After calendar year attaining full retirement age or older | No limit | No limit |
a. Test no longer applies beginning in the month in which retirement age is reached. |
Age for full retirement benefit for retired workers
Year of birth | Full retirement age |
---|---|
1938 | 65 and 2 months |
1939 | 65 and 4 months |
1940 | 65 and 6 months |
1941 | 65 and 8 months |
1942 | 65 and 10 months |
1943–1954 | 66 |
1955 | 66 and 2 months |
1956 | 66 and 4 months |
1957 | 66 and 6 months |
1958 | 66 and 8 months |
1959 | 66 and 10 months |
1960 and later | 67 |
Benefit formula bend points
Benefit formula bend points (for workers with first eligibility in 2006)
Primary insurance amount (PIA) equals
- 90% of the first $656 of AIME, plus
- 32% of AIME over $656 through $3,955 plus
- 15% of AIME over $3,955
Disability thresholds
Disability thresholds, 2006
Substantial gainful activity
- $860 per month for nonblind persons
- $1,450 per month for blind persons
Trial work period
- $620 per month
Maximum Social Security benefit
Trust fund operations
Calendar year and trust fund | Income | Outgo | Fund at end of year |
---|---|---|---|
2005 (actual) | |||
Total | 701.8 | 529.9 | 1,858.7 |
OASI | 604.3 | 441.9 | 1,663.0 |
DI | 97.4 | 88.0 | 195.6 |
2006 (estimated) | |||
Total | 740.9 | 564.2 | 2,035.3 |
OASI | 638.8 | 468.1 | 1,833.7 |
DI | 102.2 | 96.1 | 201.6 |
OASDI administrative expenses
Benefit payments
Calendar year | Total | OASI | DI |
---|---|---|---|
2004 | 4.18 | 3.55 | 0.64 |
2005 | 4.17 | 3.49 | 0.68 |
Workload
Type of filing | Number |
---|---|
OASI claims | 3.8 |
DI claims | 2.6 |
SSI applications | 2.5 |
Supplemental Security Income
Supplemental Security Income, January 2006
Federal benefit rate
- $603 individual
- $904 couple
Resource limits
- $2,000 individual
- $3,000 couple
Poverty thresholds
Family unit | 2005 |
---|---|
Aged individual | 9,367 |
Family of two, aged head | 11,805 |
Family of four | 20,144 |
SOURCE: U.S. Census Bureau as of September 2006. |
Income of the Aged Population
Size of Income, 1962 and 2004
Median annual income for married couples and nonmarried persons aged 65 or older has increased markedly since 1962 (the earliest year for which data are available). Even after adjusting for inflation, median income has risen 94% for married couples and 98% for nonmarried persons. A married couple is aged 65 or older if the husband is aged 65 or older or if the husband is aged 54 or younger and the wife is 65 or older.
![Bar chart. Median income has risen for married couples from $17,983 in 1962 to $34,900 in 2004. Likewise, it has risen for nonmarried persons from $7,068 in 1962 to $13,999 in 2004.](chart04.gif)
Receipt of Income, 1962 and 2004
Social Security benefits—the most common source of income for married couples and nonmarried persons aged 65 or older in 1962—are now almost universal. The proportion of the aged population with asset income—the next most common source—is similar to that in 1962. Over the 42-year period, receipt of private pensions has tripled, and receipt of government pensions has increased by almost 50%. The proportion of couples and nonmarried persons aged 65 or older who received earnings was smaller in 2004 than in 1962.
![Bar chart with tabular version below.](chart05.gif)
Source of income | 1962 | 2004 |
---|---|---|
Social Security | 69 | 89 |
Asset income | 54 | 55 |
Private pensions | 9 | 29 |
Government employee pensions | 9 | 14 |
Earnings | 36 | 24 |
Shares of Aggregate Income, 1962 and 2004
In 1962, Social Security, private and government employee pensions, income from assets, and earnings made up only 84% of the aggregate total income of couples and nonmarried persons aged 65 or older, compared with 97% in 2004. Although private pensions still accounted for only a small proportion of aggregate total income in 2004, they more than tripled their share over this period—from 3% to 10%. The share of aggregate total income from earnings declined from 28% to 26% during this time.
![Pie chart showing the proportion of total income of the aged from six different income sources for 2004. Social Security accounted for 39%, earnings 26%, asset income 13%, private pensions 10%, government employee pensions 9%, and other income accounted for 3%.](chart06.gif)
Relative Importance of Social Security, 2004
In 2004, 90% of married couples and 88% of nonmarried persons aged 65 or older received Social Security benefits. Social Security was the major source of income (providing at least 50% of total income) for 54% of aged beneficiary couples and 74% of aged nonmarried beneficiaries. It was 90% or more of income for 21% of aged beneficiary couples and 43% of aged nonmarried beneficiaries. Total income excludes withdrawals from savings and nonannuitized IRAs or 401(k) plans; it also excludes in-kind support, such as food stamps and housing and energy assistance.
