Table 2.-Estimated number of or- Old-Age Insurance Benefit tive in , changed the phans under age 18, by type and by earnings test for wage earners from a age, July 1, 1955 1 Award& January-June monthly to an annual basis, raised to [In thousands] 1955 $1,200 the amount that beneficiaries During the first half of 1955, old- can earn in a year before any benefits T age benefits were awarded to nearly are withheld, and lowered from 75 to 511,000 persons, a record number. 72 the age at which beneficiaries can The previous high, established in the receive benefits regardless of the Mother Both first 6 months of 1951, was due pri- amount of their earnings. Thus, many only P;rdt” dead marily to the liberalized insured- persons between age 72 and age 75 status provisions of the 1950 amend- and others under age ‘72 with moder- ments. The sharp increase in Janu- ate earnings, who had delayed filing

Total Sal 60 ary- was due mainly to the for benefits because they were work- liberalization in the retirement test ing in covered employment, filed and o-4-.... 130 130 5-9-.... 6w 3:: 410 under the 1954 amendments. These began receiving monthly benefits. 1c-14.e. 15-17--. 900 13.1 E later provisions, which became effec- Method of benefit computation.- 1,020 I 7.b: I 1 Estimated in accordance with procedures dovel- aped by the Division of the Actuary. See the Bul- Table 1.-Percentage distribution of old-age benefits awarded in January- letin, , pp. 17-19. June 1955. by bene$t-computation method and sex 2 Less than 5,003. [Based on l&percent sample]

formed a relatively small proportion Benefit-computation method 1 Total ) Male / Female -only one-sixth-of the 3.5 million widows under age 65. Fewer than 1 Totalnumber....~~...... -~~~~.~-~~~~..-~~~~~~~.~..~.---....-.-... I 510,796 I 361,787 in 25 were under age 35. More than Totalperccn- ______-__.-- _____--...-.--- . . .._ --..-_- _._. -__- _._. 1 loo I 100 I 100 half were aged 55-64. Benefit bawd on earnings after 1936_..______-_.. Arnefitbased on ewnines after 1950.. __.______-_-.. ..-. I Orphans also are much more heav- ._ ___-Ad Totalpereent-...-.--.-...------.--.-.----.-.----...... -...... 100 100 100 ily concentrated at the older than at ____ --___ the younger ages, as shown in table Beneficiary not eligible for the dropout -- -.. 16 15 18 Renefitbasedonearningsafter1936. -.- -..- I i 2. Moreover, the younger the child is, Benofitbasedoncarnin~ssfter1950~..- ._.. -.- ...... _ -_--.-.- _____ : i i the more frequent the insurance Hvnrficiary eligible for the dropout -.. 84 85 benefits, as shown by the following Bcncfit bnscd on earnings after 1936 -.. 15 13 E Reneliciary not eligible for hen&t based on earninps aftrr 1950.-.. 10 8 15 figures on the proportion of paternal Beneficiary eligible for benefit based on earnings after 19jo-.-..-.- Hrnefit based on carninps after 195C..-...- _._. _._...____...._ ~._. 2 7: 6: orphans with old-age and survivors 1952 benNit formula plus 1954 wnversion table ______.._.._.._. -.. 7 insurance benefits in current-pay- 1954 bcnrfit fornrnla . ..___.___.___ --.-._-.- . . .._. --.- 635 702 54 ment status at the end of : Table 2.-Number, percentage distribution, and average monthly amount n&w Peresnt of old-age benefits awarded in January-June 1955, by starting date used in benejit computation, age, and sex Under 5 -~~------__------64 [Hued pwtly on lo-percent sample] 5-9 -__.~~~~--~~~~~~-~~~__-______50 10-14 --- --_------~------57 Total Female 15-17 ---~~~-_-----_--_-_-_------41 -7 Age 1 Aver- Arer- AVCP The higher beneficiary rates for Num- Pcr- we SuIn- rer- SW Prr- am bcr cent monthly hrr cent month]: cent monthly amount amount amount younger children mean that benefits I i are most likely to go to those for --/-I-I- Total ._...... _.. 510,796 1M $70.91 I 361,i87 I 100 1 $76.73 149,009 100 j $56.80 whom income support is most urgent, ____ when the mother should be in the GSA9 ...... _._._...._ 334,941 fit? 103,191 i3 55.74 i(t74.....-...-....--. 130,322 26 29, s81 20 60.62 home to care for a young child in- i5-'iY...... -...... 