5 Ways Immigration Helps Boost Your Social Security Benefit

When you're looking to stretch retirement dollars further, understanding what keeps Social Security strong matters. Immigration plays a vital — and sometimes overlooked — role in boosting the system's finances.

Here are five key ways immigration helps reinforce the future of Social Security benefits, and why it matters for retirees and future beneficiaries.

Immigration increases the number of people in the workforce, expanding the pool of payroll taxpayers contributing to Social Security.

In the upcoming years, immigration is projected to be the major driver of U.S. population growth, according to the Bipartisan Policy Center. Immigrants already make up 19% of the labor force despite representing only 14.3% of the total population.

That means immigrants help strengthen the worker-to-beneficiary ratio and bolster the payroll tax base. This is a crucial factor in maintaining the health of the program, which depends on today's workers to support today's beneficiaries.

Immigrants often enter the country at younger ages and are likely to be of working age, boosting both labor-force participation and payroll-tax contributions.

Many of these immigrants work for decades, and pay into the Social Security system throughout their working lives. This youthful workforce helps counterbalance an American population that is aging overall.

Immigrants also tend to have more children than native-born Americans. Those children go on to become workers themselves.

Many legal immigrants pay into the Social Security system but don't meet the eligibility requirements to claim their own benefits. That means their payroll-tax contributions still benefit the system even though they never collect retirement benefits later.

Essentially, these immigrants subsidize the benefit structure even if they never receive a benefit themselves.

Undocumented workers also often pay payroll and income taxes. However, they are not eligible to claim benefits.

In 2022 alone, those without documentation contributed an estimated $25.7 billion to Social Security taxes, according to the Bipartisan Policy Center.

Because of their tax contributions, the system gains revenue without increasing long-term payouts.

This unexpected support plays a meaningful role in the system's fiscal health.

The Social Security trust fund is in trouble. Unless the federal government takes action, the fund could be depleted by 2033, resulting in a benefit cut of more than 20% for retirees.

Immigration brings workers into the country who help improve the Social Security trust fund's long-term solvency. The combination of new, youthful taxpayers can result in decades of individual contributions that help stabilize or even shrink the trust fund deficit.

Far from undermining the system, immigration bolsters Social Security in several ways. Newcomers play a crucial and often underappreciated role in preserving the program for all.

That's why one smart money move for seniors is to recognize the importance of immigration, and the vital support it brings to Social Security benefits.