Examining the Intersection of Immigration and Social Security Finances

By Ted Gotsch 
Senior Policy Analyst, Content and Publications 

Many Americans (especially actuaries) are familiar with the financial state of Social Security. At the same time, there is also an awareness of immigration as a high-profile issue. 

But few are likely as knowledgeable as Academy volunteers about the intersection of these two topics and how the immigrant and migrant populations impact the nation’s retirement safety net. Back in September, the Academy’s Social Security Committee released Immigration and Social Security, an issue brief examining how immigration affects the social insurance program. Among its key findings were: 

• Immigration is a crucial component to both the trajectory of the population of the United States and the financial condition of the Social Security system; 
• Immigration favorably affects Social Security due to increased tax revenue and faster economic growth, although it is not sufficient to solve Social Security finances by itself; and, 
• Immigration more quickly affects system finances than fertility because of the more immediate effect on covered employment. 

Academy Senior Retirement Fellow Linda K. Stone, in a forthcoming Actuary Voices podcast, notes that “immigration can positively impact the Social Security system, such as all of the workers it brings into the Social Security system who are paying Social Security taxes.” 

Further, as the issue brief states, “Without immigration, our country’s low fertility and aging population are projected to adversely affect the important metric of the number of workers per beneficiary.” In short, the U.S. would face relative decline in this important metric in the decades ahead, absent immigration. That, in turn, would put stressors on the financial health of Social Security. 

As it stands, the nation’s retirement program finds itself in a precarious position for the future. The 2024 Old-Age, Survivors, and Disability Insurance Trustees Report released in May found that the combined retirement and disability programs of Social Security will have sufficient reserves to fully cover benefits until 2035 – a year later than the Trustees Report estimated last year. From that point forward, the report projects that recipients would receive only 83% of their scheduled payment.  

Additional details and analyses of the report can be found in the annual issue brief that the Academy published. We also heard directly about the program’s finances from the Chief Actuary of the Social Security Administration on the annual Academy-hosted Social Security Trustees Report webinar, which is available for Academy members. 

As the Academy has noted for years, reforms to the program are badly needed. Volunteers have repeatedly laid out the options to policymakers on how the program could be made solvent long-term, and while there are many strings that could be pulled, all the solutions involve two main things—raising taxes and/or cutting benefits.  

Details on why Congress should address these issues sooner rather than later can be found within the issue brief with the same name, as well as in a C-SPAN recorded breakout session from the Academy’s Envision Tomorrow meeting in October. The Academy also hosts the Social Security Challenge, which gives everyone the opportunity to learn more about the issues facing the program and the impact potential solutions may bring to the system.  

Social Security’s financial solvency will continue to be a high priority public policy issue as we head into a year with a new administration and Congress. The Academy and its volunteers will remain trusted and respected resources for any elected official considering their options as we address the gaps within America’s retirement safety net.