Median income of the aged (in 1999 dollars)
Cost-of-living adjustment |
Cost-of-living adjustment, 2001: 3.5% | ||||||||||||||||||||||||||||||||||||
Tax rates |
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Average wage index |
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Maximum earnings subject to Social Security taxes |
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Taxes payable |
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Quarters of coverage |
Quarters of coverage, 2001 (work credits):
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Retirement earnings test |
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Age for full retirement benefit |
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Benefit formula bend points |
Benefit formula bend points (for workers who in 2001 attain age 62, become disabled, or die before age 62) Primary insurance amount equals: 90% of the first $561 of AIME, plus 32% of AIME over $561 through $3,381, plus 15% of AIME over $3,381 Maximum family benefit equals: 150% of the first $717 of PIA, plus 272% of PIA over $717 through $1,034, plus 134% of PIA over $1,034 through $1,349, plus 175% of PIA over $1,349 |
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Substantial gainful activity |
Substantial gainful activity, 2001 (used for determining eligibility for and continuation of disability benefits):
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OASDI administrative expenses |
OASDI administrative expenses (from the 2001 Trustees' Report): Costs were 0.7% of contributions in fiscal year 2000. | ||||||||||||||||||||||||||||||||||||
Trust fund operations |
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Benefit payments |
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Filings |
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Supplemental Security Income |
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Poverty thresholds |
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Median annual income for both 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 99% for married couples and 102% for nonmarried persons.
Social Security benefits—the most common source of income in 1962—are now almost universal. The proportion of the aged population with asset income—the next most common source—has grown from about one-half to nearly two-thirds. Over the
In 1962, Social Security, private and government employee pensions, income from assets, and earnings made up only 84% of the total income of the aged, compared with 96% in 1999. Although private pensions still accounted for only a small proportion of total income in 1999, they more than tripled their share in this period—from 3% to 10%. The share from earnings declined from 28% to 21%.
The OASDI program paid benefits to 90% of persons aged 65 or older. It was the major source of income (providing at least 50% of total income) for 64% of aged beneficiaries (couples or nonmarried persons), and it was the only source of income for 18%.
Overall, 8% of aged beneficiaries were poor; without Social Security, the total poverty rate would have been 48% assuming no other changes. (Data are based on family income rather than individual income to conform to official measures of poverty.)
To pay for benefits, people contribute to Social Security through payroll taxes or self-employment taxes under the Federal Insurance Contributions Acts (FICA and SECA). The maximum taxable amount is updated annually on the basis of increases in average wages. Of the 153 million workers with Social Security taxable earnings in 2000, 6% had earnings that equaled or exceeded the maximum amount subject to taxes, compared with 3% when the program began and a peak of 35% in 1965. About 84% of earnings in covered employment were taxable in 2000, compared with 92% in 1937.
Of persons aged 20 or older, the percentage insured for benefits has steadily increased over time. The percentage permanently insured (those with enough covered work experience to qualify for retired-worker benefits at retirement age) rose from 50% in 1970 to 69% in 2001. The percentage fully insured increased from 77% to 88%. To be fully insured, a worker must have at least one quarter of coverage for each year elapsed after 1950 (or age 21, if later) and before the year in which he or she attains age 62 or becomes disabled. To be insured for disability, the worker must be fully insured and have at least 20 quarters of coverage during the last 40 quarters. (Requirements for currently insured status are somewhat different for persons younger than age 31.)
| Year a | Population (millions) b |
Permanently insured |
Fully insured |
Insured for disability |
|---|---|---|---|---|
| 1970 | 135.2 | 50 | 77 | 52 |
| 1975 | 147.5 | 50 | 80 | 54 |
| 1980 | 162.0 | 53 | 83 | 58 |
| 1985 | 175.1 | 57 | 84 | 60 |
| 1990 | 186.0 | 63 | 86 | 62 |
| 1995 | 194.7 | 66 | 87 | 64 |
| 2001 | 206.8 | 69 | 88 | 66 |
| SOURCE: Office of the Chief Actuary, SSA. | ||||
| a. As of December 31. | ||||
| b. The population in the Social Security area includes residents of the 50 states and the District of Columbia; residents of other outlying areas; federal civilian employees and Armed Forces abroad and their dependents; crew members of merchant vessels; and certain other U.S. citizens residing abroad. | ||||
Although men are more likely than women to be insured, the gender gap is shrinking. The proportion of men insured has remained essentially stable, with 93% fully insured and about 73% insured for disability. By contrast, the proportion of women insured has increased dramatically—from 63% to 84% for those fully insured and from 33% to 60% for those insured for disability.
