House Document 117-127 — 2022 Annual Report, Old-Age and Survivors and Disability Insurance Trust Funds
Summary
House Document 117-127 is the 2022 annual report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, referred to the Committee on Ways and Means on June 23, 2022. Its contents cover highlights, trust fund financial operations in 2021, assumptions about the future, projections of future financial status, and changes in law and policy affecting Social Security since the 2021 report. Later sections give short-range and long-range actuarial estimates, including the year of depletion and the open-group unfunded obligation. Chief Actuary Stephen C. Goss certifies that the methods follow sound actuarial principles and that the assumptions are reasonable.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
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117th Congress, 2nd Session House Document 117-127
THE 2022 ANNUAL REPORT OF THE BOARD OF
TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS
INSURANCE AND FEDERAL DISABILITY INSURANCE
TRUST FUNDS
COMMUNICATION
FROM
THE BOARD OF TRUSTEES, FEDERAL OLD-AGE AND
SURVIVORS INSURANCE AND FEDERAL DISABILITY
INSURANCE TRUST FUNDS
TRANSMITTING
THE 2022 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE
FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL
DISABILITY INSURANCE TRUST FUNDS
June 23, 2022Referred to the Committee on Ways and Means
and ordered to be printed
U.S. GOVERNMENT PUBLISHING OFFICE
47-846 WASHINGTON: 2022
CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. TRUST FUND FINANCIAL OPERATIONS IN 2021 . . . . . . . 7
C. ASSUMPTIONS ABOUT THE FUTURE . . . . . . . . . . . . . . . . 9
D. PROJECTIONS OF FUTURE FINANCIAL STATUS . . . . . . . 11
E. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND
LEGISLATIVE CHANGES IN THE LAST YEAR . . . . . . . . . . 28
A. OPERATIONS OF THE OLD-AGE AND SURVIVORS
INSURANCE (OASI) AND DISABILITY INSURANCE (DI)
TRUST FUNDS, IN CALENDAR YEAR 2021 . . . . . . . . . . . . 28
1. OASI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
2. DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3. OASI and DI Trust Funds, Combined . . . . . . . . . . . . . . . . . . 35
B. CHANGES IN LAW AND POLICY AFFECTING SOCIAL
SECURITY SINCE THE 2021 REPORT . . . . . . . . . . . . . . . . . 40
IV. ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
A. SHORT-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . 41
1. Operations of the OASI Trust Fund . . . . . . . . . . . . . . . . . . . . 42
2. Operations of the DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . 46
3. Operations of the Combined OASI and DI Trust Funds . . . . . 49
4. Factors Underlying Changes in 10-Year Trust Fund Ratio
Estimates From Last Years Report . . . . . . . . . . . . . . . . . . . 51
B. LONG-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . 53
1. Annual Income Rates, Cost Rates, and Balances . . . . . . . . . . 54
2. Comparison of Workers to Beneficiaries . . . . . . . . . . . . . . . . 63
3. Trust Fund Ratios and Test of Long-Range
Close Actuarial Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
4. Summarized Income Rates, Summarized Cost Rates,
and Actuarial Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
5. Open-Group Unfunded Obligation . . . . . . . . . . . . . . . . . . . . 74
6. Reasons for Change in Actuarial Balance From Last Report . . 76
(V)
V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
A. DEMOGRAPHIC ASSUMPTIONS AND METHODS . . . . . . . 83
1. Fertility Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
2. Mortality Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
3. Immigration Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 89
4. Total Population Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5. Life Expectancy Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 98
B. ECONOMIC ASSUMPTIONS AND METHODS . . . . . . . . . . . 102
1. Productivity Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 103
2. Price Inflation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . 103
3. Average Earnings Assumptions . . . . . . . . . . . . . . . . . . . . . . 105
4. Assumed Real Wage Differential . . . . . . . . . . . . . . . . . . . . . 108
5. Labor Force, Employment, and Unemployment Projections . . 110
6. Gross Domestic Product Projections . . . . . . . . . . . . . . . . . . . 113
7. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114
C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS . . . 118
1. Automatically Adjusted Program Parameters . . . . . . . . . . . . . 118
2. Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
3. Insured Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
4. Old-Age and Survivors Insurance Beneficiaries . . . . . . . . . . . 130
5. Disability Insurance Beneficiaries . . . . . . . . . . . . . . . . . . . . . 136
6. Covered and Taxable Earnings, Taxable Payroll, and
Payroll Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 147
7. Income From Taxation of Benefits . . . . . . . . . . . . . . . . . . . . 151
8. Average Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
9. Scheduled Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
10. Illustrative Scheduled Benefit Amounts . . . . . . . . . . . . . . . . 153
11. Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 156
12. Railroad Retirement Financial Interchange . . . . . . . . . . . . . . 156
VI. APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS . . 157
B. HISTORY OF ACTUARIAL STATUS ESTIMATES . . . . . . . . 169
C. FISCAL YEAR HISTORICAL AND PROJECTED
TRUST FUND OPERATIONS THROUGH 2031 . . . . . . . . . . . 176
D. LONG-RANGE SENSITIVITY ANALYSIS . . . . . . . . . . . . . . 183
1. Total Fertility Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
2. Death Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185
3. Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
4. Real Wage Differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
5. Consumer Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
6. Real Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
(VI)
7. Taxable Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
8. Disability Incidence Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 193
9. Disability Termination Rates . . . . . . . . . . . . . . . . . . . . . . . . 194
E. STOCHASTIC PROJECTIONS AND UNCERTAINTY . . . . . . 196
1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
2. Stochastic Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196
3. Stochastic Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
4. Comparison of Results: Stochastic to Low-Cost,
Intermediate, and High-Cost Alternative Scenarios . . . . . . . . 200
F. INFINITE HORIZON PROJECTIONS . . . . . . . . . . . . . . . . . . 206
G. ESTIMATES FOR OASDI AND HI, SEPARATE AND
COMBINED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210
1. Estimates as a Percentage of Taxable Payroll . . . . . . . . . . . . . 210
2. Estimates as a Percentage of Gross Domestic Product . . . . . . 216
3. Estimates in Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221
H. ANALYSIS OF BENEFIT PAYMENTS FROM THE
OASI TRUST FUND WITH RESPECT TO DISABLED
BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234
I. GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238
LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256
LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261
INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
STATEMENT OF ACTUARIAL OPINION . . . . . . . . . . . . . . . 268
(VII)
THE 2022 ANNUAL REPORT OF THE BOARD OF
TRUSTEES OF THE FEDERAL OLD-AGE AND
SURVIVORS INSURANCE AND FEDERAL DISABILITY
INSURANCE TRUST FUNDS
I. INTRODUCTION
The Old-Age, Survivors, and Disability Insurance (OASDI) program makes
monthly income available to insured workers and their families at retirement,
death, or disability. The OASDI program consists of two parts. Retired work-
ers, their families, and survivors of deceased workers receive monthly bene-
fits under the Old-Age and Survivors Insurance (OASI) program. Disabled
workers and their families receive monthly benefits under the Disability
Insurance (DI) program.
The Social Security Act established the Board of Trustees to oversee the
financial operations of the OASI and DI Trust Funds. The Board is com-
posed of six members. Four members serve by virtue of their positions in the
Federal Government: the Secretary of the Treasury, who is the Managing
Trustee; the Secretary of Labor; the Secretary of Health and Human Ser-
vices; and the Commissioner of Social Security. The President appoints and
the Senate confirms the other two members to serve as public representa-
tives. These two positions are currently vacant. The Deputy Commissioner
of the Social Security Administration serves as Secretary of the Board.
The Social Security Act requires that the Board, among other duties, report
annually to the Congress on the actuarial status and financial operations of
the OASI and DI Trust Funds. The 2022 report is the 82nd such report. The
assumptions for this report were set in mid-February 2022. Developments
since then have added to the uncertainty regarding the path of the COVID-19
pandemic and the economy. The Trustees will continue to monitor these and
any future developments and modify the projections in later reports as appro-
priate.
Overview
II. OVERVIEW
A. HIGHLIGHTS
This section summarizes the reports major findings.
Readers of this report should note that the data and projections presented
include the Trustees best estimates of the effects of the COVID-19 pan-
demic. The pandemic is projected to have continuing significant effects on
the OASI and DI programs in the near term, and the future course of the pan-
demic is uncertain. However, the economic recovery from the brief recession
in 2020 has been stronger and faster than assumed in last years report. On
balance, the projected long-range actuarial status of the OASI and DI Trust
Funds has been little changed by the effects of the pandemic and ensuing
recession, considering both the effects realized to date and those yet
expected. The Trustees will continue to monitor developments and modify
the projections in later reports.
In 2021
At the end of 2021, the OASDI program was providing benefit payments 1 to
about 65 million people: 50 million retired workers and dependents of retired
workers, 6 million survivors of deceased workers, and 9 million disabled
workers and dependents of disabled workers. During the year, an estimated
179 million people had earnings covered by Social Security and paid payroll
taxes on those earnings. The total cost of the program in 2021 was
$1,145 billion. Total income was $1,088 billion, which consisted of
$1,018 billion in non-interest income and $70 billion in interest earnings.
Asset reserves held in special issue U.S. Treasury securities declined from
$2,908 billion at the beginning of the year to $2,852 billion at the end of the
year. The total cost and change in asset reserves shown for 2021 reflect the
twelve months of benefits scheduled for payment, and include the benefits
scheduled for payment on January 3, 2021, which were actually paid on
December 31, 2020 as required by the law. 2
1 The definitions of benefit payments and other terms appear in the Glossary.
2 Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal delivery
date is a Saturday, Sunday, or public legal holiday. The amount of these payments was approximately
$18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund. For comparability with the val-
ues for historical years and the projections in this report, all trust fund operations and asset reserves reflect
the 12 months of benefits scheduled for payment each year.
2
Highlights
Short-Range Results (2022-31)
Under the Trustees intermediate assumptions, Social Securitys total cost is
projected to be higher than its total income in 2022 and all later years. Total
cost began to be higher than total income in 2021. Social Securitys cost has
exceeded its non-interest income since 2010.
To illustrate the actuarial status of the Social Security program as a whole,
the operations of the OASI and DI Trust Funds are often shown on a com-
bined basis as OASDI. However, by law, the two funds are separate entities
and therefore the combined fund operations and reserves are hypothetical.
The combined reserves are projected to decrease from $2,852 billion at the
beginning of 2022 to $1,251 billion at the end of 2031, the last year of the
short-range period.
The reserves of the combined OASI and DI Trust Funds along with projected
program income are sufficient to cover projected program cost over the next
10 years under the intermediate assumptions. However, the ratio of reserves
to annual cost is projected to decline from 230 percent at the beginning of
2022 to 74 percent at the beginning of 2031. Because this ratio falls below
100 percent by the beginning of the 10th projection year, the combined OASI
and DI Trust Funds fail the Trustees test of short-range financial adequacy.
Considered separately, the OASI Trust Fund fails this test, but the DI Trust
Fund satisfies the test. For last years report, the Trustees projected that com-
bined reserves would be 231 percent of annual cost at the beginning of 2022
and 66 percent at the beginning of 2031.
Long-Range Results (2022-96)
Under the Trustees intermediate assumptions, OASDI cost is projected to
exceed total income in 2022, and the dollar level of the hypothetical com-
bined trust fund reserves declines until reserves become depleted in 2035.
Figure II.D2 shows the implications of reserve depletion for the combined
OASI and DI Trust Funds. Considered separately, the OASI Trust Fund
reserves become depleted in 2034, and, for the first time since the 1983
Trustees Report, the DI Trust Fund reserves do not become depleted within
the 75-year long-range projection period. 1 In last years report, the projected
reserve depletion years were 2034 for OASDI, 2033 for OASI, and 2057 for
1 If the OASI Trust Fund reserves were to become depleted in 2034 as is currently projected, the operations
of the hypothetical combined OASI and DI Trust Funds would not reflect the aggregated operation of the
OASI Trust Fund and the DI Trust Fund because part of the OASI benefits could not be paid without a
change in the law. The values shown for the hypothetical combined trust funds assume the law will have
been changed to permit the transfer of resources between funds as needed.
3
Overview
DI. The level of DI reserves is very sensitive to changes in program cash
flows and interest.
The DI program continues to have low levels of disability applications and
benefit awards for 2021. Disability applications have declined substantially
since 2010, and the total number of disabled-worker beneficiaries in current
payment status has been falling since 2014. For this report, disability appli-
cations are assumed to rise gradually from current low levels, resulting in a
rise in the age-sex-adjusted disability incidence rate to an ultimate rate of
4.8 per thousand exposed by the end of the short-range projection period.
The ultimate disability incidence rate was lowered from the rate of 5.0 per
thousand that was assumed in last years report.
OASDI cost has been generally increasing much more rapidly than non-
interest income since 2008 and is projected to continue to do so through
about 2040. In this period, the retirement of the baby-boom generation is
increasing the number of beneficiaries much faster than the increase in the
number of covered workers, as subsequent lower-birth-rate generations
replace the baby-boom generation at working ages. Between about 2040 and
2055, OASDI cost and non-interest income are projected to generally
increase at more similar rates as the cost rate (the ratio of program cost to
taxable payroll) roughly stabilizes, reflecting the return to birth rates above
2 children per woman between 1990 and 2008. Between 2055 and 2078,
OASDI cost is projected to grow significantly faster than income because of
the period of historically low birth rates starting with the recession of
2007-09. From 2078 to 2096, cost is projected to grow somewhat slower
than income, as birth rates return to a level of 2 children per woman for 2056
and thereafter.
Over the 75-year long-range period 2022-96, the projected OASDI annual
cost rate increases from 14.05 percent of taxable payroll for 2022 to
18.32 percent for 2078, and then decreases to 17.64 percent for 2096. The
projected cost rate for 2096 is 4.25 percent of taxable payroll more than the
projected income rate (the ratio of non-interest income to taxable payroll) for
2096. For last years report, the Trustees estimated the OASDI cost for 2096
at 17.70 percent, or 4.35 percent of payroll more than the annual income rate
for that year. Expressed in relation to the projected gross domestic product
(GDP), OASDI cost generally rises from 5.0 percent of GDP for 2022 to a
peak of about 6.2 percent for 2077, and then declines to 5.9 percent by 2096.
The actuarial deficit is 3.42 percent of taxable payroll for the 75-year projec-
tion period through 2096, decreased from 3.54 percent of taxable payroll for
the 75-year projection period through 2095 in last years report. The closely-
related open-group unfunded obligation for OASDI is 3.24 percent of taxable
4
Highlights
payroll over the 75-year projection period through 2096, decreased from
3.35 percent of payroll over the 75-year projection period through 2095 in
last years report. The open-group unfunded obligation for OASDI is
$20.4 trillion in present value over the 75-year projection period through
2096 and is $0.6 trillion more than the measured level of $19.8 trillion over
the 75-year projection period through 2095 in last years report. The actuarial
deficit rounds to 1.2 percent and the unfunded obligation rounds to
1.1 percent of GDP over the 75-year projection period through 2096, com-
pared to 1.2 percent for each over the 75-year projection period through 2095
in last years report.
If the assumptions, methods, starting values, and the law had all remained
unchanged, the actuarial deficit would have increased to 3.59 percent of tax-
able payroll, and the unfunded obligation would have risen to 3.41 percent of
taxable payroll and $20.6 trillion in present value due to the change in the
valuation date and the extension of the valuation period through an addi-
tional year, 2096. The actuarial deficit decreased significantly in this years
report due to favorable recent experience and changes in assumptions
described in detail in section IV.B.6 of this report.
To illustrate the magnitude of the 75-year actuarial deficit, consider that for
the combined OASI and DI Trust Funds to remain fully solvent throughout
the 75-year projection period ending in 2096: (1) revenue would have to
increase by an amount equivalent to an immediate and permanent payroll tax
rate increase of 3.24 percentage points 1 to 15.64 percent beginning in Janu-
ary 2022; (2) scheduled benefits would have to be reduced by an amount
equivalent to an immediate and permanent reduction of 20.3 percent applied
to all current and future beneficiaries effective in January 2022, or
24.1 percent if the reductions were applied only to those who become ini-
tially eligible for benefits in 2022 or later; or (3) some combination of these
approaches would have to be adopted.
If substantial actions are deferred for several years, the changes necessary to
maintain Social Security solvency would be concentrated on fewer years and
fewer generations. Significantly larger changes would be necessary if action
is deferred until the combined trust fund reserves become depleted in 2035.
For example, maintaining 75-year solvency through 2096 with changes that
begin in 2035 would require: (1) an increase in revenue by an amount equiv-
alent to a permanent 4.07 percentage point payroll tax rate increase to
1 The 3.24 percentage point increase in the payroll tax rate required to achieve 75-year solvency through
2096 differs somewhat from the 3.42 percent actuarial deficit. This is primarily because the rate increase
required to achieve 75-year solvency reflects a zero trust fund reserve at the end of the period in 2096,
whereas the 3.42 percent actuarial deficit incorporates an ending trust fund reserve equal to one years cost.
While such an increase in the payroll tax rate would cause some behavioral changes in earnings and ensuing
changes in benefit levels, such changes are not included in these calculations because they are assumed to
have roughly offsetting effects on OASDI actuarial status over the 75-year long-range period as a whole.
5
Overview
16.47 percent starting in 2035, (2) a reduction in scheduled benefits by an
amount equivalent to a permanent 24.9 percent reduction in all benefits start-
ing in 2035, or (3) some combination of these approaches.
Conclusion
Under the intermediate assumptions, the projected hypothetical combined
OASI and DI Trust Fund asset reserves become depleted and unable to pay
scheduled benefits in full on a timely basis in 2035. At the time of depletion
of these combined reserves, continuing income to the combined trust funds
would be sufficient to pay 80 percent of scheduled benefits. The OASI Trust
Fund reserves are projected to become depleted in 2034, at which time OASI
income would be sufficient to pay 77 percent of OASI scheduled benefits. DI
Trust Fund asset reserves are not projected to become depleted during the
75-year period ending in 2096.
Lawmakers have a broad continuum of policy options that would close or
reduce Social Security's long-term financing shortfall. Cost estimates for
many such policy options are available at
www.ssa.gov/OACT/solvency/provisions/.
The Trustees recommend that lawmakers address the projected trust fund
shortfalls in a timely way in order to phase in necessary changes gradually
and give workers and beneficiaries time to adjust to them. Implementing
changes sooner rather than later would allow more generations to share in the
needed revenue increases or reductions in scheduled benefits. Social Security
will play a critical role in the lives of 66 million beneficiaries and
182 million covered workers and their families during 2022. With informed
discussion, creative thinking, and timely legislative action, Social Security
can continue to protect future generations.
6
Calendar Year 2021 Operations
B. TRUST FUND FINANCIAL OPERATIONS IN 2021
Table II.B1 shows the income, cost, and asset reserves for the OASI, the DI,
and the combined OASI and DI Trust Funds in calendar year 2021.
Table II.B1.Summary of 2021 Trust Fund Financial Operations
[In billions]
OASI DI OASDI
Asset reserves at the end of 2020a . . . . . . . . . . . . . . . . . . . $2,811.7 $96.6 $2,908.3
Total income in 2021 b . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942.9 145.5 1,088.3
Net payroll tax contributionsc . . . . . . . . . . . . . . . . . . . . 838.2 142.4 980.6
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67.5 2.6 70.1
Taxation of benefitsc . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.2 .5 37.6
Total cost in 2021a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,001.9 142.6 1,144.6
Benefit paymentsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993.1 140.1 1,133.2
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 4.0 2.5 6.5
Railroad Retirement financial interchange . . . . . . . . . . 4.8 .1 4.9
Net increase in asset reserves in 2021a . . . . . . . . . . . . . . . -59.1 2.8 -56.3
Asset reserves at the end of 2021. . . . . . . . . . . . . . . . . . . . 2,752.6 99.4 2,852.0
a Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal delivery
date is a Saturday, Sunday, or public legal holiday. The amount of these payments was approximately $18.7
billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund. For comparability with the values for
historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12
months of benefits scheduled for payment each year.
b Includes less than $50 million in reimbursements from the General Fund of the Treasury and gifts. See sec-
tion III.A for details.
c Includes adjustments for prior calendar years. In June 2021, unusually large negative adjustments to payroll
tax contributions in the amounts of $30.4 billion for OASI and $5.2 billion for DI were made because payroll
tax revenue credited to the trust funds in 2020 was based on estimates that did not anticipate the effects of the
pandemic and recession.
Note: Components may not sum to totals because of rounding.
In 2021, net payroll tax contributions accounted for 90.1 percent of total trust
fund income. Net payroll tax contributions consist of taxes paid by employ-
ees, employers, and the self-employed on earnings covered by Social Secu-
rity. These taxes are paid on covered earnings up to a specified maximum
annual amount, which was $142,800 in 2021. Table II.B2 shows the payroll
tax rates for 2021.
Table II.B2.Payroll Tax Contribution Rates for 2021
[In percent]
OASI DI OASDI
Payroll tax contribution rate for employees. . . . . . . . . . . . . . . . . . . . . . . 5.3 0.9 6.2
Payroll tax contribution rate for employers . . . . . . . . . . . . . . . . . . . . . . . 5.3 .9 6.2
Payroll tax contribution rate for self-employed persons . . . . . . . . . . . . . 10.6 1.8 12.4
7
Overview
Interest earned on invested trust fund asset reserves accounted for
6.4 percent of OASI and DI combined trust fund income in 2021. Revenue
from subjecting up to 50 percent of Social Security benefits to Federal per-
sonal income taxation for beneficiaries with income (including half of bene-
fits and all non-taxable interest received) exceeding specified levels
accounted for 3.5 percent of OASDI income.
The Department of the Treasury invests all trust fund income in interest-
bearing securities issued by the U.S. Government. In 2021, the combined
trust fund reserves (the excess of all past income over all past expenditures)
earned interest at an effective annual rate of 2.5 percent.
Retirement, survivor, and disability benefits accounted for 99.0 percent of
OASI and DI combined trust fund cost in 2021. The expenses for administer-
ing the Social Security program were 0.6 percent of total cost. The net pay-
ment to the Railroad Retirement Social Security Equivalent Benefit Account
from the combined OASI and DI Trust Funds accounted for 0.4 percent of
total OASDI cost.
Trust fund reserves provide the basis for paying benefits. Combined trust
fund reserves decreased by $56.3 billion during 2021 because income to the
combined funds, including interest earned on trust fund reserves, was less
than total cost. 1 In last years report, combined reserves were projected to
decrease by $77.3 billion in 2021. 2 At the end of 2021, the combined
reserves of the OASI and the DI Trust Funds were $2,852 billion, or
230 percent of estimated cost 2 for 2022. In comparison, the combined
reserves at the end of 2020 were 254 percent of actual cost for 2021.
1 As noted in footnote a of table II.B1 and elsewhere in this report, asset reserves shown for the end of 2020
reflect the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for
payment on January 3, 2021, which were actually paid on December 31, 2020 as required by the law.
2 Estimated cost is based on the intermediate set of assumptions.
8
Future Assumptions
C. ASSUMPTIONS ABOUT THE FUTURE
The future income and cost of the OASI and DI Trust Funds will depend on
many factors, including the size and characteristics of the population receiv-
ing benefits, the level of monthly benefit amounts, the size of the workforce,
and the level of covered workers earnings. These factors will depend in turn
on future birth rates, death rates, immigration, marriage and divorce rates,
retirement-age patterns, disability incidence and termination rates, employ-
ment rates, productivity gains, wage increases, inflation, interest rates, and
many other demographic, economic, and program-specific factors.
Table II.C1 presents key demographic, economic, and programmatic
assumptions for three alternative scenarios. The intermediate assumptions
reflect the Trustees best estimates of future experience. Therefore, most of
the results presented in this overview indicate outcomes under the intermedi-
ate assumptions only. Any projection of the future is, of course, uncertain.
For this reason, the Trustees also present results under low-cost and high-
cost alternatives to provide a range of possible future experience. The actual
future costs are unlikely to be as extreme as those portrayed by the low-cost
or high-cost projections. A separate section on the uncertainty of the projec-
tions, beginning on page 19, highlights the implications of these alternative
scenarios.
The Trustees reexamine the assumptions each year in light of recent experi-
ence and new information. This annual review helps to ensure that the Trust-
ees assumptions provide the best estimate of future possibilities.
9
Overview
Table II.C1.Key Assumptionsa and Summary Measures
for the Long-Range (75-year) Projection Period
Long-range assumptions Intermediate Low-cost High-cost
Demographic:
Average annual total fertility rate (children per woman), for 2032
through 2096b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.99 2.19 1.69
Average annual percentage reduction in total age-sex-adjusted
death rates from 2031 to 2096. . . . . . . . . . . . . . . . . . . . . . . . . . .74 .28 1.25
Average annual net lawful permanent resident (LPR) immigration
(in thousands) for 2032 through 2096 . . . . . . . . . . . . . . . . . . . . 788 1,000 595
Average annual net other-than-LPR immigration (in thousands) for
2032 through 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 684 234
Economic:
Average annual percentage change in:
Productivity (total U.S. economy), for 2030 and later . . . . . . . 1.63 1.93 1.33
Average wage in covered employment from 2031 to 2096 . . . 3.55 4.77 2.33
Consumer Price Index (CPI-W), for 2026 and later. . . . . . . . . 2.40 3.00 1.80
Average annual real wage differential (percent) for 2032
through 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.15 1.77 .53
Unemployment rate (percent, age-sex-adjusted), for 2028 and later 4.5 3.5 5.5
Annual trust fund real interest rate (percent), for 2032 and later. 2.3 2.8 1.8
Programmatic:
Average annual disability incidence rate (per 1,000 exposed, age-
sex-adjusted) for 2032 through 2096 . . . . . . . . . . . . . . . . . . . . 4.8 3.9 5.8
Average annual disability recovery rate (per 1,000 beneficiaries,
age-sex-adjusted) for 2032 through 2096 . . . . . . . . . . . . . . . . . 10.4 12.5 8.3
a See chapter V for details, including historical and projected values.
b The ultimate total fertility rates of 2.00 for the intermediate assumptions, 2.20 for the low-cost assump-
tions, and 1.70 for the high-cost assumptions are fully reached for women of all ages in 2056. The cohort-
based projection approach assumes that the ultimate rates will be achieved over the lifetime of women
attaining age 14 soon after the start of the projection period, resulting in an extended transition from current
low birth rates to ultimate birth rates. See section V.A.1 for additional details.
10
Future Financial Status
D. PROJECTIONS OF FUTURE FINANCIAL STATUS
Short-Range Actuarial Estimates
For the short-range period (2022 through 2031), the Trustees measure finan-
cial adequacy using trust fund ratios, which compare projected asset reserves
at the beginning of a year to projected program cost for the year. Maintaining
a trust fund ratio of 100 percent or morethat is, reserves at the beginning
of a year at least equal to projected cost for the yearis a good indication
that the trust fund can cover most short-term contingencies. The Trustees'
test of short-range financial adequacy is met if under the intermediate
assumptions (1) the estimated trust fund ratio is at least 100 percent at the
beginning of the period and remains at or above 100 percent throughout the
10-year short-range period (from the beginning of 2022 through the end of
2031, which is indicated by the trust fund ratio at the beginning of 2032) or
(2) the ratio is initially less than 100 percent, but reaches at least 100 percent
within five years and remains at or above 100 percent throughout the remain-
der of the 10-year short-range period. The projected trust fund ratio under the
intermediate assumptions for the OASI Trust Fund declines to 87 percent by
the beginning of 2030 and remains below 100 percent for the remainder of
the short-range period. Therefore, OASI fails the Trustees test of short-
range financial adequacy. The DI Trust Fund satisfies the test of short-range
financial adequacy because the trust fund ratio, while below 100 percent at
the beginning of the projection period, reaches 100 percent within five years
and stays above 100 percent throughout the remainder of the 10-year period.
The Trustees estimate that the DI trust fund ratio was at 68 percent at the
beginning of 2022. The projected DI trust fund ratio then increases to
100 percent by the beginning of 2026 and continues to increase for the
remainder of the short-range period. On a combined basis, OASDI fails the
Trustees test of short-range financial adequacy because the OASDI trust
fund ratio declines to 91 percent by the beginning of 2030 and remains
below 100 percent for the remainder of the short-range period. Figure II.D1
shows that the trust fund ratio for the combined OASI and DI Trust Funds
declines steadily after 2010.
For this report, combined reserves are projected to decline in 2022, as they
did beginning in 2021, and to continue to decline throughout the remainder
of the short-range period.
11
Overview
Figure II.D1.Short-Range OASI and DI Combined Trust Fund Ratio
[Asset reserves at beginning of year as a percentage of annual cost for the year,
under intermediate assumptions]
400%
Historical Projected
350%
300%
250%
200%
Minimum level for test of
short-range financial
150% adequacy is 100%
100%
50%
0%
2017 2019 2021 2023 2025 2027 2029 2031
Calendar year
Long-Range Actuarial Estimates
The Trustees use three types of measures to assess the actuarial status of the
program over the long-range period (2022 through 2096): (1) annual cash-
flow measures, including income rates, cost rates, and balances; (2) trust
fund ratios; and (3) summary measures such as actuarial balances and open-
group unfunded obligations. The Trustees express these measures as percent-
ages of taxable payroll, as percentages of gross domestic product (GDP), or
in dollars. The Trustees also present summary measures over the infinite
horizon in appendix F. The infinite horizon values provide an additional
indication of Social Securitys very-long-run financial condition.
The Trustees also apply a test of long-range close actuarial balance each
year. To satisfy the test, a trust fund must meet two conditions: (1) the trust
fund satisfies the test of short-range financial adequacy, and (2) the trust fund
ratio stays above zero throughout the 75-year projection period, such that
benefits would be payable in a timely manner throughout the period. Under
the intermediate assumptions, the OASI Trust Fund and the combined OASI
12
Future Financial Status
and DI Trust Funds fail the test of long-range close actuarial balance, while
the DI Trust Fund satisfies the test.
Annual Income Rates, Cost Rates, and Balances
Figure II.D2 illustrates the year-by-year relationship among OASDI income
(excluding interest), cost (including scheduled benefits), and expenditures
(including payable benefits) starting in 2000 and for the full 75-year projec-
tion period (2022 through 2096). The figure shows all values as percentages
of taxable payroll. Under the intermediate assumptions, demographic factors
by themselves cause the projected cost rate to rise rapidly for the next two
decades, level off somewhat in about 2040 through 2055, rise temporarily
between 2055 and 2078, and then decline somewhat through 2096. The pro-
jected income rate is relatively stable at about 13 percent throughout the 75-
year period ending in 2096.
Annual OASDI cost has exceeded non-interest income every year beginning
with 2010. The Trustees project that cost will continue to exceed non-interest
income throughout the 75-year valuation period. Cost is projected to exceed
total income in 2022, as it did beginning in 2021, and combined OASI and
DI Trust Fund reserves decline until they become depleted in 2035. After
trust fund reserve depletion, continuing income is sufficient to support
expenditures at a level of 80 percent of program cost for the rest of 2035,
declining to 74 percent for 2096. Figure II.D2 depicts OASDI operations as a
combined whole. However, under current law, the differences between
scheduled and payable benefits for OASI would begin in 2034, when the
OASI Trust Fund is projected to become depleted. Scheduled benefits equal
payable benefits for DI throughout the entire 75-year projection period,
because the DI Trust Fund is not projected to become depleted during the
period.
