WASHINGTON –Joint Economic Committee Ranking Democrat Carolyn Maloney (D-N.Y.) Friday issued a report hailing the Social Security program – which celebrates its 80^th anniversary today - as more essential than ever in providing retirement security to millions of Americans.

With volatile economic conditions, stagnant wages, and the near extinction of traditional pensions, the earned benefits provided by Social Security account for the majority of the income of two-thirds of all retirees.

“The traditional forms of retirement security— including employer-sponsored plans and personal savings—are being eroded by large shifts in the economy,” Maloney said. “Where the labor market once was defined by lifelong manufacturing jobs with retirement pensions, it is now shifting toward mobile and short-term careers, with retirement plans based on volatile stock holdings.

“As traditional paths to retirement security continue to disappear, Social Security will be an even more crucial source of certainty to retirees in the future.”

Today, Social Security serves 60 million Americans—or one-fifth of the population. About 70 percent are retirees who paid into the program over the course of their working lives. About 30 percent are either the surviving spouses and children of deceased beneficiaries or those unable to work due to disability and injury.

According to the JEC report, Social Security provides economic security for Americans at all income levels and particularly for women:

• Half of all American families near retirement have less than $12,000 in formal retirement savings.
• Almost two-thirds of all retirees – approximately 18 million seniors – depend on their earned Social Security payments for a majority of their income. This includes almost 30 percent of seniors who count on these payments for 90 percent or more of their income. 
• Without Social Security, an additional one-third of all seniors – 14.7 million people – would live in poverty. 

• Social Security keeps 35.1 percent of elderly women out of poverty, compared to 30.5      percent of elderly men. Because women generally live longer than men, their lifetime earnings are generally lower than men’s and older women are less likely than men to have worked at jobs that provided defined benefit pension plans. 

The fundamental structure of Social Security has proven immensely durable over the decades, according to the report, withstanding substantial demographic and economic shifts, thanks to the active stewardship of policymakers.

Overall participation in retirement savings programs among workers ages 35 to 64—whether a defined benefit pension, a 401(k)-style defined contribution account or an individual retirement account—has declined since the onset of the Great Recession in 2007. Nearly 60 percent of families in the bottom half of the income distribution now lack any formal investment in their retirement whatsoever.

Although retirees are becoming a larger portion of the total American population, the cost of Social Security is projected to grow only slightly and at a rate expected to stabilize. Payments to retirees will soon begin to exceed revenues from current workers, but the resulting gap between payments to retirees and revenues from workers is projected to stop growing in 2037 and remain stable for the next half century.

  Click here to read the report

 

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