Fast Facts & Figures About Social Security, 2006

 

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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

Cost-of-living adjustment, 2006: 4.1%

Tax rates

Tax rates, 2006 (in percent)
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

Average wage index, 2004–2006
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

Maximum earnings subject to Social Security taxes, 2006 (in dollars)
Program Amount
OASDI 94,200
HI No limit
 

Taxes payable

Taxes payable, 2006 (in dollars)
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

Work credits (quarters of coverage), 2006:
  • $970 in earnings equals 1 credit
  • $3,880 is the maximum earnings needed for 4 credits in a given year

Retirement earnings test

Retirement earnings test, 2006 (in dollars)
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

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

Maximum Social Security benefit for worker retiring at full retirement age (65 and 8 months) in 2006: $2,053 per month

Trust fund operations

Trust fund operations, 2005–2006 (in billions of dollars)
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

OASDI administrative expenses: Costs were 0.9% of contributions in calendar year 2005

Benefit payments

Benefit payments as a percentage of gross domestic product, 2004–2005
Calendar year Total OASI DI
2004 4.18 3.55 0.64
2005 4.17 3.49 0.68
 

Workload

Workload, fiscal year 2005 (in millions)
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

Poverty thresholds, 2005 (in dollars)
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.

Median income of aged units, by marital status (in 2004 dollars)
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.
SOURCES: Social Security Administration, Income of the Population 55 or Older, 2004; The Aged Population of the United States: The 1963 Social Security Survey of the Aged.
NOTE: An aged unit is a married couple living together or a nonmarried person, which also includes persons who are separated or married but not living together.

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.

Percentage of aged units receiving income, by source
Bar chart linked to data in table format.
SOURCES: Social Security Administration, Income of the Population 55 or Older, 2004; The Aged Population of the United States: The 1963 Social Security Survey of the Aged.
NOTE: An aged unit is a married couple living together or a nonmarried person, which also includes persons who are separated or married but not living together.

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.

Aggregate income, by source, 2004
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%.
SOURCES: Social Security Administration, Income of the Population 55 or Older, 2004; The Aged Population of the United States: The 1963 Social Security Survey of the Aged.
NOTE: The unit of analysis is the aged unit, defined as a married couple living together or a nonmarried person, which also includes persons who are separated or married but not living together.

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.

Percentage of aged units receiving Social Security benefits, by relative importance of benefits to total income
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.
SOURCE: Social Security Administration, Income of the Population 55 or Older, 2004.
NOTE: An aged unit is a married couple living together or a nonmarried person, which also includes persons who are separated or married but not living together.

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.

Poverty status, by marital status, sex of nonmarried persons, race, and Hispanic origin
Bar chart linked to data in table format.
SOURCE: Social Security Administration, Income of the Population 55 or Older, 2004.

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.

Taxable earnings as a percentage of earnings in covered employment and percentage of workers with maximum taxable earnings, selected years
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.
SOURCE: Social Security Administration, Office of the Chief Actuary.

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).

Insured workers as a percentage of the corresponding Social Security area population, selected years
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.

Percentage of population in the Social Security area fully insured and insured for disability benefits, by sex
Bar chart linked to data in table format.
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.

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.

New awards, by type of beneficiary
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
 
New awards, 2005
Pie chart described in the text.
SOURCE: Social Security Administration, Master Beneficiary Record, 100 percent data.

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.

New awards to retired and disabled workers
Line chart linked to data in table format.
SOURCE: Social Security Administration, Master Beneficiary Record, 100 percent data.
NOTE: Beginning in 2006, this chart displays data for all years rather than selected years.

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.

Beneficiaries in current-payment status
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
 
Beneficiaries, by type
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.
SOURCE: Social Security Administration, Master Beneficiary Record, 100 percent data.

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.

Average monthly benefit for new awards and for benefits in current-payment status (in dollars)
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.

Beneficiaries, by age
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.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample.
NOTE: Percentages may not add to 100 because of rounding.

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.

Average age of disabled and retired workers, selected years
Line chart linked to data in table format.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample.

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.

Adult beneficiaries, by type of beneficiary and sex
Two pie charts linked to data in table format.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample.
NOTE: Percentages may not add to 100 because of rounding.

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.

Average benefit (in dollars)
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.

Women beneficiaries as a percentage of retired workers and disabled workers, selected years
Line chart linked to data in table format.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample.

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.

Women aged 62 or older, by basis of entitlement, selected years
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%.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample.

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.

Persons receiving federally administered SSI payments
Line chart linked to data in table format.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.
NOTE: Beginning in 2006, this chart displays data for all years rather than selected years.

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.

Average monthly federally administered SSI payment
Bar chart described in the text. In addition, recipients aged 18-64 received an average payment of $456.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.
NOTE: Amounts exclude retroactive payments.

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.

Type of SSI payment
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.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.
a. Excludes state-administered state supplementation. SSA administers state supplementation for 25 states.

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.

SSI recipients, by basis for eligibility and 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.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.

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.

Percentage distribution of SSI recipients, by age
Line chart linked to data in table format.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.
NOTE: Beginning in 2006, this chart displays data for all years rather than selected years.

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.

SSI recipients, by sex and age
Bar chart linked to data in table format.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.

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.

Other income of SSI recipients, by source and age
Bar chart linked to data in table format.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.

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.

Beneficiaries receiving OASDI, SSI, or both, December 2005
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.
Distribution of all beneficiaries
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.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample; Supplemental Security Record (Characteristic Record Extract format), 100 percent data.

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.

Beneficiaries aged 65 or older receiving OASDI, SSI, or both
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.
Distribution of beneficiaries aged 65 or older,
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.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample; Supplemental Security Record (Characteristic Record Extract format), 100 percent data.
NOTE: Percentages may not add to 100 because of rounding.

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.

Disabled beneficiaries aged 18–64 receiving OASDI, SSI, or both, December 2005
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.
Distribution of disabled beneficiaries aged 18–64
Pie chart described in the text.
SOURCE: Social Security Administration, Master Beneficiary Record, 10 percent sample; Supplemental Security Record (Characteristic Record Extract format), 100 percent data.

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.

Number of children of—
Bar chart linked to data in table format.
Average monthly benefit for children of—
Bar chart linked to data in table format.
SOURCE: Social Security Administration, Master Beneficiary Record, 100 percent data.

SSI Recipients, 1974–2005

In 1974, when the program began, 70,900 blind and disabled children were receiving SSI. That number increased to 995,000 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.

Number of children under age 18 receiving SSI
Line chart linked to data in table format.
Average monthly SSI payment to children a
Line chart linked to data in table format.
SOURCE: Social Security Administration, Supplemental Security Record (Characteristic Record Extract format), 100 percent data.
NOTE: Beginning in 2006, this chart displays data for all years rather than selected years.
a. As of 1998, these figures exclude retroactive payments.

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.

Source and uses of Social Security revenues in 2005
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%.
SOURCES: 2006 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Table II.B1.
NOTE: Percentages may not add to 100 because of rounding.

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.

Ratio of covered workers to Social Security beneficiaries
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.
SOURCE: 2006 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Table IV.B2.

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.

Social Security income minus costs as a percentage of taxable payroll
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.
SOURCE: 2006 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds, Figure II.D6.

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.

Long-range (75-year) projections of Social Security's unfunded obligation
Bar chart linked to data in table format.
SOURCE: Social Security Administration, Office of the Chief Actuary.
NOTE: Present value as of January 1 of each year.