Many people don’t know that Social Security provides more than just retirement benefits. Even though retirees and dependents are a majority of the program, it is also used to assist disabled workers and their dependents.
The retirement portion of Social Security is known as the Old Age and Survivors Insurance (OASI) and the disability portion is known as the Social Security Disability Insurance. Each has their own trust fund that supplies payments to its respective recipients.
According to the website moneytips.com here are some new figures that factor into how Social Security is actually divided up:
“Based on Social Security Administration data from June 2015, 39.5 million retirees were paid a total of $53 billion in benefits for an average of $1,335 per month. The 3 million dependents of retirees consumed another $2 billion in benefits. Between the two groups, they account for 72% of Social Security benefits.
In that same month, approximately 9 million disabled workers were paid $10.5 billion (an average of $1,165 per month) and their 2 million dependents were paid another $700 million. Disabled workers and their dependents account for 18% of the June 2015 Social Security benefits. Survivor benefits of $6.7 billion (10% of the Social Security benefit total) were paid to another 6.1 million recipients.
Over the course of the entire year, these combined benefits approach a trillion dollars annually — 2015 benefits totaled almost $870 billion. Here are some other pertinent numbers to consider about the Social Security program:
- Coverage – Approximately 165 million workers are covered by Social Security — which is extremely important given that just over one-third of America’s workforce have no savings in a separate retirement program.
- Worker-to-Retiree Ratio – The Social Security system will be strained in future years from simple logistics. Americans are living longer, with a life expectancy of 21 additional years for a 65-year-old compared to only fourteen years in 1940 when the system was in its early years
In the midst of all of this the baby boomer generation is steadily retiring, which shifts the worker-to-retiree-ratio. Today it is 2.8 workers per every retiree, but by 2035, it will be 2.1 workers per retiree as the number of older Americans increases from 48 million to 79 million.
Dependence – 90% of Americans aged 65 and above receive benefits from Social Security, and those benefits represent approximately 39% of their income. A majority of elderly Social Security beneficiaries get at least half of their income from Social Security (74% of single recipients and 53% of married couples). A significant number of these families (47% of singles and 22% of married couples) depend on Social Security to provide at least 90% of their income.