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Role of Social Security Benefits in Income and Poverty

Published on January 25th, 2018

Social Security income is a major factor in the lives of most Americans over the age of 65. Currently around 80 percent of the people above 65 take in benefits. The program was designed with that in mind, knowing that Americans needed help in their later years to keep going.

Role of Social Security

As time goes by, Social Security income is taking on a bigger role in keeping older Americans from slipping into poverty. This is most clear in the fact that Social Security benefits keep 22 million people above the poverty line. That number includes all people that receive benefits, including those on SSI, SSDI or children. That being said, it’s 15 million out of that 22 million people that are seniors.

WIthout the support of Social Security, it’s likely that 40 percent of all senior citizens would be living below the poverty line. Social Security acts as a way to fill the gaps between work, pensions and other retirements that our seniors receive. Currently, Social Security income helps keep 91 percent of older Americans out of poverty.

Social Security and Demographics

The way Social Security is set up, it benefits many individual classes of society differently. The role of the programs are most apparently helpful when it comes to women and minority groups. This is because statistically women make less money in their lifetimes compared to men, and black and Latino people also have less than average incomes.

When looking at the impact of Social Security benefits, if they were removed from the population then nearly 50 percent of all Latinos would be in poverty during their senior years. Even worse, black citizens would see more than half of their elderly population living in poverty. For these groups alone, the impact on their income would, without a doubt, be disastrous if the benefits no longer existed.

Social Security and States

While the program is a federal level program, which is included in every state, many states see differences in the economic impact Social Security has. Many southern states, like Florida, Texas and Georgia, see large numbers recipients that are lifted out of poverty because of Social Security income. Due to the nature of where many Americans choose to retire, or the economies of those specific states, some have greater numbers of people that the programs help than others.

Needless to say, Social Security’s role in the economy, how it provides income to keep people out of poverty, is dramatic. So long as the programs stay solvent then they will continue to protect tens of millions of people every year.

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