13
Overview
Figure II.D2.OASDI Income, Cost, and Expenditures as Percentages of Taxable Payroll
[Under intermediate assumptions]
25%
Cost: Scheduled and Cost: Scheduled but not
payable benefits fully payable benefits
20%
15%
Non-interest Income Expenditures: Payable benefits =
10% income after trust fund depletion in 2035
Payable benefits as percent
of scheduled benefits:
5%
2022-34: 100%
2035: 80%
2096: 74%
0%
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Figure II.D3 shows the estimated number of covered workers per OASDI
beneficiary. Figures II.D2 and II.D3 illustrate the inverse relationship
between cost rates and the number of workers per beneficiary. In particular,
the projected future increase in the cost rate reflects a projected decline in the
number of covered workers per beneficiary. There were about 2.8 workers
for every OASDI beneficiary in 2021. This ratio had been stable, remaining
between 3.2 and 3.4 from 1974 through 2008, and has generally declined
since then, initially due to the economic recession of 2007-09 and the begin-
ning of a notable demographic shift. This shift causes the ratio of workers to
beneficiaries to decline, as workers of lower-birth-rate generations replace
workers of the baby-boom generation. The decline in the ratio slowed sub-
stantially between 2013 and 2019 as the recovery of the economy largely off-
set the demographic shift during that period. The ratio declined slightly in
2020 and then increased slightly in 2021, due to effects of the pandemic-
induced recession and recovery on the number of workers. The underlying
demographic shift will continue to drive this ratio down over the next 10 to
15 years. The ratio of workers to beneficiaries reaches 2.3 by 2033 when the
baby-boom generation will have largely retired, and will generally decline
very gradually thereafter due to increasing longevity.
14
Future Financial Status
Figure II.D3.Number of Covered Workers Per OASDI Beneficiary
[Under intermediate assumptions]
4
3
2
Historical Projected
1
0
1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Another important way to look at Social Securitys future financial status is
to view its annual cost and non-interest income as a share of U.S. economic
output (GDP). As shown in figure II.D4, Social Securitys cost as a percent
of GDP is generally projected to grow from 5.0 percent in 2022 to a peak of
about 6.2 percent for 2077, and then decline to 5.9 percent by 2096. Social
Securitys non-interest income is projected to rise from 4.5 percent of GDP
in 2022 to a peak of about 4.8 percent by 2031. Thereafter, non-interest
income as a percent of GDP declines gradually, to about 4.4 percent for
2096, because the Trustees expect the share of employee compensation pro-
vided as noncovered fringe benefits to increase gradually.
15
Overview
Figure II.D4.OASDI Cost and Non-interest Income as a Percentage of GDP
[Under intermediate assumptions]
10%
Historical Projected
8%
Cost
6%
4%
Non-interest Income
2%
0%
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Trust Fund Ratios
The trust fund ratio is defined as the asset reserves at the beginning of a year
expressed as a percentage of the cost during the year. The trust fund ratio
thus represents the proportion of a years cost which could be paid solely
with the accumulated reserves at the beginning of the year. Table II.D1 dis-
plays the projected maximum trust fund ratios during the long-range period
for the OASI, DI, and combined OASI and DI funds. The table also shows
the year of maximum projected trust fund ratio during the long-range projec-
tion period (2022 through 2096) and the year of trust fund asset reserve
depletion. Trust fund ratios for OASI and combined OASI and DI are pro-
jected to decline from their current levels until reserve depletion. For DI, the
trust fund ratio is projected to rise to 231 percent of cost in 2043, and then
decline to 53 percent of cost by 2096.
Table II.D1.Projected Maximum Trust Fund Ratios During the Long-Range Period
and Trust Fund Reserve Depletion Dates
[Under Intermediate Assumptions]
OASI DI OASDI
Maximum projected trust fund ratio (percent). . . . . . 251 231 230
Year attained. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022 2043 2022
Projected year of trust fund reserve depletion . . . . . . 2034 a 2035
a The trust fund is not projected to become depleted during the 75-year period ending in 2096.
16
Future Financial Status
Summary Measures
The actuarial balance is a summary measure of the programs financial status
through the end of the 75-year valuation period. The actuarial balance mea-
sure includes the trust fund asset reserves at the beginning of the period, all
cost and income during the valuation period, and the cost of reaching a target
trust fund reserve of one years cost by the end of the period. Therefore, the
actuarial balance is essentially the difference between the present values of
income and cost from 1937 through the end of the valuation period,
expressed as a percentage of the taxable payroll for the 75-year valuation
period. A negative actuarial balance is called an actuarial deficit. The actuar-
ial deficit represents the average amount of change in income or cost that is
needed throughout the valuation period in order to achieve actuarial balance.
In this report, the actuarial deficit for the combined OASI and DI Trust
Funds under the intermediate assumptions is 3.42 percent of taxable payroll.
The actuarial deficit was 3.54 percent of payroll in the 2021 report. If the
assumptions, methods, starting values, and the law had all remained
unchanged from last year, the actuarial deficit would have increased to
3.59 percent of payroll solely due to advancing the valuation period by
1 year. The actuarial deficit is 1.2 percent of GDP in this years report,
unchanged from last years report.
Another way to illustrate the projected financial shortfall of the OASDI pro-
gram is to examine the cumulative present value of scheduled income less
cost. Figure II.D5 shows the present value of cumulative OASDI income less
cost from the inception of the program through each of the years from 2021
to 2096. A positive value represents the present value of trust fund reserves
at the end of the selected year. A negative value is the unfunded obligation
through the selected year. The asset reserves of the combined trust funds
were about $2.85 trillion at the end of 2021. The combined trust fund
reserves decline on a present value basis after 2021, but remain positive
through 2034. However, after 2034 this cumulative amount declines and
becomes negative in 2035, which means that the combined OASI and DI
Trust Funds have a net unfunded obligation through the end of each year
after 2034. Through the end of 2096, the combined funds have a present-
value unfunded obligation of $20.4 trillion. If the assumptions, methods,
starting values, and the law had all remained unchanged from last year, the
unfunded obligation in this years report would have risen to about
$20.6 trillion due to the change in the valuation date and the extension of the
valuation period through an additional year, 2096.
17
Overview
This unfunded obligation through 2096 represents 3.24 percent of taxable
payroll for 2022 through 2096 (decreased from an unfunded obligation
through 2095 of 3.35 percent of taxable payroll for 2021 through 2095 in last
years report) and 1.1 percent of GDP over the 75-year valuation period end-
ing in 2096 (decreased from 1.2 percent of GDP over the 75-year period end-
ing in 2095 in last years report). The unfunded obligation as a share of
taxable payroll over the period (3.24 percent) and the actuarial deficit
(3.42 percent) are similar measures, but differ because the actuarial deficit
includes the cost of having an ending trust fund reserve equal to one years
cost.
Figures II.D2, II.D4, and II.D5 show that the programs financial condition
will deteriorate throughout the projection period if current law is not altered.
Negative annual balances and increasing cumulative shortfalls toward the
end of the 75-year period provide an indication of the additional change that
will be needed by that time in order to maintain solvency beyond 75 years.
Consideration of summary measures alone for a 75-year period can lead to
incorrect perceptions and to policy prescriptions that do not achieve sustain-
able solvency. 1
1 Sustainable solvency for the financing of the program under a specified set of assumptions has been
achieved when the projected trust fund ratio is positive throughout the 75-year projection period and is either
stable or rising at the end of the period.
18
Future Financial Status
Figure II.D5.Cumulative Scheduled OASDI Income Less Cost,
From Program Inception Through Years 2021-2096
[Present value as of January 1, 2022, in trillions, under Intermediate Assumptions]
2035
$4
$2
$0
Trust fund
-$2 reserves
(positive)
-$4
-$6
-$8 Unfunded
obligation
-$10 (negative)
-$12
-$14
-$16
-$18
-$20
-$22
2021 2036 2051 2066 2081 2096
Ending year of accumulation
Appendix F presents summary measures over the infinite horizon. The
infinite horizon values provide an additional indication of Social Securitys
financial condition extending indefinitely into the future, but results are sub-
ject to much greater uncertainty. Extending the horizon beyond 75 years
increases the measured unfunded obligation. Through the infinite horizon,
the unfunded obligation, or shortfall, is equivalent to 4.5 percent of future
taxable payroll or 1.4 percent of future GDP.
Uncertainty of the Projections
Significant uncertainty surrounds the intermediate assumptions. The Trustees
use several methods to help illustrate that uncertainty.
A first approach uses alternative scenarios reflecting low-cost (alternative I)
and high-cost (alternative III) sets of assumptions. Figure II.D6 shows the
projected trust fund ratios for the combined OASI and DI Trust Funds under
the intermediate, low-cost, and high-cost assumptions. The figure indicates
that the combined trust funds are projected to become depleted in 2035 under
the intermediate alternative and in 2031 under the high-cost alternative.
19
Overview
Under the low-cost alternative, trust fund reserves are projected to become
depleted in 2069, but the trust funds would have sufficient income by the end
of 2088 to permit full payment of scheduled benefits thereafter and also to
pay in arrears the temporary shortfalls between 2069 and 2088. The low-cost
alternative includes a higher ultimate total fertility rate, slower improvement
in mortality, a higher real wage differential, a higher ultimate real interest
rate, a higher ultimate annual change in the CPI, and a lower unemployment
rate. The high-cost alternative, in contrast, includes a lower ultimate total fer-
tility rate, more rapid improvement in mortality, a lower real wage differen-
tial, a lower ultimate real interest rate, a lower ultimate annual change in the
CPI, and a higher unemployment rate. These alternatives are not intended to
suggest that all parameters would be likely to differ from the intermediate
values in the specified directions, but are intended to illustrate the effect of
clearly defined scenarios that are, on balance, very favorable or unfavorable
for the programs financial status. Actual future costs are unlikely to be as
extreme as those portrayed by the low-cost or high-cost projections. The
method for constructing the low-cost and high-cost projections does not lend
itself to estimating the probability that actual experience will lie within or
outside the range they define.
20
Future Financial Status
Figure II.D6.Long-Range OASI and DI Combined Trust Fund Ratios Under
Alternative Scenarios
[Asset reserves as a percentage of annual cost]
400%
Historical Projected
300%
200%
100%
III II I
0%
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Appendix D of this report presents long-range sensitivity analysis for the
OASDI program. By varying one parameter at a time, sensitivity analysis
provides a second approach for illustrating the uncertainty surrounding pro-
jections into the future.
A third approach uses 5,000 independently generated stochastic simulations
that reflect randomly assigned annual values and central tendencies for most
of the key parameters. These simulations produce a distribution of projected
outcomes and corresponding probabilities that future experience will fall
within or outside a given range. The results of the stochastic simulations, dis-
cussed in more detail in appendix E, suggest that trust fund reserve depletion
(the point at which reserves are insufficient to pay scheduled benefits in full
and on time) is very likely before mid-century. In particular, figure II.D7
suggests that based on these stochastic simulations, trust fund reserves will
become depleted between 2031 and 2043 with 95-percent confidence. In last
years report, this range was between 2031 and 2041.
The stochastic results suggest that trust fund ratios as high as the low-cost
alternative or as low as the high-cost alternative are very unlikely.
21
Overview
Figure II.D7.Long-Range OASI and DI Combined Trust Fund Ratios
From Stochastic Modeling
250%
200%
150%
97.5%
90%
100%
50%
50%
10%
2.5%
0%
2022 2032 2042 2052 2062 2072 2082 2092
Calendar year
Changes From Last Years Report
The projected long-range OASDI actuarial deficit decreased from
3.54 percent of taxable payroll for last years report to 3.42 percent of tax-
able payroll for this years report. The change in the valuation date and the
extension of the 75-year projection period for an additional year, 2096,
would have by itself increased the actuarial deficit to 3.59 percent. However,
changes in law, methods, starting values, and assumptions combined to
decrease the actuarial deficit by 0.17 percent of taxable payroll, more than
offsetting the increase due to the change in valuation date. For a detailed
description of the specific changes identified in table II.D2, see
section IV.B.6.
22
Future Financial Status
Table II.D2.Reasons for Change in the 75-Year Actuarial Balance,
Based on Intermediate Assumptions
[As a percentage of taxable payroll]
Item OASI DI OASDI
Shown in last years report:
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.39 1.92 17.31
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54
Changes in actuarial balance due to changes in:
Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . .00 .00 .00
Valuation period a . . . . . . . . . . . . . . . . . . . . . . . . . . . . -.05 -.01 -.06
Demographic data and assumptions . . . . . . . . . . . . . . -.04 .00 -.04
Economic data and assumptions. . . . . . . . . . . . . . . . . .13 .00 .13
Disability data and assumptions . . . . . . . . . . . . . . . . . .00 .08 .07
Methods and programmatic data . . . . . . . . . . . . . . . . .01 .00 .01
Total change in actuarial balance . . . . . . . . . . . . . . . . . . .05 .07 .12
Shown in this report:
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.41 -.01 -3.42
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.34 1.86 17.20
a The change in the 75-year valuation period from last years report to this report means that the 75-year
actuarial balance now includes the relatively large negative annual balance for 2096. This change in the val-
uation period results in a larger long-range actuarial deficit. The actuarial deficit includes the trust fund
reserve at the beginning of the projection period.
Note: Components may not sum to totals because of rounding.
Figure II.D8 compares this years projections of annual balances (non-inter-
est income minus cost) to those in last years report. The annual balances in
this years report are higher (less negative) in all years from 2022 through
2096. For the full 75-year projection period, the annual balances are higher,
on average, by 0.18 percentage point.
23
Overview
Figure II.D8.OASDI Annual Balances: 2021 and 2022 Trustees Reports
[As a percentage of taxable payroll, under the intermediate assumptions]
0%
-2%
-4%
2021 Report
2022 Report
-6%
2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
24
Conclusion
E. CONCLUSION
The data and projections presented in this report continue to include the
Trustees best estimates of the effects of the COVID-19 pandemic. The pan-
demic is projected to have continuing significant effects on the OASI and DI
programs in the near term, and the future course of the pandemic is uncer-
tain. On balance, the projected long-range actuarial status of the OASI and
DI Trust Funds has been little changed by the effects of the pandemic and
ensuing recession, considering both the effects realized to date and those yet
expected. The Trustees will continue to monitor the development of the pan-
demic and adjust their projections accordingly in future reports.
Under current law, the projected cost of Social Security generally increases
faster than projected income through about 2040 primarily because the ratio
of workers paying taxes to beneficiaries receiving benefits will decline as the
baby-boom generation retires and is replaced at working ages with subse-
quent lower birth-rate generations. The effects of the aging baby boom and
subsequent lower birth rates will have largely stabilized between about 2040
and 2055, but annual cost is projected to grow significantly faster than
income between 2055 and 2078 due to the period of historically low birth
rates starting with the recession of 2007-09. Between 2078 and 2096, cost is
projected to grow somewhat slower than income, reflecting a return to a sta-
ble ultimate birth rate of 2 children per woman for 2056 and thereafter.
Based on the Trustees intermediate assumptions, Social Securitys cost
exceeds total income in 2022, as it did beginning in 2021, and remains higher
throughout the remainder of the 75-year projection period.
The OASI Trust Fund is projected to have sufficient reserves to pay full ben-
efits on time until 2034. The DI Trust Fund is projected to have sufficient
reserves to pay full benefits throughout the 75-year projection period ending
in 2096. Legislative action will be needed to prevent OASI reserve depletion.
In the absence of such legislation, continuing income to the trust funds at the
time of reserve depletion would be sufficient to pay 77 percent of OASI ben-
efits.
Social Securitys combined trust funds are projected to cover full payment of
scheduled benefits on a timely basis until the trust fund reserves become
depleted in 2035. (Full payment of benefits until depletion of the hypotheti-
cal combined reserves in 2035 implicitly assumes that the law will have been
changed to permit the transfer of funds between OASI and DI as needed.) At
that time, projected continuing income to the combined trust funds equals
about 80 percent of the program cost. By 2096, continuing income equals
about 74 percent of the program cost.
25
Overview
The actuarial deficit for the combined trust funds under the intermediate
assumptions is 3.42 percent of taxable payroll for the 75-year period through
2096, decreased (improved) from the 3.54 percent deficit for the 75-year
period through 2095 in last years report. To illustrate the magnitude of the
deficit, consider that for the combined OASI and DI Trust Funds to remain
fully solvent throughout the 75-year projection period ending with 2096:
(1) revenue would have to be increased by an amount equivalent to an imme-
diate and permanent payroll tax rate increase of 3.24 percentage points to
15.64 percent; (2) scheduled benefits would have to be reduced by an
amount equivalent to an immediate and permanent reduction of 20.3 percent
applied to all current and future beneficiaries through 2096, or 24.1 percent if
the reductions were applied only to those who become initially eligible for
benefits in 2022 or later; or (3) some combination of these approaches would
have to be adopted. If actions are deferred for several years, the changes nec-
essary to maintain Social Security solvency through 2096 become concen-
trated on fewer years and fewer generations.
If lawmakers design legislative solutions only to eliminate the overall actuar-
ial deficit without consideration of year-by-year financing, then a substantial
financial imbalance could remain for 2096, the end of the 75-year valuation
period. In that case, the long-range sustainability of program financing could
still be in doubt. Sustainable solvency for the financing of the program under
a specified set of assumptions is achieved when the projected trust fund ratio
is positive throughout the 75-year long-range period and is either stable or
rising at the end of the period. Making changes now that achieve sustainable
solvency could avoid the need for later legislative changes.
Lawmakers have a broad continuum of policy options that would close or
reduce Social Security's long-term financing shortfall. Cost estimates for
many such policy options are available at www.ssa.gov/OACT/solvency/
provisions/. Broadly speaking, the approaches that lawmakers can take
include increasing revenue from workers and employers by raising the tax
rate or the maximum level of taxable earnings, or by dedicating revenue
from other sources; lowering benefits for some or all beneficiaries by chang-
ing certain program parameters; or a combination of these approaches. There
are countless variations on these options, including those that vary the tim-
ing, magnitude, and other specifics of the changes under consideration.
The Trustees recommend that lawmakers address the projected trust fund
shortfalls in a timely way in order to phase in necessary changes gradually
and give workers and beneficiaries time to adjust to them. Implementing
changes sooner rather than later would allow more generations to share in the
needed revenue increases or reductions in scheduled benefits. Social Security
26
Conclusion
will play a critical role in the lives of 66 million beneficiaries and
182 million covered workers and their families during 2022. With informed
discussion, creative thinking, and timely legislative action, Social Security
can continue to protect future generations.
For further information related to the contents of this report, see the follow-
ing websites:
www.ssa.gov/OACT/tr/2022/
www.ssa.gov/OACT/solvency/provisions/
www.cms.gov/OACT/TR/2022
https://home.treasury.gov/policy-issues/economic-policy/social-security-
and-medicare-trustee-reports
27
Financial Operations and Legislative Changes
III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND
LEGISLATIVE CHANGES IN THE LAST YEAR
A. OPERATIONS OF THE OLD-AGE AND SURVIVORS
INSURANCE (OASI) AND DISABILITY INSURANCE (DI) TRUST
FUNDS, IN CALENDAR YEAR 2021
This section presents detailed information on the operations of the OASI and
DI Trust Funds 1 during calendar year 2021. Chapter IV provides projections
for calendar years 2022 through 2100.
1. OASI Trust Fund
Table III.A1 presents a statement of the income and cost of the Federal Old-
Age and Survivors Insurance Trust Fund in calendar year 2021, and of the
asset reserves in the fund at the beginning and end of the calendar year. As
shown in this table, total trust fund income in 2021 amounted to
$942.9 billion, while cost totaled $1,001.9 billion, a decrease in trust fund
reserves during 2021 of $59.1 billion. 2
Total income during calendar year 2021 included $841.4 billion in payroll
tax contributions. These contributions include initial appropriations of pay-
roll taxes, made on an estimated basis, and adjustments to appropriations for
prior years to reflect actual tax income. In June 2021, an unusually large neg-
ative adjustment in the amount of $30.4 billion was made because payroll tax
revenue credited to the trust fund in 2020 was based on estimates that did not
anticipate effects of the pandemic and recession. The OASI fund paid the
General Fund $3.1 billion for the estimated amount of employee payroll-tax
refunds, partially offsetting these gross contributions. Employees who work
for more than one employer during a year and pay contributions on total
earnings in excess of the contribution and benefit base are eligible for such
refunds. Net payroll tax contributions were therefore $838.2 billion in 2021.
Net reimbursements from the General Fund of the Treasury amounted to
$1 million in 2021. As shown in the table, almost all of that amount came
from adjustments to prior year reimbursements based on Public Law 111-
312, the Tax Relief, Unemployment Insurance Reauthorization, and Job Cre-
ation Act of 2010, Public Law 112-78, the Temporary Payroll Tax Cut Con-
tinuation Act of 2011, and Public Law 112-96, the Middle Class Tax Relief
1 See www.ssa.gov/oact/ProgData/fundsQuery.html.
2 In order to provide values that are comparable with other years, the cost and change in asset reserves
shown for 2021 reflect the 12 months of benefits scheduled for payment in 2021 and thus include the bene-
fits scheduled for payments on January 3, 2021, which were actually paid on December 31, 2020, as
required by the law.
28
Calendar Year 2021 Operations
and Job Creation Act of 2012. These acts specified General Fund reimburse-
ment for temporary reductions in employee and self-employment payroll
taxes for earnings in 2011 and 2012.
Income to the OASI Trust Fund based on the taxation of OASI benefits
amounted to $37.2 billion in 2021. As first required by the 1983 Social Secu-
rity Amendments, this income comes from two separate sources: (1) Federal
income taxation on up to 50 percent of an individuals or couples OASI ben-
efits under certain circumstances, and (2) a tax withheld from the benefits
paid to certain nonresident alien beneficiaries. For the direct Federal income
tax portion, Treasury transfers estimated amounts to the OASI Trust Fund in
advance at the beginning of each calendar quarter. Treasury makes subse-
quent adjustments based on the actual amounts shown on annual income tax
records. There were two such adjustments made in 2021 totaling $5.1 billion.
The amount of income from direct Federal income taxation on OASI benefits
constituted approximately 99 percent of income from benefit taxation. The
remaining one percent of the income from benefit taxation is the amounts
withheld from the benefits paid to nonresident aliens.
In 2021, the OASI Trust Fund earned $67.5 billion in net interest, which con-
sisted of: (1) interest earned on the investments held by the trust fund,
(2) interest on adjustments in the allocation of administrative expenses
between the trust fund and the General Fund account for the Supplemental
Security Income program, (3) interest arising from the revised allocation of
administrative expenses among the trust funds, and (4) interest on certain
reimbursements to the trust fund.
The remaining income, about $90 thousand, consisted of gifts received under
the provisions authorizing the deposit of monetary gifts or bequests in the
trust funds.
29
Financial Operations and Legislative Changes
Table III.A1.Operations of the OASI Trust Fund, Calendar Year 2021
[In millions]
Total asset reserves, December 31, 2020a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,811,716
Income:
Net payroll tax contributions:
Payroll tax contributionsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $841,383
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,148
Net payroll tax contributionsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 838,235
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78,
and P.L. 112-96b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Payroll tax credits due to P.L. 98-21b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
b
Net General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 244
All other, not subject to withholdingb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,907
b
Total income from taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,151
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67,469
Interest adjustmentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 67,470
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 942,856
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsa e . . . . . . . . . . . . . . . . . . . . . . . . . 993,167
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -49
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 14
Net benefit paymentsa e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993,133
Financial interchange with the Railroad Retirement Social Security Equivalent
Benefit Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,792
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,320
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 697
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2
f
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . . -5
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,011
Total costa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,001,936
Net increase in asset reservesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -59,080
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,752,688
Undisbursed balances g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -53
Total asset reserves, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,752,636
a Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal payment
delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accel-
erated basis was approximately $18.7 billion. For comparability with the values for historical years and the
projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits sched-
uled for payment in each year.
b Includes adjustments for prior calendar years. In June 2021, an unusually large negative adjustment to pay-
roll tax contributions in the amount of $30,380 million was made because payroll tax revenue credited to the
trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
c Between -$0.5 and $0.5 million.
d Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and
the General Fund account for the Supplemental Security Income program, (2) interest arising from the revised
allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the
trust fund.
e Includes net reductions for the recovery of overpayments.
f Reimbursements for costs incurred in performing certain legislatively mandated activities not directly
related to administering the OASI program.
g A negative balance represents a situation where the actual cash payments exceeded the amount of invested
securities of the OASI Trust Fund that were redeemed to make such payments. In this situation, future
redemption of additional invested securities will be required to pay for this shortfall.
Note: Components may not sum to totals because of rounding.
30
Calendar Year 2021 Operations
Of the $1,001.9 billion in total OASI cost in 2020, $993.1 billion was for net
benefit payments, including recovered overpayments, 1 reimbursements from
the General Fund for unnegotiated checks, and the reimbursable costs of
vocational rehabilitation services. 2 Net benefit payments increased by
4.3 percent from calendar year 2020 to calendar year 2021. This increase is
due primarily to: (1) an increase in the average number of beneficiaries
during the year and (2) an increase in the average monthly benefit amount.
The increase in the average benefit amount in 2021 was due in part to the
automatic cost-of-living benefit increase of 1.3 percent which became effec-
tive for December 2020 under the automatic-adjustment provisions in section
215(i) of the Social Security Act. In addition, new beneficiaries tend to have
higher monthly benefit amounts than previous beneficiary cohorts, because
their initial benefits are based on average wages, which tend to rise faster
than the cost of living.
The Railroad Retirement Act requires an annual financial interchange
between the Railroad Retirement program and the OASDI program. The pur-
pose of the interchange is to put the OASI and DI Trust Funds in the same
financial position in which they would have been had railroad employment
always been covered directly by Social Security. The Railroad Retirement
Board and the Social Security Administration calculated an interchange of
$4.8 billion from the OASI Trust Fund to the Social Security Equivalent
Benefit Account for June 2021.
The remaining $4.0 billion of cost for the OASI Trust Fund was for net
administrative expenses. The Social Security Administration charges admin-
istrative expenses incurred to administer the OASI program directly to the
trust fund on an estimated basis. Periodically, as actual expenses are
recorded, adjustments are made to the allocations of administrative expenses
for prior periods. These adjustments affect the OASI Trust Fund, the
DI Trust Fund, the Hospital Insurance (HI) Trust Fund, the Supplementary
Medical Insurance (SMI) Trust Fund, and the General Fund account for the
Supplemental Security Income program, and include appropriate interest
adjustments. As described earlier, the trust fund accounting records such
interest adjustments under investment income.
1 As noted in footnote a of table III.A1 and elsewhere in this report, benefit payments shown for 2021 reflect
the 12 months of benefits scheduled for payment in 2021 and thus include the benefits scheduled for pay-
ment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.
2 Vocational rehabilitation services under the OASI program are furnished to disabled widow(er) beneficia-
ries and to those children of retired or deceased workers who receive benefits based on disabilities that
began before age 22. The trust funds reimburse the providers of such services only in those cases where the
services contributed to the successful rehabilitation of the beneficiary.
31
Financial Operations and Legislative Changes
For 2021, the cost incurred by the Social Security Administration to adminis-
ter the OASI program was 83 percent of OASI net administrative expenses.
The Social Security Administration charged such costs to the trust fund in
the amount of $3.3 billion in 2021. In addition, the Department of the Trea-
sury charged the trust fund $0.7 billion in 2021 for services provided in
administering the OASI program. A relatively small offset to administrative
expenses of $2 million in 2021 represents income from miscellaneous
receipts due to the trust fund, which may include refunds, penalties, fees, and
other receipts.
Finally, the General Fund of the Treasury makes net reimbursements for
administrative costs incurred by the Social Security Administration in per-
forming certain legislatively mandated activities that are not directly related
to paying OASI benefits. These reimbursements include $2 million in costs
associated with union activities related to administering the OASI program
and $2 million in costs of providing information to participants in certain
pension plans in 2021. These miscellaneous reimbursements totaled
$5 million in 2021.
The asset reserves shown for the OASI Trust Fund at the end of calendar
year 2021 totaled $2,752.6 billion, consisting of $2,752.7 billion in U.S.
Government obligations and, as an offset, an extension of credit totaling $53
million against securities to be redeemed in the first few days of the follow-
ing year. The effective annual rate of interest earned by the reserves in the
OASI Trust Fund during calendar year 2021 was 2.4 percent, somewhat
lower than the 2.6 percent earned during calendar year 2020. Table VI.A4,
presented in appendix A, shows a detailed listing of OASI Trust Fund hold-
ings by type of security, interest rate, and year of maturity at the end of cal-
endar years 2020 and 2021.
By law, the Department of the Treasury must invest trust fund reserves in
interest-bearing securities backed by the full faith and credit of the United
States Government. The securities currently held by the OASI Trust Fund are
entirely special issue securities sold by the Treasury only to the trust funds.
These special issues are of two types: short-term certificates of indebtedness
and longer-term bonds. Daily trust fund tax income is invested in the short-
term certificates of indebtedness which mature on the next June 30 following
the date of issue. The trust fund normally acquires long-term special-issue
bonds when special issue securities of either type mature on June 30 and
must be reinvested. The amount of long-term bonds acquired on June 30 is
equal to the amount of special issue securities maturing (including accrued
interest earnings), plus tax income for that day, less amounts required to meet
cost on that day.
32
Calendar Year 2021 Operations
Section 201(d) of the Social Security Act provides that the obligations issued
for purchase by the OASI and DI Trust Funds shall have maturities fixed
with due regard for the needs of the funds. The usual practice has been to
reinvest the maturing special issue securities, as of each June 30, so that the
value of the total portfolio of special issue securities maturing in each of the
next 15 years are approximately equal. However, as of June 2021, the Chief
Actuarys updated baseline of November 2020, which modified the Trustees
most recent projections in the 2020 Trustees Report 1 , indicated that the
reserves in the OASI Trust Fund would become depleted within 15 years.
Therefore, the Department of the Treasury, in consultation with the Chief
Actuary of the Social Security Administration, selected the amounts and
maturity dates of the OASI special-issue bonds purchased on June 30, 2021,
so that the maturity dates of the total portfolio of special issue securities
would be spread evenly to the extent possible over the 12-year period 2022
through 2033. The bonds purchased on that date have an interest rate of
1.500 percent, reflecting the average market yield, as of the last business day
of the prior month, on all of the outstanding marketable U.S. obligations that
are due or callable more than 4 years in the future. Table III.A7 shows addi-
tional details on the investment transactions during 2021, including the
amounts of bonds purchased on June 30, 2021.
2. DI Trust Fund
Table III.A2 presents a statement of the income and cost of the Federal Dis-
ability Insurance Trust Fund in calendar year 2021, and of the asset reserves
in the fund at the beginning and end of the calendar year.
Line entries in the DI statement are similar to those in the OASI statement.
The explanations of the OASI entries generally apply to DI as well.
Of the $145.5 billion in total income, $142.4 billion was net payroll tax con-
tributions.
