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Social Security Lifts 22 Million Americans Out of Poverty

Social Security lifted 22 million people out of poverty last year, our new analysis of Census data finds.  Social Security’s anti-poverty effect extends to every state, lifting more than 1 million elderly people out of poverty in California, Florida, and Texas, our 50-state analysis shows.

Without Social Security benefits, 41 percent of elderly Americans would have incomes below the official poverty line, all else being equal.  With Social Security, only 9 percent do.  (See graph.)

Social Security is also important for non-elderly adults and children.  (See table.)  It lifted more than 1 million children from poverty in 2015.  Some of these children receive benefits because a parent died, became disabled, or retired; others live with relatives who receive Social Security.  

Given the program’s powerful anti-poverty impact, cuts in Social Security benefits could significantly raise poverty — particularly among the elderly and the disabled — depending on their design.

Social Security benefits are already modest, both in dollar terms (the average retired worker receives $1,328 a month) and by international standards.  Also, elderly Americans depend heavily on their Social Security benefits — particularly women and minorities.  A third of beneficiaries receive at least 90 percent of their income from Social Security; 61 percent of beneficiaries receive more than 50 percent of their income from the program.

While policymakers should work to close Social Security’s long-term funding gap, they should remember that this program is a vital part of the safety net for Americans of all ages. 

Effect of Social Security on Poverty, 2015
Age Group Percent in Poverty Number Lifted Out of Poverty By Social Security
  Excluding Social Security Including Social Security  
Children Under 18 21.2% 19.7% 1,078,000
Adults Ages 18-64 15.4% 12.4% 5,944,000
Elderly Age 65 And Over 40.5% 8.8% 15,067,000
Total, All Ages 20.5% 13.5% 22,090,000

Source: CBPP, based on data from the Census Bureau Current Population Survey, March 2016