![Bar chart described in the text. In addition, Social Security provided at least 50% of total income for 66% of all beneficiary units. It was 90% or more of income for 34% of all beneficiary units.](chart07.gif)
Poverty Status Based on Family Income, 2004
The aged poor are those with income below the poverty line. The near poor have income between the poverty line and 125% of the poverty line. Nonmarried women and minorities have the highest poverty rates, ranging from 17.4% to 23.9%. Married persons have the lowest poverty rates, with 4.5% poor and 3.6% near poor. Overall, 9.8% are poor and 6.7% near poor.
![Bar chart with tabular version below.](chart08.gif)
Characteristic | Percent poor | Percent near poor |
---|---|---|
All persons | 9.8 | 6.7 |
By marital status | ||
Married | 4.5 | 3.6 |
Nonmarried men | 13.1 | 9.6 |
Nonmarried women | 17.4 | 10.8 |
By race and Hispanic origin | ||
White alone | 8.3 | 6.1 |
Black alone | 23.9 | 11.2 |
Hispanic | 18.7 | 11.3 |
OASDI Program
Earnings in Covered Employment, 1937–2005
People contribute to Social Security through payroll taxes or self-employment taxes (FICA and SECA), as required by the Federal Insurance Contributions Act. The maximum taxable amount is updated annually on the basis of increases in the average wage. Of the 159 million workers with earnings in Social Security–covered employment in 2005, 6% had earnings that equaled or exceeded the maximum amount subject to taxes, compared with 3% when the program began and a peak of 36% in 1965. About 84% of earnings in covered employment were taxable in 2005, compared with 92% in 1937.
![Line chart. In 1937, 92% of earnings were in covered employment. That percentage fell gradually, reaching a low of 71.3% in 1965. It then rose steadily, peaking at 88.9% in 1985, then fell back slowly to about 84% in 2005. The percentage of workers with maximum earnings shows an inverse pattern. Only 3.1% of workers had maximum earnings in 1937, rising steadily and reaching a high of 36.1% in 1965. The percentage fell to 15% in 1975, then to 6.5% in 1985, and to 6% in 2005.](chart09.gif)
Insured Status, 1970–2006
The percentage of persons aged 20 or older who are insured for benefits has increased over time. To be fully insured, a worker must have at least one work credit (quarter of coverage) for each year elapsed after age 21 (but no earlier than 1950) and before the year in which he or she attains age 62 or becomes disabled. The maximum number of work credits needed to be fully insured is 40. An individual is said to be permanently insured if he or she has earned 40 work credits. To be insured for disability, the worker must be fully insured and have at least 20 work credits during the last 40 calendar quarters. (Requirements for disability-insured status are somewhat different for persons younger than age 31.) Disability benefits are available up to full retirement age (FRA).
Year | Population aged 20 or older | Population aged 20–FRA | |||
---|---|---|---|---|---|
Millions | Percentage permanently insured |
Percentage fully insured |
Millions | Percentage insured for disability |
|
1970 | 135.2 | 50 | 77 | 113.2 | 62 |
1975 | 147.5 | 50 | 80 | 122.9 | 65 |
1980 | 162.0 | 53 | 83 | 133.3 | 70 |
1985 | 175.1 | 57 | 84 | 144.1 | 73 |
1990 | 186.0 | 63 | 86 | 151.9 | 76 |
1995 | 194.7 | 66 | 87 | 160.5 | 78 |
2000 | 204.7 | 69 | 88 | 169.2 | 79 |
2001 | 206.8 | 69 | 88 | 171.3 | 80 |
2002 | 209.1 | 69 | 89 | 173.2 | 80 |
2003 | 216.3 | 68 | 87 | 179.7 | 78 |
2004 | 216.9 | 69 | 87 | 180.3 | 79 |
2005 | 219.0 | 69 | 87 | 182.0 | 79 |
2006 | 221.8 | 69 | 87 | 184.3 | 79 |
SOURCE: Social Security Administration, Office of the Chief Actuary. | |||||
NOTE: The population in the Social Security area includes residents of the 50 states and the District of Columbia adjusted for net census undercount; civilian residents of American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands; federal civilian employees and persons in the armed forces abroad and their dependents; crew members of merchant vessels; and all other U.S. citizens abroad. |
Insured Status, by Sex, 1970 and 2006
Although men are more likely than women to be insured, the gender gap is shrinking. The proportion of men who are insured has remained essentially stable, with 92% fully insured and 83% insured for disability. By contrast, the proportion of women who are insured has increased dramatically—from 63% to 84% fully insured and from 41% to 75% insured for disability.