Of the $142.6 billion of total cost, $140.1 billion was net benefit payments. 2
The total level of net benefit payments in 2021 decreased by 2.4 percent
from total net benefit payments paid in 2020, largely due to a decrease in the
total amount of retroactive payments paid to newly awarded beneficiaries, as
well as a decrease in the average number of total current beneficiaries, par-
tially offset by an increase in average benefit levels. DI non-interest income,
and total income, exceeded total cost in 2021.
1 This updated baseline reflects the effects of the COVID-19 pandemic and the recession on the intermediate
projections of the 2020 Social Security Trustees Report. For more information on this updated baseline, see
www.ssa.gov/OACT/solvency/UpdatedBaseline_20201124.pdf.
2 As noted in footnote a of table III.A2 and elsewhere in this report, benefit payments shown for 2021 reflect
the 12 months of benefits scheduled for payment in 2021 and thus include the benefits scheduled for pay-
ment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.
33
Financial Operations and Legislative Changes
Table III.A2.Operations of the DI Trust Fund, Calendar Year 2021
[In millions]
Total asset reserves, December 31, 2020a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $96,570
Income:
Net payroll tax contributions:
Payroll tax contributionsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,900
Payments from the General Fund of the Treasury for payroll tax contributions
subject to refundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -533
Net payroll tax contributionsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,367
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78,
and P.L. 112-96b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
Payroll tax credits due to P.L. 98-21b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
Net General Fund reimbursementsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 4
All other, not subject to withholdingb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 455
Total income from taxation of benefitsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 459
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,642
Interest adjustments d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 2,644
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,470
Cost:
Benefit payments:
Monthly benefitsa e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139,996
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -27
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 89
Net benefit paymentsa e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,058
Financial interchange with the Railroad Retirement Social Security Equivalent
Benefit Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,349
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
f
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . . -2
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,481
Total costa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,646
Net increase in asset reservesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,824
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,438
Undisbursed balancesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -44
Total asset reserves, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,394
a Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal payment
delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accel-
erated basis was approximately $6.1 billion. For comparability with the values for historical years and the
projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits sched-
uled for payment in each year.
b Includes adjustments for prior calendar years. In June 2021, an unusually large negative adjustment to pay-
roll tax contributions in the amount of $5,155 million was made because payroll tax revenue credited to the
trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
c Between -$0.5 and $0.5 million.
d Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and
the General Fund account for the Supplemental Security Income program, (2) interest arising from the
revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimburse-
ments to the trust fund.
e Includes net reductions for the recovery of overpayments.
f Reimbursements for costs incurred in performing legislatively mandated activities not directly related to
administering the DI program.
g A negative balance represents a situation where the actual cash payments exceeded the amount of invested
securities of the DI Trust Fund that were redeemed to make such payments. In this situation, future redemp-
tion of additional invested securities will be required to pay for this shortfall.
Note: Components may not sum to totals because of rounding.
34
Calendar Year 2021 Operations
During 2021, the reserves in the DI Trust Fund increased by $2.8 billion,
from $96.6 billion at the end of 2020 to $99.4 billion at the end of 2021. This
$99.4 billion consisted of $99.4 billion in U.S. Government obligations and,
as an offset, an extension of credit totaling $44 million against securities to
be redeemed in the first few days of the following year. 1 The effective
annual rate of interest earned by the asset reserves in the DI Trust Fund
during calendar year 2021 was 2.8 percent, slightly lower than the
2.9 percent earned during calendar year 2020. Table VI.A5 shows a detailed
listing of DI Trust Fund holdings by type of security, interest rate, and year
of maturity at the end of calendar years 2020 and 2021.
Section 201(d) of the Social Security Act provides that the Treasury securi-
ties issued for purchase by the OASI and DI Trust Funds shall have matur-
ities fixed with due regard for the needs of the funds. Each year, bond
purchases for each trust fund are made on June 30, taking into account the
projected reserve depletion date in the most recently issued Trustees Report.
The usual practice has been to reinvest the maturing special issue securities,
as of each June 30, so that the values of the securities maturing in each of the
next 15 years are approximately equal. Accordingly, the Department of the
Treasury, in consultation with the Chief Actuary of the Social Security
Administration, selected the amounts and maturity dates of the DI special-
issue bonds purchased on June 30, 2021, so that the maturity dates of the
total portfolio of special issue securities would be evenly spread to the extent
possible over the 15-year period 2022-36. The bonds purchased have an
interest rate of 1.500 percent, reflecting the average market yield, as of the
last business day of the prior month, on the outstanding marketable U.S.
obligations that are due or callable more than 4 years in the future. Table
III.A7 shows details on investment transactions during 2021.
3. OASI and DI Trust Funds, Combined
Table III.A3 presents a statement of the operations of the OASI and DI Trust
Funds on a hypothetical combined basis. 2 The entries in this table represent
the sums of the corresponding values from tables III.A1 and III.A2. The two
preceding subsections that cover OASI and DI provide a description of the
nature of these income and cost transactions.
1 As noted in footnote a of table III.A2 and elsewhere in this report, benefit payments and asset reserves
shown for 2021 reflect the 12 months of benefits scheduled for payment in 2021 and thus include the bene-
fits scheduled for payment on January 3, 2021, which were actually paid on December 31, 2020, as required
by the law.
2 The OASI and DI Trust Funds are distinct legal entities which operate independently. To illustrate the
actuarial status of the program as a whole, the fund operations are often combined on a hypothetical basis.
35
Financial Operations and Legislative Changes
Table III.A3.Operations of the Combined OASI and DI Trust Funds,
Calendar Year 2021
[In millions]
Total asset reserves, December 31, 2020a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,908,286
Income:
Net payroll tax contributions:
Payroll tax contributionsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $984,284
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,681
Net payroll tax contributionsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 980,602
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78,
and P.L. 112-96b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Payroll tax credits due to P.L. 98-21b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
b
Net General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 248
All other, not subject to withholdingb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,362
Total income from taxation of benefitsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,610
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,110
Interest adjustments d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 70,113
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,088,326
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsa e . . . . . . . . . . . . . . . . . . . . . . . . . 1,133,164
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -76
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 103
Net benefit paymentsa e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,133,191
Financial interchange with the Railroad Retirement Social Security Equivalent
Benefit Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,669
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 819
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Miscellaneous reimbursements from the General Fund f . . . . . . . . . . . . . . . . . . . . . -6
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,492
Total costa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,144,582
Net increase in asset reservesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -56,256
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,852,126
Undisbursed balancesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -96
Total asset reserves, December 31, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,852,030
a Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal payment
delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accel-
erated basis was approximately $24.8 billion. For comparability with the values for historical years and the
projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits sched-
uled for payment in each year.
b Includes adjustments for prior calendar years. In June 2021, unusually large negative adjustments to payroll
tax contributions in the amount of $35,536 million were made because payroll tax revenue credited to the trust
funds in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
c Between -$0.5 and $0.5 million.
d Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust funds and
the General Fund account for the Supplemental Security Income program, (2) interest arising from the revised
allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the
trust funds.
e Includes net reductions for the recovery of overpayments.
f Reimbursements for costs incurred in performing certain legislatively mandated activities not directly related
to administering the OASI and DI programs.
g A negative balance represents a situation where the actual cash payments exceeded the amount of invested
securities of the DI Trust Fund that were redeemed to make such payments. In this situation, future redemp-
tion of additional invested securities will be required to pay for this shortfall.
Note: Components may not sum to totals because of rounding.
36
Calendar Year 2021 Operations
Table III.A4 compares estimates of total income and total cost for calendar
year 2021 from the intermediate projections in the 2017 through 2021 Trust-
ees Reports to the corresponding actual amounts for 2021.
Table III.A4.Comparison of Actual Calendar Year 2021 Trust Fund Operations
With Estimates Made in Prior Reports, Based on Intermediate Assumptions a
[Amounts in billions]
Total income b Total cost c
Difference Difference
from actual from actual
Amount (percent) Amount (percent)
OASI Trust Fund:
Estimate in 2017 report . . . . . . . . . . . . . . $1,065.2 13.0 $1,053.2 5.1
Estimate in 2018 report . . . . . . . . . . . . . . 1,011.6 7.3 1,036.9 3.5
Estimate in 2019 report . . . . . . . . . . . . . . 1,005.2 6.6 1,025.7 2.4
Estimate in 2020 report . . . . . . . . . . . . . . 995.6 5.6 1,019.2 1.7
Estimate in 2021 report . . . . . . . . . . . . . . 930.1 -1.4 1,005.4 .3
Actual amount . . . . . . . . . . . . . . . . . . . . . 942.9 1,001.9
DI Trust Fund:
Estimate in 2017 report . . . . . . . . . . . . . . 162.5 11.7 171.3 20.1
Estimate in 2018 report . . . . . . . . . . . . . . 155.4 6.8 163.0 14.3
Estimate in 2019 report . . . . . . . . . . . . . . 155.2 6.7 154.6 8.4
Estimate in 2020 report . . . . . . . . . . . . . . 154.3 6.0 151.8 6.4
Estimate in 2021 report . . . . . . . . . . . . . . 143.7 -1.2 145.7 2.1
Actual amount . . . . . . . . . . . . . . . . . . . . . 145.5 142.6
OASI and DI Trust Funds, combined:
Estimate in 2017 report . . . . . . . . . . . . . . 1,227.7 12.8 1,224.5 7.0
Estimate in 2018 report . . . . . . . . . . . . . . 1,167.0 7.2 1,199.9 4.8
Estimate in 2019 report . . . . . . . . . . . . . . 1,160.4 6.6 1,180.3 3.1
Estimate in 2020 report . . . . . . . . . . . . . . 1,149.8 5.7 1,170.9 2.3
Estimate in 2021 report . . . . . . . . . . . . . . 1,073.8 -1.3 1,151.0 .6
Actual amount . . . . . . . . . . . . . . . . . . . . . 1,088.3 1,144.6
a Percentage differences are calculated prior to rounding.
b Actual income for 2021 reflects adjustments to payroll tax contributions for prior calendar years (see
appendix A for description of these adjustments). Estimated income also includes such adjustments, but on
an estimated basis.
c Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal payment
delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accel-
erated basis was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund.
For comparability with the values for historical years and the projections in this report, all trust fund opera-
tions and asset reserves reflect the 12 months of benefits scheduled for payment in each year.
Note: Components may not sum to totals because of rounding.
A number of factors contribute to differences between estimates and subse-
quent actual amounts, including: (1) actual values for key demographic, eco-
nomic, and other variables that differ from earlier assumed levels; and
(2) legislation that was enacted or other administrative initiatives that were
finalized after the Trustees completed their estimates. In addition, estimates
for the 2017 through 2020 Trustees Reports did not anticipate the pandemic
and recession, while the actual income and cost for 2021 do reflect the pan-
demic, contributing to these differences as well.
37
Financial Operations and Legislative Changes
At the end of calendar year 2021, the OASDI program was providing
monthly benefits to about 65.2 million people. The OASI Trust Fund was
providing benefits to about 56.0 million people and the DI Trust Fund was
providing benefits to about 9.2 million people. The number of people receiv-
ing benefits from the OASI Trust Fund grew by 1.4 percent while the num-
ber of people receiving DI benefits fell by 4.2 percent during calendar year
2021. These changes are in large part due to the gradual aging of the popula-
tion, with the earliest cohorts of the baby-boom generation now moving
above normal retirement age, where DI benefits are no longer applicable.
Table III.A5 shows the estimated distributions of benefit payments in calen-
dar years 2020 and 2021, by type of beneficiary, for each trust fund sepa-
rately.
Table III.A5.Distribution of Benefit Paymentsa by Type of Beneficiary or Payment,
Calendar Years 2020 and 2021
[Amounts in millions]
Calendar year 2020 Calendar year 2021
Percentage Percentage
Amount of total Amount of total
Total OASDI benefit payments . . . . . . . . . . $1,095,875 100.0 $1,133,164 100.0
OASI benefit payments . . . . . . . . . . . . . . 952,388 86.9 993,167 87.6
DI benefit payments . . . . . . . . . . . . . . . . . 143,487 13.1 139,996 12.4
OASI benefit payments, total. . . . . . . . . . . . 952,388 100.0 993,167 100.0
Monthly benefits:
Retired workers and auxiliaries . . . . . . 823,868 86.5 861,873 86.8
Retired workers . . . . . . . . . . . . . . . . 783,504 82.3 822,440 82.8
Spouses . . . . . . . . . . . . . . . . . . . . . . . 34,023 3.6 33,050 3.3
Children . . . . . . . . . . . . . . . . . . . . . . 6,341 .7 6,384 .6
Survivors of deceased workers. . . . . . . 128,294 13.5 131,057 13.2
Aged widows and widowers. . . . . . . 102,669 10.8 104,868 10.6
Disabled widows and widowers . . . . 2,330 .2 2,233 .2
Parents . . . . . . . . . . . . . . . . . . . . . . . 19 b 19 b
Children . . . . . . . . . . . . . . . . . . . . . . 21,795 2.3 22,445 2.3
Widowed mothers and fathers
caring for child beneficiaries . . . . 1,480 .2 1,492 .2
Lump-sum death payments . . . . . . . . . . . 226 b 237 b
DI benefit payments, total . . . . . . . . . . . . . . 143,487 100.0 139,996 100.0
Disabled workers . . . . . . . . . . . . . . . . . 135,204 94.2 132,401 94.6
Spouses. . . . . . . . . . . . . . . . . . . . . . . . . 509 .4 465 .3
Children . . . . . . . . . . . . . . . . . . . . . . . . 7,774 5.4 7,131 5.1
a Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal payment
delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an
accelerated basis was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust
Fund. For comparability with the values for historical years and the projections in this report, all trust fund
operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.
b Less than 0.05 percent.
Note: Benefits are monthly benefits and lump-sum death payments. Components may not sum to totals
because of rounding.
Net administrative expenses of the OASI and DI Trust Funds in calendar
year 2021 totaled $6.5 billion, equal to 0.6 percent each of total cost and total
38
Calendar Year 2021 Operations
income. Table III.A6 shows corresponding percentages for each trust fund
separately and for OASDI as a whole for the last 5 years.
Table III.A6.Administrative Expenses as a Percentage of Total Income and
of Total Cost, Calendar Years 2017-2021
OASI and DI
Trust Funds,
OASI Trust Fund DI Trust Fund combined
Total Total Total Total Total Total
Calendar year income cost income cost income cost
2017 . . . . . . . . . . . 0.4 0.5 1.6 1.9 0.6 0.7
2018 . . . . . . . . . . . .5 .4 1.7 1.9 .7 .7
2019 . . . . . . . . . . . .4 .4 1.9 1.8 .6 .6
2020 . . . . . . . . . . . .4 .4 1.7 1.7 .6 .6
2021 . . . . . . . . . . . .4 .4 1.7 1.7 .6 .6
The acquisition and redemption of securities during calendar year 2021
changed the invested reserves of the OASI and DI Trust Funds. Table III.A7
presents investment transactions for each fund separately and combined.
Table III.A7.Trust Fund Investment Transactions, Calendar Year 2021
[In millions]
OASI and DI
OASI DI Trust Funds,
Trust Fund Trust Fund combined
Invested asset reserves,
December 31, 2020a . . . . . . . . . . . . . . . . . . $2,793,146 $90,703 $2,883,849
Acquisitions:
Special issue securities:
Certificates of indebtedness . . . . . . . . . . . 940,507 150,277 1,090,784
Bonds b . . . . . . . . . . . . . . . . . . . . . . . . . . . 152,354 7,180 159,534
Total acquisitions . . . . . . . . . . . . . . . . . . . 1,092,861 157,456 1,250,318
Redemptions:
Special issue securities:
Certificates of indebtednessc . . . . . . . . . . 917,972 142,383 1,060,355
Bondsc . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,347 6,339 221,686
Total redemptionsc . . . . . . . . . . . . . . . . . . 1,133,319 148,722 1,282,041
Net increase in invested asset reserves . . . . . . -40,458 8,734 -31,723
Invested asset reserves,
December 31, 2021a . . . . . . . . . . . . . . . . . . 2,752,688 99,438 2,852,126
a Invested asset reserves differ from total asset reserves by the amount of undisbursed balances. See
tables VI.A4 and VI.A5 for details.
b Purchased on June 30, 2021. The interest rate on these purchases was 1.500 percent.
c Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,
2020 as required by the statutory provision for early delivery of benefit payments when the normal payment
delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an
accelerated basis was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust
Fund. For comparability with the values for historical years and the projections in this report, all trust fund
operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.
Note: Investments are shown at par value. Components may not sum to totals because of rounding.
39
Financial Operations and Legislative Changes
B. CHANGES IN LAW AND POLICY AFFECTING SOCIAL
SECURITY SINCE THE 2021 REPORT
Since the Trustees submitted the 2021 report to Congress, there has been one
change in policy that has a notable effect on OASDI program operations.
On July 16, 2021, pursuant to a United States District Court order, the US
Citizenship and Immigration Services stopped approving first time applica-
tions under the Deferred Action for Childhood Arrivals (DACA) policy but
continues to approve renewal applications. On September 10, 2021, the
Administration appealed the District Court ruling. Changes in DACA policy
affect OASDI program operations because those who apply for and receive
deferred action status are eligible for work authorization, which leads to
additional workers covered by the OASDI program and increased payroll tax
revenue. The estimates presented in last years report reflected the assump-
tion that the DACA program would be maintained in full, consistent with the
Administrations intent. The estimates presented in this years report con-
tinue to reflect the assumption that DACA will eventually be fully in effect.
However, because of the court challenges, the estimates now incorporate a
roughly one-year delay in resuming approval of new applications. This
change is estimated to have negligible financial effects on the OASDI pro-
gram over both the short-range and long-range projection periods.
Sections IV.A.4 and IV.B.6 of this report provide further description of the
magnitude of effects on the financial status of the OASDI program.
40
Short-Range Estimates
IV. ACTUARIAL ESTIMATES
This chapter presents actuarial estimates of the future financial condition of
the Social Security program. These estimates show the income, cost, and
asset reserves or unfunded obligation of the OASI and DI Trust Funds: (1) in
dollars over the 10-year short-range period; and (2) as a percentage of tax-
able payroll, as a percentage of gross domestic product, and in present-value
dollars over the 75-year long-range period. In addition, the chapter discusses
a variety of measures of the adequacy of current program financing. This
report distinguishes between: (1) the cost (obligations) of the program, which
includes all past and future benefits scheduled under current law; and
(2) expenditures, which include actual payments for the past plus only the
portion of projected program cost that would be payable with the financing
provisions in current law.
This chapter presents the estimates and measures of trust fund financial ade-
quacy for the short-range period (2022 through 2031) first, followed by esti-
mates and measures of actuarial status for the long-range period
(2022 through 2096). Summary measures are also provided for trust fund
status over the infinite horizon. As described in chapter II of this report, these
estimates depend upon a broad set of demographic, economic, and program-
matic factors. This chapter presents estimates under three sets of assumptions
to show a wide range of possible outcomes, because assumptions related to
these factors are subject to uncertainty. The intermediate set of assumptions,
designated as alternative II, reflects the Trustees best estimate of future
experience; the low-cost alternative I is significantly more optimistic and the
high-cost alternative III is significantly more pessimistic for the trust funds
future financial outlook. The tables of this report show the intermediate esti-
mates first, followed by the low-cost and high-cost estimates. Chapter V
describes these three sets of assumptions, along with the actuarial methods
used to produce the estimates. Appendix D and appendix E present two addi-
tional methods to illustrate the uncertainty of the projections. Appendix D
presents sensitivity analyses of the effects of variation in individual factors
and appendix E presents probability distributions generated by a stochastic
model.
A. SHORT-RANGE ESTIMATES
The Trustees consider the trust funds to be solvent at any point in time if the
funds can pay scheduled benefits in full on a timely basis. A standard mea-
sure for assessing solvency is the trust fund ratio, which is the reserves in a
fund at the beginning of a year (not including advance tax transfers)
expressed as a percentage of the cost during the year. A positive trust fund
ratio indicates that the trust fund was solvent at the end of the prior year. The
41
Actuarial Estimates
trust fund ratio represents the proportion of a years cost which the reserves
available at the beginning of that year can cover. The Trustees assume that a
trust fund ratio of 100 percent of annual program cost provides a reasonable
contingency reserve. Maintaining a reasonable contingency reserve is
important because the trust funds do not have borrowing authority. After
reserves are depleted, the trust funds would be unable to pay scheduled bene-
fits in full on a timely basis if annual revenue were less than annual cost.
Unexpected events, such as severe economic recessions, can quickly dimin-
ish reserves. In such cases, a reasonable contingency reserve can maintain
the ability to pay scheduled benefits while giving lawmakers time to address
possible changes to the program.
The test of short-range financial adequacy applies to the OASI and DI Trust
Funds individually and combined on a hypothetical basis. 1 If the estimated
trust fund ratio is at least 100 percent at the beginning of the projection
period, the test requires that it remain at or above 100 percent throughout the
10-year period. If the ratio is initially less than 100 percent, then it must
reach at least 100 percent within 5 years (without reserve depletion at any
time during this period) and then remain at or above 100 percent throughout
the remainder of the 10-year period. This test is applied using the estimates
based on the intermediate assumptions. If either trust fund fails this test, then
program solvency in the next 10 years is in question, and lawmakers should
take prompt action to improve short-range financial adequacy.
1. Operations of the OASI Trust Fund
This subsection presents projections, based on the assumptions described in
chapter V, of the operations and financial status of the OASI Trust Fund for
the period 2022 through 2031. These estimates assume that there are no fur-
ther changes in the statutory provisions and regulations under which the
OASDI program currently operates beyond the changes since last years
report indicated in section III.B. 2
Estimates of the OASI Trust Fund operations presented in table IV.A1 indi-
cate that the asset reserves of the OASI Trust Fund are projected to decrease
in years 2022 through 2031 under all three sets of assumptions. Under the
intermediate and low-cost assumptions, asset reserves remain positive
through the end of the short-range period, but under the high-cost assump-
tions, asset reserves become depleted in the fourth quarter of 2031. Trust
fund ratios are similarly projected to decline throughout the 10-year projec-
1 The OASI and DI Trust Funds are distinct legal entities which operate independently. To illustrate the
actuarial status of the program as a whole, the fund operations are often combined on a hypothetical basis.
2 The estimates shown in this subsection reflect 12 months of scheduled benefits in each year of the short-
range projection period. In practice, the actual payment dates have at times shifted over calendar year
boundaries as a result of the statutory requirement for early delivery of benefit payments when the normal
check delivery date is a Saturday, Sunday, or legal public holiday.
42
Short-Range Estimates
tion period under all three sets of assumptions. Based on the intermediate
assumptions, the reserves of the OASI Trust Fund drop below 100 percent of
annual cost during 2029, to a trust fund ratio of 87 percent at the beginning
of 2030, and remain below 100 percent for the remainder of the short-range
period. Consequently, the OASI Trust Fund fails the test of short-range
financial adequacy. See figure IV.A1 for an illustration of these results.
Table IV.A1.Operations of the OASI Trust Fund, Calendar Years 2017-2031a
[Dollar amounts in billions]
Income Costb Asset Reservesb
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Calendar contri- burse- bene- Net uled tive inter- during at end fund
year Total butionsc mentsd fitsce interest Total benefits costs change year of year ratio f
Historical data:
2017 . . $825.6 $706.5 g $35.9 $83.2 $806.7 $798.7 $3.7 $4.3 $19.0 $2,820.3 347
2018 . . 831.0 715.9 g 34.5 80.7 853.5 844.9 3.8 4.8 -22.4 2,797.9 330
2019 . . 917.9 805.1 g 34.9 77.9 911.4 902.8 3.7 4.9 6.5 2,804.3 307
2020 . . 968.3 856.0 g 39.0 73.3 961.0 952.4 3.7 4.8 7.4 2,811.7 292
2021 . . 942.9 838.2 g 37.2 67.5 1,001.9 993.1 4.0 4.8 -59.1 2,752.6 281
Intermediate:
2022 . . 1,034.4 926.6 g 45.7 62.0 1,096.2 1,087.1 3.8 5.3 -61.9 2,690.8 251
2023 . . 1,100.8 993.5 g 49.9 57.5 1,179.4 1,169.8 4.2 5.4 -78.5 2,612.2 228
2024 . . 1,144.9 1,035.9 g 54.4 54.6 1,254.9 1,244.8 4.3 5.8 -110.0 2,502.2 208
2025 . . 1,195.7 1,083.3 g 59.3 53.1 1,332.9 1,322.7 4.5 5.8 -137.3 2,364.9 188
2026 . . 1,257.7 1,131.7 g 73.0 52.9 1,414.7 1,404.2 4.6 5.9 -157.1 2,207.9 167
2027 . . 1,313.4 1,181.0 g 79.5 52.9 1,499.7 1,489.1 4.7 5.9 -186.4 2,021.5 147
2028 . . 1,370.3 1,232.7 g 86.1 51.4 1,591.1 1,580.2 4.9 6.0 -220.8 1,800.7 127
2029 . . 1,427.0 1,285.6 g 93.3 48.1 1,685.2 1,674.2 5.0 6.0 -258.2 1,542.5 107
2030 . . 1,482.7 1,338.0 g 101.2 43.5 1,781.9 1,770.7 5.1 6.1 -299.2 1,243.3 87
2031 . . 1,539.4 1,393.1 g 109.5 36.8 1,881.0 1,869.5 5.3 6.2 -341.6 901.7 66
Low-cost:
2022 . . 1,040.6 932.2 g 45.7 62.7 1,095.5 1,086.4 3.8 5.3 -54.8 2,697.8 251
2023 . . 1,134.6 1,024.0 g 50.2 60.5 1,186.4 1,176.9 4.2 5.4 -51.8 2,646.0 227
2024 . . 1,198.1 1,082.4 g 54.9 60.8 1,267.3 1,257.2 4.3 5.7 -69.3 2,576.8 209
2025 . . 1,272.8 1,150.6 g 60.1 62.1 1,352.5 1,342.2 4.5 5.8 -79.7 2,497.1 191
2026 . . 1,361.7 1,222.3 g 74.4 64.9 1,442.0 1,431.3 4.8 5.9 -80.3 2,416.8 173
2027 . . 1,445.3 1,295.2 g 81.4 68.6 1,535.5 1,524.6 5.0 6.0 -90.3 2,326.5 157
2028 . . 1,533.1 1,372.9 g 88.6 71.6 1,636.3 1,625.1 5.2 6.0 -103.2 2,223.3 142
2029 . . 1,624.2 1,454.2 g 96.4 73.7 1,741.0 1,729.5 5.4 6.1 -116.8 2,106.6 128
2030 . . 1,717.8 1,537.4 g 105.0 75.4 1,849.9 1,838.1 5.6 6.2 -132.1 1,974.4 114
2031 . . 1,816.0 1,625.7 g 114.3 76.0 1,962.8 1,950.7 5.8 6.3 -146.8 1,827.6 101
43
Actuarial Estimates
Table IV.A1.Operations of the OASI Trust Fund, Calendar Years 2017-2031a (Cont.)
[Dollar amounts in billions]
Income Costb Asset Reservesb
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Calendar contri- burse- bene- Net uled tive inter- during at end fund
year Total butionsc mentsd fitsce interest Total benefits costs change year of year ratio f
High-cost:
2022 . . $1,011.1 $904.0 g $45.8 $61.4 $1,097.1 $1,088.0 $3.8 $5.3 -$86.1 $2,666.6 251
2023 . . 1,024.7 920.9 g 49.6 54.2 1,173.9 1,164.3 4.2 5.4 -149.2 2,517.4 227
2024 . . 1,058.7 956.3 g 53.4 49.0 1,233.5 1,223.3 4.3 5.8 -174.8 2,342.6 204
2025 . . 1,091.8 989.3 g 57.9 44.6 1,301.5 1,291.4 4.4 5.8 -209.7 2,132.9 180
2026 . . 1,135.6 1,023.4 g 71.0 41.3 1,375.1 1,364.8 4.4 5.9 -239.4 1,893.5 155
2027 . . 1,168.7 1,054.0 g 77.0 37.8 1,451.2 1,440.8 4.5 5.8 -282.5 1,611.0 130
2028 . . 1,198.9 1,083.8 g 83.0 32.2 1,532.9 1,522.4 4.6 5.9 -333.9 1,277.1 105
2029 . . 1,227.3 1,113.1 g 89.5 24.8 1,616.2 1,605.7 4.6 5.9 -388.9 888.2 79
2030 . . 1,253.6 1,140.5 g 96.6 16.5 1,700.8 1,690.1 4.7 5.9 -447.2 441.0 52
2031 . . h 1,169.0 g 104.0 h 1,786.4 1,775.7 4.7 6.0 h h 25
a The OASI Trust Fund reserves become depleted in the fourth quarter of 2031 under the high-cost assumptions. For
any period during which reserves would be depleted, scheduled benefits could not be paid in full on a timely basis,
income from taxing benefits would be less than would apply to scheduled benefits, and interest on trust fund reserves
would be negligible. Appendix A presents a detailed description of the components of income and cost, along with
complete historical values.
b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly scheduled
in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as required by the statutory
provision for early benefit payments when the normal delivery date is on a weekend or holiday. Such shifts in pay-
ments across calendar years have occurred in the past, including in 2016, and will occur periodically in the future
whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on trust fund operations over
time, all trust fund operations in each year reflect the 12 months of benefits that are regularly scheduled for payment
in that year.
c Includes adjustments for prior calendar years. For example, in June 2021, an unusually large negative adjustment to
payroll tax contributions in the amount of $30.4 billion was made because payroll tax revenue credited to the trust
fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
d Includes reimbursements from the General Fund of the Treasury to the OASI Trust Fund for: (1) the cost of payroll
tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21; (2) the cost
in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public Law 110-246; and (3) pay-
roll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and 112-96.
e Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the law.
f The Trust fund ratio column represents reserves at the beginning of a year (which are identical to reserves at the
end of the prior year shown in the Amount at end of year column) as a percentage of cost for the year. The trust
fund ratio at the beginning of 2032 is projected to be 46 percent for the intermediate, and 88 percent for the low-cost
assumptions.
g Between -$50 million and $50 million.
h When the fund is depleted, values under current law would reflect permissible expenditures only, which would be
less than the cost of scheduled benefits shown in this table.
Note: Components may not sum to totals because of rounding.
44
Short-Range Estimates
Figure IV.A1.Short-Range OASI and DI Trust Fund Ratios
[Asset reserves as a percentage of annual cost]
400%
Historical Projected
350%
300%
250%
DI Minimum level for
200% test of short-range
OASI financial adequacy
is 100%
150%
I
II I
100%
II
50% III
III
0%
2017 2019 2021 2023 2025 2027 2029 2031
Calendar year
The estimated income shown in table IV.A1 increases annually after 2022
under each set of assumptions throughout the short-range projection period.
The estimated increases in income result primarily from the projected
increases in OASDI taxable payroll. Employment increases in years 2022
through 2031 for all three alternatives, with the exception of small decreases
in covered employment in 2022 and 2023 for the high-cost alternative: the
number of covered workers increases under alternatives I, II, and III from
179 million during calendar year 2021 to about 191 million, 187 million, and
183 million, respectively, in 2031. 1 The total annual amount of taxable pay-
roll increases in years 2022 through 2031 for each alternative. Total taxable
payroll increases from $8,223 billion in 2021 to $15,379 billion,
$13,169 billion, and $11,043 billion in 2031, on the basis of alternatives I, II,
and III, respectively. 2 These increases in taxable payroll are due primarily to:
(1) projected increases in employment levels as the working-age population
increases; (2) trend increases in average earnings in covered employment
(reflecting both real growth and price inflation); (3) increases in the contribu-
tion and benefit base under the automatic-adjustment provisions; and
(4) growth in employment and average earnings.