40,3o!l 8 9,362 G 58.40 stead of being away at work. This 80 and owr- 5,224 1 1,575 1 47.62 difference, however-at least below 77.40 290,208 loo 82.79 104,642 100 / 62.45 the age when children may start __~ __- 237,564 i7.44 163,545 58 33.48 69.019 66 62.69 work-is likely to disappear in the 116,684 78.78 90,651 31 83.30 26,033 25 63.06 future because it reflects the fact 36,238 75.30 28,033 10 is.58 8,205 8 60.6!l 4,364 55.sil 2,979 1 58.82 1,385 1 49.60 that the older the orphan the more !ikely it is that his father had died 115,946 48.81 71,579 100 52.12 44,367 100 / 43.46 -__ at a time when the coverage of the IiS-(ig...... 97.37i 49.38 58,205 81 53.34 39,172 88I 43.49 old-age and survivors insurance pro- TO-i4. _..~_.___._._... 13,638 4i.93 9.7w 14 49.44 3,848 9 1 44.09 7-h-79 .._. ..-. 4.071 41.52 2,914 4 41. 26 1,157 3 42.20 gram was more restricted. x0 and owr- . .._____. 8tN 32. 99 6i0 1 32.94 190 (9 ; 33.17

1 Sge on birthday in 1955. * Less thnn 0.5 percent. Bulletin, 11 About 84 percent of the beneficiaries Table 4.-Number. percentage distribution, and average monthly amount of awarded old-age benefits in the flrst old-age benejits awarded in January-June 1955 to beneficiaries eligible for half of 1955 were eligible for the the dropout, 1 by starting date used in benefit computation, age, and sex dropout-that is, up to 5 years of IBased on IO-percent sample] lowest earnings could be excluded in Total Male Female the calculation of their average T-- - monthly wage (table 1). A worker Am 2 Aver- Aver- Aver- NUIXl- Per- age Num- Per- age NUEO- Per- we is eligible for the dropout if he has ber ckmt month13 ber cent monthly ber cent monthly 6 quarters of coverage after June nInount amount amount 1953, or if he first becomes eligible _ -__ -___- _____ Total-. .._._.. -_. 100 1 $75.10 306,255 100 $81.02 122,287 100 $60.29 (that is, fully insured and aged 65 or .- over) for old-age benefits after Au- 65-69 __.. . .______.. 286,901 E 81.1272.61 195,238 64 79.26 91,663 75 58.43 70-74 ._..__..._ -_- _._. 107,643 84,011 27 85.15 23,032 19 66.43 gust 1954. Of the awards made in 75-79 ..______31,656 7 78.68 24,988 8 82.26 6,667 5 65.27 80 and over ______.. 2,943 1 60.91 2,018 1 63.54 925 1 55.16 1954 under the 1954amendments, only - - -- 24 percent were eligible for the drop- Based on earnings after 19.Y.-.. 106 I 79.83 100 1 84.98 1 QO,752 out-a percentage that is understand- .- FMQ.. ._ _. _. 215,047 153,363 68 64.45 ably low since (1) awards in this 7*74 . ..-- ______. 103,123 ii 81.7479.23 81,255 24 66.70 period included a large proportion 75-79..--.-..---...-.. 30,789 9 79.26 24,458 7 65.72 80 and over ______.. 2,791 1 62.12 1,922 1 56.25 __~ made to beneficiaries first eligible for - 1= y- - Based on earnings beneflts before , and after 1936._.... 100 53.45 45,257 100 46.71 (2) the fourth quarter of 1954 marked .- __- 65+9 ___.___. --- _____. 71,854 94 52.79 41,875 93 29,979 95 46.05 the first time beneficiaries could qual- 7&74. _. - -. ______. _-. 3,92Il 5 64.99 2,756 6 1, 164 4 61.22 75-79..-.....----.---. 866 1 5s. 04 530 1 336 1 56.81 ify for the dropout on the basis of 6 80 and over-. ..______152 (9 38.75 96 (9 56 (9 38.30 quarters of coverage after . - It was recognized that the percent- * Beneflcia?ries eligible for the exclusion of up to 5 f .4ge on birthday in 1955. yews of lowest earnings in the calculation of the 3 Less than 0.5 percent. age eligible for the dropout would in- average monthly wage. crease rapidly, leaving ineligible only a small group-those who have been eligible for benefits since Table 5.-Number and percentage distribution of old-age benefits awarded or earlier and who do not have suffi- in January-June 1955. by starting date used in benefit computation, amount cient work after June 1953. The flg- of monthly benefit, and sex ure for the first half of 1955 also [Based pertly on IO-percent sample1 showed the effect of the liberalized Total Male I Female retirement test; virtually all workers Amount of T - monthly beuetit flling because of that provision qual- Number Percent Number Percent Number Percent ify for the dropout. _- ~~- Awards to persons whose benefits Total ______361,787 100 149,009 100 .