Economic Snapshot | Retirement

The importance of Social Security to seniors

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Snapshot for April 28, 1999

The importance of Social Security to seniors

Social Security benefits significantly reduce poverty among seniors. While currently 12% of the elderly live in poverty, more than 50% of seniors would live in poverty without Social Security. Thirty percent of elderly beneficiaries derive 90% or more of their income from Social Security benefits, and another two-thirds of seniors receive 50% or more of their total income from the program.

The median income for elderly households is currently below $18,000, even after including Social Security benefits. For middle-income retirees, Social Security benefits provide 66% of all income. Although most elderly households (headed by someone 65 or above) receive some income from personal savings and other assets, those sources contribute just 10% to the total household income of the typical middle-income senior. Employment-based pensions contribute another 14% of income for this group.

Chart 1

Source: Social Security Administration and Fixing Social Security: The Clinton Plan and Its Alternatives (1999) by Edith Rasell and Jeff Faux. Economic Policy Institute.

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