E March 2016 Social Security Enrollment Numbers

Each month the Social Security Agency issues a report detailing the number of retirees, survivors, and disability recipients currently receiving nearly $900 billion dollars of social security payments each year. For the last five years I have been following this monthly report for additional insight into the health of the labor market and the future of the US budget deficit. Social security enrollment has a close, if lagging correlation with employment prospects and US recessions.

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We can see this clearly in the chart showing the annual change from 2006 to 2016. Starting back in 2006 we see that Social Security was adding beneficiaries at a rate of about 700,000 a year but spiked to over 1,600,000 by the end of 2009 following the "Great Recession." The mechanism for this link is clear and simple. In a recession, as the unemployment rate rises and it becomes harder to find jobs, workers over the age of 62, and workers with qualifying disabilities start enrolling in social security en masse. They may prefer to work, but when unemployment runs out and there are no jobs to be had, Social Security becomes a viable plan "B." Knowing this, a spike in this rate is a negative indicator for both the economy and the budget while a decrease is a positive indicator.

As I track it, there are 3 distinct parts of what we think of as Social Security. The first is the retirement program. The idea is that you pay into the system with a portion of each paycheck, and when you reach 62 you can retire and receive a moderate check each month for the rest of your life. Of course, you can keep working, and each year you defer retirement will increase the size of your monthly check. Spouses and dependent children are also eligible for benefits from the retirement program.

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At the end of March 2016 there were 43,462,512 individuals receiving an average of $1,300 a month through the retirement program. The March 2016 increase in beneficiaries was 121,657 and the annual rate increased to a rate of 1.173 million per year. While the rate of new beneficiaries does seem to be trending up again, the increase isn't particularly alarming, and in fact is about what we would expect as more and more Boomers retire.

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Fred Wright 1 year ago Member's comment

Really great presentation of hard to find data that stimulated my brain.

Craig Newman 1 year ago Member's comment

I totally agree.

Gary Anderson 1 year ago Contributor's comment

And most of that money finds its way back into the banking system. So, it isn't as if it is useless for society. Interesting article.