![Bar chart with tabular version below.](chart11.gif)
Sex | 1970 | 2006 |
---|---|---|
Fully insured | ||
Men | 92 | 92 |
Women | 63 | 84 |
Insured for disability | ||
Men | 85 | 83 |
Women | 41 | 75 |
New Benefit Awards, 2005
Benefits were awarded to nearly 4.7 million persons: of those, 43% were retired workers and 18% were disabled workers. The remaining 39% were survivors or the spouses and children of retired or disabled workers. These awards represent not only new entrants to the benefit rolls but also persons already on the rolls who become entitled to a different benefit, particularly conversions of disabled-worker benefits to retired-worker benefits at full retirement age.
Beneficiary | Number (thousands) |
Percent |
---|---|---|
Total | 4,672 | 100 |
Retired workers and dependents | 2,453 | 52 |
Workers | 2,000 | 43 |
Spouses and children | 453 | 10 |
Disabled workers and dependents | 1,349 | 29 |
Workers | 830 | 18 |
Spouses and children | 519 | 11 |
Survivors of deceased workers | 870 | 19 |
![Pie chart described in the text.](chart12.gif)
New Awards to Workers, 1960–2005
Awards to retired workers have increased considerably since 1960 but proportionately much less than awards to disabled workers. Following the implementation of Medicare in 1965, the number of awards to retired workers rose from 1.2 million in 1967 to 2 million in 2005. Disabled-worker awards increased—from 208,000 in 1960 to 592,000 in the mid-1970s—before falling to 297,000 in 1982. The number then rose, reaching 830,000 in 2005.
![Line chart with tabular version below.](chart13.gif)
Year | Retired workers |
Disabled workers |
---|---|---|
1968 | 1200.00 | 323.00 |
1969 | 1272.78 | 344.74 |
1970 | 1338.11 | 350.38 |
1971 | 1391.40 | 415.90 |
1972 | 1461.40 | 455.44 |
1973 | 1493.19 | 491.62 |
1974 | 1413.15 | 535.98 |
1975 | 1505.75 | 592.05 |
1976 | 1475.77 | 551.46 |
1977 | 1593.63 | 568.87 |
1978 | 1472.79 | 464.42 |
1979 | 1590.85 | 416.71 |
1980 | 1612.67 | 396.56 |
1981 | 1578.99 | 351.85 |
1982 | 1618.41 | 297.13 |
1983 | 1669.74 | 311.55 |
1984 | 1607.37 | 362.00 |
1985 | 1690.49 | 377.37 |
1986 | 1734.25 | 416.87 |
1987 | 1681.72 | 415.85 |
1988 | 1654.07 | 409.49 |
1989 | 1656.74 | 425.58 |
1990 | 1664.75 | 467.98 |
1991 | 1695.35 | 536.43 |
1992 | 1707.95 | 636.64 |
1993 | 1661.28 | 635.24 |
1994 | 1625.35 | 631.87 |
1995 | 1609.17 | 645.83 |
1996 | 1581.45 | 624.34 |
1997 | 1718.62 | 587.42 |
1998 | 1631.51 | 608.13 |
1999 | 1690.02 | 620.49 |
2000 | 1960.65 | 621.65 |
2001 | 1779.23 | 691.31 |
2002 | 1812.55 | 750.00 |
2003 | 1791.32 | 777.46 |
2004 | 1883.06 | 795.78 |
2005 | 2000.00 | 830.00 |
Beneficiaries in Current-Payment Status, December 2005
More than 48 million beneficiaries were in current-payment status, that is, they were being paid a benefit. Sixty-three percent of those beneficiaries were retired workers and 13% were disabled workers. The remaining 24% were survivors or the spouses and children of retired or disabled workers.
Beneficiary | Number (thousands) |
Percent |
---|---|---|
Total | 48,434 | 100 |
Retired workers and dependents | 33,476 | 69 |
Workers | 30,461 | 63 |
Spouses and children | 3,015 | 6 |
Disabled workers and dependents | 8,306 | 17 |
Workers | 6,519 | 13 |
Spouses and children | 1,787 | 4 |
Survivors of deceased workers | 6,653 | 14 |
![Pie chart illustrating the Percent data from the previous table. In addition, showing that 10% of beneficiaries in current-payment status were spouses and children of retired and disabled workers.](chart14.gif)
Average Benefit Amounts, 2005
Benefits payable to workers who retire at the full retirement age and to disabled workers are equal to 100% of the PIA (subject to any applicable deductions). At the full retirement age, widow(er)s' benefits are also payable at 100% of the insured worker's PIA. Nondisabled widow(er)s can receive reduced benefits at age 60. Disabled widow(er)s can receive reduced benefits at age 50. Spouses, children, and parents receive a smaller proportion of the worker's PIA than do widow(er)s.
