By Steve Doster
Illegal immigration is in the news and it deserves to be front and center. Reading and listening to the debate, there isn’t much discussion of the larger economic picture when it comes to U.S. immigration policy.
Baby boomers are retiring at a rate of about 10,000 people every day! In 2016, there were 61 million people receiving $911 billion in Social Security benefits. These numbers will grow as fast as baby boomers retire. Also in 2016, there were 171 million workers that paid $836 billion in Social Security taxes. That’s 2.8 workers for every retiree and a shortfall of about $75 billion. In 2000, we had 3.4 workers for every retiree and a surplus of $84 billion going into the Social Security trust fund.
These are long-term trends where the ratio of workers to retirees is decreasing and the amount of Social Security paid out is higher than what is coming in. We aren’t going to “grow” out of this problem as American families are choosing to have fewer children.
The most recent jobs report shows hiring is slowing down. One of the reasons for this is employers can’t find workers. We have the jobs. Immigrants want to come to the U.S. to find work. It should be a win-win situation.
Rowling & Associates, the wealth management firm where I work, is an excellent example of how immigration works for the benefit of all. One third of our team was not born in the United States. We can assist clients in Spanish, Hindi, Croatian, and of course English. Our team members are highly skilled professionals that contribute to the greater good of our society and the economy. And we all pay into Social Security!
Illegal immigrants pay billions of dollars of Social Security taxes every year even though they will probably never get a penny of Social Security benefits. Many immigrants who aren’t authorized to work in the United States obtain fake Social Security cards and present them to their employers. Employers collect Social Security tax and send these payments to the government. The fake Social Security numbers don’t match so the collected taxes get journaled into something called the Earnings Suspense File and the money is used to pay current benefits to retirees. So yes, illegal immigrants help pay for our Social Security benefits.
We do have immigration laws. However, sometimes rules are meant to be broken. Let’s say you have a medical emergency. It could be anything — spouse is going into labor, you sliced your hand instead of that avocado, or your kid hit their head. You jump in the car and speed to the emergency room. There are laws against speeding, but sometimes emergency situations require that rules not be followed exactly as written.
Looking at Social Security and the larger economic picture in the United States, we can apply similar logic to our immigration laws. We have a crisis on our hands. Let’s look at immigration laws with the bigger picture in mind. 
There are not enough workers to support our retirees. Our aging workforce is retiring faster than we can bring in the next generation to fill their shoes. They are applying for Social Security in record numbers and there are not enough workers to support the program. Immigration can be the solution to our Social Security problem.
—Steve Doster, CFP is the financial planning manager at Rowling & Associates – a fee-only wealth management firm in Mission Valley helping individuals create a worry-free financial life. Rowling & Associates helps people with their taxes, investments, and retirement planning. Read more articles at rowling.com/blog
