The Social Security Database
Elon Musk has reported that there are 20.8 million centenarians in the Social Security database who are not marked as deceased. This is not actually a new problem, according to an analysis by Justin Fox published by wealthmanagement.com (https://www.wealthmanagement.com/retirement/the-truth-about-social-security-and-dead-people). The Inspector General has been trying to make certain that dead people are not on the benefit rolls for more than a decade. Earlier audits have found a small number of inappropriate benefit payouts, but for the most part the millions of persons not marked as dead are not collecting benefits. Hence, the cost of updating the records is hard to justify when it won’t have a material effect on the benefits being paid.
However, Fox noted that there is a different cost to not updating records properly. The Social Security numbers of inactive accounts are available to enable identity theft. “Between 2006 and 2011, 66,920 of the Social Security numbers registered to people born in 1901 or earlier had wages, tips, and self-employment income associated with them — meaning that people born a lot more recently than that, and probably lacking in authorization to work in the US, had used them to get jobs. Between 2016 and 2020, 139,211 of the numbers registered to people born in 1920 or earlier did.” These folks reported $11.6 billion in taxable income, which implies that they paid roughly $1.4 billion in payroll taxes. That is a windfall for the Social Security Trust Funds, as those Social Security numbers will never trigger benefit payments.
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