Beneficiary | New awards | Benefits in current-payment status, December |
---|---|---|
Total | 810 | 916 |
Retired workers | 1,001 | 1,002 |
Spouses | 370 | 499 |
Children | 465 | 493 |
Disabled workers | 1,000 | 938 |
Spouses | 254 | 246 |
Children | 259 | 279 |
Survivors of deceased workers | ||
Nondisabled widow(er)s | 795 | 966 |
Disabled widow(er)s | 611 | 609 |
Widowed mothers and fathers | 714 | 724 |
Surviving children | 662 | 656 |
Parents | 815 | 851 |
SOURCE: Social Security Administration, Master Beneficiary Record, 100 percent data. |
Beneficiaries, by Age, December 2005
About four-fifths of all OASDI beneficiaries in current-payment status were aged 62 or older, including 25 percent aged 75–84 and 9 percent aged 85 or older. About 14 percent were persons aged 18–61 receiving benefits as disabled workers, survivors, or dependents. Another 6 percent were children under age 18.
![Pie chart described in the text. In addition, 36% of all OASDI beneficiaries in current-payment status were aged 65-74 and 9% were aged 62-64.](chart16.gif)
Disabled and Retired Workers, by Age, 1960–2005
The average age of disabled-worker beneficiaries in current-payment status has declined substantially since 1960, when DI benefits first became available to persons younger than age 50. In that year, the average age of a disabled worker was 57.2 years. The rapid drop in average age in the following years reflects a growing number of awards to workers under 50. By 1995, the average age had fallen to a low of 49.8, and by 2005, it had risen slightly, to 51.8. In contrast, the average age of retired workers has changed little over time, rising from 72.4 in 1960 to 73.9 in 2005.
![Line chart with tabular version below.](chart17.gif)
Year | Disabled workers |
Retired workers |
---|---|---|
1960 | 57.2 | 72.4 |
1965 | 54.7 | 72.5 |
1970 | 54.2 | 72.3 |
1975 | 53.8 | 72.3 |
1980 | 53.2 | 72.4 |
1985 | 52.1 | 72.8 |
1990 | 50.5 | 73.1 |
1995 | 49.8 | 73.6 |
2000 | 50.8 | 73.9 |
2005 | 51.8 | 73.9 |
Beneficiaries, by Sex, December 2005
Of all adults receiving monthly Social Security benefits, 44% were men and 56% were women. Seventy-nine percent of the men and 58% of the women received retired-worker benefits. About one-fifth of the women received survivor benefits.
![Two pie charts with tabular version below.](chart18.gif)
Type of beneficiary | Men | Women |
---|---|---|
Retired workers | 79 | 58 |
Disabled workers | 18 | 12 |
Spouses of retired or disabled workers | a | 10 |
Widows and mothers | a | 18 |
Disabled adult children | 2 | 1 |
a. Less than 0.5 percent. |
Average Monthly Benefit, by Sex, December 2005
Among retired and disabled workers who collected benefits based on their own work records, men received a higher average monthly benefit than did women. For those with benefits based on another person's work record (spouses and survivors), women had higher average benefits.
Beneficiary | Men | Women |
---|---|---|
All beneficiaries | 1,101 | 832 |
Workers | ||
Retired | 1,130 | 867 |
Disabled | 1,051 | 806 |
Spouses of— | ||
Retired workers | 285 | 503 |
Disabled workers | 203 | 245 |
Survivors of deceased workers | ||
Nondisabled widow(er)s | 782 | 969 |
Disabled widow(er)s | 439 | 613 |
Mothers and fathers | 617 | 728 |
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample. |
Women Beneficiaries, 1940–2005
The proportion of women among retired-worker beneficiaries has quadrupled since 1960. The percentage climbed steadily from 12% in 1940 to 47% in 1980, 48% in 1990, and 49% in 2005. The proportion of women among disabled-worker beneficiaries has more than doubled since 1957, when DI benefits first became payable. The percentage rose steadily from 19% in 1957 to 35% in 1990 and 46% in 2005.