1 See table IV.B3.
2 See table VI.G6.
45
Actuarial Estimates
Interest earnings contribute to the overall projected level of trust fund
income during this period. Interest income declines generally at a slow rate
under the intermediate assumptions and much faster under the high-cost
assumptions, and increases generally under the low-cost assumptions, due to
the net effects of changes in reserve levels and the patterns of projected inter-
est rates. Under the intermediate assumptions, interest also declines as a
share of total OASI Trust Fund income reaching 2 percent of total trust fund
income for 2031, as compared to 7 percent for 2021.
Rising OASI cost from 2021 through 2031 reflects automatic benefit
increases each year after initial benefit eligibility and increases each year for
those becoming newly eligible based on rising average earnings levels, as
well as the upward trend in the number of beneficiaries. The steady growth
in the number of OASI beneficiaries in the past and the expected future
growth result both from the increase in the aged population and from the
increase in the proportion of the population that is insured for benefits.
The Treasury invests OASI income in financial securities, generally special
public-debt obligations of the U.S. Government. The revenue used to make
these purchases flows to the General Fund of the Treasury. The trust fund
earns interest on these securities, and the Treasury invests the proceeds from
maturing securities in new securities if not immediately needed to pay pro-
gram costs. Program expenditures require the redemption of trust fund secu-
rities, generally prior to maturity, to cover the payments made by the General
Fund of the Treasury on behalf of the trust fund.
2. Operations of the DI Trust Fund
Table IV.A2 shows the projected operations and financial status of the DI
Trust Fund during calendar years 2022 through 2031 under the three sets of
assumptions, together with values for actual experience during 2017 through
2021. Non-interest income for DI was much lower in 2019 through 2021
than in 2017 and 2018, due to the temporary payroll tax rate reallocation
from OASI to DI in 2016 through 2018. For 2021, non-interest income was
higher than DI cost. Non-interest income increases throughout the short-
range projection period under each alternative, due to most of the same fac-
tors described previously for the OASI Trust Fund beginning on page 45. DI
cost grows steadily throughout the period under each alternative. Under the
intermediate and low-cost assumptions, DI reserves increase through 2031.
Under the high-cost assumptions, DI reserves increase through 2024 and
then decline through 2031.
46
Short-Range Estimates
Table IV.A2.Operations of the DI Trust Fund, Calendar Years 2017-2031a
[Dollar amounts in billions]
Income Costb Asset Reservesb
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Calendar contri- burse- bene- Net uled tive inter- during at end fund
year Total butionsc mentsd fitsce interest Total benefits costs change year of year ratio f
Historical data:
2017 . . . $171.0 $167.1 g $2.0 $1.9 $145.8 $142.8 $2.8 $0.2 $25.1 $71.5 32
2018 . . . 172.3 169.2 g .5 2.6 146.8 143.7 2.9 .2 25.6 97.1 49
2019 . . . 143.9 139.4 g 1.6 2.9 147.9 145.1 2.7 .1 -4.0 93.1 66
2020 . . . 149.7 145.3 g 1.7 2.8 146.3 143.6 2.6 .1 3.5 96.6 64
2021 . . . 145.5 142.4 g .5 2.6 142.6 140.1 2.5 .1 2.8 99.4 68
Intermediate:
2022 . . . 161.5 157.4 g 1.5 2.6 146.4 143.4 2.9 .1 15.0 114.4 68
2023 . . . 173.1 168.7 g 1.6 2.8 152.7 149.6 3.0 .1 20.4 134.8 75
2024 . . . 181.0 175.9 g 1.7 3.3 159.1 155.9 3.1 .1 21.9 156.7 85
2025 . . . 190.0 184.0 g 1.9 4.1 168.5 165.1 3.3 .1 21.5 178.2 93
2026 . . . 199.6 192.2 g 2.3 5.1 177.7 174.1 3.5 .1 21.9 200.1 100
2027 . . . 209.2 200.5 g 2.5 6.1 187.4 183.6 3.7 .1 21.8 221.9 107
2028 . . . 219.4 209.3 g 2.7 7.3 194.5 190.6 3.9 .1 24.8 246.7 114
2029 . . . 230.0 218.3 g 2.9 8.8 200.6 196.4 4.0 .2 29.3 276.1 123
2030 . . . 240.8 227.2 g 3.0 10.5 206.4 202.0 4.2 .2 34.4 310.5 134
2031 . . . 252.3 236.6 g 3.2 12.5 213.7 209.1 4.4 .2 38.6 349.0 145
Low-cost:
2022 . . . 162.5 158.3 g 1.5 2.7 145.6 142.6 2.9 .1 17.0 116.4 68
2023 . . . 178.9 173.9 g 1.6 3.4 151.6 148.5 3.0 .1 27.3 143.7 77
2024 . . . 190.2 183.8 g 1.7 4.7 156.5 153.3 3.1 .1 33.7 177.4 92
2025 . . . 203.7 195.4 g 1.9 6.4 164.0 160.6 3.3 .1 39.7 217.1 108
2026 . . . 218.5 207.6 g 2.2 8.7 170.8 167.2 3.5 .1 47.7 264.8 127
2027 . . . 233.9 219.9 g 2.4 11.6 177.5 173.6 3.8 .1 56.4 321.2 149
2028 . . . 250.9 233.1 g 2.5 15.3 181.8 177.7 4.0 .1 69.2 390.3 177
2029 . . . 269.5 246.9 g 2.6 19.9 185.3 180.9 4.2 .1 84.2 474.5 211
2030 . . . 289.4 261.1 g 2.8 25.6 188.7 184.1 4.5 .2 100.6 575.2 251
2031 . . . 311.2 276.1 g 2.9 32.2 193.7 188.8 4.7 .2 117.5 692.6 297
47
Actuarial Estimates
Table IV.A2.Operations of the DI Trust Fund, Calendar Years 2017-2031a (Cont.)
[Dollar amounts in billions]
Income Costb Asset Reservesb
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Calendar contri- burse- bene- Net uled tive inter- during at end fund
year Total butionsc mentsd fitsce interest Total benefits costs change year of year ratio f
High-cost:
2022 . . .$157.5 $153.5 g $1.5 $2.5 $147.5 $144.5 $2.9 $0.1 $10.0 $109.4 67
2023 . . . 160.2 156.4 g 1.6 2.2 155.2 152.1 3.0 .1 5.0 114.4 71
2024 . . . 166.4 162.4 g 1.8 2.2 162.8 159.6 3.1 .1 3.5 118.0 70
2025 . . . 172.3 168.0 g 2.0 2.3 174.0 170.6 3.3 .1 -1.7 116.3 68
2026 . . . 178.5 173.8 g 2.4 2.3 185.3 181.7 3.4 .1 -6.7 109.5 63
2027 . . . 183.8 179.0 g 2.7 2.2 197.1 193.4 3.6 .1 -13.3 96.2 56
2028 . . . 188.8 184.0 g 2.9 1.9 205.4 201.5 3.7 .1 -16.6 79.6 47
2029 . . . 193.6 189.0 g 3.0 1.6 212.3 208.2 3.9 .2 -18.6 61.0 38
2030 . . . 198.0 193.7 g 3.2 1.1 218.5 214.2 4.0 .2 -20.4 40.5 28
2031 . . . 202.6 198.5 g 3.4 .6 226.2 221.8 4.2 .2 -23.6 16.9 18
a Appendix A presents a detailed description of the components of income and cost, along with complete histor-
ical values.
b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly sched-
uled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as required by
the statutory provision for early benefit payments when the normal delivery date is on a weekend or holiday.
Such shifts in payments across calendar years have occurred in the past, including in 2016, and will occur peri-
odically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on
trust fund operations over time, all trust fund operations in each year reflect the 12 months of benefits that are
regularly scheduled for payment in that year.
c Includes adjustments for prior calendar years. For example, in June 2021, an unusually large negative adjust-
ment to payroll tax contributions in the amount of $5.2 billion was made because payroll tax revenue credited to
the trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
d Includes reimbursements from the General Fund of the Treasury to the DI Trust Fund for: (1) the cost of pay-
roll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21; (2)
the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public
Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312,
112-78, and 112-96.
e Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the
law.
f The Trust fund ratio column represents reserves at the beginning of a year (which are identical to reserves at
the end of the prior year shown in the Amount at end of year column) as a percentage of cost for the year. The
trust fund ratio at the beginning of 2032 is projected to be 157 percent for the intermediate, 346 percent for the
low-cost, and 7 percent for the high-cost assumptions.
g Between -$50 million and $50 million.
Note: Components may not sum to totals because of rounding.
For the future, DI cost is projected to increase in part due to increases in
average benefit levels resulting from: (1) automatic benefit increases and
(2) projected increases in the amounts of average monthly earnings on which
benefits are based. Future changes in DI cost also reflect changes in the num-
ber of DI beneficiaries in current-payment status. In 2021, the number of DI
beneficiaries in current-payment status continued the declining trend of the
prior seven years. Under the intermediate assumptions, that number of DI
beneficiaries is projected to drop further through the end of 2023, then
increase through the end of 2031 to a level of about 9 million. The rate of
increase after 2023 is much slower than was experienced on average from
1990 to 2010, when the population with the highest disability prevalence
rates was growing rapidly due to the aging of the baby-boom generation. See
section V.C.5 for further details.
48
Short-Range Estimates
At the beginning of calendar year 2022, the reserves of the DI Trust Fund rep-
resented 68 percent of estimated annual cost. Under the intermediate assump-
tions, DI trust fund reserves and the trust fund ratio increase throughout the
short-range projection period. The trust fund ratio is slightly above 100 percent
at the beginning of the fifth projected year, 2026, and continues to increase for
the remainder of the short-range period.
Because the reserves of the DI Trust Fund at the beginning of 2022 were less
than the estimated annual cost for 2022, but are projected to increase to above
annual cost within five years, and then remain above annual cost throughout
the rest of the short-range period under the intermediate assumptions, the DI
Trust Fund satisfies the Trustees test of short-range financial adequacy.
3. Operations of the Combined OASI and DI Trust Funds
Table IV.A3 shows the projected operations and status of the combined OASI
and DI Trust Funds for calendar years 2022 through 2031 under the three alter-
natives, together with actual experience in 2017 through 2021. Income and cost
for the OASI Trust Fund represent over 80 percent of the corresponding
amounts for the combined OASI and DI Trust Funds. Under the intermediate
and low-cost assumptions, the combined OASI and DI Trust Funds would have
sufficient financial resources to pay all scheduled benefits through the end of
the short-range period, although it is important to note that under current law,
one trust fund cannot share financial resources with another trust fund. Under
the high-cost assumptions, combined OASI and DI trust fund reserves deplete
in the fourth quarter of 2031. The combined OASI and DI Trust Funds do not
satisfy the test of short-range financial adequacy because under the intermedi-
ate assumptions, trust fund reserves drop below 100 percent of annual cost
during 2029, to a trust fund ratio of 91 percent at the beginning of 2030, and
remain below 100 percent for the remainder of the short-range period.
Table IV.A3.Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2017-2031a
[Dollar amounts in billions]
Income Costb Asset Reservesb
Net pay- GF Taxa- Admin- Net
roll tax reim- tion Sched- istra- RRB increase Amount Trust
Calendar contri- burse- of bene- Net uled tive inter- during at end fund
year Total butionsc mentsd fitsce interest Total benefits costschange year of year ratio f
Historical data:
2017 . . $996.6 $873.6 g $37.9 $85.1 $952.5 $941.5 $6.5 $4.5 $44.1 $2,891.8 299
2018 . . 1,003.4 885.1 g 35.0 83.3 1,000.2 988.6 6.7 4.9 3.1 2,894.9 289
2019 . . 1,061.8 944.5 g 36.5 80.8 1,059.3 1,047.9 6.4 4.9 2.5 2,897.4 273
2020 . . 1,118.1 1,001.3 g 40.7 76.1 1,107.2 1,095.9 6.3 5.0 10.9 2,908.3 262
2021 . . 1,088.3 980.6 g 37.6 70.1 1,144.6 1,133.2 6.5 4.9 -56.3 2,852.0 254
Intermediate:
2022 . . 1,195.8 1,084.0 g 47.2 64.6 1,242.7 1,230.6 6.7 5.4 -46.8 2,805.2 230
2023 . . 1,273.9 1,162.2 g 51.5 60.2 1,332.1 1,319.4 7.2 5.5 -58.2 2,747.0 211
2024 . . 1,325.8 1,211.8 g 56.1 57.9 1,413.9 1,400.7 7.4 5.8 -88.1 2,658.9 194
2025 . . 1,385.7 1,267.3 g 61.2 57.2 1,501.5 1,487.8 7.8 5.9 -115.8 2,543.1 177
2026 . . 1,457.3 1,323.9 g 75.4 58.0 1,592.4 1,578.3 8.1 6.0 -135.1 2,408.0 160
49
Actuarial Estimates
Table IV.A3.Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2017-2031a (Cont.)
[Dollar amounts in billions]
Income Costb Asset Reservesb
Net pay- GF Taxa- Admin- Net
roll tax reim- tion Sched- istra- RRB increase Amount Trust
Calendar contri- burse- of bene- Net uled tive inter- during at end fund
year Total butionsc mentsd fitsce interest Total benefits costschange year of year ratio f
Intermediate (Cont.):
2027 . . $1,522.6$1,381.5 g $82.1 $59.0 $1,687.1 $1,672.7 $8.4 $6.0 -$164.6 $2,243.4 143
2028 . . 1,589.6 1,442.1 g 88.9 58.7 1,785.6 1,770.8 8.7 6.1 -196.0 2,047.4 126
2029 . . 1,656.9 1,503.9 g 96.2 56.9 1,885.8 1,870.6 9.1 6.2 -228.9 1,818.6 109
2030 . . 1,723.4 1,565.2 g 104.2 54.0 1,988.3 1,972.6 9.4 6.3 -264.8 1,553.7 91
2031 . . 1,791.7 1,629.7 g 112.7 49.3 2,094.7 2,078.6 9.7 6.4 -303.0 1,250.8 74
Low-cost:
2022 . . 1,203.2 1,090.5 g 47.2 65.4 1,241.0 1,228.9 6.7 5.4 -37.9 2,814.2 230
2023 . . 1,313.5 1,197.9 g 51.8 63.9 1,338.0 1,325.3 7.2 5.4 -24.5 2,789.7 210
2024 . . 1,388.3 1,266.2 g 56.6 65.5 1,423.8 1,410.5 7.5 5.8 -35.6 2,754.2 196
2025 . . 1,476.5 1,346.0 g 62.0 68.5 1,516.5 1,502.7 7.9 5.9 -40.0 2,714.1 182
2026 . . 1,580.2 1,429.9 g 76.7 73.6 1,612.8 1,598.5 8.3 6.0 -32.6 2,681.5 168
2027 . . 1,679.2 1,515.2 g 83.8 80.2 1,713.0 1,698.2 8.7 6.1 -33.8 2,647.7 157
2028 . . 1,784.0 1,606.0 g 91.1 86.9 1,818.1 1,802.7 9.2 6.2 -34.0 2,613.7 146
2029 . . 1,893.7 1,701.1 g 99.0 93.6 1,926.3 1,910.4 9.6 6.3 -32.6 2,581.1 136
2030 . . 2,007.2 1,798.4 g 107.8 100.9 2,038.6 2,022.2 10.1 6.4 -31.5 2,549.6 127
2031 . . 2,127.2 1,901.8 g 117.2 108.2 2,156.5 2,139.5 10.6 6.5 -29.4 2,520.2 118
High-cost:
2022 . . 1,168.6 1,057.5 g 47.3 63.8 1,244.6 1,232.5 6.7 5.4 -76.0 2,776.0 229
2023 . . 1,184.9 1,077.2 g 51.3 56.4 1,329.1 1,316.4 7.2 5.5 -144.2 2,631.8 209
2024 . . 1,225.0 1,118.7 g 55.2 51.2 1,396.3 1,382.9 7.4 6.0 -171.3 2,460.6 188
2025 . . 1,264.1 1,157.4 g 59.8 46.9 1,475.5 1,462.0 7.6 5.9 -211.4 2,249.2 167
2026 . . 1,314.2 1,197.2 g 73.4 43.6 1,560.4 1,546.5 7.9 6.0 -246.2 2,003.0 144
2027 . . 1,352.5 1,232.9 g 79.6 40.0 1,648.3 1,634.3 8.1 6.0 -295.8 1,707.2 122
2028 . . 1,387.8 1,267.8 g 85.9 34.1 1,738.3 1,724.0 8.3 6.0 -350.5 1,356.7 98
2029 . . 1,420.9 1,302.1 g 92.5 26.3 1,828.5 1,813.9 8.5 6.1 -407.5 949.2 74
2030 . . 1,451.6 1,334.2 g 99.8 17.6 1,919.2 1,904.4 8.7 6.1 -467.6 481.5 49
2031 . . h 1,367.5 g 107.4 h 2,012.6 1,997.5 8.9 6.2 h h 24
a The OASDI Trust Fund reserves become depleted in the fourth quarter of 2031 under the high-cost assumptions.
For any period during which reserves would be depleted, scheduled benefits could not be paid in full on a timely
basis, income from taxing benefits would be less than would apply to scheduled benefits, and interest on trust fund
reserves would be negligible. Appendix A presents a detailed description of the components of income and cost,
along with complete historical values.
b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly sched-
uled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as required by the
statutory provision for early benefit payments when the normal delivery date is on a weekend or holiday. Such
shifts in payments across calendar years have occurred in the past, including in 2016, and will occur periodically in
the future whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on trust fund oper-
ations over time, all trust fund operations in each year reflect the 12 months of benefits that are regularly scheduled
for payment in that year.
c Includes adjustments for prior calendar years. For example, in June 2021, an unusually large negative adjustment
to payroll tax contributions in the amount of $35.5 billion was made because payroll tax revenue credited to the
trust funds in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
d Includes reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds for: (1) the cost
of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21;
(2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public Law
110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and
112-96.
e Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the law.
f The Trust fund ratio column represents reserves at the beginning of a year (which are identical to reserves at
the end of the prior year shown in the Amount at end of year column) as a percentage of cost for the year. The
trust fund ratio at the beginning of 2032 is projected to be 57 percent for the intermediate, and 111 percent for the
low-cost assumptions.
g Between -$50 million and $50 million.
h When the fund is depleted, values under current law would reflect permissible expenditures only, which would
be less than the cost of scheduled benefits shown in this table.
Note: Components may not sum to totals because of rounding.
50
Short-Range Estimates
4. Factors Underlying Changes in 10-Year Trust Fund Ratio Estimates
From Last Years Report
Table IV.A4 presents an analysis of the factors underlying the changes in the
intermediate estimates over the short-range projection period for the OASI,
DI, and the combined funds from last years report to this report.
In the 2021 report under the intermediate assumptions, the trust fund ratio for
OASI reached 85 percent at the beginning of 2030the tenth projection
year for that report. The change in the short-range valuation period alone,
from 2021 through 2030 to 2022 through 2031, lowered the estimated trust
fund ratio for the tenth year by 22 percentage points, to 63 percent. All other
changes to reflect modifications in law and regulations since last years
report, the most recent data, adjustments to the assumptions for future years,
and changes in projection methods combined for a net increase in the ratio
for the tenth projection year of 3 percentage points. Therefore, the total
change in the tenth year projected trust fund ratio from last years report to
this years report is a reduction of 19 percentage points to 66 percent.
The change in policy for the Deferred Actions for Childhood Arrivals pro-
gram discussed in III.B did not significantly affect the tenth year OASI trust
fund ratio. Changes in demographic assumptions over the short-range period
also did not significantly affect the projected tenth year trust fund ratio for
OASI. Several changes in economic data and assumptions combined to cause
a net reduction in the OASI trust fund ratio of 5 percentage points by the
beginning of 2031. Incorporating recent programmatic data and assumptions,
including actual average benefits and beneficiary counts for 2021 and higher
estimated near-term revenue from taxation of benefits income, resulted in an
increase of 8 percentage points in the tenth year OASI trust fund ratio.
Finally, the tenth year trust fund ratio was not affected significantly by
changes in the short-range methodology for this report.
Table IV.A4 also shows corresponding estimates of the factors underlying
the changes in the financial projections for the DI Trust Fund and for the
combined OASI and DI Trust Funds. The 64-percentage-point increase in the
DI trust fund ratio from the beginning of 2030 in last years report to the
beginning of 2031 in this years report is the net effect of increases and
decreases from the factors described above for the OASI Trust Fund, com-
bined with other changes that are significant for DI but not OASI. The large
increase of 57 points due to programmatic data and assumptions reflects:
(1) lower recent disabled-worker application and incidence rates, (2) a more
gradual return of initial disability application rates to their ultimate levels
from recent lows, and (3) lowering the ultimate disabled worker incidence
rate from 5.0 to 4.8 in this report.
51
Actuarial Estimates
Table IV.A4.Reasons for Change in Trust Fund (Unfunded Obligation) Ratios
at the Beginning of the Tenth Year of Projection Under Intermediate Assumptions
[In percent]
OASI and DI
OASI DI Trust Funds,
Item Trust Fund Trust Fund combined
Trust fund ratio shown in last years report for calendar year 2030 . 85 81 85
Change in trust fund ratio due to changes in:
Legislation and regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a a a
Valuation period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22 5 -19
Demographic data and assumptions. . . . . . . . . . . . . . . . . . . . . . . a a a
Economic data and assumptions . . . . . . . . . . . . . . . . . . . . . . . . . -5 2 -4
Programmatic data and assumptions . . . . . . . . . . . . . . . . . . . . . . 8 57 13
Projection methods and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . a a a
Total change in trust fund ratio -19 64 -11
Trust fund ratio shown in this report for calendar year 2031. . . . . . . 66 145 74
a Between -0.5 and 0.5 percent.
Note: Components may not sum to totals because of rounding.
52
Long-Range Estimates
B. LONG-RANGE ESTIMATES
The Trustees use three types of financial measures to assess the actuarial sta-
tus of the Social Security trust funds under the financing approach specified
in current law: (1) annual cash-flow measures, including income rates, cost
rates, and balances; (2) trust fund ratios; and (3) summary measures such as
actuarial balances and unfunded obligations.
The difference between the annual income rate and annual cost rate, both
expressed as percentages of taxable payroll, is the annual balance. The level
and trend of the annual balances at the end of the 75-year projection period
are factors that the Trustees use to assess the financial condition of the pro-
gram.
The trust fund ratio for a year is the proportion of the years projected cost
that could be paid with fund reserves available at the beginning of the year.
Critical factors considered by the Trustees in assessing actuarial status
include: (1) the level and year of maximum trust fund ratio, (2) the year of
depletion of the fund reserves and the percent of scheduled benefits that is
still payable after reserves are depleted, and (3) the stability of the trust fund
ratio at the end of the long-range period.
Solvency at any point in time requires that sufficient financial resources are
available to pay all scheduled benefits at that time. Solvency is generally
indicated by a positive trust fund ratio. Sustainable solvency for the financ-
ing of the program under a specified set of assumptions is achieved when the
projected trust fund ratio is positive throughout the 75-year projection period
and is either stable or rising at the end of the period.
The Trustees summarize the total income and cost over valuation periods that
extend through 75 years and over the infinite horizon. 1 This section presents
several summarized measures, including the actuarial balance and the open-
group unfunded obligation. The actuarial balance indicates the size of any
surplus or shortfall as a percentage of the taxable payroll over the period.
The open-group unfunded obligation indicates the size of any shortfall in
present-value dollars.
This section also includes additional information that the Trustees use to
assess the financial status of the Social Security program, including: (1) a
comparison of the number of beneficiaries to the number of covered workers,
(2) the test of long-range close actuarial balance, and (3) the reasons for the
change in the actuarial balance from the last report.
1 See appendix F.
53
Actuarial Estimates
1. Annual Income Rates, Cost Rates, and Balances
The concepts of income rate and cost rate, expressed as percentages of tax-
able payroll, are important in the consideration of the long-range actuarial
status of the trust funds. The annual income rate is the ratio of all non-inter-
est income to the OASDI taxable payroll for the year. Non-interest income
includes payroll taxes, taxes on scheduled benefits, and any General Fund
transfers or reimbursements. The OASDI taxable payroll consists of the total
earnings subject to OASDI taxes with some relatively small adjustments. 1
The annual cost rate is the ratio of the cost of the program to the taxable pay-
roll for the year. The cost includes scheduled benefits, administrative
expenses, net interchange with the Railroad Retirement program, and pay-
ments for vocational rehabilitation services for disabled beneficiaries. For
any year, the annual income rate minus the annual cost rate is the annual
balance for the year.
Table IV.B1 presents a comparison of the estimated annual income rates and
cost rates by trust fund and alternative. Table IV.B2 shows the separate com-
ponents of the annual income rates.
Under the intermediate assumptions, the Trustees project that the OASI
income rate will increase from 10.65 percent of payroll for 2021 to
11.00 percent of payroll for 2022 and 11.21 percent of payroll for 2023. The
income rate in 2021 is relatively low because an unusually large negative
adjustment to payroll tax contributions was made in June 2021 reflecting the
excess amounts credited in 2020. The OASI income rate then decreases to
11.14 percent in 2024 and generally gradually rises thereafter, reaching
11.55 percent of taxable payroll for 2096. Income from taxation of benefits
causes this gradual increase in the OASI income rate for two main reasons:
(1) total scheduled benefits are rising faster than payroll; and (2) the ratio of
total income tax on benefits to total benefits increases over time for reasons
discussed in detail on page 152.
The OASI cost rate rises rapidly from 2021 2 to 2038. During this period, the
retirement of the baby-boom generation will continue to increase the number
of beneficiaries much faster than the number of workers increases, as subse-
1 Adjustments include adding deemed wage credits based on military service for 1983-2001 and reflecting
the lower effective tax rates (as compared to the combined employee-employer rate) that apply to multiple-
employer excess wages. Lower rates also applied to net earnings from self-employment before 1984 and
to income from tips before 1988.
2 Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly
scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as
required by the statutory provision for early benefit payments when the normal delivery date is on a week-
end or holiday. Such shifts in payments across calendar years have occurred in the past and will occur peri-
odically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on
trust fund operations over time, all trust fund operations in each year reflect the 12 months of benefits that
are regularly scheduled for payment in that year.
54
Long-Range Estimates
quent lower-birth-rate generations replace the baby-boom generation at
working ages. From 2040 to 2046, the cost rate declines because the aging
baby-boom generation is gradually replaced at retirement ages by the lower-
birth-rate generations that followed. The OASI cost rate then rises from
14.95 percent in 2046 to 16.45 percent in 2078, largely because of the period
of reduced birth rates starting with the recession of 2007-09, and then
declines to 15.69 percent in 2096.
Projections of income rates under the low-cost and high-cost sets of assump-
tions are similar to those projected for the intermediate assumptions, because
income rates are largely a reflection of the payroll tax rates specified in the
law, with the changes from taxation of benefits noted above. In contrast,
OASI cost rates for the low-cost and high-cost assumptions are significantly
different from those projected for the intermediate assumptions. For the low-
cost assumptions, the OASI cost rate rises from 12.28 percent in 2022 until it
peaks in 2034 at 12.85 percent of payroll. The cost rate then declines to
12.01 percent for 2055, rises to 12.14 percent for 2070, and then mostly
declines to 10.98 percent in 2096, at which point the income rate reaches
11.26 percent. For the high-cost assumptions, the OASI cost rate rises from
12.81 percent in 2022 to 24.67 percent in 2088 and then declines gradually to
24.45 percent in 2096, at which point the income rate reaches 12.10 percent.
The pattern of the projected OASI annual balance is important in the analysis
of the financial condition of the program. Under the intermediate assump-
tions, the annual balance is negative throughout the projection period. The
annual deficit decreases from 1.54 percent in 2021 to 1.40 percent in 2022,
mainly because of the 2021 adjustment for lower-than-expected payroll tax
revenue in 2020 mentioned earlier. After 2022, the annual deficit rises to
3.50 percent for 2040. It then declines to 3.47 percent of payroll for 2046,
rises to 4.85 percent for 2078, and declines thereafter, reaching 4.14 percent
of taxable payroll for 2096.
Under the low-cost assumptions, the OASI annual deficit decreases from
1.32 percent of payroll for 2022 to 1.17 percent in 2023, and then mostly
rises to 1.52 percent of payroll for 2034. After 2034, the annual deficit
declines to 0.70 percent of payroll for 2055, and rises to 0.82 percent for
2070. After 2070, the OASI annual balance mostly improves, turning posi-
tive in 2088, and reaching 0.27 percent of payroll for 2096. Under the high-
cost assumptions, the OASI annual deficit rises from 1.72 percent for 2022 to
12.56 percent for 2088, and then declines relatively modestly to
12.36 percent for 2096.