- I ! were based on earnings after 1950 $30.00 _-_-___----_------56,370 11 27,598 19 and who were eligible for the dropout 30.10-3Q.W ______29,774 14,950 10 40.00-49.90 ______-_--- --______- 30,209 : 16,099 9 are likely to be typical of future 50. co-59.90. ______------___-__- 36,849 20,310 60.0+69.90 ______.______73,897 1: 42,371 1: awards; this group made up 69 per- 70. m-79.90 ______-_----____--- 74,541 51,411 16 80. C&89.90.. ______..______. 57,449 :: 46,728 cent of all old-age benefit awards 90.~99.90 _____-___------_____-. 151,202 30 141,815 ; made in January-June. In 1954, only 100. lwlO3.50 ______--__---______- 505 (9 505 0

16 percent of the old-age beneflts Average benefit ______$70.91 ______, $76.73 -. _ _ _ - - - - - _ _ $56.60 ____-__-____ awarded under the 1954 amendments - -~ ~~~ Based on earnines after 1950..- I 394.850 I 100 290,208 1Ml 104,642 106 I- -_ ___~___ Table S.-Average old-age benefits so. 00__--______---_----______19,413 8,128 30.10-39. QO______--._-______-- 18.259 8,798 ; 11.2859,461 119 awarded in January-June 1955, by ~O.W~Q.SCI______15,333 7,721 benefit-computation method and 50.00-69.90 ______19,136 9,575 i 9,5617,612 i sex 60.00-69.90 ______57,027 31.177 70.W79.w) ______. 62.717 41,410 :: 25,85021,307 iif? [Based on IO-percent sample; average benefits shown 80.00-8Q.fW ______.. 51,258 41,079 14 10,179 10 to the nearest dollar] w.ro-9!xQo~~- ______151,202 141,815 49 9,387 - loo. 00-103.50 ______505 505 (9 0 NY

Total Mall? Izemale Average benefit- ______.______1 $77.40 I ______---. $82.79 .______- $62.45 ______- Based on earnings after lQ36--- II~ 71.579 100 44.367 100 - A- Total ._..___.._ -- ..___ $71 $77 $57 $30.00- --______--_----__..---- 36,957 -ii 19,470 27 17,487 39 _- 30.10-39.90 ______--- ____ 11,515 6,152 Bem5ciarynot eligible for 40. m-49.90 .______-_----___-_--- 14,876 :i 8,378 1; 5,3636,498 :; the dropout ..__ .____ 49 53 41 50. W5Q.Qil______17,713 10,735 :F” 6,978 1316 60. W-69.90. ______.. 16,870 :5” 11,184 5,676 Beneficiary eligible for the 70. W-79.90 ______11,824 10 10,001 dropout ______. -.-__ 75 81 Gil 80.00-88.50 _-___------6,191 5 5,649 148 1,823 542 : Benefit based ou earn- ings after 1936------53 58 47 Average benefit ______$48.81 ____------$52.12 ______1 $43.46 I______Renc5t based on earu- I I ings after 19%--... 80 85 65 - - 1 Less than 0.5 percent. 12 Social Security Table 6.-Number and percentage distribution of old-age benefits awarded in 1954. As in previous years, awards in January-June 1955 to beneficiaries eligible for the dropout, 1 by starting of benefits based on earnings after date used in benefit computation, amount of monthly benejit, dnd sex 1936 were concentrated at age 65; [Based on lo-percent sample] many persons in this group had no current earnings and filed for bene- I Total Mah? Amount of - I fits as soon as they reached the re- monthly benefit Number Percent Number Percent tirement age. _- Average monthly benefit.-The av- Tot.11 ______- ______428,542 306,255 100 122,287 100 erage old-age benefit awarded in -~ .%3o.c0.. ______.______26,149 15,748 13 January-June 1955 was $70.91, an 30.10-39.%.~-- ______.__ 18,012 10,4018,033 ; 9,979 increase of $4.55 from the average 4o.(xt49.!4l______._ _- ______-___ 22,992 11,946 1: 50. m-59.90 _____.______.___-- 29,829 15,30911,046 4 14,520 12 monthly amount awarded in 1954 un- 60. os69.90 _____-______-__-- 63.--, 337 ~-. 34,522 11 23,815 24 70. m-79.90 ______68,432 21,978 18 der the 1954 amendments. The high- 80.00-89.90 ______53,578 43,33946,454 :: 10,239 er average benefit was due chiefly cnl.oo-99.90. ___.--.-______._.-.-.! 145.708 136,646 45 9,062 ; loo. 00-103.50 ______. 1 505 (9 0 0 to the increase in the proportion of Aueragc benefit- ______$75.10 _ $31.02 ______$60.29 ______beneficiaries eligible for a benefit Based on eSrnings after 1950.- 351,750 260,998 Ioil 90,752 100 computation with the dropout. The .- ____- average monthly amount awarded on sm.w _____.______11,082 4,103 6,979 30. N-39.90 _____-______.