![Line chart with tabular version below.](chart20.gif)
Year | Retired workers |
Disabled workers |
---|---|---|
1940 | 11.6 | -- |
1950 | 17.1 | -- |
1957 | -- | 19.1 |
1960 | 35.3 | 21.8 |
1970 | 42.4 | 28.4 |
1980 | 46.5 | 32.6 |
1990 | 47.7 | 34.7 |
2000 | 48.2 | 43.3 |
2005 | 48.6 | 46.0 |
NOTE: -- = not available. |
Women with Dual Entitlement, 1960–2005
The proportion of women aged 62 or older who are receiving benefits as dependents (that is, on the basis of their husband's earnings record only) has been declining—from 57% in 1960 to 31% in 2005. At the same time, the proportion of women with dual entitlement (that is, paid on the basis of both their own earnings record and that of their husband) has been increasing—from 5% in 1960 to 28% in 2005.
![Area chart described in the text. In addition, the percentage of women who are entitled solely on their own earnings records as retired or disabled workers has remained fairly steady over this period at about 42%.](chart21.gif)
SSI Program
Number of Recipients, 1974–2005
The Supplemental Security Income (SSI) program provides income support to needy persons aged 65 or older, blind or disabled adults, and blind or disabled children. Eligibility requirements and federal payment standards are nationally uniform. SSI replaced the former federal/state adult assistance programs in the 50 states and the District of Columbia.
Payments under SSI began in January 1974, with 3.2 million persons receiving federally administered payments. By December 1974, this number had risen to nearly 4 million and remained at about that level until the mid-1980s, then rose steadily, reaching nearly 6 million in 1993 and 7 million by the end of 2004. As of December 2005, the number of recipients stood at 7.1 million. Of this total, 4.1 million were between the ages of 18 and 64, 2 million were aged 65 or older, and 1 million were under age 18.
![Line chart with tabular version below.](chart22.gif)
Year | Total | Under 18 | 18–64 | 65 or older |
---|---|---|---|---|
1974 | 4.0 | 0.1 | 1.5 | 2.4 |
1975 | 4.3 | 0.1 | 1.7 | 2.5 |
1976 | 4.2 | 0.1 | 1.7 | 2.4 |
1977 | 4.2 | 0.1 | 1.7 | 2.4 |
1978 | 4.2 | 0.2 | 1.7 | 2.3 |
1979 | 4.1 | 0.2 | 1.7 | 2.2 |
1980 | 4.1 | 0.2 | 1.7 | 2.2 |
1981 | 4.0 | 0.2 | 1.7 | 2.1 |
1982 | 3.9 | 0.2 | 1.7 | 2.0 |
1983 | 3.9 | 0.2 | 1.7 | 2.0 |
1984 | 4.0 | 0.2 | 1.8 | 2.0 |
1985 | 4.1 | 0.2 | 1.9 | 2.0 |
1986 | 4.3 | 0.2 | 2.0 | 2.0 |
1987 | 4.4 | 0.3 | 2.1 | 2.0 |
1988 | 4.5 | 0.3 | 2.2 | 2.0 |
1989 | 4.6 | 0.3 | 2.3 | 2.0 |
1990 | 4.8 | 0.3 | 2.4 | 2.1 |
1991 | 5.1 | 0.4 | 2.6 | 2.1 |
1992 | 5.6 | 0.6 | 2.9 | 2.1 |
1993 | 6.0 | 0.7 | 3.1 | 2.1 |
1994 | 6.3 | 0.8 | 3.3 | 2.1 |
1995 | 6.5 | 0.9 | 3.5 | 2.1 |
1996 | 6.6 | 1.0 | 3.6 | 2.1 |
1997 | 6.5 | 0.9 | 3.6 | 2.1 |
1998 | 6.6 | 0.9 | 3.6 | 2.0 |
1999 | 6.6 | 0.8 | 3.7 | 2.0 |
2000 | 6.6 | 0.8 | 3.7 | 2.0 |
2001 | 6.7 | 0.9 | 3.8 | 2.0 |
2002 | 6.8 | 0.9 | 3.9 | 2.0 |
2003 | 6.9 | 1.0 | 4.0 | 2.0 |
2004 | 7.0 | 1.0 | 4.0 | 2.0 |
2005 | 7.1 | 1.0 | 4.1 | 2.0 |
Payment Amounts, by Age, December 2005
The average federally administered SSI payment was $439. Payments varied by age group, ranging from an average of $523 for recipients under 18 to $362 for those 65 or older. The maximum federal benefit rate in December 2005 was $579 for an individual, $869 for a couple, plus any applicable state supplementation.
![Bar chart described in the text. In addition, recipients aged 18-64 received an average payment of $456.](chart23.gif)
Federally Administered Payments, December 2005
A total of 7.1 million persons received federally administered SSI payments. The majority received federal SSI only. States have the option of supplementing the federal benefit rate and are required to do so if that rate is less than the income the recipient would have had under the former state program.
