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Entitlement beneficiaries: Who are they and where do they live?

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Entitlements have been a key part of political discussions during the course of the presidential election and the “fiscal cliff” debate. Some 55.4 million Americans are receiving Social Security benefits, and 8.1 million receive Supplemental Security Income disability payments. Many Americans use these benefits to feed and clothe their families, to pay for health care and just survive.

Where do these Americans live? What do we know about them?

Not surprisingly, the counties with high, dense populations of those receiving benefits such as Social Security and disability payments from the government are in densely populated places — especially large cities such as Los Angeles, New York, Miami and Chicago.

Social Security

In 2008, $615.3 billion was paid out in Social Security benefits. This was an increase of more than $1 billion from just 2007. Each year, this amount increases as more people retire, though others, such as the disabled may also claim Social Security. The amount has been growing at a faster rate than in history due to the number of baby boomers who are now retiring. Americans can start collecting Social Security benefits at age 62, but they can receive the maximum benefit if they wait to age 70 to collect benefits. The amount paid to each recipient can be a moving target as Americans decide when to start collecting benefits. In December 2011, 35.6 million retirees received $43.7 billion in Social Security benefits.

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Los Angeles County has the largest number of Social Security recipients at 1.2 million. This is followed by Cook County, Ill., with 759,125 recipients.

Lewis County, Idaho, has the highest percentage of its population receiving Social Security benefits: 54.4% of the population of 3,668 receives Social Security. This is followed by Sumter County, Fla., where 50.7% of its population of 97,884 receives Social Security. Interestingly, there are three counties in Michigan where more than 40% of the population receives Social Security– Alcona, Roscommon and Montmorency.

County governments with high percentages of residents receiving Social Security have different challenges than other areas because they have to handle a potentially older and less affluent population.

Who are these recipients? What type of consumers are they?

Esri, a geographic information systems company, developed the Tapestry Segmentation system that classifies U.S. residential neighborhoods into 65 unique market segments based on socioeconomic and demographic characteristics. Neighborhoods with dominant Tapestry segments of High Rise Renters, The Elders and Urban Melting Pot have high numbers of recipients.

In The Elders neighborhoods, 80% of the householders are aged 65 years or older. There is little ethnic diversity; 95% of the population is white. The highest concentrations of these retiree residents are found in senior living communities in the warm climates of Florida, Arizona and California. With a median household income of $38,167, approximately 80% collect Social Security, 48% receive retirement income and 65% receive income from their investments. Only 20% are still working. They visit their doctors regularly, watch their diets and take vitamins. In their spare time, they join veterans clubs and fraternal organizations, play golf, watch TV and read daily newspapers.

Supplemental Security Income

Supplemental Security Income is a U.S. government program that provides stipends to low-income Americans who are either aged 65 or older, blind or otherwise disabled. The program is funded from the U.S. Treasury but managed by the Social Security Administration.

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The counties with the largest number of SSI recipients are those with the largest populations. Los Angeles County has the largest number of SSI recipients with 418,384. This is followed by Cook County, Ill., with 159,231.

The four counties with the highest percentages of SSI recipients are in Kentucky. In Owsley, Breathitt, Clay and Wolfe counties, between 16.5% and 19.2% of the populations receive SSI benefits. In 2012, residents of these low income counties had median household incomes between $22,588 and $25,534. This compares to a U.S. median household income of $50,157.

Why is this important?

Congress is continually trying to change the entitlements that Americans receive. This is often a push and pull between parties and between states and counties whose residents rely on the benefits. It is critical that politicians and business executives understand where the entitlements are going. This type of information can help aid governments and businesses in making decisions such as providing health care facilities, new businesses, as well as community services. Additionally, it can aid in deciding where to add and cut services on a local level.

More information about Esri’s Tapestry Segmentation data can be found at www.esri.com/tapestry or to learn more about Esri in general, go to www.esri.com.

Pam Allison is a digital media, marketing strategist and location intelligence consultant. You can visit her blog at www.pamallison.com.