55
Actuarial Estimates
Table IV.B1.Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2100
[As a percentage of taxable payroll]
OASI DI OASDI
Calendar Income Cost Income Cost Income Cost
year rate a rateb Balanceb rate a rateb Balanceb rate a rateb Balanceb
Historical data:
1990 . . . . . 11.47 9.65 1.82 1.18 1.09 0.10 12.65 10.74 1.91
1995 . . . . . 10.65 10.23 .42 1.87 1.44 .43 12.52 11.67 .85
2000 . . . . . 10.85 8.98 1.87 1.78 1.42 .36 12.62 10.40 2.23
2005 . . . . . 10.96 9.31 1.65 1.84 1.85 -.02 12.80 11.16 1.63
2010 . . . . . 10.75 11.06 -.30 1.79 2.41 -.62 12.54 13.47 -.92
2011 . . . . . 10.83 11.04 -.21 1.80 2.42 -.62 12.63 13.46 -.83
2012 . . . . . 11.05 11.35 -.30 1.81 2.47 -.66 12.85 13.82 -.96
2013 . . . . . 10.96 11.53 -.57 1.81 2.43 -.63 12.77 13.97 -1.20
2014 . . . . . 10.95 11.59 -.64 1.81 2.35 -.55 12.76 13.95 -1.19
2015 . . . . . 11.02 11.64 -.62 1.81 2.27 -.47 12.82 13.91 -1.09
2016 . . . . . 10.70 11.70 -.99 2.39 2.20 .19 13.09 13.89 -.80
2017 . . . . . 10.64 11.56 -.92 2.42 2.09 .33 13.06 13.65 -.59
2018 . . . . . 10.27 11.69 -1.41 2.32 2.01 .31 12.60 13.69 -1.10
2019 . . . . . 10.97 11.90 -.93 1.84 1.93 -.09 12.81 13.83 -1.02
2020 . . . . . 11.59 12.44 -.85 1.90 1.89 .01 13.49 14.33 -.84
2021 . . . . . 10.65 12.19 -1.54 1.74 1.73 c 12.38 13.92 -1.54
Intermediate:
2022 . . . . . 11.00 12.40 -1.40 1.80 1.66 .14 12.79 14.05 -1.26
2023 . . . . . 11.21 12.67 -1.46 1.83 1.64 .19 13.04 14.31 -1.27
2024 . . . . . 11.14 12.82 -1.68 1.82 1.63 .19 12.95 14.45 -1.49
2025 . . . . . 11.15 13.01 -1.86 1.81 1.64 .17 12.97 14.66 -1.69
2026 . . . . . 11.26 13.22 -1.96 1.82 1.66 .16 13.08 14.88 -1.80
2027 . . . . . 11.28 13.43 -2.14 1.82 1.68 .14 13.10 15.10 -2.00
2028 . . . . . 11.32 13.66 -2.34 1.82 1.67 .15 13.14 15.33 -2.19
2029 . . . . . 11.35 13.88 -2.52 1.82 1.65 .17 13.17 15.53 -2.35
2030 . . . . . 11.38 14.09 -2.71 1.82 1.63 .19 13.20 15.72 -2.52
2031 . . . . . 11.41 14.28 -2.87 1.82 1.62 .20 13.23 15.91 -2.67
2035 . . . . . 11.45 14.76 -3.31 1.82 1.66 .17 13.27 16.42 -3.15
2040 . . . . . 11.47 14.98 -3.50 1.83 1.74 .08 13.30 16.72 -3.42
2045 . . . . . 11.48 14.95 -3.47 1.83 1.87 -.04 13.31 16.82 -3.51
2050 . . . . . 11.49 15.01 -3.52 1.83 1.94 -.11 13.32 16.95 -3.63
2055 . . . . . 11.50 15.17 -3.67 1.83 1.98 -.14 13.34 17.15 -3.81
2060 . . . . . 11.53 15.50 -3.98 1.83 1.95 -.11 13.36 17.45 -4.09
2065 . . . . . 11.55 15.80 -4.25 1.83 1.93 -.10 13.38 17.73 -4.35
2070 . . . . . 11.57 16.08 -4.51 1.83 1.93 -.09 13.40 18.00 -4.60
2075 . . . . . 11.59 16.36 -4.77 1.83 1.89 -.06 13.42 18.25 -4.83
2080 . . . . . 11.59 16.43 -4.84 1.83 1.87 -.04 13.43 18.30 -4.87
2085 . . . . . 11.58 16.24 -4.65 1.83 1.87 -.03 13.42 18.11 -4.69
2090 . . . . . 11.56 15.88 -4.32 1.83 1.91 -.08 13.40 17.79 -4.39
2095 . . . . . 11.55 15.69 -4.14 1.84 1.95 -.11 13.39 17.64 -4.25
2100 . . . . . 11.56 15.77 -4.21 1.84 1.96 -.12 13.39 17.73 -4.33
First year balance becomes
negative and remains negative
throughout the 75-year
projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2044 . . . . . . . . . . . . . . . . 2010
56
Long-Range Estimates
Table IV.B1.Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2100 (Cont.)
[As a percentage of taxable payroll]
OASI DI OASDI
Calendar Income Cost Income Cost Income Cost
year rate a rateb Balanceb rate a rateb Balanceb rate a rateb Balanceb
Low-cost:
2022 . . . . . 10.96 12.28 -1.32 1.79 1.63 0.16 12.75 13.91 -1.16
2023 . . . . . 11.21 12.38 -1.17 1.83 1.58 .25 13.04 13.96 -.92
2024 . . . . . 11.12 12.39 -1.27 1.81 1.53 .28 12.93 13.92 -.99
2025 . . . . . 11.12 12.42 -1.30 1.81 1.51 .31 12.93 13.93 -1.00
2026 . . . . . 11.21 12.47 -1.26 1.81 1.48 .34 13.03 13.95 -.92
2027 . . . . . 11.23 12.53 -1.30 1.81 1.45 .37 13.04 13.97 -.93
2028 . . . . . 11.26 12.60 -1.35 1.82 1.40 .42 13.07 14.00 -.93
2029 . . . . . 11.28 12.66 -1.39 1.82 1.35 .47 13.09 14.01 -.92
2030 . . . . . 11.29 12.72 -1.43 1.81 1.30 .52 13.11 14.02 -.91
2031 . . . . . 11.31 12.76 -1.45 1.81 1.26 .55 13.13 14.02 -.89
2035 . . . . . 11.33 12.84 -1.51 1.82 1.21 .60 13.15 14.06 -.91
2040 . . . . . 11.33 12.67 -1.33 1.82 1.24 .58 13.15 13.91 -.76
2045 . . . . . 11.32 12.31 -1.00 1.82 1.31 .51 13.14 13.62 -.49
2050 . . . . . 11.31 12.09 -.78 1.82 1.33 .49 13.13 13.42 -.29
2055 . . . . . 11.31 12.01 -.70 1.82 1.34 .48 13.13 13.35 -.22
2060 . . . . . 11.32 12.09 -.78 1.82 1.30 .52 13.14 13.40 -.26
2065 . . . . . 11.32 12.14 -.81 1.82 1.28 .54 13.14 13.42 -.28
2070 . . . . . 11.32 12.14 -.82 1.82 1.27 .55 13.14 13.42 -.27
2075 . . . . . 11.32 12.13 -.80 1.82 1.25 .57 13.14 13.37 -.23
2080 . . . . . 11.31 11.91 -.60 1.82 1.24 .58 13.13 13.15 -.02
2085 . . . . . 11.29 11.51 -.22 1.82 1.24 .58 13.11 12.75 .36
2090 . . . . . 11.26 11.08 .18 1.82 1.28 .54 13.08 12.36 .72
2095 . . . . . 11.25 10.97 .29 1.82 1.31 .52 13.08 12.27 .80
2100 . . . . . 11.26 11.12 .14 1.82 1.31 .52 13.09 12.43 .66
First year balance becomes
negative and remains negative
throughout the 75-year
projection period . . . . . . . . . . . d ................ e ................ d
High-cost:
2022 . . . . . 11.09 12.81 -1.72 1.81 1.72 .09 12.90 14.53 -1.63
2023 . . . . . 11.20 13.55 -2.35 1.82 1.79 .03 13.02 15.34 -2.31
2024 . . . . . 11.17 13.65 -2.48 1.82 1.80 .01 12.99 15.45 -2.46
2025 . . . . . 11.20 13.92 -2.72 1.82 1.86 -.04 13.02 15.78 -2.76
2026 . . . . . 11.32 14.22 -2.90 1.82 1.92 -.09 13.14 16.14 -3.00
2027 . . . . . 11.35 14.57 -3.21 1.82 1.98 -.16 13.17 16.54 -3.37
2028 . . . . . 11.40 14.98 -3.58 1.83 2.01 -.18 13.22 16.98 -3.76
2029 . . . . . 11.44 15.38 -3.94 1.83 2.02 -.19 13.27 17.40 -4.13
2030 . . . . . 11.48 15.79 -4.30 1.83 2.03 -.20 13.31 17.82 -4.50
2031 . . . . . 11.53 16.18 -4.65 1.83 2.05 -.22 13.36 18.22 -4.87
57
Actuarial Estimates
Table IV.B1.Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2100 (Cont.)
[As a percentage of taxable payroll]
OASI DI OASDI
Calendar Income Cost Income Cost Income Cost
year rate a rateb Balanceb rate a rateb Balanceb rate a rateb Balanceb
High-cost (Cont.):
2035 . . . . . 11.59 17.15 -5.56 1.83 2.19 -0.35 13.43 19.34 -5.91
2040 . . . . . 11.65 17.92 -6.27 1.84 2.36 -.53 13.48 20.28 -6.80
2045 . . . . . 11.69 18.47 -6.78 1.84 2.59 -.75 13.53 21.06 -7.53
2050 . . . . . 11.73 19.11 -7.38 1.84 2.74 -.89 13.58 21.85 -8.27
2055 . . . . . 11.78 19.82 -8.03 1.85 2.84 -.99 13.63 22.65 -9.02
2060 . . . . . 11.84 20.66 -8.82 1.85 2.83 -.98 13.69 23.49 -9.80
2065 . . . . . 11.89 21.47 -9.58 1.85 2.84 -.99 13.74 24.32 -10.57
2070 . . . . . 11.95 22.35 -10.40 1.85 2.85 -1.00 13.80 25.21 -11.40
2075 . . . . . 12.02 23.32 -11.31 1.85 2.81 -.96 13.87 26.13 -12.27
2080 . . . . . 12.07 24.12 -12.05 1.85 2.76 -.91 13.92 26.89 -12.97
2085 . . . . . 12.10 24.60 -12.50 1.85 2.72 -.87 13.95 27.31 -13.36
2090 . . . . . 12.10 24.63 -12.53 1.85 2.73 -.88 13.96 27.36 -13.41
2095 . . . . . 12.10 24.48 -12.38 1.85 2.78 -.93 13.95 27.26 -13.31
2100 . . . . . 12.10 24.44 -12.35 1.85 2.81 -.96 13.95 27.25 -13.30
First year balance becomes
negative and remains negative
throughout the 75-year
projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2025 . . . . . . . . . . . . . . . . 2010
a Income rates include certain reimbursements from the General Fund of the Treasury.
b Benefit payments scheduled to be paid on January 3 are actually paid on December 31 as required by the
statutory provision for early delivery of benefit payments when the normal payment delivery date is a Satur-
day, Sunday, or legal public holiday. For comparability with the values for historical years and the projec-
tions in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for
payment each year.
c Between 0 and 0.005 percent of taxable payroll.
d The annual balance is projected to be negative for a temporary period and then return to positive levels
before the end of the projection period.
e The annual balance is projected to be positive throughout the entire 75-year projection period.
Notes:
1. The income rate excludes interest income.
2. Revisions of taxable payroll may change some historical values.
3. Components may not sum to totals because of rounding.
Under the intermediate assumptions, the projected DI cost rate declines from
1.73 percent for 2021 to 1.66 percent for 2022 due primarily to changes in
assumed near-term disability incidence rates. After 2022, the cost rate fluctu-
ates, reaching 1.62 percent for 2031. Then the DI cost rate increases gradu-
ally to 1.98 percent for 2055. Thereafter, the cost rate remains relatively
stable, decreasing slowly to 1.86 percent for 2083, and then increasing to
1.95 percent for 2096. The DI income rate in 2021 is relatively low, mainly
from the decline in payroll tax contributions in 2021 reflecting the adjust-
ment from lower-than-expected 2020 payroll tax contributions mentioned
earlier. The DI income rate increases from 1.74 percent for 2021 to
1.83 percent for 2023, and is relatively stable thereafter, reaching
1.84 percent for 2096. The annual balance is between 0 and 0.005 percent of
payroll in 2021, increases to 0.19 percent in 2024, and then fluctuates
through 2032. After 2032, the annual balance declines and becomes negative
in 2044. After 2044, the annual deficit increases to 0.14 percent in 2055,
58
Long-Range Estimates
decreases to 0.03 percent in 2083, and then increases to 0.12 percent of pay-
roll for 2096.
Under the low-cost assumptions, the projected DI cost rate declines from
1.63 percent of payroll for 2022 to 1.21 percent for 2035 and then increases
to 1.34 percent for 2053. The cost rate then declines through 2081 and
increases slowly thereafter, reaching 1.31 percent for 2096. The annual bal-
ance is positive throughout the long-range period, reaching 0.52 percent of
payroll for 2096. Under the high-cost assumptions, the DI cost rate rises
from 1.72 percent of payroll in 2022 to 2.85 percent in 2057 and fluctuates
thereafter, reaching 2.79 percent for 2096. The DI annual balance declines
from 0.09 percent of payroll in 2022 and becomes negative in 2025, with a
0.04 percent annual deficit in 2025. After 2025, annual deficits increase to
1.00 percent of payroll in 2057 and fluctuate thereafter, reaching
0.94 percent for 2096.
Figure IV.B1 shows the patterns of the historical and projected OASI and DI
annual cost rates. The patterns in projected OASI and DI cost rates are
described earlier in this chapter. Historical annual OASI cost rates shifted
upward starting in 2008 and have remained at relatively high levels since
then, primarily due to the retirement of the baby-boom generation. Historical
annual DI cost rates rose substantially between 1990 and 2010 in large part
due to: (1) aging of the working population as the baby-boom generation
moved from ages 25-44 in 1990, where disability prevalence is low, to ages
45-64 in 2010, where disability prevalence is much higher; (2) a substantial
increase in the percentage of women insured for DI benefits as a result of
increased and more consistent rates of employment; and (3) increased dis-
ability incidence rates for women to a level similar to those for men by 2010.
As of 2010, these three factors have largely stabilized. Other factors that are
not yet fully understood, including the changing nature of work, have caused
age-sex-adjusted incidence rates and cost rates to decline from 2010 to 2021.
Figure IV.B1 shows only the income rates for alternative II because the vari-
ation in income rates by alternative is very small. Income rates generally
increase slowly for each of the alternatives over the long-range period. Taxa-
tion of benefits, which is a small portion of income, is the main source of the
increases in the income rate and the variation among the alternatives.
Table IV.B1 shows the annual balances for OASI, DI, and OASDI. The pat-
tern of the annual balances is important to the analysis of the financial condi-
tion of the Social Security program as a whole. As seen in figure IV.B1, the
magnitude of each of the positive balances is the distance between the appro-
priate cost-rate curve and the income-rate curve above it. The magnitude of
each of the deficits is the distance between the appropriate cost-rate curve
and the income-rate curve below it. Annual balances follow closely the pat-
59
Actuarial Estimates
tern of annual cost rates after 1990 because the payroll tax rate does not
change for the OASDI program, with only small variations in the allocation
between DI and OASI except for changes due to the 1994 and the
2016 through 2018 payroll tax rate reallocations.
In the future, the costs of OASI, DI, and the combined OASDI programs as a
percentage of taxable payroll are unlikely to fall outside the range encom-
passed by alternatives I and III because alternatives I and III define a wide
range of demographic and economic conditions.
Figure IV.B1.Long-Range OASI and DI Annual Income Rates and Cost Rates
[As a percentage of taxable payroll]
25%
III
Historical Projected
20%
OASI
II
15%
I
10%
Alternative II Income rates
OASI Cost rates
DI Cost rates
5%
DI III
II
I
0%
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Long-range OASDI cost and income are most often expressed as percentages
of taxable payroll. However, the Trustees also present cost and income as
shares of gross domestic product (GDP), the value of goods and services pro-
duced during the year in the United States. Under alternative II, the Trustees
project OASDI cost to increase from about 5.0 percent of GDP for 2022 to
about 6.0 percent for 2039. After 2039, OASDI cost as a percentage of GDP
declines slightly through 2049, increases to a peak of 6.2 percent for 2077,
and thereafter decreases slowly, reaching about 5.9 percent by 2096. Appen-
dix G presents full estimates of income and cost relative to GDP.
Table IV.B2 contains historical and projected annual income rates and their
components by trust fund and alternative. The annual income rates consist of
the scheduled payroll tax rates, the rates of income from taxation of sched-
60
Long-Range Estimates
uled benefits, and the rates of income from General Fund reimbursements.
Projected income from taxation of benefits increases over time for reasons
discussed on page 152.
Table IV.B2.Components of Annual Income Rates, Calendar Years 1990-2100
[As a percentage of taxable payroll]
OASI DI OASDI
Tax- General Tax- General Tax- General
ation Fund ation Fund ation Fund
of Reim- of Reim- of Reim-
Calendar Payroll bene- burse- Payroll bene- burse- Payroll bene- burse-
year tax fitsa mentsb Totalc tax fitsa mentsb Totalc tax fitsa mentsb Totalc
Historical data:
1990 . . 11.29 0.21 -0.03 11.47 1.21 0.01 -0.03 1.18 12.50 0.21 -0.06 12.65
1995 . . 10.46 .19 -.01 10.65 1.87 .01 -.01 1.87 12.33 .20 -.01 12.52
2000 . . 10.56 .29 d 10.85 1.78 .02 -.02 1.78 12.34 .31 -.02 12.62
2005 . . 10.68 .29 -.01 10.96 1.81 .02 d 1.84 12.49 .31 -.01 12.80
2010 . . 10.30 .42 .04 10.75 1.75 .04 .01 1.79 12.05 .45 .05 12.54
2011 . . 8.82 .41 1.61 10.83 1.50 .03 .27 1.80 10.32 .44 1.88 12.63
2012 . . 8.86 .47 1.72 11.05 1.51 .01 .29 1.81 10.36 .48 2.01 12.85
2013 . . 10.54 .35 .07 10.96 1.79 .01 .01 1.81 12.33 .36 .08 12.77
2014 . . 10.49 .45 .01 10.95 1.78 .03 d 1.81 12.27 .48 .01 12.76
2015 . . 10.54 .47 d 11.02 1.79 .02 d 1.81 12.33 .49 .01 12.82
2016 . . 10.23 .48 d 10.70 2.37 .02 d 2.39 12.60 .49 d 13.09
2017 . . 10.12 .51 d 10.64 2.39 .03 d 2.42 12.52 .54 d 13.06
2018 . . 9.80 .47 d 10.27 2.32 .01 d 2.32 12.12 .48 d 12.60
2019 . . 10.51 .46 d 10.97 1.82 .02 d 1.84 12.33 .48 d 12.81
2020 . . 11.08 .51 d 11.59 1.88 .02 d 1.90 12.96 .53 d 13.49
2021 . . 10.19 .45 d 10.65 1.73 .01 d 1.74 11.93 .46 d 12.38
Intermediate:
2022 . . 10.48 .52 d 11.00 1.78 .02 d 1.80 12.26 .53 d 12.79
2023 . . 10.67 .54 d 11.21 1.81 .02 d 1.83 12.48 .55 d 13.04
2024 . . 10.58 .56 d 11.14 1.80 .02 d 1.82 12.38 .57 d 12.95
2025 . . 10.58 .58 d 11.15 1.80 .02 d 1.81 12.37 .60 d 12.97
2026 . . 10.58 .68 d 11.26 1.80 .02 d 1.82 12.38 .70 d 13.08
2027 . . 10.57 .71 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10
2028 . . 10.58 .74 d 11.32 1.80 .02 d 1.82 12.38 .76 d 13.14
2029 . . 10.59 .77 d 11.35 1.80 .02 d 1.82 12.38 .79 d 13.17
2030 . . 10.58 .80 d 11.38 1.80 .02 d 1.82 12.38 .82 d 13.20
2031 . . 10.58 .83 d 11.41 1.80 .02 d 1.82 12.37 .86 d 13.23
2035 . . 10.58 .87 d 11.45 1.80 .03 d 1.82 12.38 .90 d 13.27
2040 . . 10.58 .89 d 11.47 1.80 .03 d 1.83 12.38 .92 d 13.30
2045 . . 10.58 .90 d 11.48 1.80 .03 d 1.83 12.38 .93 d 13.31
2050 . . 10.58 .91 d 11.49 1.80 .03 d 1.83 12.38 .94 d 13.32
2055 . . 10.58 .92 d 11.50 1.80 .04 d 1.83 12.38 .96 d 13.34
2060 . . 10.58 .95 d 11.53 1.80 .04 d 1.83 12.38 .98 d 13.36
2065 . . 10.58 .97 d 11.55 1.80 .04 d 1.83 12.38 1.01 d 13.38
2070 . . 10.58 .99 d 11.57 1.80 .04 d 1.83 12.38 1.03 d 13.40
2075 . . 10.58 1.01 d 11.59 1.80 .04 d 1.83 12.38 1.05 d 13.42
2080 . . 10.58 1.02 d 11.59 1.80 .04 d 1.83 12.38 1.05 d 13.43
2085 . . 10.58 1.01 d 11.58 1.80 .04 d 1.83 12.38 1.04 d 13.42
2090 . . 10.58 .98 d 11.56 1.80 .04 d 1.83 12.37 1.02 d 13.40
2095 . . 10.58 .97 d 11.55 1.80 .04 d 1.84 12.37 1.01 d 13.39
2100 . . 10.58 .98 d 11.56 1.80 .04 d 1.84 12.38 1.02 d 13.39
Low-cost:
2022 . . 10.45 .51 d 10.96 1.77 .02 d 1.79 12.22 .53 d 12.75
2023 . . 10.69 .52 d 11.21 1.81 .02 d 1.83 12.50 .54 d 13.04
2024 . . 10.58 .54 d 11.12 1.80 .02 d 1.81 12.38 .55 d 12.93
2025 . . 10.57 .55 d 11.12 1.79 .02 d 1.81 12.36 .57 d 12.93
61
Actuarial Estimates
Table IV.B2.Components of Annual Income Rates, Calendar Years 1990-2100 (Cont.)
[As a percentage of taxable payroll]
OASI DI OASDI
Tax- General Tax- General Tax- General
ation Fund ation Fund ation Fund
of Reim- of Reim- of Reim-
Calendar Payroll bene- burse- Payroll bene- burse- Payroll bene- burse-
year a b
tax fits ments Total c tax fitsa mentsb Totalc tax fitsa mentsb Totalc
Low-cost (Cont.):
2026 . . 10.57 0.64 d 11.21 1.80 0.02 d 1.81 12.37 0.66 d 13.03
2027 . . 10.57 .66 d 11.23 1.79 .02 d 1.81 12.36 .68 d 13.04
2028 . . 10.57 .68 d 11.26 1.80 .02 d 1.82 12.37 .70 d 13.07
2029 . . 10.58 .70 d 11.28 1.80 .02 d 1.82 12.37 .72 d 13.09
2030 . . 10.57 .72 d 11.29 1.80 .02 d 1.81 12.37 .74 d 13.11
2031 . . 10.57 .74 d 11.31 1.80 .02 d 1.81 12.37 .76 d 13.13
2035 . . 10.57 .76 d 11.33 1.80 .02 d 1.82 12.37 .78 d 13.15
2040 . . 10.57 .76 d 11.33 1.80 .02 d 1.82 12.37 .78 d 13.15
2045 . . 10.57 .75 d 11.32 1.80 .02 d 1.82 12.37 .77 d 13.14
2050 . . 10.57 .74 d 11.31 1.80 .02 d 1.82 12.37 .76 d 13.13
2055 . . 10.57 .74 d 11.31 1.80 .03 d 1.82 12.37 .76 d 13.13
2060 . . 10.57 .74 d 11.32 1.80 .03 d 1.82 12.37 .77 d 13.14
2065 . . 10.57 .75 d 11.32 1.80 .03 d 1.82 12.37 .77 d 13.14
2070 . . 10.57 .75 d 11.32 1.80 .03 d 1.82 12.37 .78 d 13.14
2075 . . 10.57 .75 d 11.32 1.80 .02 d 1.82 12.37 .78 d 13.14
2080 . . 10.57 .74 d 11.31 1.80 .02 d 1.82 12.37 .76 d 13.13
2085 . . 10.57 .71 d 11.29 1.80 .03 d 1.82 12.37 .74 d 13.11
2090 . . 10.57 .69 d 11.26 1.80 .03 d 1.82 12.37 .71 d 13.08
2095 . . 10.57 .68 d 11.25 1.80 .03 d 1.82 12.37 .71 d 13.08
2100 . . 10.57 .69 d 11.26 1.80 .03 d 1.82 12.37 .72 d 13.09
High-cost:
2022 . . 10.55 .53 d 11.09 1.79 .02 d 1.81 12.35 .55 d 12.90
2023 . . 10.63 .57 d 11.20 1.80 .02 d 1.82 12.43 .59 d 13.02
2024 . . 10.58 .59 d 11.17 1.80 .02 d 1.82 12.38 .61 d 12.99
2025 . . 10.58 .62 d 11.20 1.80 .02 d 1.82 12.38 .64 d 13.02
2026 . . 10.58 .73 d 11.32 1.80 .03 d 1.82 12.38 .76 d 13.14
2027 . . 10.58 .77 d 11.35 1.80 .03 d 1.82 12.38 .80 d 13.17
2028 . . 10.59 .81 d 11.40 1.80 .03 d 1.83 12.39 .84 d 13.22
2029 . . 10.59 .85 d 11.44 1.80 .03 d 1.83 12.39 .88 d 13.27
2030 . . 10.59 .90 d 11.48 1.80 .03 d 1.83 12.38 .93 d 13.31
2031 . . 10.59 .94 d 11.53 1.80 .03 d 1.83 12.38 .97 d 13.36
2035 . . 10.59 1.01 d 11.59 1.80 .03 d 1.83 12.38 1.04 d 13.43
2040 . . 10.59 1.06 d 11.65 1.80 .04 d 1.84 12.38 1.10 d 13.48
2045 . . 10.59 1.10 d 11.69 1.80 .04 d 1.84 12.38 1.15 d 13.53
2050 . . 10.59 1.15 d 11.73 1.80 .05 d 1.84 12.38 1.19 d 13.58
2055 . . 10.59 1.20 d 11.78 1.80 .05 d 1.85 12.38 1.25 d 13.63
2060 . . 10.59 1.25 d 11.84 1.80 .05 d 1.85 12.38 1.30 d 13.69
2065 . . 10.59 1.31 d 11.89 1.80 .05 d 1.85 12.38 1.36 d 13.74
2070 . . 10.59 1.36 d 11.95 1.80 .05 d 1.85 12.38 1.42 d 13.80
2075 . . 10.59 1.43 d 12.02 1.80 .05 d 1.85 12.39 1.48 d 13.87
2080 . . 10.59 1.48 d 12.07 1.80 .05 d 1.85 12.39 1.53 d 13.92
2085 . . 10.59 1.51 d 12.10 1.80 .05 d 1.85 12.38 1.56 d 13.95
2090 . . 10.59 1.52 d 12.10 1.80 .05 d 1.85 12.38 1.57 d 13.96
2095 . . 10.59 1.51 d 12.10 1.80 .05 d 1.85 12.38 1.57 d 13.95
2100 . . 10.59 1.51 d 12.10 1.80 .06 d 1.85 12.38 1.57 d 13.95
a Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the
law.
b Includes payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and
112-96, and other miscellaneous reimbursements.
c Values exclude interest income.
d Between 0 and 0.005 percent of taxable payroll.
Note: Components may not sum to totals because of rounding.
62
Long-Range Estimates
2. Comparison of Workers to Beneficiaries
Under the intermediate assumptions, the Trustees project that the OASDI
cost rate will rise rapidly between 2022 and 2038, primarily because the
number of beneficiaries rises much more rapidly than the number of covered
workers as the baby-boom generation retires. The ratio of OASDI beneficia-
ries to workers is dominated by the OASI program because all workers even-
tually die or retire, but only a relatively small minority become disabled. The
trends described below are primarily due to demographic changes and thus
affect the DI program roughly 20 years earlier than the OASI and OASDI
programs. The baby-boom generation had lower fertility rates than their par-
ents, and the Trustees expect that lower fertility rates will persist for all
future generations; therefore, the ratio of OASDI beneficiaries to workers
will rise rapidly and reach a permanently higher level after all of the baby-
boom generation has retired. Due to increasing longevity, the ratio of benefi-
ciaries to workers will generally rise slowly thereafter. Table IV.B3 provides
a comparison of the numbers of covered workers and beneficiaries.
Table IV.B3.Covered Workers and Beneficiaries, Calendar Years 1945-2100
OASDI
Beneficiaries b (in thousands) Covered beneficiaries
Covered workers per per 100
workers a OASDI covered
Calendar year (in thousands) OASI DI OASDIc beneficiary workers
Historical data:
1945 . . . . . . . . . 46,390 1,106 - 1,106 41.9 2
1950 . . . . . . . . . 48,280 2,930 - 2,930 16.5 6
1955 . . . . . . . . . 65,066 7,564 - 7,564 8.6 12
1960 . . . . . . . . . 72,371 13,740 522 14,262 5.1 20
1965 . . . . . . . . . 80,539 18,509 1,648 20,157 4.0 25
1970 . . . . . . . . . 92,963 22,618 2,568 25,186 3.7 27
1975 . . . . . . . . . 100,193 26,998 4,125 31,123 3.2 31
1980 . . . . . . . . . 112,651 30,384 4,734 35,117 3.2 31
1985 . . . . . . . . . 120,437 32,763 3,874 36,636 3.3 30
1990 . . . . . . . . . 133,004 35,255 4,204 39,459 3.4 30
1995 . . . . . . . . . 140,798 37,364 5,731 43,096 3.3 31
2000 . . . . . . . . . 154,703 38,556 6,606 45,162 3.4 29
2005 . . . . . . . . . 159,034 39,961 8,172 48,133 3.3 30
2010 . . . . . . . . . 157,063 43,440 9,958 53,398 2.9 34
2011 . . . . . . . . . 158,604 44,388 10,428 54,816 2.9 35
2012 . . . . . . . . . 160,763 45,377 10,799 56,176 2.9 35
2013 . . . . . . . . . 163,086 46,517 10,954 57,471 2.8 35
2014 . . . . . . . . . 165,461 47,603 10,971 58,574 2.8 35
2015 . . . . . . . . . 168,169 48,663 10,881 59,543 2.8 35
2016 . . . . . . . . . 170,687 49,811 10,728 60,539 2.8 35
2017 . . . . . . . . . 172,744 50,962 10,517 61,480 2.8 36
2018 . . . . . . . . . 175,215 52,168 10,296 62,464 2.8 36
2019 . . . . . . . . . 176,506 53,508 10,063 63,570 2.8 36
2020 . . . . . . . . . 174,479 54,843 9,844 64,686 2.7 37
2021 . . . . . . . . . 179,256 55,546 9,486 65,032 2.8 36
Intermediate:
2022 . . . . . . . . . 182,300 56,586 9,103 65,689 2.8 36
2025 . . . . . . . . . 183,809 60,687 8,926 69,613 2.6 38
2030 . . . . . . . . . 186,359 67,361 9,465 76,826 2.4 41
2035 . . . . . . . . . 188,698 71,872 9,810 81,682 2.3 43
2040 . . . . . . . . . 190,509 74,163 10,425 84,588 2.3 44
63
Actuarial Estimates
Table IV.B3.Covered Workers and Beneficiaries, Calendar Years 1945-2100 (Cont.)