![Pie chart. In December 2005, 69% of 7.1 million SSI recipients received only a federal SSI payment, 27% received federally administered state supplementation along with their federal SSI payment, and 4% received only federally administered state supplementation.](chart24.gif)
Basis for Eligibility and Age of Recipients, December 2005
Seventeen percent of SSI recipients received benefits on the basis of age, the rest on the basis of disability. Twenty-eight percent of the recipients were aged 65 or older. In the SSI program—unlike the OASDI program—a disabled recipient is still classified as "disabled" after reaching full retirement age. DI beneficiaries are converted to the retirement program when they attain full retirement age.
![Two pie charts. The first pie chart shows the percentage distribution in December 2005 of SSI recipients by basis for eligibility: 82% are disabled, 17% are aged, and 1% are blind. The second pie chart shows the same group distributed by age: 15% are under 18, 57% are aged 18-64, and 28% are 65 or older.](chart25.gif)
Percentage Distribution of Recipients, by Age, 1974–2005
The proportion of SSI recipients aged 65 or older has declined from 61% in January 1974 to 28% in December 2005. The overall long-term growth of the SSI program has occurred because of an increase in the number of disabled recipients, most of whom are under age 65.
![Line chart with tabular version below.](chart26.gif)
Year | Under 18 | 18–64 | 65 or older |
---|---|---|---|
1974 | 1.8 | 37.6 | 60.6 |
1975 | 2.5 | 39.4 | 58.1 |
1976 | 3.0 | 40.5 | 56.6 |
1977 | 3.5 | 41.0 | 55.5 |
1978 | 3.9 | 41.4 | 54.6 |
1979 | 4.3 | 41.6 | 54.1 |
1980 | 4.6 | 41.8 | 53.6 |
1981 | 4.8 | 42.4 | 52.8 |
1982 | 5.0 | 42.9 | 52.1 |
1983 | 5.1 | 43.6 | 51.3 |
1984 | 5.3 | 44.2 | 50.6 |
1985 | 5.5 | 45.4 | 49.1 |
1986 | 5.6 | 47.1 | 47.3 |
1987 | 5.7 | 48.3 | 46.0 |
1988 | 5.7 | 49.3 | 44.9 |
1989 | 5.8 | 50.1 | 44.1 |
1990 | 6.4 | 50.9 | 42.7 |
1991 | 7.8 | 51.6 | 40.6 |
1992 | 10.0 | 52.3 | 37.7 |
1993 | 12.1 | 52.6 | 35.3 |
1994 | 13.4 | 53.0 | 33.7 |
1995 | 14.1 | 53.5 | 32.5 |
1996 | 14.4 | 54.0 | 31.6 |
1997 | 13.5 | 54.8 | 31.6 |
1998 | 13.5 | 55.5 | 31.0 |
1999 | 12.9 | 56.3 | 30.8 |
2000 | 12.8 | 56.7 | 30.5 |
2001 | 13.2 | 57.0 | 29.8 |
2002 | 13.5 | 57.1 | 29.4 |
2003 | 13.9 | 57.3 | 28.8 |
2004 | 14.2 | 57.5 | 28.3 |
2005 | 14.6 | 57.4 | 28.0 |
Recipients, by Sex and Age, December 2005
Overall, 57% of the 7.1 million SSI recipients were women, but that percentage varied greatly by age group. Women accounted for 70% of the 2 million beneficiaries aged 65 or older, 56% of the 4.1 million recipients aged 18–64, and 35% of the 1 million recipients under age 18.
![Bar chart with tabular version below.](chart27.gif)
Age | Men | Women |
---|---|---|
All ages | 43 | 57 |
Under 18 | 65 | 35 |
18–64 | 44 | 56 |
65 or older | 30 | 70 |
Other Income, December 2005
Fifty-seven percent of SSI recipients aged 65 or older received OASDI benefits, as did 32% of those aged 18–64 and 7% of those under age 18. Other types of unearned income, such as income from assets, were reported most frequently among those under age 18 (19%) and those aged 65 or older (15%). Earned income was most prevalent (6%) among those aged 18–64.
![Bar chart with tabular version below.](chart28.gif)
Age | OASDI | Other unearned income |
Earnings |
---|---|---|---|
All ages | 35.2 | 11.5 | 3.8 |
Under 18 | 7.2 | 19.1 | 0.3 |
18–64 | 31.5 | 8.0 | 5.9 |
65 or older | 57.1 | 14.8 | 1.4 |
OASDI, SSI, or Both
All Beneficiaries, December 2005
About 53 million people received a payment from Social Security. Most (45.9 million) received OASDI benefits only, about 4.6 million received SSI only, and 2.5 million received payments from both programs.