______10,863 4,848 i 6,015 the basis of earnings after 1950 to 40. w-49.90 ______12,347 6,617 50. w-59.99 ______-. 16.003 7,5945,730 3” 8,409 persons eligible for the dropout was 60.w69.90 -______-_____-__I 49; 056 25,437 10 23,619 $79.83 (for men, $84.98; for women, 7O.cGi9.90.~. _..______-__ 20,312 SO.o(t89.9tl______%zi! 38,24137,894 :i 9,739 $65.01) (tables 3 and 4). 90. w-99.90 ______145: 708 136,646 52 9,062 100.00-103.50 ______-_____ 505 505 0) 0 Distribution by size of benefit.-A provision of the 1954 amendments Acvrooe bent-lit ______/ $79.83 _. $84.98 ______. $65.01 raised the maximum taxable annual Based On earnings after 1936.../ 76,792 .- 100 45,257 100 31,535 earnings from $3,600 to $4,200,begin- $30.00 ______.______15,067 20 6,298 14 8,769 ning in 1955. The maximum old-age 3O.lrh39.90 ______.____-__ ._._ 7,149 3,964 40.c0-49.90 _____-______-_-_____ 10, E&5 1: 3,1855,316 1; 5,329 benefit award in 1954 was $98.50, 50. co-59.90 ______-- 13,826 7,715 17 6,111 60.00-69.90 ______14,281 :: 9, a85 20 5,196 based on an average monthly wage of 70.00-79.80 ______10,226 13 1,666 $300; the maximum possible in the 80.0+88.50 ______5,598 7 8,5,098.WJ :: 5oQ first half of 1955 was $103.50, based Average benefit ______$53.45 _..___------. $58.14 __----_---- $46.71 - on an average monthly wage of $325. For old-age beneflt awards in the 1 Beneficiaries eligible for the exclusion of up to 5 average monthly wage. years of lowest earnings in the calculation of the ’ Le.3 than 0.5 percent. first 6 months of 1955, minimum beneflts of $30 were payable in 11 were based on earnings after 1950 1936. Among workers eligible for a percent of the cases (table 5), while and awarded to persons eligible for benefit computation based on earn- benefits of $90 or more were payable the dropout. ings after 1950 with the dropout, in 30 percent of the cases. The cor- For some workers, the dropout of about 7 percent were awarded higher responding flgures for 1954 awards years with low earnings does not old-age beneflts based on earnings under the 1954 amendments were 15 produce a significant increase in the after 1936 (for men, 6 percent: for percent and 27 percent, respectively. average monthly wage. If the worker women, 9 percent). The shift toward higher beneflts was had low earnings, it is often more In all, about 23 percent of the old- due chiefly to the larger proportion advantageous to him to apply the age beneflts awarded in the first 6 of beneficiaries eligible for the drop- 1952 benefit formula to the average months of 1955 were based on earn- out who were awarded benefits based monthly wage, calculated without the ings after 1936; this percentage va- on earnings after 1950; only 3 per- dropout, and to increase the result- ried from 18 percent among persons cent of them received the minimum ing amount by means of the 1954 eligible for the dropout to 48 per- amount and 42 percent received $90 conversion table. Of those workers cent among those not eligible. or more (table 6). eligible for a benefit computation Age distribution.-Awards to per- based on earnings after 1950 with the sons benefited by the liberalization in dropout, about 5 percent were award- the retirement test had a significant ed higher old-age insurance bene- effect on the age distribution. Of all Life Insurance In Force As fits under this alternative method of workers aged 65-74 who Aled for Survivor Benefits Under computation (for men, 3 percent: for benefits as a result of these liberali- OASI, 1955 * women, 10 percent). zations, it is estimated that about Estimates have recently been made In some instances, workers eligible half were aged 72-74. Consequently, of the amount of life insurance that for a benefit computation based on old-age beneflt awards to persons would have to be in force under earnings after 1950 were awarded aged ‘70-74 made up 26 percent of higher beneflts when the computa- the total in the first half of 1955 * Prepared in the Division of the Actuary, tion was based on earnings after (table 2)) compared with 17 percent Social Security Administration. Bulletin, February 1956 13