For many retired Americans, Social Security isn’t just a monthly check—it’s a lifeline. It forms the financial backbone for millions of seniors, helping them make ends meet. Over the years, surveys by Gallup have consistently shown that about 80% to 90% of retirees depend on Social Security as a primary or secondary source of income. This highlights the program’s critical role in ensuring financial stability for retirees.
However, Social Security is facing significant challenges, and immigration trends are playing a crucial role in the program’s troubles. Let’s take a closer look at the problem, its causes, and what can be done.
A Looming Crisis: Benefit Cuts Could Begin in 2033
Every year, the Social Security Board of Trustees releases a detailed report on the program’s financial health. This report projects how much money Social Security will collect and spend over the next 75 years. Unfortunately, for nearly four decades, these reports have warned about a looming financial shortfall.
While Social Security will never go bankrupt—because it is funded through payroll taxes—the current payout schedule is not sustainable in the long run. The 2024 Trustees Report estimates that Social Security faces a $23.2 trillion funding gap over the next 75 years. If no action is taken, the trust fund that supports retired workers (the Old-Age and Survivors Insurance Trust Fund, or OASI) will run out of reserves by 2033.
When this happens, Social Security will still collect taxes and pay benefits, but these payments will be reduced by about 21%. This means retirees could face smaller monthly checks, making it harder to cover their basic expenses.
The Role of Immigration in Social Security’s Challenges
One major factor contributing to Social Security’s financial struggles is immigration—or rather, the lack of it. Contrary to common misconceptions, undocumented workers are not draining Social Security. In fact, they contribute positively to the program by paying taxes without receiving benefits. However, the real issue lies in the declining number of legal migrants entering the U.S.
Social Security relies on payroll taxes from working Americans to fund its benefits. Young, working-age legal migrants are especially important because they contribute to the system for decades before claiming benefits. According to the Trustees’ intermediate model (the most likely scenario), the U.S. needs about 1.24 million net migrants per year to maintain Social Security’s financial stability.
But migration rates have dropped significantly over the past 25 years. Between 1998 and 2023, the net migration rate fell by 58%, meaning far fewer young workers are contributing to the system. In 2024, the U.S. welcomed just under 960,000 migrants—far below the needed 1.24 million.
Undocumented Workers: A Surprising Boost to Social Security
There’s a common misconception that undocumented workers burden Social Security. However, studies show the opposite. While undocumented workers do not qualify for Social Security benefits, they pay billions in payroll taxes. A study by New American Economy found that undocumented workers contributed a $100 billion surplus to Social Security over a decade.
This surplus occurs because undocumented workers use Individual Taxpayer Identification Numbers (ITINs) to pay taxes but cannot collect benefits. This means they add money to the system without taking any out.
Addressing the Immigration Problem
To secure Social Security’s future, lawmakers need to address the decline in legal migration. Policies encouraging higher immigration rates can help stabilize the program’s finances. Young, skilled workers contribute to the economy and ensure that Social Security remains sustainable for future generations.
Immigration reform is a challenging topic, but it is essential to tackle it head-on. Without meaningful action, Social Security’s financial shortfall will continue to grow, putting millions of retirees at risk.
Conclusion: Time for Action
Social Security is a vital program that millions of Americans depend on, but its future is uncertain. While several factors contribute to its challenges, immigration is a critical piece of the puzzle. Increasing net migration and dispelling myths about undocumented workers could help secure Social Security’s long-term health.
The clock is ticking, and the decisions made today will determine the financial stability of Social Security for generations to come.