Benefits were awarded to 4.3 million persons: 46% were retired workers and 14% were disabled workers. The remaining 40% were spouses, children, survivors, or dependents of workers who received benefits based on the worker's earnings record. 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, for example, conversions of disabled-worker benefits to retired-worker benefits at age 65.
| Type of award | Number (thousands) |
Percent |
|---|---|---|
| New awards | 4,290 | 100 |
| Retired workers and dependents | 2,418 | 56 |
| Workers | 1,961 | 46 |
| Spouses and children | 457 | 10 |
| Disabled workers and dependents | 1,029 | 24 |
| Workers | 622 | 14 |
| Spouses and children | 408 | 10 |
| Survivors of deceased workers | 843 | 20 |
Awards to retired workers have increased considerably since 1960 but proportionately much less than awards to disabled workers. The patterns of growth have also differed. Retired-worker awards rose steadily during the first half of the period, then leveled off around 1980. Disabled-worker awards increased rapidly until the mid-seventies, then declined considerably for about a decade, resuming their growth during the nineties.
More than 45 million beneficiaries were in current-payment status, that is, they were being paid a benefit. The majority of those beneficiaries were retired workers.
| Beneficiary | Number (thousands) |
Percent |
|---|---|---|
| All beneficiaries in current-payment status | 45,415 | 100 |
| Retired workers and dependents | 31,756 | 70 |
| Workers | 28,499 | 63 |
| Spouses and children | 3,257 | 7 |
| Disabled workers and dependents | 6,673 | 15 |
| Workers | 5,042 | 11 |
| Spouses and children | 1,631 | 4 |
| Survivors of deceased workers | 6,985 | 15 |
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, widows' benefits are also payable at 100% of the insured worker's PIA. Nondisabled widows and widowers can receive reduced benefits at age 60. Disabled widows can receive benefits (with a greater reduction) at age 50. Spouses, children, and parents receive a smaller proportion of the worker's PIA than widows do.
| Type of beneficiary | New awards | Current-payment amount |
|---|---|---|
| All beneficiaries | 706 | 767 |
| Retired workers | 869 | 844 |
| Spouses | 344 | 429 |
| Children | 381 | 395 |
| Disabled workers | 835 | 786 |
| Spouses | 219 | 198 |
| Children | 226 | 228 |
| Survivors | ||
| Nondisabled widows and widowers | 717 | 810 |
| Disabled widows and widowers | 527 | 520 |
| Widowed mothers and fathers | 600 | 595 |
| Surviving children | 566 | 550 |
| Parents | 707 | 704 |
A covered worker who had worked continuously at low wages (45% of average national wages) and who claimed benefits at age 62 in January 2001 would receive a monthly benefit of $541. One who had earnings at or above the maximum amount subject to Social Security taxes and who claimed benefits at age 65 would receive $1,538. Someone who retired at age 70, which maximizes the effect of the delayed retirement credit, would receive $1,879.
Some 81% of all OASDI beneficiaries with benefits in current-payment status were aged 62 or older. Among OASI beneficiaries, 93% were 62 or older. Among DI beneficiaries (disabled workers and their spouses and children), most were under age 62.
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. By 1980, it had fallen to 53.2, and in 2000, the average age was 50.8.
Of all adults receiving monthly Social Security benefits, 43% were men and 57% were women. More than 81% of the men and more than 57% of the women received retired-worker benefits. About one-fifth of the women received survivors benefits.
Among retired and disabled workers who collected benefits based on their own work record, men received a higher average monthly benefit than women. For those with benefits based on another person's work record (spouses and survivors), women had higher average benefits.
| Type of beneficiary | Men | Women | |
|---|---|---|---|
| All beneficiaries | 928 | 696 | |
| Retired workers | 951 | 730 | |
| Spouses | 243 | 431 | |
| Disabled workers | 883 | 661 | |
| Spouses | 156 | 199 | |
| Survivors | |||
| Nondisabled widows and widowers | 607 | 812 | |
| Disabled widows and widowers | 362 | 524 | |
| Mothers and fathers | 503 | 600 | |
The proportion of women among retired-worker beneficiaries has quadrupled since 1940. The proportion of women among disabled-worker beneficiaries has more than doubled since 1957, when DI benefits first became payable.
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 34% in 2000. 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 2000.