OASDI
Beneficiaries b (in thousands) Covered beneficiaries
Covered workers per per 100
workers a OASDI covered
Calendar year (in thousands) OASI DI OASDIc beneficiary workers
Intermediate (Cont.):
2045 . . . . . . . . . 192,949 75,112 11,354 86,465 2.2 45
2050 . . . . . . . . . 196,372 76,576 12,009 88,585 2.2 45
2055 . . . . . . . . . 200,215 78,811 12,489 91,300 2.2 46
2060 . . . . . . . . . 204,245 82,062 12,613 94,675 2.2 46
2065 . . . . . . . . . 208,016 85,175 12,784 97,959 2.1 47
2070 . . . . . . . . . 211,599 88,268 12,976 101,245 2.1 48
2075 . . . . . . . . . 215,301 91,422 13,037 104,458 2.1 49
2080 . . . . . . . . . 219,668 93,560 13,193 106,753 2.1 49
2085 . . . . . . . . . 224,955 94,554 13,503 108,057 2.1 48
2090 . . . . . . . . . 230,862 94,908 14,150 109,058 2.1 47
2095 . . . . . . . . . 236,829 96,295 14,749 111,043 2.1 47
2100 . . . . . . . . . 242,393 98,979 15,168 114,147 2.1 47
Low-cost:
2022 . . . . . . . . . 182,867 56,577 9,093 65,671 2.8 36
2025 . . . . . . . . . 185,650 60,600 8,683 69,282 2.7 37
2030 . . . . . . . . . 189,850 67,017 8,369 75,386 2.5 40
2035 . . . . . . . . . 193,237 70,871 8,178 79,049 2.4 41
2040 . . . . . . . . . 196,352 72,490 8,407 80,897 2.4 41
2045 . . . . . . . . . 201,229 72,732 9,018 81,751 2.5 41
2050 . . . . . . . . . 207,756 73,526 9,463 82,989 2.5 40
2055 . . . . . . . . . 214,885 75,209 9,810 85,018 2.5 40
2060 . . . . . . . . . 222,174 77,899 9,919 87,818 2.5 40
2065 . . . . . . . . . 229,252 80,457 10,105 90,562 2.5 40
2070 . . . . . . . . . 236,460 82,969 10,350 93,319 2.5 39
2075 . . . . . . . . . 244,398 85,468 10,557 96,025 2.5 39
2080 . . . . . . . . . 253,726 86,966 10,880 97,846 2.6 39
2085 . . . . . . . . . 264,612 87,403 11,410 98,812 2.7 37
2090 . . . . . . . . . 276,253 87,847 12,237 100,084 2.8 36
2095 . . . . . . . . . 287,594 90,396 12,920 103,316 2.8 36
2100 . . . . . . . . . 298,332 94,717 13,434 108,152 2.8 36
High-cost:
2022 . . . . . . . . . 178,934 56,598 9,116 65,714 2.7 37
2025 . . . . . . . . . 180,423 60,807 9,266 70,073 2.6 39
2030 . . . . . . . . . 183,166 67,830 10,496 78,325 2.3 43
2035 . . . . . . . . . 184,640 73,199 11,483 84,681 2.2 46
2040 . . . . . . . . . 185,211 76,475 12,445 88,920 2.1 48
2045 . . . . . . . . . 184,997 78,534 13,662 92,195 2.0 50
2050 . . . . . . . . . 184,913 81,103 14,504 95,607 1.9 52
2055 . . . . . . . . . 184,922 84,294 15,092 99,385 1.9 54
2060 . . . . . . . . . 185,121 88,285 15,172 103,457 1.8 56
2065 . . . . . . . . . 184,940 92,074 15,246 107,320 1.7 58
2070 . . . . . . . . . 184,252 95,887 15,247 111,134 1.7 60
2075 . . . . . . . . . 183,085 99,703 14,978 114,681 1.6 63
2080 . . . . . . . . . 181,859 102,501 14,675 117,176 1.6 64
2085 . . . . . . . . . 180,977 103,916 14,393 118,309 1.5 65
2090 . . . . . . . . . 180,511 103,807 14,417 118,224 1.5 65
2095 . . . . . . . . . 180,311 103,167 14,655 117,822 1.5 65
2100 . . . . . . . . . 180,102 103,022 14,778 117,799 1.5 65
a Workers who are paid at some time during the year for employment on which OASDI taxes are due.
b Beneficiaries with monthly benefits in current-payment status as of June 30.
c This column is the sum of OASI and DI beneficiaries. A small number of beneficiaries receive benefits
from both funds.
Notes:
1. The number of beneficiaries does not include uninsured individuals who received benefits under
section 228 of the Social Security Act. The General Fund of the Treasury reimbursed the trust funds for the
costs of most of these individuals.
2. Historical covered worker and beneficiary data are subject to revision.
3. Components may not sum to totals because of rounding.
64
Long-Range Estimates
The effect of the demographic shift under the three alternatives on the
OASDI cost rates is clear when one considers the projected number of
OASDI beneficiaries per 100 covered workers. Compared to the 2021 level
of 36 beneficiaries per 100 covered workers, the Trustees project that this
ratio rises to 44 by 2038 under the intermediate assumptions because the
growth in beneficiaries greatly exceeds the growth in workers. This projected
ratio continues to rise through 2078 and then generally declines, reaching 47
under the intermediate assumptions by 2100. Under the high-cost assump-
tions, this ratio generally rises to 65 by 2100. Under the low-cost assump-
tions, this ratio rises to 41 by 2038 and then generally declines, reaching 36
by 2100. Figure IV.B2 shows beneficiaries per 100 covered workers.
For each alternative, the curve in figure IV.B2 is strikingly similar to the cor-
responding cost-rate curve in figure IV.B1. This similarity emphasizes the
extent to which the cost rate is determined by the age distribution of the pop-
ulation. The cost rate is essentially the product of the number of beneficiaries
and their average benefit, divided by the product of the number of covered
workers and their average taxable earnings. For this reason, the pattern of the
annual cost rates is similar to that of the annual ratios of beneficiaries to
workers.
Figure IV.B2.Number of OASDI Beneficiaries Per 100 Covered Workers
100
90
80
Historical Projected
70 III
60
50 II
40
30 I
20
10
0
1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Table IV.B3 also shows the number of covered workers per OASDI benefi-
ciary, which was about 2.8 for 2021. Under the intermediate assumptions,
65
Actuarial Estimates
this ratio declines generally throughout the long-range period, reaching 2.3
for 2038 and 2.1 by 2100. Under the low-cost assumptions, this ratio
declines to 2.4 for 2038, then generally rises to 2.8 by 2100. Under the high-
cost assumptions, this ratio decreases to 1.5 by 2100.
3. Trust Fund Ratios and Test of Long-Range Close Actuarial Balance
Trust fund ratios are critical indicators of the adequacy of the financial
resources of the Social Security program. The trust fund ratio for a year is the
amount of asset reserves in a fund at the beginning of a year expressed as a
percentage of the cost for the year. Under present law, the OASI and DI Trust
Funds do not have the authority to borrow other than in the form of advance
tax transfers, which are limited to expected taxes for the current calendar
month. If reserves held in either trust fund become depleted during a year,
and continuing revenue falls short of the cost of scheduled benefits, then full
scheduled benefits would not be payable on a timely basis. For this reason,
the trust fund ratio is a critical financial measure.
The trust fund ratio serves an additional important purpose in assessing the
actuarial status of the program. If the projected trust fund ratio is positive
throughout the period and is either level or increasing at the end of the
period, then projected adequacy for the long-range period is likely to con-
tinue for subsequent reports. Under these conditions, the program has
achieved sustainable solvency.
Table IV.B4 shows the Trustees projections of trust fund ratios by alterna-
tive, without regard to advance tax transfers that would be effected, for the
separate and combined OASI and DI Trust Funds. The table also shows the
years of trust fund reserve depletion and the percentage of scheduled benefits
that would be payable thereafter, by alternative.
Under the intermediate assumptions, the OASI trust fund ratio is projected to
decline from 251 percent at the beginning of 2022 until the trust fund
reserves become depleted in 2034 (one year later than projected in last years
report), at which time 77 percent of scheduled benefits would be payable.
The DI Trust Fund remains solvent throughout the long-range period, com-
pared to a depletion date of 2057 in last years report. The DI trust fund ratio
increases from 68 percent at the beginning of 2022 to a peak of 231 percent
in 2043. After 2043, the DI trust fund ratio declines throughout the remain-
der of the long-range period, reaching 47 percent in 2097. The change in
reserve depletion year for the OASI Trust Fund to 2034, compared to 2033 in
last years report, is due primarily to (1) lower cost as a percentage of taxable
payroll over several years in the near-term, and (2) higher projected revenue
from taxation of benefits. The change from the DI reserve depletion year of
2057 projected in last years report to 75-year solvency of the DI program in
66
Long-Range Estimates
this years report occurs primarily because of (1) the reduction in the
assumed ultimate disability incidence rate, from 5.0 to 4.8 per 1,000
exposed, and (2) changes in the near-term assumed disability incidence rates.
Under the intermediate assumptions, the trust fund ratio for the combined
OASI and DI Trust Funds declines from 230 percent at the beginning of
2022 until the combined fund reserves become depleted early in 2035 (one
year later than projected in last years report), at which time 80 percent of
scheduled benefits would be payable.
Under the low-cost assumptions, the trust fund ratio for the DI program
increases from 2022 throughout the remainder of the projection period, from
68 percent at the beginning of 2022 to the extremely high level of
3,359 percent for 2097. For the OASI program, the trust fund ratio declines
steadily, from 251 percent for 2022 until the reserves become depleted in
2039, at which time 88 percent of scheduled benefits would be payable. For
the combined OASDI program, the trust fund ratio declines from 230 percent
for 2022 until the combined fund reserves become depleted in 2069. How-
ever, the trust funds would have sufficient income by the end of 2088 to per-
mit full payment of scheduled benefits thereafter and also to pay in arrears
the temporary shortfalls between 2069 and 2088. By 2089, trust fund
reserves become positive and the trust fund ratio increases thereafter, to a
ratio of 55 percent in 2097. Because the DI trust fund ratio is positive
throughout the projection period and increasing at the end of the period,
under the low-cost assumptions, only the DI program achieves sustainable
solvency.
Under the high-cost assumptions, the OASI trust fund ratio declines from
251 percent for 2022 until reserves become depleted in 2031, at which time
69 percent of scheduled benefits would still be payable. The DI trust fund
ratio declines from 71 percent for 2023 until the reserves become depleted in
2032. At that time, 88 percent of scheduled benefits would still be payable.
The combined OASI and DI trust fund ratio declines from 229 percent for
2022 until reserves become depleted in 2031, at which time 72 percent of
scheduled benefits would still be payable.
The Trustees project trust fund reserve depletion within the 75-year projec-
tion period for the OASI Trust Fund under the low-cost, intermediate, and
high-cost assumptions, and for the DI Trust Fund under the high-cost
assumptions. It is therefore very likely that lawmakers will need to increase
income, reduce program costs, or both, in order to maintain solvency for the
OASI Trust Fund. The stochastic projections discussed in appendix E sug-
gest that OASI and combined OASI and DI Trust Fund reserve depletion is
highly probable before mid-century.
67
Actuarial Estimates
In the 2021 report, the Trustees projected that the combined trust fund
reserves would become depleted in 2031 and 2034 under the high-cost and
intermediate assumptions, respectively, and would become temporarily
depleted between 2061 and 2092 under the low-cost assumptions.
Table IV.B4.Trust Fund Ratios, Calendar Years 2022-2100a
[In percent]
Intermediate Low-cost High-cost
Calendar
year OASI DI OASDI OASI DI OASDI OASI DI OASDI
2022 . . . . . . . . . . . . . 251 68 230 251 68 230 251 67 229
2023 . . . . . . . . . . . . . 228 75 211 227 77 210 227 71 209
2024 . . . . . . . . . . . . . 208 85 194 209 92 196 204 70 188
2025 . . . . . . . . . . . . . 188 93 177 191 108 182 180 68 167
2026 . . . . . . . . . . . . . 167 100 160 173 127 168 155 63 144
2027 . . . . . . . . . . . . . 147 107 143 157 149 157 130 56 122
2028 . . . . . . . . . . . . . 127 114 126 142 177 146 105 47 98
2029 . . . . . . . . . . . . . 107 123 109 128 211 136 79 38 74
2030 . . . . . . . . . . . . . 87 134 91 114 251 127 52 28 49
2031 . . . . . . . . . . . . . 66 145 74 101 297 118 25 18 24
2035 . . . . . . . . . . . . . b 189 3 52 497 91 b b b
2040 . . . . . . . . . . . . . b 227 b b 738 64 b b b
2045 . . . . . . . . . . . . . b 228 b b 929 44 b b b
2050 . . . . . . . . . . . . . b 210 b b 1,118 32 b b b
2055 . . . . . . . . . . . . . b 183 b b 1,316 25 b b b
2060 . . . . . . . . . . . . . b 158 b b 1,563 17 b b b
2065 . . . . . . . . . . . . . b 138 b b 1,821 8 b b b
2070 . . . . . . . . . . . . . b 120 b b 2,086 b b b b
2075 . . . . . . . . . . . . . b 105 b b 2,387 b b b b
2080 . . . . . . . . . . . . . b 98 b b 2,684 b b b b
2085 . . . . . . . . . . . . . b 93 b b 2,930 b b b b
2090 . . . . . . . . . . . . . b 81 b b 3,080 10 b b b
2095 . . . . . . . . . . . . . b 58 b b 3,267 42 b b b
2100 . . . . . . . . . . . . . b 30 b b 3,511 73 b b b
Trust fund reserves
permanently
become
depleted in . . . . . . 2034 c 2035 2039 c d 2031 2032 2031
Payable benefits as
percent of sched-
uled benefits:
At the time of
permanent
reserve
depletion . . . . . 77 c 80 88 c d 69 88 72
For 2096 . . . . . 72 c 74 100 c d 46 66 48
a Benefit payments scheduled to be paid on January 3 are actually paid on December 31 as required by the
statutory provision for early delivery of benefit payments when the normal payment delivery date is a Satur-
day, Sunday, or legal public holiday. For comparability with the values for historical years and the projec-
tions in this report, all trust fund ratios reflect the 12 months of benefits scheduled for payment each year.
b Trust fund reserves would be depleted at the beginning of this year.
c Trust fund reserves would not be depleted within the projection period.
d Trust fund reserves would be depleted for a temporary period, and return to positive levels before the end
of the period.
Note: The definition of trust fund ratio appears in the Glossary. The ratios shown for the combined trust
funds for years after reserve depletion of either the DI or OASI Trust Fund are hypothetical.
68
Long-Range Estimates
Since 2013, when the Trustees modified the test of long-range close actuarial
balance, the standard for each trust fund requires meeting two conditions:
(1) the test of short-range financial adequacy is satisfied; and (2) the trust
fund ratios stay above zero throughout the 75-year projection period, allow-
ing scheduled benefits to be paid in a timely manner throughout the period.
Both the long-range test and the short-range test are applied based on the
intermediate set of assumptions. As discussed in section IV.A, the DI Trust
Fund passes the test of short-range financial adequacy because the trust fund
ratio, while below 100 percent at the beginning of the projection period,
reaches 100 percent within 5 years and stays above 100 percent throughout
the remainder of the 10-year period. The OASI and combined OASI and DI
Trust Funds fail the test of short-range financial adequacy because the trust
fund ratios drop below 100 percent by the end of the 10-year period. Under
the intermediate assumptions, the OASI Trust Fund reserves become
depleted in 2034, DI Trust Fund reserves stay positive throughout the 75-
year period, and the combined OASI and DI Trust Fund reserves become
depleted in 2035. Therefore, the OASI and combined OASI and DI Trust
Funds fail the test of long-range close actuarial balance, and the DI program
passes the test of long-range close actuarial balance.
Figure IV.B3 illustrates the trust fund ratios for the separate OASI and DI
Trust Funds for each of the alternative sets of assumptions. DI Trust Fund
status is more uncertain than OASI Trust Fund status because there is a high
degree of uncertainty associated with future disability prevalence. A graph of
the trust fund ratios for the combined trust funds appears in figure II.D6.
69
Actuarial Estimates
Figure IV.B3.Long-Range OASI and DI Trust Fund Ratios
[Asset reserves as a percentage of annual cost]
1,000%
Historical Projected
800%
I
600%
400% OASI
DI
200%
II
III
0% II I
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
4. Summarized Income Rates, Summarized Cost Rates, and Actuarial
Balances
Summarized values for the full 75-year period are useful in analyzing the
programs long-range financial adequacy over the period as a whole, both
under present law and under proposed modifications to the law. All annual
amounts included in a summarized value are present-value discounted to the
valuation date. It is important to note that the actuarial balance indicates the
solvency status of the fund only for the very end of the period.
Table IV.B5 presents summarized income rates, summarized cost rates, and
actuarial balances for 25-year, 50-year, and 75-year valuation periods. Sum-
marized income rates are the sum of the present value of non-interest income
for a period (which includes scheduled payroll taxes, the projected income
from the taxation of scheduled benefits, and reimbursements from the Gen-
eral Fund of the Treasury) and the starting trust fund asset reserves,
expressed as a percentage of the present value of taxable payroll over the
period. Under current law, the total OASDI payroll tax rate will remain at
12.4 percent in the future. In contrast, the Trustees expect income from taxa-
tion of benefits, expressed as a percentage of taxable payroll, to increase in
most years of the long-range period for the reasons discussed on page 152.
Summarized cost rates are the sum of the present value of cost for a period
70
Long-Range Estimates
(which includes scheduled benefits, administrative expenses, net interchange
with the Railroad Retirement program, and payments for vocational rehabili-
tation services for disabled beneficiaries) and the present value of the cost of
reaching a target trust fund of 100 percent of annual cost at the end of the
period, expressed as a percentage of the present value of taxable payroll over
the period.
The actuarial balance for a valuation period is equal to the difference
between the summarized income rate and the summarized cost rate for the
period. An actuarial balance of zero for any period indicates that cost for the
period could be met for the period as a whole (but not necessarily at all
points within the period), with a remaining trust fund reserve at the end of
the period equal to 100 percent of the following years cost. A negative actu-
arial balance for a period indicates that the present value of income to the
program plus the existing trust fund is less than the present value of the cost
of the program plus the cost of reaching a target trust fund reserve of
one years cost by the end of the period. Generally, a trust fund is deemed to
be adequately financed for a period if the actuarial balance is zero or posi-
tive, meaning that the reserves at the end of the period are at least equal to
annual cost. Note that solvency is possible with a small negative actuarial
balance where reserves are still positive. 1
Table IV.B5 contains summarized rates for the intermediate, low-cost, and
high-cost assumptions. The low-cost and high-cost assumptions define a
wide range of possibilities. Financial outcomes as good as the low-cost sce-
nario or as bad as the high-cost scenario are unlikely to occur.
For the 25-year valuation period, the OASDI program has an actuarial bal-
ance of -0.34 percent of taxable payroll under the low-cost assumptions,
-2.24 percent under the intermediate assumptions, and -4.61 percent under
the high-cost assumptions. These balances indicate that the program is not
adequately financed for the 25-year valuation period under any of these three
sets of assumptions.
For the 50-year valuation period, the OASDI program has actuarial balances
of -0.27 percent under the low-cost assumptions, -3.02 percent under the
intermediate assumptions, and -6.68 percent under the high-cost assump-
1 A program is solvent over any period for which the trust fund maintains a positive level of asset reserves.
In contrast, the actuarial balance for a period includes the cost of having a target fund equal to 100 percent of
the following years cost at the end of the period. Therefore, if a program ends the period with reserves that
are positive but not sufficient to cover the following years costs, it will be solvent at the end of the period
and yet still have a small negative actuarial balance for that period.
71
Actuarial Estimates
tions. These actuarial balances mean that the OASDI program is not ade-
quately financed for the 50-year valuation period under any of these three
sets of assumptions.
For the entire 75-year valuation period, the combined OASDI program has
actuarial balances of -0.07 percent of taxable payroll under the low-cost
assumptions, -3.42 percent under the intermediate assumptions, and
-8.09 percent under the high-cost assumptions. These balances indicate that
the combined OASDI program is not adequately financed for the 75-year
valuation period under any of these three sets of assumptions.
Assuming the intermediate assumptions accurately capture future demo-
graphic and economic trends, solvency for the program over the next
75 years could be restored using a variety of approaches. For example, reve-
nue could be increased in a manner equivalent to an immediate and perma-
nent increase in the combined Social Security payroll tax rate from
12.40 percent to 15.64 percent (a relative increase of 26.1 percent), 1 cost
could be reduced in a manner equivalent to an immediate and permanent
reduction in scheduled benefits of 20.3 percent, or some combination of
approaches could be used.
However, eliminating the actuarial deficit for the next 75-year valuation
period requires raising payroll taxes or lowering benefits by more than is
required just to achieve solvency, because the actuarial deficit includes the
cost of attaining a target trust fund equal to 100 percent of annual program
cost by the end of the period. The actuarial deficit could be eliminated for the
75-year period by increasing revenue in a manner equivalent to an immediate
and permanent increase in the combined payroll tax from 12.40 percent to
15.83 percent (a relative increase of 27.7 percent), 2 reducing cost in a man-
ner equivalent to an immediate reduction in scheduled benefits of
21.2 percent, or some combination of approaches could be used.
Under the intermediate assumptions, the OASDI program has large annual
deficits toward the end of the long-range period that reach 4.25 percent of
payroll for 2096 (see table IV.B1). These large deficits indicate that annual
cost continues to exceed non-interest income after 2096, so continued ade-
quate financing would require larger changes than those needed to maintain
solvency for the 75-year period. Over the period extending through the
1 The 3.24 percentage point increase in the payroll tax rate required to achieve 75-year solvency differs
somewhat from the 3.42 percent actuarial deficit. This is primarily because the rate increase required to
achieve 75-year solvency reflects a zero trust fund reserve at the end of the period, whereas the 3.42 percent
actuarial deficit incorporates an ending trust fund reserve equal to one years cost. While such an increase in
the payroll tax rate would cause some behavioral changes in earnings and ensuing changes in benefit levels,
such changes are not included in these calculations because they are assumed to have roughly offsetting
effects on OASDI actuarial status over the 75-year long-range period as a whole.
2 The calculation of the payroll tax rate increase required to eliminate the actuarial deficit also does not
include the effects of behavioral changes, because they are assumed to have roughly offsetting effects.
72
Long-Range Estimates
infinite horizon, the actuarial deficit is 4.5 percent of payroll under the inter-
mediate assumptions.
Table IV.B5.Components of Summarized Income Rates and Cost Rates,
Calendar Years 2022-2096
[As a percentage of taxable payroll]
Summarized income rate Summarized cost rate
Beginning Ending
Non-interest asset target Actuarial
Valuation period income reservesa Total Costa funda Total balance
OASI:
Intermediate:
2022-46. . . . . 11.39 1.12 12.51 14.27 0.58 14.84 -2.33
2022-71. . . . . 11.46 .60 12.06 14.81 .28 15.08 -3.02
2022-96. . . . . 11.50 .44 11.93 15.18 .16 15.34 -3.41
Low-cost:
2022-46. . . . . 11.30 .99 12.29 12.60 .50 13.11 -.82
2022-71. . . . . 11.31 .51 11.82 12.36 .23 12.59 -.77
2022-96. . . . . 11.31 .35 11.66 12.11 .14 12.25 -.59
High-cost:
2022-46. . . . . 11.51 1.30 12.81 16.36 .67 17.03 -4.23
2022-71. . . . . 11.65 .74 12.39 18.11 .34 18.45 -6.06
2022-96. . . . . 11.75 .56 12.32 19.53 .20 19.73 -7.41
DI:
Intermediate:
2022-46. . . . . 1.82 .04 1.86 1.70 .07 1.78 .09
2022-71. . . . . 1.83 .02 1.85 1.81 .03 1.85 b
2022-96. . . . . 1.83 .02 1.85 1.84 .02 1.86 -.01
Low-cost:
2022-46. . . . . 1.82 .04 1.85 1.32 .05 1.38 .48
2022-71. . . . . 1.82 .02 1.84 1.32 .02 1.34 .50
2022-96. . . . . 1.82 .01 1.83 1.30 .02 1.32 .52
High-cost:
2022-46. . . . . 1.83 .05 1.88 2.16 .10 2.26 -.38
2022-71. . . . . 1.84 .03 1.87 2.44 .04 2.48 -.62
2022-96. . . . . 1.84 .02 1.86 2.52 .02 2.54 -.68
OASDI:
Intermediate:
2022-46. . . . . 13.22 1.16 14.38 15.97 .65 16.62 -2.24
2022-71. . . . . 13.29 .62 13.91 16.62 .31 16.93 -3.02
2022-96. . . . . 13.33 .45 13.78 17.02 .18 17.20 -3.42
Low-cost:
2022-46. . . . . 13.11 1.03 14.14 13.93 .56 14.48 -.34
2022-71. . . . . 13.13 .53 13.66 13.67 .25 13.93 -.27
2022-96. . . . . 13.13 .36 13.50 13.41 .15 13.56 -.07
High-cost:
2022-46. . . . . 13.34 1.34 14.69 18.52 .77 19.29 -4.61
2022-71. . . . . 13.49 .76 14.25 20.56 .38 20.93 -6.68
2022-96. . . . . 13.60 .58 14.18 22.05 .22 22.27 -8.09
a Benefit payments scheduled to be paid on January 3 are actually paid on December 31 as required by the
statutory provision for early delivery of benefit payments when the normal payment delivery date is a Satur-
day, Sunday, or legal public holiday. For comparability with the values for historical years and the projec-
tions in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for
payment each year.
b Between 0 and 0.005 percent of taxable payroll.
Note: Components may not sum to totals because of rounding.
73
Actuarial Estimates
5. Open-Group Unfunded Obligation
Consistent with practice since 1965, this report focuses on a 75-year open-
group valuation to evaluate the long-run financial status of the OASDI pro-
gram. The open-group valuation includes non-interest income and cost for
past, current, and future participants through the year 2096. The open-group
unfunded obligation measures the adequacy of financing over the period as a
whole for a program financed on a pay-as-you-go basis. On this basis, pay-
roll taxes and scheduled benefits for all participants are included through
2096.
The open-group unfunded obligation increased from $19.8 trillion shown in
last year's report to $20.4 trillion in this report. If there had been no changes
in starting values, assumptions, laws, or methods for this report, then the
open-group unfunded obligation would have increased to $20.6 trillion
solely due to the change in the valuation period. This expected increase in
the unfunded obligation occurs because: (1) the unfunded obligation is now
discounted to January 1, 2022, rather than to January 1, 2021, which tends to
increase the unfunded obligation by the annual nominal interest rate; and
(2) the unfunded obligation now includes an additional year (2096). How-
ever, changes in the law, assumptions, methods, and starting values resulted
in a net $0.1 trillion decrease in the unfunded obligation.
The 75-year unfunded obligation is equivalent to 3.24 percent of OASDI tax-
able payroll and 1.1 percent of GDP for 2022-96. 1 These percentages were
3.35 and 1.2, respectively, for last years report. The 75-year unfunded obli-
gation as a percentage of taxable payroll is less than the actuarial deficit,
because the unfunded obligation excludes the cost of having an ending target
trust fund value.
The actuarial deficit was 3.54 percent of payroll in last years report, and was
expected to increase to a deficit of 3.59 percent of payroll solely due to the
change in the valuation period. Changes in the law, assumptions, methods,
and starting values combined to account for a 0.17 percentage point decrease
(improvement) in the actuarial deficit to 3.42 percent of payroll. The actuar-
ial deficit is 1.2 percent of GDP in this years report, the same as in last
years report.
As mentioned above, the open-group unfunded obligation expressed in dol-
lars is less than it would have been if only the valuation period had been
1 The present value of taxable payroll for 2022-96 is $631.6 trillion. The present value of GDP for 2022-96
is $1,817.7 trillion. In last years report, the present value of taxable payroll for 2021-95 was $591.5 trillion
and the present value of GDP was $1,698.0 trillion.
74
Long-Range Estimates
changed. This net decrease occurred for a variety of reasons described in the
next section, including a reduction in near-term and ultimate assumed dis-
ability incidence rates and changes in economic data and assumptions.
Table IV.B6 presents the components and the calculation of the long-range
(75-year) actuarial balance under the intermediate assumptions. The present
value of future cost less future non-interest income over the long-range
period, minus the amount of trust fund asset reserves at the beginning of the
projection period, is $20.4 trillion for the OASDI program. This amount is
the 75-year open-group unfunded obligation (see row H). The actuarial
deficit (which is the negative of the actuarial balance) combines this
unfunded obligation with the present value of the ending target trust fund and
expresses the total as a percentage of the present value of the taxable payroll
for the period. The present value of future non-interest income minus cost,
plus starting trust fund reserves, minus the present value of the ending target
trust fund, is -$21.6 trillion for the OASDI program.
Table IV.B6.Components of 75-Year Actuarial Balance and Unfunded Obligation
Under Intermediate Assumptions
Item OASI DI OASDI
Present value as of January 1, 2022 (in billions):
A. Payroll tax revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $66,872 $11,356 $78,227
B. Reimbursements from general revenue . . . . . . . . . . . . . . . . . . . a a a
C. Taxation of benefits revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,738 206 5,944
D. Non-interest income (A + B + C) . . . . . . . . . . . . . . . . . . . . . . . 72,610 11,562 84,172
E. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95,868 11,605 107,473
F. Cost minus non-interest income (E - D) . . . . . . . . . . . . . . . . . . 23,258 43 23,301
G. Trust fund asset reserves at start of period . . . . . . . . . . . . . . . . 2,753 99 2,852
H. Open-group unfunded obligation (F - G) . . . . . . . . . . . . . . . . . 20,505 -56 20,449
I. Ending target trust fundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,026 128 1,154
J. Income minus cost, plus reserves at start of period, minus
ending target trust fund (D - E + G - I = - H - I) . . . . . . . . . . . . -21,531 -72 -21,603
K. Taxable payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 631,589 631,589 631,589
Percent of taxable payroll:
Actuarial balance (100 × J ÷ K) . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.41 -.01 -3.42
a Less than $0.5 billion.
b The calculation of the actuarial balance includes the cost of accumulating a target trust fund reserve equal
to 100 percent of annual cost at the end of the period.
Note: Components may not sum to totals because of rounding.
Consideration of summary measures alone (such as the actuarial balance and
open-group unfunded obligation) for a 75-year period can lead to incorrect
perceptions and to policy prescriptions that do not achieve sustainable sol-
vency. These concerns can be addressed by considering the trend in trust
fund ratios toward the end of the period. (See the discussion of sustainable
solvency beginning on page 53.)
Another measure of trust fund finances, discussed in appendix F, is the
infinite horizon unfunded obligation, which takes account of all annual bal-
ances, even those after 75 years. The extension of the time period past
75
Actuarial Estimates
75 years assumes that the current-law OASDI program and the demographic
and economic trends used for the 75-year projection continue indefinitely.
This infinite horizon unfunded obligation is estimated to be 4.5 percent of
taxable payroll or 1.4 percent of GDP. These percentages were 4.6 and 1.4,
respectively, for last years report. Of course, the degree of uncertainty asso-
ciated with estimates increases substantially for years further in the future.
6. Reasons for Change in Actuarial Balance From Last Report
Table IV.B7 shows the effects of changes on the long-range actuarial balance
under the intermediate assumptions, by category, between last years report
and this report.
Table IV.B7.Reasons for Change in the 75-Year Actuarial Balance,
Based on Intermediate Assumptions
[As a percentage of taxable payroll]
Item OASI DI OASDI
Shown in last years report:
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.39 1.92 17.31
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54
Changes in actuarial balance due to changes in:
Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . .00 .00 .00
Valuation period a . . . . . . . . . . . . . . . . . . . . . . . . . . . . -.05 -.01 -.06
Demographic data and assumptions . . . . . . . . . . . . . . -.04 .00 -.04
Economic data and assumptions. . . . . . . . . . . . . . . . . .13 .00 .13
Disability data and assumptions . . . . . . . . . . . . . . . . . .00 .08 .07
Methods and programmatic data . . . . . . . . . . . . . . . . .01 .00 .01
Total change in actuarial balance . . . . . . . . . . . . . . . . . . .05 .07 .12
Shown in this report:
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.41 -.01 -3.42
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.34 1.86 17.20
a The change in the 75-year valuation period from last years report to this report means that the 75-year
actuarial balance now includes the relatively large negative annual balance for 2096. This change in the val-
uation period results in a larger long-range actuarial deficit. The actuarial deficit includes the trust fund
reserve at the beginning of the projection period.
