In a landscape where Social Security benefits are a lifeline for many, about 3.3% of individuals aged 62-84 face a unique set of challenges, as they will never receive these benefits. This insight, derived from the 2023 Trustees Report, highlights a segment of the population grappling with higher poverty rates compared to those who do receive Social Security.
For millions of Americans, Social Security is essential for financial stability. This year, nearly 68 million people will benefit from a monthly Social Security payment. Of these, approximately 75% are retired workers, each receiving an average monthly check of $1,918 as of June.
Who are the individuals who will never receive Social Security benefits?
Based on data from May 2024, this diverse group comprises higher proportions of the following demographics:
- Women (63%)
- Hispanics (28%)
- Immigrants (49%)
- Never-married individuals (21%)
- Widows (20%)
- Those with less than a high school education (36%)
When examining the landscape of Social Security and its beneficiaries, certain trends and statistics stand out, particularly for those aged 50 and older. Understanding these can shed light on the challenges faced by different groups.
Understanding the Different Types of Workers
- Infrequent Workers (38.9%): This group includes individuals who have not amassed sufficient work credits, which are necessary to qualify for Social Security benefits.
- Noncovered Workers (10.8%): Mainly comprised of state and local government employees, these individuals are not covered under the Social Security system.
- Die Before Receiving Benefits (1.3%): A small percentage of individuals pass away before they have the opportunity to receive their benefits.
Poverty Rates Among Never-Beneficiaries
The statistics highlight a significant disparity in poverty rates:
- Overall Never-Beneficiary Poverty Rate: A staggering 54.3% of those who never receive benefits live in poverty.
- Current and Future Beneficiary Poverty Rate: In contrast, only 5.8% of those who are current or future beneficiaries experience poverty.
Income Sources for Never-Beneficiaries
Unlike Social Security recipients, never-beneficiaries depend heavily on alternative income sources:
- Late-Arriving Immigrants: Often depend significantly on coresident income, which constitutes 36.5% of their household income.
- Infrequent Workers: This group is more likely to receive Supplemental Security Income (SSI), with 31.2% relying on it.
- Both Groups: While asset income is a common source for both, it is generally at lower levels compared to those who receive Social Security benefits.
A Decline in Never-Beneficiaries Expected
Encouragingly, the percentage of never-beneficiaries is anticipated to decrease slightly in the coming years. This trend suggests potential improvements in the system, aiming to reduce the number of individuals left without benefits.
