STUMP » Articles » Checking the Numbers: How Much are Social Security Benefits? » 2 August 2018, 22:29

No, I’m not addressing the affordability of the program, etc.

I’m looking at: how much are people actually paid in Social Security benefits

Luckily, the Office of the Chief Actuary of the Social Security Administration has lots of information so we can get a good idea. I went here, clicked through to the tables and put them in a spreadsheet.

The spreadsheet is here.

I’m just looking at a one-month snapshot – all June 2018.

First, in June 2018, there were 62.5 million unique individuals receiving Social Security benefits. With 328 million in population, about 19% of the population are receiving SocSec benefits.

Of those beneficiaries, 69% are retired workers receiving the benefits they are getting based on their own full career earnings.

Rather than going into the weeds of disabled, widow, and child benefits, let’s just focus on that largest group — retired workers receiving benefits based on their own earnings history.

FULL DISTRIBUTION

To make the numbers more comprehensible in my graphs, I will convert the monthly amount to annual amounts. In general, one is getting the same monthly payment throughout the year, but some people die, and some people file for new benefits… yadda yadda. It’s just fine to multiply by 12, okay? Also, I’m using the midpoint for the interval (except for the largest, because… well, I’m just pretending it’s as wide, but it’s not).

Here’s the full distribution:

Some stats from this:

• The modal amount is $19,800 per year — or about $20,000.
• The median is about $16,200 — that is, about half get less and about half more.
• About a third get less than $12,600/year
• About 75% get less than $21,000/year

These are very modest amounts.

SEX SPLIT

Let’s redo this graph splitting out men & women.

Hmmm, because I’m doing a stacked column graph, it overall looks the same… but it looks like there may be a skew.

Let’s try this by changing it so we can see it add up to 100%:

That looks… weird. It seems that women are more skewed towards lower benefit levels, and men higher, until you get to the very high levels. But hardly anybody has levels that high.

Let’s try graphing the same data one more way:

Ah, now we can see the sex disparities in benefits.

The median for men is about $18,600/year, and the median for women about $13,800/year. That makes for a 35% higher median for men than women.

See, you can talk about the wage gap between men and women, but it’s compounded by women working fewer years (though they live longer). Isn’t that interesting?

Finally, even with the history of lower labor force participation by women than men, there are 21.6 million women retired workers receiving benefits and 21.5 million men… because women live longer. (And I’m not even including widow/spouse benefits right now, which I’ll do in a future post)

AGE SPLIT

I don’t want to do sex & age split (right now), but I will split by the age ranges I’m given.

So it kind of looks like it peters off by age as they get older… but the 70 – 79 group may be bigger than the 62-69 group (more on that in a bit).

Let’s look at it in 100% stacked:

Now that’s interesting. In the “normal” area, where most of the distribution is, less than $20K/year, the age structure is about what you’d guess.

But above about $34,000, the lower ages drop off and you’re seeing it dominated by higher ages. I think there’s a few things going on here:

• the only way to have gotten benefits that high was to be at max or near max benefits when you retired
• a bunch of COLAs over the years

It gets really weird above $45,000/year, but very few people are up there.

And now, the line graph:

So we can see via eyeball that there’s more in the 70-79 age group than the 62-29 age group… and if you ignore birth and death patterns, that makes sense — they’re not covering the same number of ages.
Ages 60 & 61 are excluded.

Also, while many people (about half) file for SocSec benefits when they’re 62, many more hang on for a while.

You’re essentially forced to file by the time you’re 70, so everybody who’s eligible in their 70s are receiving benefits, but not everybody in their 60s is.

Also, while mortality really kicks up in one’s 60s, and into the 70s, the mass of deaths occur in 80s. So 70-79 has a pretty robust group in there.

Anyway, the main reason I did this is that many people have no idea what kinds of benefits are actually doled out.

That most recipients are receiving very modest amounts will not fix Social Security. Some can be taken off the top… but it will not fill in a lot of the low benefit levels.

But I’ll try those out another time.

Spreadsheet is here.