Note: Components may not sum to totals because of rounding.
If the law, data, assumptions, and methods had all remained unchanged from
last years Trustees Report, the long-range OASDI actuarial balance would
have decreased (worsened) by 0.06 percent of taxable payroll solely due to
the change in the valuation period. However, as described below, projections
in this report also reflect new data and changes in law, assumptions, and
methods. These changes, including the change in the valuation period, com-
bine to increase (improve) the long-range OASDI actuarial balance by
0.12 percentage point, from -3.54 percent of taxable payroll in last years
report to -3.42 percent in this report.
76
Long-Range Estimates
Legislation/Regulation
Changes in law, regulations, and policy have a negligible effect on the long-
range OASDI actuarial balance.
Since the last report, there has been one change in policy that has a notable
effect on program operations but has a negligible effect on the long-range
actuarial balance. On July 16, 2021, pursuant to a United States District
Court order, the Department of Homeland Security stopped approving first-
time applications under the Deferred Action for Childhood Arrivals (DACA)
policy but continues to approve renewal applications. On September 10,
2021, the Administration appealed the District Court ruling. Changes in
DACA policy affect OASDI program operations because those who apply
for and receive deferred action status are eligible for work authorization,
which leads to additional workers covered by the OASDI program and
increased payroll tax revenue. The estimates presented in last years report
reflected the assumption that the DACA program would be maintained in
full, consistent with the Administrations intent. The estimates presented in
this years report continue to reflect the assumption that DACA will eventu-
ally be fully in effect. However, because of the court challenges, the esti-
mates now incorporate a roughly one-year delay in resuming approval of
new applications.
Valuation Period
As mentioned above, changing the 75-year valuation period from 2021
through 2095 for last years report to 2022 through 2096 for this report
decreases the projected long-range OASDI actuarial balance by 0.06 percent
of taxable payroll. This decrease occurs because (1) the negative annual bal-
ances after trust fund reserve depletion are now discounted to January 1,
2022, rather than to January 1, 2021, and (2) the relatively large negative
annual balance for 2096 is now included in this years 75-year projection
period. Note that the actuarial balance calculation includes trust fund
reserves at the beginning of the projection period. These reserves reflect the
programs net financial flows for all past years, including 2021, up to the
start of the valuation period.
Demographic Data and Assumptions
New demographic data and changes in demographic assumptions combine to
decrease (worsen) the long-range OASDI actuarial balance by 0.04 percent
of taxable payroll.
77
Actuarial Estimates
The ultimate demographic assumptions are unchanged for this years report.
However, updates to near-term demographic data and assumptions result in
significant changes in the long-range actuarial balance.
First, final birth data for calendar year 2020, the base year for the fertility
rate projections, indicate slightly lower rates than were assumed in last years
report for 2020. These updated data for the base year, when considered
alone, result in slightly lower projected birth rates during the transition
period to the ultimate level, decreasing the actuarial balance by 0.01 percent
of taxable payroll.
Second, updates to lawful permanent resident (LPR) immigration data and a
small revision to near-term LPR immigration assumptions to better reflect
the expected effects of the recovery from the pandemic combine to decrease
the actuarial balance by 0.01 percent of taxable payroll.
Finally, updates to historical population data and other-than-LPR immigra-
tion data combine to decrease the actuarial balance by 0.02 percent of tax-
able payroll.
Economic Data and Assumptions
New economic data and changes in economic assumptions, in combination,
increase the long-range OASDI actuarial balance by 0.13 percent of taxable
payroll.
The ultimate economic assumptions are unchanged for this years report.
However, updates to near-term economic data and assumptions result in sig-
nificant changes in the long-range actuarial balance.
An update to educational attainment data caused an increase in the long-
range actuarial balance of 0.01 percent of taxable payroll. The level of edu-
cational attainment affects the modeled labor force participation rates for
ages 55 and older for men and 50 and older for women; as the level of educa-
tional attainment rises, participation rates tend to increase.
The ultimate real interest rate assumption remains at 2.3 percent for this
years report. The real interest rates for calendar years 2021 through 2024 are
assumed to be negative in this years report, with a gradual rise to the ulti-
mate real interest rate after the economy has fully recovered. These real
interest rates are on average slightly higher for the short-range projection
period 2022-31 than they were in last years report for 2021-30, which
increases the actuarial balance by 0.02 percent of payroll.
The level of potential GDP is assumed to be about 1.1 percent higher than
the level projected in last years report for 2021 and later, reflecting the
stronger-than-expected recovery from the pandemic-induced recession and
78
Long-Range Estimates
the expectation of a permanent level shift in total economy labor productiv-
ity, compared to the assumption for last years report. This change increases
the actuarial balance by roughly 0.03 percent of taxable payroll.
Other changes to historical data and near-term economic assumptions com-
bine for a net increase in the actuarial balance of about 0.06 percent of tax-
able payroll. The pandemic and ensuing recession had a dramatic effect on
the economy in 2020. However, employment, earnings, and GDP recovered
much faster late in 2020, 2021, and early 2022 than had been assumed in last
years report.
Disability Data and Assumptions
New disability data and changes in disability assumptions combine to
increase the long-range OASDI actuarial balance by 0.07 percent of taxable
payroll.
Disabled-worker application and incidence rates dropped substantially from
2010 through 2019 before the pandemic and have fallen even further in 2020
and 2021 during the pandemic. Applications and incidence rates since 2013
have been well below expectations and are not consistent with an assumption
of a full rise back to longer-term past historical averages. Based on this expe-
rience, the Trustees reduced the ultimate disability incidence rate for this
report from 5.0 to 4.8 per thousand exposed. In addition, recent disability
data and changes to the near-term disability incidence assumptions have been
incorporated. These changes have direct effects on the number of disability
beneficiaries, increasing the actuarial balance by 0.06 percent of payroll.
These changes to the ultimate and near-term disability incidence assumptions
were incorporated into the labor force participation model, leading to an
additional increase in the long-range actuarial balance of 0.01 percent of tax-
able payroll. More specifically, the labor force model now uses this years
lower disability incidence assumptions and resulting lower disability preva-
lence projections. A decrease in disability prevalence increases the modeled
labor force participation and employment rates.
These new disability data and changes in assumptions are almost entirely
responsible for the change in the DI Trust Fund reserve depletion date, from
2057 in last years report to not becoming depleted over the next 75 years in
this years report.
Methods and Programmatic Data
The projections in this report also reflect several methodological improve-
ments and updates based on new program-specific data. These methodologi-
cal changes, programmatic data updates, and interactions combine to
79
Actuarial Estimates
increase the long-range OASDI actuarial balance by 0.01 percent of taxable
payroll. Descriptions of four significant methodological changes and pro-
grammatic data updates follow.
First, a methodological improvement was made to put more emphasis on
recent mortality data. To accomplish this, the weights for the most recent
years (2018 and 2019 for this report) in the regressions used to calculate the
starting rates of improvement and starting death rates were increased. This
change in methodology decreases the actuarial balance by 0.02 percent of
taxable payroll.
The second significant set of changes is related to the sample used for the
long-range model for projecting average benefit levels of retired-worker and
disabled-worker beneficiaries who become newly entitled for benefits. This
model uses a large sample of 10 percent of all newly entitled retired-worker
beneficiaries in a recent year. The sample used in last years report was for
worker beneficiaries newly entitled in 2017, while this years report uses the
results from worker beneficiaries newly entitled in 2018. This update to the
sample year by itself decreases the actuarial balance slightly. Other data
updates more than offset the effect of the change in sample year, resulting in
a combined increase in the actuarial balance of 0.01 percent of payroll.
Third, recent data and estimates provided by the Office of Tax Analysis at
the Department of the Treasury indicate higher near-term and ultimate levels
of revenue from income taxation of OASDI benefits than projected in last
years report. The increase in projected ratios of income tax on benefits to
benefit amounts increases the actuarial balance by 0.04 percent of taxable
payroll.
The fourth significant change is updating the post-entitlement benefit adjust-
ment factors based on new programmatic data. Post-entitlement factors are
used to account for changes in benefit levels, primarily due to differential
mortality by benefit level and earnings after benefit entitlement. This data
update decreases the actuarial balance by 0.02 percent of payroll.
In addition to these four significant methodological changes and program-
matic data updates, changes in starting levels and projected levels of OASI
and DI beneficiaries and benefit amounts over the first 10 years of the pro-
jection period, updating other programmatic data, other small methodologi-
cal improvements, and interactions among the various method changes and
updates to programmatic experience combine to have a negligible effect on
the long-range actuarial balance.
80
Long-Range Estimates
Figure IV.B4.OASDI Annual Balances: 2021 and 2022 Trustees Reports
[As a percentage of taxable payroll, under intermediate assumptions]
0%
-2%
-4%
2021 Report
2022 Report
-6%
2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Figure IV.B4 compares the annual balances for this report and the prior
years report for the combined OASDI program over the long-range (75-
year) projection period. The figure illustrates the annual effects of the
changes described earlier in this section.
The annual balances in this years report are higher (less negative) in all
75 years of the long-range projection period, primarily due to the changes in
economic factors and disability incidence rates described above. For the full
75-year projection period, the annual balances average 0.18 percentage point
higher in this years report. For 2096, the projected annual deficit is
4.25 percent of taxable payroll in this report, compared to 4.35 percent in last
year's report.
81
Assumptions and Methods
V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES
The future income and cost of the OASDI program will depend on many
demographic, economic, and program-specific factors. Trust fund income
will depend on how these factors affect the size and composition of the
working population as well as the level and distribution of earnings. Simi-
larly, program cost will depend on how these factors affect the size and com-
position of the beneficiary population as well as the general level of benefits.
The Trustees make basic assumptions for several of these factors based on
analysis of historical trends, historical conditions, and expected future condi-
tions. These factors include fertility, mortality, immigration, marriage,
divorce, productivity, inflation, average earnings, unemployment, real inter-
est rates, and disability incidence and termination. Other factors depend on
these basic assumptions. These other, often interdependent, factors include
total population, life expectancy, labor force participation, gross domestic
product, and program-specific factors. Each year, the Trustees reexamine
these assumptions and methods in light of new information and make appro-
priate revisions. The assumptions for this report were set by the middle of
February 2022.
Future levels of these factors and their interrelationships are inherently
uncertain. To address these uncertainties, this report uses three sets of
assumptions, designated as intermediate (alternative II), low-cost
(alternative I), and high-cost (alternative III). The intermediate set represents
the Trustees best estimate of the future course of the population and the
economy. With regard to the net effect on the actuarial status of the OASDI
program, the low-cost set is more optimistic and the high-cost set is more
pessimistic. The low-cost and high-cost sets of assumptions reflect signifi-
cant potential changes in the interrelationships among factors, as well as
changes in the values for individual factors.
While it is unlikely that all of the factors and interactions will differ in the
specified directions from the intermediate values, many combinations of
individual differences in the factors could have a similar overall effect. Out-
comes with overall long-range cost as low as the low-cost scenario or as high
as the high-cost scenario are very unlikely. This report also includes a section
on sensitivity analysis, where factors are changed one at a time (see
appendix D), and a section on stochastic projections, which provides a prob-
ability distribution of possible future outcomes, with most of the key factors
being varied around the intermediate alternative (see appendix E).
82
Demographic Assumptions and Methods
Readers should interpret the estimates based on the three sets of alternative
assumptions with care. These estimates are not specific predictions of the
future financial status of the OASDI program. Rather, they provide a reason-
able range of future income and cost.
All of the key demographic, economic, and program-specific assumptions
reach their long-range ultimate values within the next 25 years. For extrapo-
lations beyond the 75-year long-range period, the ultimate levels or trends
reached by the end of the 75-year period remain unchanged. The assumed
ultimate values represent average annual experience or growth rates. Actual
future values will exhibit fluctuations or cyclical patterns, as in the past.
At this time, there is no consensus on what the lasting effects of the COVID-
19 pandemic on long-term experience might be, if any. Given the unprece-
dented level of uncertainty, the Trustees have assumed that the pandemic will
have no net effect on the individual long-range ultimate assumptions. How-
ever, pandemic effects are reflected in the short-range (first 10-year) period,
as described in the remainder of this chapter.
The following sections briefly discuss the various assumptions and methods
used in making the estimates of trust fund actuarial status, which are the
focus of this report. 1 There are, of course, many interrelationships among
these factors that are important but are beyond the scope of this discussion.
A. DEMOGRAPHIC ASSUMPTIONS AND METHODS
This section of the report provides a brief overview of the demographic his-
torical data and the assumptions used for the projections.
1. Fertility Assumptions
Birth rates by single year of age, for girls and women aged 14 to 49, 2 are the
basis for the fertility assumptions. These rates apply to the total number of
women, across all marital statuses, in the midyear population at each age.
Table V.A1 displays the historical and projected total fertility rates. 3
1 Actuarial Studies published by the Office of the Chief Actuary, Social Security Administration, contain
further details about the assumptions, methods, and actuarial estimates. A complete list of available studies
may be found at www.ssa.gov/OACT/NOTES/actstud.html. This entire report, along with supplemental
year-by-year tables and additional documentation on assumptions and methods, may be found at
www.ssa.gov/OACT/TR/2022/.
2 Birth rates at age 14 include births to girls aged 14 and under, and birth rates at age 49 include births to
women aged 49 and over.
3 The total fertility rate may be interpreted as the average number of children that would be born to a woman
if she were to experience, at each age of her life, the birth rate observed in, or assumed for, a specified year,
and if she were to survive the entire childbearing period. A rate of about 2.1 would ultimately result in a
nearly constant population if immigration and emigration were both zero, and if death rates were to remain
at current levels.
83
Assumptions and Methods
Historically, birth rates in the United States have fluctuated widely. The total
fertility rate decreased from 3.31 children per woman at the end of World
War I (1918) to 2.15 during the Great Depression (1936). After 1936, the
total fertility rate rose to 3.68 in 1957 and then fell to 1.74 by 1976. After
1976, the total fertility rate rose above 2.00 by 1990, where it generally
remained through 2009, but it dropped below 1.90 for 2011 and has been at
relatively low levels since then. It reached an all-time low of 1.64 for 2020.
In last years report, the Trustees assumed that the COVID-19 pandemic
would affect birth rates in years 2021 through 2026, with a drop in fertility
rates in 2021 and 2022 that would be fully made up with elevated rates in
2024 through 2026. However, preliminary data indicate that, overall, fertility
rates for 2021 increased somewhat from 2020. For this years report, the
Trustees have assumed that the pandemic will not have any significant net
effect on fertility rates in either the near term or the long term.
The variations in the historical total fertility rate resulted from changes in
many factors, including social attitudes, economic conditions, birth-control
practices, and the racial/ethnic composition of the population. Since the
baby-boom era (1946-65), women have had higher educational attainment,
higher labor force participation, an older average age at first marriage, a
higher propensity to remain unmarried, and higher rates of divorce. All of
these factors are consistent with continued lower total fertility rates than
those experienced during the baby-boom era. Based on consideration of
these factors, the Trustees expect the ultimate total fertility rate to be rela-
tively close to the average level since the end of the baby-boom era. The
assumed ultimate total fertility rates are 2.20, 2.00, and 1.70 children per
woman for the low-cost, intermediate, and high-cost assumptions, respec-
tively. These are the same ultimate rates as those assumed for last years
report.
The 2022 Trustees Report continues the use of the cohort-based projection
approach that was first implemented in the 2021 Trustees Report. This
cohort-based approach results in a much longer transition to ultimate birth
rates from the current low birth rates than the period-based approach that was
used in the 2020 and prior Trustees Reports. The cohort-based approach also
assumes a more gradual shift to older ages of childbearing for birth cohorts
who have not yet reached age 49. For the intermediate assumptions, the pro-
jected total fertility rate gradually increases through the year the ultimate
value is reached (2056). The assumed low-cost and high-cost total fertility
rates trend away from the intermediate path, also reaching their ultimate lev-
els in 2056.
84
Demographic Assumptions and Methods
2. Mortality Assumptions
Mortality projections are developed by assuming ultimate average annual
percentage reductions in future mortality rates by age group and cause of
death. The assumptions are used to estimate future central death rates by age
group, sex, and cause of death. Adjustments were made to the death rates for
2020, 2021, 2022, and 2023 to account for the effects of the COVID-19 pan-
demic. Preliminary data for 2020 show that while the effects of the pandemic
led to significantly higher death rates for those aged 15 and older, the death
rates for those aged 1-14 were generally unaffected, and death rates for those
age 0 (children in their first year of life) were significantly lower. The table
below shows the multiplicative factors that were applied to the probabilities
of death that would have been projected in the absence of the pandemic.
Compared to the death rates used for last years report, these factors result in
higher total death rates in 2021 and 2022 and slightly lower total death rates
in 2023.
Year age 0 ages 1-14 ages 15-64 ages 65 and older
2020 0.890 1.000 1.161 1.161
2021 .960 1.040 1.195 1.175
2022 .990 1.010 1.059 1.047
2023 1.000 1.000 1.012 1.009
From the estimated central death rates, probabilities of death by single year
of age and sex were calculated. Projected death rates for years after 2023 are
unchanged from the levels that would have been projected in the absence of
the pandemic, under the assumption that increased deaths from the residual
effects of living through the pandemic (both physiological and psychologi-
cal) will be roughly offset by decreased deaths that instead happened sooner
(during the pandemic).
Historical death rates were calculated for years 1900 through 2019 for ages
below 65 (and for all ages for years prior to 1968) using data from the
National Center for Health Statistics (NCHS). 1 For ages 65 and over, final
Medicare data on deaths for years 1968 through 2018 and preliminary data
for 2019 were used. 2 Death rates by cause of death were produced for all
ages for years 1979-2019 using data from the NCHS.
1 These rates reflect NCHS data on deaths and Census estimates of population.
2 These rates reflect Medicare data on deaths and enrollments.
85
Assumptions and Methods
The total age-sex-adjusted death rate 1 declined at an average annual rate of
1.02 percent between 1900 and 2019. Between 1979 and 2019, the period for
which death rates were analyzed by cause, the total age-sex-adjusted death
rate, for all causes combined, declined at an average rate of 0.85 percent per
year.
Death rates have declined substantially in the U.S. since 1900, with rapid
declines over some periods and slow or no improvement over the other peri-
ods. Many factors are responsible for historical reductions in death rates,
including medical advances, increased availability of health-care services,
and improvements in sanitation and nutrition. Historical death rates generally
declined more slowly for older ages and more rapidly for children and
infants than for the rest of the population. Between 1900 and 2019, the age-
sex-adjusted death rate declined at an average rate of 0.78 percent per year
for ages 65 and over, and 2.97 percent per year for ages under 15.
Mortality assumptions differ for the low-cost, intermediate, and high-cost
scenarios. Throughout the projection period, the low-cost scenario contains
annual percentage reductions that are smaller than those in the intermediate
scenario, while those in the high-cost scenario are larger. The ultimate annual
percentage reductions for each of the three alternatives are unchanged from
last years report.
The trends in the annual reductions in central death rates were calculated for
the period from 2008 to 2019 for both the NCHS and Medicare data, by age
group, sex, and cause of death. 2 These trends are the starting reductions for
alternative II. For alternatives I and III, 50 and 150 percent of the starting
reductions are used, respectively. These annual reductions, by alternative, are
assumed to transition rapidly from the starting reductions until they reach the
ultimate annual percentage reductions assumed for 2046 and later.
Table V.A1 contains historical and projected age-sex-adjusted death rates for
the total population (all ages), for ages under 65, and for ages 65 and over.
Age-sex adjustment eliminates the effect of a changing distribution of popu-
lation by age and sex, allowing the pure effects of changes in death rates to
be observed. Under the intermediate assumptions, projected age-sex-adjusted
death rates are slightly lower than the rates in last years report after 2023.
These changes primarily result from increasing the weights for the most
recent years in the regressions used to calculate the starting rates of improve-
ment and starting death rates.
1 Based on the enumerated total population as of April 1, 2010, if that population were to experience the
death rates by age and sex for the selected year.
2 Cause of death is only available for the NCHS data.
86
Demographic Assumptions and Methods
The projected average annual rate of decline for the total age-sex-adjusted
death rate is about 0.49 percent, 0.97 percent, and 1.51 percent between 2021
and 2096 for alternatives I, II, and III, respectively. In keeping with the pat-
terns observed in the historical data, the assumed future rates of decline are
greater for younger ages than for older ages, but to a substantially lesser
degree than in the past. Accordingly, the projected age-sex-adjusted death
rates for ages 65 and over decline at average annual rates of about
0.48 percent, 0.90 percent, and 1.36 percent between 2021 and 2096 for
alternatives I, II, and III, respectively. The projected age-sex-adjusted death
rates for ages under 15 decline at average annual rates of about 0.49 percent,
1.50 percent, and 2.92 percent between 2021 and 2096 for alternatives I, II,
and III, respectively. It should be noted that these average annual rates of
decline between 2021 and 2096 are not directly comparable with the rates of
decline between 2020 and 2095 in last years report, because the 75-year
period used for last years report included the pandemic year of 2020, and
the death rate assumptions for 2021-23 were revised for this years report to
better reflect the current expected course of the pandemic.
Demographers express a wide range of views on the likely rate of future
decline in death rates. For example, some believe that the long-standing his-
torical tendency for mortality to decline more slowly at the oldest ages will
cease in the future. Others believe that biological factors, social factors, and
limitations on health care spending may slow future rates of decline in mor-
tality.
87
Assumptions and Methods
.
Table V.A1.Fertility and Mortality Assumptions,a
Calendar Years 1940-2100
Total Age-sex-adjusted death rate c
fertility per 100,000
Calendar year rateb Total Under 65 65 and over
Historical data:
1940 . . . . . . . . . 2.23 1,919.8 750.1 9,718.8
1945 . . . . . . . . . 2.42 1,716.6 674.8 8,662.9
1950 . . . . . . . . . 3.03 1,561.9 570.2 8,173.7
1955 . . . . . . . . . 3.50 1,453.8 508.2 7,758.4
1960 . . . . . . . . . 3.61 1,454.3 503.2 7,795.6
1965 . . . . . . . . . 2.88 1,428.8 495.2 7,653.9
1970 . . . . . . . . . 2.43 1,340.0 485.7 7,036.3
1975 . . . . . . . . . 1.77 1,204.8 426.6 6,393.6
1980 . . . . . . . . . 1.82 1,136.9 384.3 6,154.3
1985 . . . . . . . . . 1.83 1,081.0 353.3 5,932.9
1990 . . . . . . . . . 2.07 1,022.9 333.6 5,618.9
1995 . . . . . . . . . 1.98 1,002.7 317.9 5,568.6
2000 . . . . . . . . . 2.05 961.5 281.0 5,498.9
2005 . . . . . . . . . 2.06 901.9 270.7 5,110.3
2010 . . . . . . . . . 1.93 820.8 248.5 4,636.1
2011 . . . . . . . . . 1.89 820.7 249.2 4,631.3
2012 . . . . . . . . . 1.87 811.8 248.8 4,565.6
2013 . . . . . . . . . 1.85 812.4 249.6 4,564.6
2014 . . . . . . . . . 1.86 805.2 251.7 4,495.1
2015 . . . . . . . . . 1.85 815.4 255.3 4,549.7
2016 . . . . . . . . . 1.82 808.7 260.9 4,461.0
2017 . . . . . . . . . 1.76 812.8 261.6 4,487.7
2018 . . . . . . . . . 1.73 803.7 258.7 4,437.4
2019 . . . . . . . . . 1.70 d792.8 257.7 d4,360.2
2020 . . . . . . . . . 1.64 e924.4 e298.7 e5,096.0
2021 . . . . . . . . . e1.66 e935.6 e307.4 e5,123.7
Intermediate:
2025 . . . . . . . . . 1.75 768.2 254.0 4,196.3
2030 . . . . . . . . . 1.87 738.4 243.8 4,035.5
2035 . . . . . . . . . 1.93 708.5 232.6 3,881.3
2040 . . . . . . . . . 1.98 679.8 221.5 3,735.8
2045 . . . . . . . . . 2.00 652.7 210.8 3,599.1
2050 . . . . . . . . . 2.00 627.2 200.7 3,470.8
2055 . . . . . . . . . 2.00 603.2 191.2 3,350.4
2060 . . . . . . . . . 2.00 580.6 182.2 3,237.3
2065 . . . . . . . . . 2.00 559.4 173.7 3,131.1
2070 . . . . . . . . . 2.00 539.3 165.6 3,031.1
2075 . . . . . . . . . 2.00 520.5 158.0 2,936.9
2080 . . . . . . . . . 2.00 502.6 150.9 2,848.0
2085 . . . . . . . . . 2.00 485.8 144.1 2,764.2
2090 . . . . . . . . . 2.00 469.9 137.6 2,685.0
2095 . . . . . . . . . 2.00 454.8 131.6 2,610.1
2100 . . . . . . . . . 2.00 440.6 125.8 2,539.2
88
Demographic Assumptions and Methods
Table V.A1.Fertility and Mortality Assumptions,a
Calendar Years 1940-2100 (Cont.)
Total Age-sex-adjusted death rate c
fertility per 100,000
Calendar year rateb Total Under 65 65 and over
Low-cost:
2025 . . . . . . . . . 1.89 794.3 263.4 4,333.3
2030 . . . . . . . . . 2.06 785.4 261.4 4,279.2
2035 . . . . . . . . . 2.13 774.9 257.7 4,223.1
2040 . . . . . . . . . 2.18 764.1 253.7 4,167.1
2045 . . . . . . . . . 2.20 753.3 249.5 4,112.1
2050 . . . . . . . . . 2.20 742.6 245.3 4,058.0
2055 . . . . . . . . . 2.20 732.1 241.2 4,005.1
2060 . . . . . . . . . 2.20 721.9 237.2 3,953.4
2065 . . . . . . . . . 2.20 711.9 233.3 3,902.8
2070 . . . . . . . . . 2.20 702.1 229.5 3,853.3
2075 . . . . . . . . . 2.20 692.5 225.7 3,804.9
2080 . . . . . . . . . 2.20 683.1 222.0 3,757.5
2085 . . . . . . . . . 2.20 673.9 218.4 3,711.2
2090 . . . . . . . . . 2.20 664.9 214.8 3,665.8
2095 . . . . . . . . . 2.20 656.1 211.3 3,621.4
2100 . . . . . . . . . 2.20 647.4 207.9 3,577.9
High-cost:
2025 . . . . . . . . . 1.54 736.4 242.3 4,030.4
2030 . . . . . . . . . 1.59 680.4 221.9 3,737.1
2035 . . . . . . . . . 1.63 628.1 201.7 3,471.1
2040 . . . . . . . . . 1.68 581.2 183.2 3,234.7
2045 . . . . . . . . . 1.70 539.4 166.5 3,025.5
2050 . . . . . . . . . 1.70 502.1 151.5 2,840.0
2055 . . . . . . . . . 1.70 469.0 138.1 2,675.0
2060 . . . . . . . . . 1.70 439.3 126.1 2,527.8
2065 . . . . . . . . . 1.70 412.7 115.3 2,395.7
2070 . . . . . . . . . 1.70 388.8 105.6 2,276.9
2075 . . . . . . . . . 1.70 367.2 96.9 2,169.4
2080 . . . . . . . . . 1.70 347.7 89.1 2,071.8
2085 . . . . . . . . . 1.70 329.9 82.0 1,982.9
2090 . . . . . . . . . 1.70 313.7 75.6 1,901.4
2095 . . . . . . . . . 1.70 298.9 69.7 1,826.6
2100 . . . . . . . . . 1.70 285.3 64.4 1,757.6
a This table contains basic assumptions along with key summary values that are derived from basic assump-
tions.
b The total fertility rate for any year is the average number of children that would be born to a woman if she
were to experience, at each age of her life, the birth rate observed in, or assumed for, the selected year, and if
she were to survive the entire childbearing period.
c Based on the enumerated total population as of April 1, 2010, if that population were to experience the
death rates by age and sex observed in, or assumed for, the selected year.
d Estimated using final data for ages below 65 and preliminary data for ages 65 and older.
e Estimated, intermediate alternative.
3. Immigration Assumptions
Projections of the total Social Security area population reflect assumptions
for the following four annual immigration flows:
89
Assumptions and Methods
Lawful permanent resident (LPR) immigration: Persons who enter the
Social Security area and are granted LPR status, or who are already in
the Social Security area and adjust their status to become LPRs. 1
Legal emigration: LPRs and citizens who leave the Social Security area
population.
Other-than-LPR immigration: Persons who enter the Social Security
area and stay to the end of the year without being granted LPR status,
such as undocumented immigrants, and foreign workers and students
entering with temporary visas.
Other-than-LPR emigration: Other-than-LPR immigrants who leave the
Social Security area population or who adjust their status to become
LPRs.
Net LPR immigration is the difference between LPR immigration and legal
emigration. Net other-than-LPR immigration is the difference between other-
than-LPR immigration and other-than-LPR emigration. Total net immigra-
tion refers to the sum of net LPR immigration and net other-than-LPR immi-
gration.
Immigration assumptions differ for the low-cost, intermediate, and high-cost
scenarios. The low-cost scenario includes higher annual net immigration and
the high-cost scenario includes lower annual net immigration. Table V.A2
contains historical and projected levels of various immigration flows.
LPR immigration has increased significantly since World War II, due to vari-
ous factors and legislative changes, including the Immigration Act of 1965
and the Immigration Act of 1990.
The data show that LPR immigration dropped significantly in 2020. LPR
immigration levels in 2020 are estimated to be about 354,000 lower than
would have been expected in the absence of the pandemic. For all three alter-
natives, the Trustees assume that the COVID-19 pandemic will continue to
affect LPR immigration in years 2021 through 2024. The estimated LPR
immigration levels for 2021 are 118,000 lower than would have been
expected in the absence of the pandemic. The LPR immigration levels for
2022 are assumed to be the same as would have been assumed in the absence
of the pandemic. LPR immigration levels for 2023 and 2024 are assumed to
be higher than would have been assumed in the absence of the pandemic,
fully making up for the lower levels in 2020 and 2021. These pandemic
1 Persons who enter the country with legal visas but without LPR status, such as temporary foreign workers
and students, are not included in the LPR immigration category.
90
Demographic Assumptions and Methods
effects on LPR immigration levels are all smaller than the assumed pandemic
effects in last years report.
For the intermediate alternative, the ultimate level of annual LPR immigra-
tion, which includes residents who adjust their status to become LPRs, is
assumed to be 1,050,000 persons for 2025 and later. For alternative I, ulti-
mate annual LPR immigration is assumed to be 1,250,000 persons for 2025
and later, and for alternative III, ultimate annual LPR immigration is
assumed to be 850,000 persons for 2025 and later. The ultimate levels of
LPR immigration are unchanged from last years report.
The assumed ratios of annual legal emigration to LPR immigration are 20,
25, and 30 percent for alternatives I, II, and III, respectively. This range is
consistent with the limited historical data for legal emigration from the
Social Security area. These ratios are unchanged from last years report.
Under the intermediate alternative, by combining the ultimate annual LPR
immigration and legal emigration assumptions, ultimate annual net LPR
immigration is about 788,000 persons. For the low-cost and high-cost sce-
narios, ultimate annual net LPR immigration is 1,000,000 persons and
595,000 persons, respectively.