Shortly after the SSI program began in 1974, the number of persons receiving federally administered payments rose to 4 million. It remained at about that level until the mid-1980s, then rose through the mid-1990s. In 2000, it stood at about 6.6 million.
| Year | Number (thousands) |
|---|---|
| 1974 | 3,216 |
| 1976 | 4,326 |
| 1978 | 4,217 |
| 1980 | 4,142 |
| 1982 | 3,858 |
| 1984 | 4,029 |
| 1986 | 4,269 |
| 1988 | 4,464 |
| 1990 | 4,817 |
| 1992 | 5,566 |
| 1994 | 6,296 |
| 1996 | 6,614 |
| 1998 | 6,566 |
| 2000 | 6,602 |
The average federally administered SSI payment was $379. Payments varied by age group, ranging from an average of $463 for those under 18 to $303 for beneficiaries 65 or older.
Over 6.6 million persons received federally administered SSI payments. Most 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 beneficiary would have had under the former state program.
One-fifth of SSI beneficiaries have been awarded benefits on the basis of age; most of the rest on the basis of disability. Almost one-third of the beneficiaries were aged 65 or older. In the SSI program—unlike the OASDI program—a disabled beneficiary is still classified as "disabled" after reaching age 65. DI beneficiaries are converted to the retirement program when they attain age 65.
The proportion of SSI beneficiaries aged 65 or older has declined from 61% in January 1974 to 30% in December 2000. The long-term growth of the SSI program has occurred because of an increase in the number of disabled beneficiaries, most of whom are under age 65.
Overall, 59% of the SSI beneficiaries were women, but that percentage varied greatly by age group. Women accounted for nearly three-fourths of beneficiaries aged 65 or older, nearly three-fifths of those aged
Fifty-nine percent of aged SSI beneficiaries received OASDI benefits, as did about 30% of those aged 18-64 and 7% of those under age 18. Other types of unearned income, such as veterans' pensions or income from assets, occurred most frequently among those under age 18 (17%) and those aged 65 or older (16%). Earned income was most
prevalent (7%) among those
More than 49 million people received a payment from Social Security. Most (43.0 million) received OASDI benefits only, about 4.2 million received SSI only, and 2.4 million received payments from both programs.
| Type of benefit | Number (thousands) |
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|---|---|---|
| All beneficiaries | 49,637 | |
| Total receiving | ||
| OASDI | 45,418 | |
| OASDI only | 43,035 | |
| SSI | 6,602 | |
| SSI only | 4,218 | |
| Both OASDI and SSI | 2,383 | |
Aged or survivors benefits were paid to 33.5 million people aged 65 or older. About 1.2 million of them received both OASI and SSI.
| Type of beneficiary | Number (thousands) |
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|---|---|---|
| Aged 65 or older, total (unduplicated) | 33,544 | |
| OASI, total a | 32,722 | |
| Retired workers | 25,954 | |
| Spouses b | 2,459 | |
| Nondisabled |
4,242 | |
| Disabled adult children aged 65 or older | 64 | |
| SSI, total c | 2,011 | |
| Receiving SSI only | 822 | |
| Concurrently receiving both OASI and SSI | 1,188 | |
| a. Total includes 3,500 persons who received either dependent parents benefits, special |
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| b. Includes 23,000 spouses of disabled workers who were aged 65 or older. | ||
| c. Includes 721,500 disabled and blind SSI beneficiaries aged 65 or older. | ||
Payments based on the beneficiary's own disability were made to 9.3 million people under age 65. About 36% of them received payments from the SSI program only, 51% received Disability Insurance payments under the OASDI program only, and 13% received payments from both programs.
| Type of benefit | Number (thousands) |
|
|---|---|---|
| All payments | 9,304 | |
| Disability Insurance | 5,908 | |
| Workers | 5,042 | |
| Children aged |
665 | |
| 201 | ||
| Disability Insurance only | 4,713 | |
| SSI disability a | 4,591 | |
| Aged |
3,744 | |
| Under age 18 | 847 | |
| SSI disability only | 3,396 | |
| Both Disability Insurance and SSI | 1,195 | |
| a. Total excludes 721,500 disabled and blind SSI beneficiaries aged 65 or older. | ||
Over 3 million children under age 18 and students aged
In 1974, when the program began, there were 70,900 blind and disabled children receiving SSI. Since then, that number has increased to 847,000. 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 peak in average monthly benefits in 1992 is due to retroactive payments resulting from the Sullivan v. Zebley decision.
In 1999, 6.6 million children were living in families receiving OASDI and/or SSI. About 1.8 million children were poor even though those benefits improved their situation. Excluding Social Security and assuming no other changes, about 3 million children would have had income below the poverty level.
