A Statistical Breakdown of Where Social Security’s Monthly Payments Go

Social Security is, for a majority of Americans, a critical source of income during retirement. Data from the Social Security Administration (SSA) finds that more than three out of five seniors counts on their retirement benefits for at least half of their monthly income.

According to the recently released Social Security Snapshot in March, some $76.64 billion was parsed out to 61.26 million eligible beneficiaries. This is a figure that’s expected to steadily grow over time as baby boomers reach the eligible retirement age and exit the workforce, and as current retirees live longer as a result of improved health education and more effective medicine. This also means that Social Security’s draw as a percentage of U.S. GDP is expected to grow, too.

A Social Security card wedged in between cash.
Image source: Getty Images.

A breakdown of where Social Security’s monthly checks go

But have you ever wondered where that $76.64 billion in benefit payments (at least for March) are heading each month?

Remember, while Social Security was primarily designed to provide a financial foundation for lower- and middle-income retired workers (and that is where a majority of monthly checks head), it’s also a source of income for the spouses and children of those retired workers, as well as a relied-upon financial foundation for the disabled and for survivors of deceased workers who qualified for Social Security benefits.

A very simplistic breakdown of Social Security’s payouts looks like this:

  • Retirement benefits: 76.9%
  • Disability benefits: 14.3%
  • Survivor benefits 8.8%

The bulk of Social Security’s monthly income is headed to more than 41 million retired workers, who are bringing in an average monthly benefit check of $1,365.35. This work out to a little more than $16,300 in annual income. It may not sound like much, but as noted above it’s good enough for at least half of the annual income for a little over 60% of today’s retired workers who are receiving benefits. The remainder heads to disability insurance or survivor benefits.

An illustration of who’s getting your Social Security payroll tax dollars

But let’s break things down a bit further. Below is an illustration that transcends the so-called simplistic breakdown and the three categories by presenting Social Security’s monthly payments from its largest source to its smallest.

Retired workers comprise nearly three-quarters of Social Security's monthly payouts.
Data source: Social Security Administration’s March 2017 snapshot. Chart by author. Parents of deceased…

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