Benefit | Number (thousands) |
---|---|
Total (unduplicated) | 53,048 |
OASDI | 48,434 |
OASDI only | 45,934 |
SSI | 7,114 |
SSI only | 4,613 |
Both OASDI and SSI | 2,501 |
NOTE: SSI includes federal SSI payments and federally administered state supplementation. |
![Pie chart. Of the 53 million beneficiaries in December 2005, 86.6% received only OASDI benefits, 8.7% received only SSI benefits, and 4.7% received both OASDI and SSI benefits.](chart29.gif)
Beneficiaries Aged 65 or Older, December 2005
Benefits were paid to 34.9 million people aged 65 or older. About 1.1 million received both OASDI and SSI.
Beneficiary | Number (thousands) |
---|---|
Total (unduplicated) | 34,881 |
OASDI, total | 34,026 |
Retired workers | 27,651 |
Disabled workers | 133 |
Spouses | 2,258 |
Nondisabled widow(er)s | 3,914 a |
Disabled adult children | 70 |
SSI, total | 1,995 b |
Receiving SSI only | 855 |
Receiving both OASDI and SSI | 1,140 |
NOTE: SSI includes federal SSI payments and federally administered state supplementation. | |
a. Includes 3,300 persons who received dependent parents' benefits, special age-72 benefits, or mother's and father's benefits. | |
b. Includes 780,200 SSI beneficiaries aged 65 or older who are disabled or blind. |
by program
![Pie chart. Of the 34.9 million beneficiaries aged 65 or older in December 2005, 94.3% received only OASDI benefits, 3.3% received both OASDI and SSI benefits, and 2.5% received only SSI payments.](chart30.gif)
Disabled Beneficiaries Aged 18–64, December 2005
Payments were made to 10.1 million people aged 18–64 on the basis of their own disability. Fifty-nine percent received disability payments from the OASDI program only, 28% received payments from the SSI program only, and 13% received payments from both programs.
Beneficiary | Number (thousands) |
---|---|
Total (unduplicated) | 10,080 |
OASDI disability, total | 7,294 a |
Workers aged 64 or younger | 6,378 |
Disabled adult children | 704 |
Widow(er)s | 212 |
SSI disability, total | 4,083 |
Receiving SSI disability only | 2,786 |
Receiving both OASDI and SSI disability | 1,297 |
NOTE: SSI includes federal SSI payments and federally administered state supplementation. | |
a. Includes 5,997,000 beneficiaries receiving OASDI disability only. |
![Pie chart described in the text.](chart31.gif)
Children
OASDI Beneficiaries, December 2005
More than 3.2 million children under age 18 and students aged 18–19 received OASDI benefits. Children of deceased workers had the highest average payments, in part because they are eligible to receive monthly benefits based on 75% of the worker's PIA, compared with 50% for children of retired or disabled workers. Overall, the average monthly benefit amount for children was $452.
![Bar chart with tabular version below.](chart32a.gif)
![Bar chart with tabular version below.](chart32b.gif)
Type of beneficiary | Number (thousands) |
Average monthly benefit (dollars) |
---|---|---|
Children of retired workers | 296 | 470 |
Children of disabled workers | 1,564 | 274 |
Children of deceased workers | 1,396 | 648 |
SSI Recipients, 1974–2005
In 1974, when the program began, 70,900 blind and disabled children were receiving SSI. That number increased to 955,000 in 1996, declined to 847,000 in 2000, and is now 1,036,500. The relatively high average payment to children (compared with payments made to blind and disabled adults) is due in part to a limited amount of other countable income. The spike in average monthly benefits in 1992 is due to retroactive payments resulting from the Sullivan v. Zebley decision. As of December 2005, blind and disabled children were receiving SSI payments averaging $523.
