Pensionomics 2025: Measuring the Economic Impact of Defined Benefit Pension Expenditures finds pension spending powered by U.S. private and public sector defined benefit pensions contributed significantly to the economy. In 2022, retiree spending of public and private sector pension benefits generated $1.5 trillion in total economic output, supporting 7.1 million jobs across the nation.
In addition to its impact on employment and economic activity, pension spending bolstered public finances in 2022, adding $224.3 billion in tax revenue at the federal, state, and local levels. The report highlights that key sectors such as food services, healthcare, and retail experienced the most significant benefits from this spending, underscoring the critical role of pensions in supporting economic stability and growth.
Pensionomics 2025 quantifies the economic impact of private and public sector pension payments in the U.S. It also quantifies the impact of public pensions in each of the 50 states and the District of Columbia. Using the IMPLAN model, the analysis estimates the employment, output, value added, and tax impacts of pension benefit expenditures at the national and state levels.
The economic analysis finds that in 2022:
- $680.6 billion in pension benefits were paid to 26.3 million retired Americans.
- Expenditures from those payments collectively supported $1.5 trillion in total economic output nationwide, 7.1 million American jobs that paid $466.2 billion in labor income, and $224.3 billion in federal, state, and local tax revenue.
- Pension expenditures have large multiplier effects. Each dollar paid out in pension benefits supported $2.28 in total economic output nationally. Each taxpayer dollar contributed to state and local pensions supported $7.79 in total output nationally.
- The largest economic impacts from pension expenditures were in the food services, health care, and retail trade sectors.
NOTE: The original published report of Pensionomics 2025 contained formatting errors in Figures 4 and 5, which resulted in some column totals being incorrect. Those errors have been corrected in the present version of the report. Please note that the overall totals displayed in Figures 4 and 5 were not affected.
