By Andrew Clark

Earlier this month, the National Institute on Retirement Security (NIRS) released its bi-annual Pensionomics report, which details how spending from defined-benefit pensions boosts economies in communities nationwide and continues to be a reliable economic driver for millions of people.

The report examines the impact of pensions on local economies nationwide by calculating the benefits paid to retirees and the subsequent spending generated by these benefits. This analysis includes tax revenue and local expenditures, which stimulate the broader economy, leading to growth and job creation.

NIRS found that in 2022, $680.60 billion in pension benefits were distributed to 26.3 million private and public sector retirees. Of that, $371.60 billion was paid to 12 million retired state and local public employees and beneficiaries.

These dollars stimulate the local economies. When retirees receive their pension money and make purchases in their community, it has a compounding effect that benefits everyone. When a retiree makes a significant purchase–such as a new washing machine–that business can order more to sell to customers and use the money to hire workers to facilitate the sales. The money the store owner and the employees receive further increases the reach of that initial pension investment.

The report calculated that pension spending supported 7.1 million American jobs and generated $1.5 trillion in total economic output nationwide. Each dollar paid out in benefits nearly tripped, resulting in 2.8 dollars in total economic output.

Get the report here