![Line chart with tabular version below.](chart33a.gif)
![Line chart with tabular version below.](chart33b.gif)
Year | Number of children receiving SSI (in thousands) |
Average monthly SSI payment (in percent) a |
---|---|---|
1974 | 70.90 | 109.15 |
1975 | 107.03 | 141.09 |
1976 | 125.41 | 154.24 |
1977 | 147.36 | 170.03 |
1978 | 165.90 | 171.72 |
1979 | 177.31 | 193.26 |
1980 | 190.39 | 219.08 |
1981 | 194.89 | 240.84 |
1982 | 191.57 | 263.22 |
1983 | 198.32 | 280.96 |
1984 | 211.59 | 292.86 |
1985 | 227.38 | 301.26 |
1986 | 241.20 | 321.34 |
1987 | 250.90 | 327.27 |
1988 | 255.14 | 343.24 |
1989 | 264.89 | 357.64 |
1990 | 308.59 | 403.72 |
1991 | 397.16 | 446.05 |
1992 | 556.47 | 610.98 |
1993 | 722.68 | 460.54 |
1994 | 841.47 | 448.07 |
1995 | 917.05 | 447.57 |
1996 | 955.17 | 442.01 |
1997 | 879.83 | 433.83 |
1998 | 887.07 | 441.75 |
1999 | 847.06 | 450.13 |
2000 | 846.78 | 463.05 |
2001 | 881.84 | 476.09 |
2002 | 914.82 | 487.73 |
2003 | 959.38 | 490.63 |
2004 | 993.13 | 505.98 |
2005 | 1036.50 | 522.80 |
Social Security Financing
How Social Security Is Financed
Social Security is largely a pay-as-you-go program. Most of the payroll taxes collected from today's workers are used to pay benefits to today's recipients. In 2005, the Old-Age and Survivors Insurance and Disability Insurance Trust Funds collected $702 billion in revenues. Of that amount, 84% was derived from payroll taxes and 2% from income taxes on Social Security benefits. Interest earned on the government bonds held by the trust funds provided the remaining 13% of income. Assets increased in 2005 because income exceeded expenditures for benefit payments and administrative expenses.
![Two pie charts showing the sources and uses of the $702 billion in revenue collected by the Social Security trust funds in 2005. The Sources of Revenues pie has three slices. Payroll taxes: 84%. Interest: 13%. Taxation of benefits: 2%. The Uses of Revenues pie has four slices. Benefit payments: 74%. Increase in trust funds: 24%. Administrative expenses: 1%. Railroad Retirement financial interchange: 1%.](chart34.gif)
Social Security's Demographic Challenge
The number of retired workers is projected to grow rapidly starting in 2008, when the members of the post–World War II baby boom begin to reach early retirement age, and will double in less than 30 years. People are also living longer, and the birth rate is low. As a result, the ratio of workers paying Social Security taxes to people collecting benefits will fall from 3.3 to 1 in 2005 to 2.1 to 1 by 2032. The Trustees Report projects that in 2017, when the ratio will be 2.7, there will not be enough workers to pay scheduled benefits at current tax rates. The Trustees Report also projects that redemption of trust fund assets will be sufficient to allow for full payment of scheduled benefits until 2040.
![Line chart. In 1955, there were 8.6 workers supporting each retiree. By 1975, that ratio had declined to 3.2 workers per beneficiary and remained between 3.1 and 3.4 over the next 30 years. Current projections have the ratio starting to decline again in 2008, decreasing at an accelerating rate until it reaches 2.1 workers per beneficiary in 2031. Thereafter, it continues to decline by one-tenth of a percentage point approximately every 15 years, arriving in 2080 at only 1.9 workers per beneficiary.](chart35.gif)
The Long-Run Financial Outlook
Social Security is not sustainable over the long term at current benefit and tax rates. Within 11 years the program will begin paying more in benefits than it collects in taxes (see the chart below). By 2040 the trust funds will be exhausted. At that point, payroll taxes and other income will flow into the fund but will be sufficient to pay only 74% of program costs. Another way to illustrate the financial shortfall of the Social Security system is to examine the cumulative value of taxes minus costs, assuming currently scheduled benefits and tax rates. In present-value terms, the shortfall over the next 75 years is $4.6 trillion, which is roughly equal to the total U.S. government debt held by the public today.
![Line chart showing Social Security trust fund balance (income minus costs), expressed as a percentage of taxable payroll, from 2006 to 2080. The trust fund balance is about 1.52 percent of taxable payroll in 2006. After a brief upturn, the trust fund balance is projected to decline rapidly. Costs will begin to exceed income in 2017 and the trust fund will become insolvent in 2040. Annual trust fund balances are projected to range between -4.23 and -5.38 percent of taxable payroll from 2037 to 2080.](chart36.gif)
The Growth of Unfunded Obligations
Each year, Social Security's trustees provide an estimate of the financial status of the program for the next 75 years. In changing from the valuation period of one year's Trustees Report to the next, an additional year with a large imbalance between taxes and benefits is added to the projection. As a result, the estimated cost of meeting Social Security's long-range financial shortfall tends to go up every year. For 2006, the unfunded obligation over the 75-year period is $4.6 trillion.
![Bar chart with tabular version below.](chart37.gif)
Year | Unfunded obligation |
---|---|
2000 | 2.9 |
2001 | 3.2 |
2002 | 3.3 |
2003 | 3.5 |
2004 | 3.7 |
2005 | 4.0 |
2006 | 4.6 |