The estimated number of other-than-LPR immigrants residing in the Social
Security area and the annual level of other-than-LPR immigration were
affected significantly by the economic recession of 2007-09. Although other-
than-LPR immigration was greatly reduced during the economic downturn
and immediate years thereafter, it returned to higher levels for 2014 through
2018, and is estimated to remain at a higher level in 2019, reflecting a recov-
ery from levels experienced during the recession.
For all three alternatives, the Trustees assume that the COVID-19 pandemic
affects other-than-LPR immigration in years 2020 through 2024. The esti-
mated other-than-LPR immigration levels for 2020 and 2021 are 660,000
and 350,000 lower, respectively, than would have been estimated in the
absence of the pandemic. The other-than-LPR immigration levels for 2022
are assumed to be the same as would have been assumed in the absence of
the pandemic. Other-than-LPR immigration levels for 2023 and 2024 are
assumed to be higher than would have been assumed in the absence of the
pandemic, fully making up for the lower levels in 2020 and 2021. These pan-
demic effects on other-than-LPR immigration levels are all smaller than the
assumed pandemic effects in last years report.
The ultimate annual levels of other-than-LPR immigration are 1,350,000 per-
sons for alternative II, 1,850,000 persons for alternative I, and 850,000 per-
sons for alternative III. These ultimate levels are unchanged from those used
91
Assumptions and Methods
in last years report. The ultimate levels are attained in 2025 for all three
alternatives.
Emigration from the other-than-LPR immigrant population includes those
who leave the Social Security area and those who adjust their status to
become LPRs. This other-than-LPR immigrant population is highly mobile
and far more likely to leave the Social Security area than is the citizen or
LPR population. However, as other-than-LPR immigrants stay in the country
for longer periods of time, they generally become less likely to leave the
country.
Under the intermediate assumptions, the total annual number of other-than-
LPR immigrants who leave the Social Security area averages about 425,000
through the 75-year projection period. The ultimate annual number of other-
than-LPR immigrants who adjust status to become LPRs is assumed to be
450,000 for the intermediate assumptions, and is unchanged from last years
report. For the low-cost and high-cost scenarios, the total annual number of
other-than-LPR emigrants averages about 583,000 and 266,000, respectively,
through the 75-year projection period. The ultimate annual number of people
adjusting status to LPR status is assumed to be 550,000 persons and 350,000
persons, for the low-cost and high-cost scenarios, respectively, and is
unchanged from last years report.
Under the assumptions described above, the projected size of the other-than-
LPR immigrant population grows substantially, from about 15.4 million by
the end of 2022 to about 35.5 million by the end of 2096. This growth
reflects the excess of annual immigration over the combined annual numbers
of emigrants (including adjustments of status) and deaths that occur within
the other-than-LPR immigrant population.
Under the intermediate assumptions, projected net other-than-LPR immigra-
tion gradually decreases over time. Because the projected number of other-
than-LPR immigrants leaving the Social Security area is based on rates of
departure, an increase in the number of other-than-LPR immigrants residing
in the Social Security area results in an increase in the number who emigrate
out of the area. All other components of net other-than-LPR immigration are
assumed to be stable after 2024, and thus do not contribute toward any
change in annual net other-than-LPR immigration. Under the intermediate
assumptions, the projected average annual level of net other-than-LPR immi-
gration over the 75-year projection period is about 489,000 persons. For the
low-cost and high-cost assumptions, projected average annual net other-than-
LPR immigration is about 731,000 persons and 248,000 persons, respec-
tively.
92
Demographic Assumptions and Methods
The projected average annual level of total net immigration (LPR and other-
than-LPR, combined) is about 1,281,000 persons per year during the 75-year
projection period under the intermediate assumptions. For the low-cost and
high-cost assumptions, projected average annual total net immigration is
about 1,736,000 persons and 847,000 persons, respectively.
Demographers express a wide range of views about the future course of
immigration for the United States. Some believe that net immigration will
increase substantially in the future. Others believe that potential immigrants
may be increasingly attracted to other countries, that the number of potential
immigrants may be lower due to lower birth rates in many countries, or that
changes in the law or enforcement of the law will reduce immigration.
93
Assumptions and Methods
Table V.A2.Immigration Assumptions,a Calendar Years 1940-2100
[In thousands]
LPR immigration Other-than-LPR immigrationb
Other- Other- Net
than- than- other-
Calendar LPR Legal Adjustments Net LPR LPR Adjustments than- Total net
year in out of statusc d LPR in out of statusc d LPR immigration
Historical data:
1940 . . . . 61 15 - 46 - - - - -
1945 . . . . 73 18 - 55 - - - - -
1950 . . . . 227 57 - 171 - - - - -
1955 . . . . 280 70 - 210 - - - - -
1960 . . . . 268 67 - 201 - - - - -
1965 . . . . 261 77 49 232 - - 49 - -
1970 . . . . 307 93 65 279 - - 65 - -
1975 . . . . 340 98 53 294 - - 53 - -
1980 . . . . 430 135 112 406 - - 112 203 610
1985 . . . . 458 144 118 432 - - 118 261 693
1990 . . . . 548 166 114 497 - - 114 629 1,125
1995 . . . . 511 192 255 575 - - 255 563 1,137
2000 . . . . 482 224 413 671 1,412 308 413 691 1,362
2005 . . . . 561 290 597 869 1,823 79 597 1,147 2,015
2010 . . . . 622 262 426 786 669 195 426 48 834
2011 . . . . 646 264 408 791 583 245 408 -70 721
2012 . . . . 621 255 401 766 777 506 401 -130 636
2013 . . . . 588 249 409 748 826 327 409 91 839
2014 . . . . 627 256 398 769 1,425 114 398 912 1,681
2015 . . . . 689 271 395 813 1,383 312 395 677 1,490
2016 . . . . 763 292 407 877 1,120 692 407 21 898
2017 . . . . 722 280 398 840 938 288 398 252 1,092
2018 . . . . 678 270 403 810 915 238 403 274 1,084
2019 . . . . 508 238 443 713 e1,100 e940 443 e-283 e430
2020 . . . . e332 e177 e375 e531 f540 e 243 e375 f -79 f452
2021 . . . . f482 f233 f450 f699 f950 f241 f450 f 259 f958
Intermediate:
2025 . . . . 600 263 450 788 1,350 314 450 586 1,374
2030 . . . . 600 263 450 788 1,350 347 450 553 1,341
2035 . . . . 600 263 450 788 1,350 374 450 526 1,313
2040 . . . . 600 263 450 788 1,350 400 450 500 1,288
2045 . . . . 600 263 450 788 1,350 419 450 481 1,268
2050 . . . . 600 263 450 788 1,350 432 450 468 1,256
2055 . . . . 600 263 450 788 1,350 440 450 460 1,247
2060 . . . . 600 263 450 788 1,350 447 450 453 1,240
2065 . . . . 600 263 450 788 1,350 454 450 446 1,234
2070 . . . . 600 263 450 788 1,350 459 450 441 1,228
2075 . . . . 600 263 450 788 1,350 463 450 437 1,224
2080 . . . . 600 263 450 788 1,350 467 450 433 1,221
2085 . . . . 600 263 450 788 1,350 469 450 431 1,219
2090 . . . . 600 263 450 788 1,350 471 450 429 1,217
2095 . . . . 600 263 450 788 1,350 472 450 428 1,216
2100 . . . . 600 263 450 788 1,350 472 450 428 1,215
94
Demographic Assumptions and Methods
Table V.A2.Immigration Assumptions,a Calendar Years 1940-2100 (Cont.)
[In thousands]
LPR immigration Other-than-LPR immigrationb
Other- Other- Net
than- than- other-
Calendar LPR Legal Adjustments Net LPR LPR Adjustments than- Total net
year in out of statusc d LPR in out of statusc d LPR immigration
Low-cost:
2025 . . . . 700 250 550 1,000 1,850 361 550 939 1,939
2030 . . . . 700 250 550 1,000 1,850 425 550 875 1,875
2035 . . . . 700 250 550 1,000 1,850 479 550 821 1,821
2040 . . . . 700 250 550 1,000 1,850 529 550 771 1,771
2045 . . . . 700 250 550 1,000 1,850 567 550 733 1,733
2050 . . . . 700 250 550 1,000 1,850 595 550 705 1,705
2055 . . . . 700 250 550 1,000 1,850 615 550 685 1,685
2060 . . . . 700 250 550 1,000 1,850 631 550 669 1,669
2065 . . . . 700 250 550 1,000 1,850 643 550 657 1,657
2070 . . . . 700 250 550 1,000 1,850 653 550 647 1,647
2075 . . . . 700 250 550 1,000 1,850 660 550 640 1,640
2080 . . . . 700 250 550 1,000 1,850 665 550 635 1,635
2085 . . . . 700 250 550 1,000 1,850 669 550 631 1,631
2090 . . . . 700 250 550 1,000 1,850 671 550 629 1,629
2095 . . . . 700 250 550 1,000 1,850 672 550 628 1,628
2100 . . . . 700 250 550 1,000 1,850 673 550 627 1,627
High-cost:
2025 . . . . 500 255 350 595 850 269 350 231 826
2030 . . . . 500 255 350 595 850 271 350 229 824
2035 . . . . 500 255 350 595 850 271 350 229 824
2040 . . . . 500 255 350 595 850 273 350 227 822
2045 . . . . 500 255 350 595 850 272 350 228 823
2050 . . . . 500 255 350 595 850 269 350 231 826
2055 . . . . 500 255 350 595 850 265 350 235 830
2060 . . . . 500 255 350 595 850 263 350 237 832
2065 . . . . 500 255 350 595 850 262 350 238 833
2070 . . . . 500 255 350 595 850 263 350 237 832
2075 . . . . 500 255 350 595 850 263 350 237 832
2080 . . . . 500 255 350 595 850 264 350 236 831
2085 . . . . 500 255 350 595 850 264 350 236 831
2090 . . . . 500 255 350 595 850 265 350 235 830
2095 . . . . 500 255 350 595 850 265 350 235 830
2100 . . . . 500 255 350 595 850 266 350 234 829
a This table contains basic assumptions along with key summary values that are derived from basic assump-
tions.
b Historical other-than-LPR immigration and emigration estimates depend on a residual method. The Office
of the Chief Actuary developed these estimates, as well as the resulting other-than-LPR January 1 stock
estimates, for years through 2000. For years 2001 and later, the residual method uses stock estimates. For
2001 through 2004, the stock is set to values that linearly grade from the 2000 stock estimate to the DHS
2005 stock estimate. For 2005 through 2012, stock estimates come from DHS. For 2013 through 2020,
stock estimates are developed by the Office of the Chief Actuary, based on the same methods used by DHS.
c Estimates do not include persons who attained LPR status under the special one-time provisions of the
Immigration Reform and Control Act of 1986.
d Adjustments of status are a positive for net LPR immigration and a negative for net other-than-LPR immi-
gration.
e Estimated.
f Estimated, intermediate alternative.
Note: Components may not sum to totals because of rounding.
95
Assumptions and Methods
4. Total Population Estimates
The starting Social Security area population for December 31, 2019, is
derived from the Census Bureaus estimate of the residents of the 50 States
and D.C. and U.S. Armed Forces overseas. Adjustments are made to reflect
mortality assumptions for the aged population since 2010 that are consistent
with Medicare and Social Security data, net immigration assumptions for the
aged population since 2010, estimates of the net undercount in the 2010 cen-
sus, inclusion of U.S. citizens living abroad (including residents of U.S. terri-
tories), and inclusion of non-citizens living abroad who are insured for Social
Security benefits. The Office of the Chief Actuary projects the population in
the Social Security area by age, sex, and marital status for December 31 of
each year from 2020 through 2096 by combining the assumptions for future
fertility, mortality, and immigration with assumptions for marriage and
divorce. Previous sections of this chapter present the assumptions for future
fertility, mortality, and immigration. Assumptions for future rates of mar-
riage and divorce reflect historical data from the National Center for Health
Statistics, the Census Bureau, and selected individual States.
This report presents a July 1 (i.e., midyear) population for each year, which
is derived from surrounding December populations. Table V.A3 shows the
historical and projected population for July 1 by broad age group, for the
three alternatives. It also shows the aged and total dependency ratios (see
table footnotes for definitions).
96
Demographic Assumptions and Methods
Table V.A3.Social Security Area Population on July 1 and Dependency Ratios,
Calendar Years 1945-2100
Population (in thousands) Dependency ratio
65 and
Calendar year Under 20 20-64 over Total Aged a Total b
Historical data:
1945 . . . . . . . . . . . . . . 49,107 87,891 10,886 147,883 0.124 0.683
1950 . . . . . . . . . . . . . . 53,918 92,190 12,789 158,897 .139 .724
1955 . . . . . . . . . . . . . . 63,337 96,003 15,161 174,501 .158 .818
1960 . . . . . . . . . . . . . . 72,915 99,752 17,323 189,990 .174 .905
1965 . . . . . . . . . . . . . . 80,002 104,864 19,153 204,019 .183 .946
1970 . . . . . . . . . . . . . . 80,856 112,953 21,007 214,816 .186 .902
1975 . . . . . . . . . . . . . . 78,574 122,598 23,370 224,542 .191 .832
1980 . . . . . . . . . . . . . . 74,841 134,029 26,314 235,184 .196 .755
1985 . . . . . . . . . . . . . . 72,892 144,585 29,131 246,608 .201 .706
1990 . . . . . . . . . . . . . . 74,791 152,731 31,926 259,449 .209 .699
1995 . . . . . . . . . . . . . . 79,286 160,737 34,298 274,321 .213 .707
2000 . . . . . . . . . . . . . . 81,980 170,164 35,501 287,646 .209 .690
2005 . . . . . . . . . . . . . . 83,942 181,084 37,135 302,161 .205 .669
2010 . . . . . . . . . . . . . . 85,678 188,270 41,021 314,969 .218 .673
2011 . . . . . . . . . . . . . . 85,296 189,898 41,739 316,933 .220 .669
2012 . . . . . . . . . . . . . . 84,906 190,397 43,421 318,724 .228 .674
2013 . . . . . . . . . . . . . . 84,608 191,129 44,803 320,539 .234 .677
2014 . . . . . . . . . . . . . . 84,486 192,183 46,198 322,867 .240 .680
2015 . . . . . . . . . . . . . . 84,519 193,385 47,604 325,508 .246 .683
2016 . . . . . . . . . . . . . . 84,520 194,081 49,088 327,690 .253 .688
2017 . . . . . . . . . . . . . . 84,394 194,553 50,602 329,550 .260 .694
2018 . . . . . . . . . . . . . . 84,185 195,043 52,182 331,410 .268 .699
2019c . . . . . . . . . . . . . 83,898 195,131 53,815 332,844 .276 .706
2020d . . . . . . . . . . . . . 83,463 194,942 55,304 333,710 .284 .712
2021d . . . . . . . . . . . . . 82,952 194,947 56,615 334,514 .290 .716
Intermediate:
2025 . . . . . . . . . . . . . . 82,961 197,402 63,453 343,816 .321 .742
2030 . . . . . . . . . . . . . . 82,994 200,496 71,153 354,643 .355 .769
2035 . . . . . . . . . . . . . . 85,401 204,083 75,644 365,128 .371 .789
2040 . . . . . . . . . . . . . . 89,130 207,586 78,089 374,805 .376 .806
2045 . . . . . . . . . . . . . . 93,271 210,406 79,745 383,422 .379 .822
2050 . . . . . . . . . . . . . . 95,545 213,527 82,062 391,135 .384 .832
2055 . . . . . . . . . . . . . . 96,630 216,933 85,132 398,696 .392 .838
2060 . . . . . . . . . . . . . . 97,639 220,448 88,907 406,994 .403 .846
2065 . . . . . . . . . . . . . . 99,458 224,412 92,425 416,294 .412 .855
2070 . . . . . . . . . . . . . . 102,228 227,722 96,165 426,115 .422 .871
2075 . . . . . . . . . . . . . . 105,314 230,304 100,216 435,833 .435 .892
2080 . . . . . . . . . . . . . . 107,882 234,607 102,671 445,160 .438 .897
2085 . . . . . . . . . . . . . . 109,683 240,463 104,117 454,263 .433 .889
2090 . . . . . . . . . . . . . . 111,192 247,291 105,067 463,550 .425 .875
2095 . . . . . . . . . . . . . . 112,997 252,895 107,421 473,313 .425 .872
2100 . . . . . . . . . . . . . . 115,310 257,469 110,829 483,608 .430 .878
97
Assumptions and Methods
Table V.A3.Social Security Area Population on July 1 and Dependency Ratios,
Calendar Years 1945-2100 (Cont.)
Population (in thousands) Dependency ratio
65 and
Calendar year Under 20 20-64 over Total Aged a Total b
Low-cost:
2025 . . . . . . . . . . . . . . 84,987 199,402 63,321 347,710 0.318 0.744
2030 . . . . . . . . . . . . . . 88,022 204,416 70,642 363,081 .346 .776
2035 . . . . . . . . . . . . . . 93,861 209,879 74,529 378,269 .355 .802
2040 . . . . . . . . . . . . . . 101,136 215,187 76,224 392,547 .354 .824
2045 . . . . . . . . . . . . . . 107,867 220,744 77,098 405,709 .349 .838
2050 . . . . . . . . . . . . . . 111,843 227,686 78,698 418,227 .346 .837
2055 . . . . . . . . . . . . . . 114,762 235,291 81,181 431,234 .345 .833
2060 . . . . . . . . . . . . . . 118,358 243,005 84,497 445,860 .348 .835
2065 . . . . . . . . . . . . . . 123,462 251,085 87,630 462,178 .349 .841
2070 . . . . . . . . . . . . . . 129,693 258,716 90,947 479,356 .352 .853
2075 . . . . . . . . . . . . . . 135,913 266,236 94,485 496,634 .355 .865
2080 . . . . . . . . . . . . . . 141,102 276,318 96,428 513,849 .349 .860
2085 . . . . . . . . . . . . . . 145,347 288,663 97,386 531,396 .337 .841
2090 . . . . . . . . . . . . . . 149,623 301,448 98,770 549,841 .328 .824
2095 . . . . . . . . . . . . . . 154,699 312,268 102,492 569,459 .328 .824
2100 . . . . . . . . . . . . . . 160,575 322,006 107,546 590,128 .334 .833
High-cost:
2025 . . . . . . . . . . . . . . 80,623 195,542 63,633 339,798 .325 .738
2030 . . . . . . . . . . . . . . 76,949 196,812 71,844 345,605 .365 .756
2035 . . . . . . . . . . . . . . 75,133 198,632 77,156 350,920 .388 .767
2040 . . . . . . . . . . . . . . 74,482 200,435 80,622 355,539 .402 .774
2045 . . . . . . . . . . . . . . 75,575 200,239 83,347 359,160 .416 .794
2050 . . . . . . . . . . . . . . 76,071 198,878 86,646 361,595 .436 .818
2055 . . . . . . . . . . . . . . 75,338 197,308 90,512 363,158 .459 .841
2060 . . . . . . . . . . . . . . 73,800 195,769 94,871 364,441 .485 .862
2065 . . . . . . . . . . . . . . 72,356 194,731 98,805 365,893 .507 .879
2070 . . . . . . . . . . . . . . 71,678 192,827 102,922 367,428 .534 .905
2075 . . . . . . . . . . . . . . 71,681 189,550 107,371 368,603 .566 .945
2080 . . . . . . . . . . . . . . 71,798 187,090 110,170 369,058 .589 .973
2085 . . . . . . . . . . . . . . 71,488 185,395 111,864 368,747 .603 .989
2090 . . . . . . . . . . . . . . 70,716 185,557 111,647 367,921 .602 .983
2095 . . . . . . . . . . . . . . 69,841 185,658 111,379 366,878 .600 .976
2100 . . . . . . . . . . . . . . 69,223 184,967 111,654 365,844 .604 .978
a Ratio of the population at ages 65 and over to the population at ages 20-64.
b Ratio of the population at ages 65 and over and the population under age 20 to the population at
ages 20-64.
c Estimated.
d Estimated, intermediate alternative.
Notes:
1. Historical data are subject to revision.
2. Components may not sum to totals because of rounding.
5. Life Expectancy Estimates
Life expectancy, or the average remaining number of years expected prior to
death, is an additional way to summarize the Trustees mortality assump-
tions. This report includes life expectancy in two different forms (period and
cohort), which are useful for two separate purposes.
98
Demographic Assumptions and Methods
Period life expectancy for a given year incorporates the actual or
expected death rates at each age for that year. It is a useful summary sta-
tistic for illustrating the overall level of the death rates experienced in a
single year. Period life expectancy for a particular year provides an indi-
viduals expected average remaining lifetime at a selected age, assum-
ing no change in death rates after that year. Table V.A4 presents
historical and projected life expectancy calculated on a period basis.
Cohort life expectancy does not incorporate death rates for a single
year, but for the series of years in which the individual will actually
reach each succeeding age if he or she survives. Cohort life expectancy
provides an individuals expected average remaining lifetime at a
selected age in a given year, using actual or expected future death rates.
Table V.A5 presents historical and projected life expectancy calculated
on a cohort basis. Cohort life expectancy is somewhat greater than
period life expectancy for a given year because: (1) death rates at any
age tend to decline over time; and (2) cohort life expectancy uses death
rates from future years, while period life expectancy uses death rates
only from the given year.
Life expectancy at a given age reflects death rates at that and all older ages.
Period life expectancy is somewhat related to the age-sex-adjusted death rate
discussed in section V.A.2. However, life expectancy places far greater
weight on death rates at relatively younger ages than those at relatively older
ages. Therefore, changes in death rates at younger ages have far greater
effects in changing life expectancy over time. It is important to keep this
concept in mind when considering trends in life expectancy.
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Assumptions and Methods
Table V.A4.Period Life Expectancy a
Historical data
At birth At age 65
Calendar
year Male Female Male Female
1940 . . . . 61.4 65.7 11.9 13.4
1945 . . . . 62.9 68.4 12.6 14.4
1950 . . . . 65.6 71.1 12.8 15.1
1955 . . . . 66.7 72.8 13.1 15.6
1960 . . . . 66.7 73.2 12.9 15.9
1965 . . . . 66.8 73.8 12.9 16.3
1970 . . . . 67.1 74.9 13.1 17.1
1975 . . . . 68.7 76.6 13.7 18.0
1980 . . . . 69.9 77.5 14.0 18.4
1985 . . . . 71.1 78.2 14.4 18.6
1990 . . . . 71.8 78.9 15.0 19.0
1995 . . . . 72.5 79.1 15.4 19.0
2000 . . . . 74.0 79.4 15.9 19.0
2005 . . . . 74.8 80.0 16.7 19.5
2010 . . . . 76.1 80.9 17.6 20.2
2011 . . . . 76.2 80.9 17.6 20.2
2012 . . . . 76.3 81.0 17.7 20.3
2013 . . . . 76.3 81.0 17.7 20.3
2014 . . . . 76.3 81.1 17.8 20.4
2015 . . . . 76.1 80.9 17.8 20.3
2016 . . . . 76.0 81.0 17.9 20.5
2017 . . . . 76.0 81.0 17.9 20.5
2018 . . . . 76.1 81.1 18.0 20.6
2019b . . . 76.2 81.3 18.1 20.7
2020c . . . 74.5 79.7 17.0 19.6
2021c . . . 74.2 79.5 16.9 19.5
Intermediate Low-cost High-cost
At birth At age 65 At birth At age 65 At birth At age 65
Calendar
year Male Female Male Female Male Female Male Female Male Female Male Female
2025 . . . . 76.6 81.6 18.5 21.0 76.1 81.3 18.2 20.8 77.1 82.1 18.8 21.3
2030 . . . . 77.1 82.1 18.8 21.3 76.2 81.4 18.3 20.9 78.2 83.0 19.4 21.9
2035 . . . . 77.6 82.5 19.1 21.6 76.4 81.5 18.4 21.0 79.2 83.8 20.0 22.5
2040 . . . . 78.2 83.0 19.4 21.9 76.6 81.7 18.5 21.1 80.2 84.7 20.6 23.0
2045 . . . . 78.7 83.4 19.7 22.2 76.8 81.9 18.6 21.2 81.2 85.4 21.2 23.5
2050 . . . . 79.2 83.9 20.0 22.4 77.0 82.0 18.7 21.3 82.1 86.2 21.7 24.0
2055 . . . . 79.7 84.3 20.3 22.7 77.2 82.2 18.8 21.4 82.9 86.8 22.3 24.4
2060 . . . . 80.2 84.7 20.6 23.0 77.4 82.3 19.0 21.5 83.7 87.5 22.7 24.9
2065 . . . . 80.7 85.1 20.9 23.2 77.5 82.5 19.1 21.6 84.4 88.1 23.2 25.3
2070 . . . . 81.2 85.4 21.2 23.5 77.7 82.6 19.2 21.7 85.1 88.6 23.6 25.7
2075 . . . . 81.6 85.8 21.5 23.7 77.9 82.8 19.3 21.7 85.8 89.2 24.1 26.0
2080 . . . . 82.0 86.2 21.7 23.9 78.1 82.9 19.4 21.8 86.4 89.6 24.5 26.4
2085 . . . . 82.5 86.5 22.0 24.2 78.3 83.1 19.5 21.9 87.0 90.1 24.9 26.7
2090 . . . . 82.9 86.8 22.2 24.4 78.5 83.2 19.6 22.0 87.6 90.6 25.2 27.0
2095 . . . . 83.3 87.1 22.5 24.6 78.6 83.4 19.7 22.1 88.1 91.0 25.6 27.3
2100 . . . . 83.7 87.5 22.7 24.8 78.8 83.5 19.8 22.2 88.6 91.4 25.9 27.6
a The period life expectancy at a given age for a given year is the average remaining number of years
expected prior to death for a person at that exact age, born on January 1, using the mortality rates for that
year over the course of his or her remaining life.
b Estimated using final data for ages below 65 and preliminary data for ages 65 and older.
c Estimated using the intermediate assumptions for all ages.
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Demographic Assumptions and Methods
Table V.A5.Cohort Life Expectancy a
Intermediate Low-cost High-cost
At birth b At age 65 c At birth b At age 65 c At birth b At age 65 c
Calendar
year Male Female Male Female Male Female Male Female Male Female Male Female
1940 . . . . 70.2 76.4 12.7 14.7 70.1 76.3 12.7 14.7 70.3 76.6 12.7 14.7
1945 . . . . 72.0 78.1 13.0 15.4 71.8 77.8 13.0 15.4 72.2 78.4 13.0 15.4
1950 . . . . 73.1 79.4 13.1 16.2 72.8 79.0 13.1 16.2 73.5 79.9 13.1 16.2
1955 . . . . 73.6 79.9 13.1 16.7 73.1 79.4 13.1 16.7 74.2 80.7 13.1 16.7
1960 . . . . 74.2 80.2 13.2 17.4 73.6 79.5 13.2 17.4 75.1 81.3 13.2 17.4
1965 . . . . 75.1 80.8 13.5 18.0 74.2 79.9 13.5 18.0 76.4 82.1 13.5 18.0
1970 . . . . 76.3 81.7 13.8 18.5 75.1 80.5 13.8 18.5 77.9 83.2 13.8 18.5
1975 . . . . 77.1 82.4 14.2 18.7 75.7 81.0 14.2 18.7 79.0 84.2 14.2 18.7
1980 . . . . 77.8 83.0 14.7 18.8 76.1 81.3 14.7 18.8 80.1 85.1 14.7 18.8
1985 . . . . 78.3 83.5 15.4 19.0 76.3 81.6 15.4 19.0 81.0 85.9 15.4 19.1
1990 . . . . 78.9 84.0 16.0 19.3 76.6 81.8 16.0 19.3 81.9 86.6 16.0 19.3
1995 . . . . 79.5 84.5 16.6 19.6 77.0 82.1 16.6 19.6 82.9 87.4 16.7 19.6
2000 . . . . 80.1 84.9 17.3 20.0 77.2 82.3 17.3 19.9 83.7 88.0 17.4 20.1
2005 . . . . 80.5 85.3 17.8 20.4 77.4 82.5 17.7 20.3 84.4 88.6 18.0 20.7
2010 . . . . 81.1 85.7 18.2 20.8 77.6 82.7 18.0 20.5 85.2 89.2 18.6 21.2
2011 . . . . 81.2 85.8 18.3 20.9 77.7 82.7 18.1 20.6 85.4 89.3 18.7 21.3
2012 . . . . 81.3 85.8 18.4 21.0 77.7 82.7 18.1 20.6 85.5 89.4 18.8 21.5
2013 . . . . 81.3 85.9 18.4 21.0 77.7 82.8 18.1 20.7 85.6 89.5 18.9 21.6
2014 . . . . 81.4 86.0 18.5 21.1 77.8 82.8 18.1 20.7 85.8 89.6 19.0 21.7
2015 . . . . 81.5 86.1 18.6 21.2 77.8 82.8 18.2 20.7 85.9 89.7 19.1 21.8
2016 . . . . 81.6 86.1 18.6 21.3 77.9 82.9 18.2 20.8 86.1 89.8 19.2 21.9
2017 . . . . 81.7 86.2 18.7 21.3 77.9 82.9 18.2 20.8 86.2 89.9 19.3 22.1
2018 . . . . 81.8 86.3 18.7 21.4 77.9 82.9 18.2 20.8 86.3 90.0 19.5 22.2
2019 . . . . 81.9 86.4 18.8 21.5 78.0 83.0 18.2 20.9 86.5 90.1 19.6 22.3
2020 . . . . 82.0 86.5 18.9 21.5 78.1 83.1 18.2 20.9 86.7 90.3 19.7 22.4
2021 . . . . 82.1 86.5 19.0 21.6 78.1 83.1 18.3 20.9 86.8 90.4 19.9 22.6
2025 . . . . 82.5 86.8 19.3 21.9 78.2 83.2 18.5 21.1 87.3 90.8 20.5 23.1
2030 . . . . 82.9 87.1 19.6 22.2 78.4 83.3 18.6 21.2 88.0 91.2 21.1 23.6
2035 . . . . 83.3 87.5 19.9 22.5 78.6 83.5 18.7 21.3 88.6 91.7 21.7 24.1
2040 . . . . 83.8 87.8 20.3 22.8 78.8 83.6 18.8 21.4 89.2 92.1 22.3 24.6
2045 . . . . 84.2 88.1 20.6 23.0 78.9 83.8 18.9 21.5 89.7 92.6 22.8 25.1
2050 . . . . 84.5 88.4 20.9 23.3 79.1 83.9 19.0 21.6 90.2 92.9 23.3 25.5
2055 . . . . 84.9 88.7 21.2 23.6 79.3 84.0 19.1 21.7 90.7 93.3 23.8 25.9
2060 . . . . 85.3 89.0 21.4 23.8 79.5 84.2 19.2 21.8 91.2 93.6 24.2 26.3
2065 . . . . 85.6 89.3 21.7 24.0 79.6 84.3 19.3 21.9 91.6 94.0 24.6 26.6
2070 . . . . 86.0 89.5 22.0 24.3 79.8 84.5 19.4 21.9 92.0 94.3 25.1 27.0
2075 . . . . 86.3 89.8 22.2 24.5 80.0 84.6 19.6 22.0 92.5 94.6 25.4 27.3
2080 . . . . 86.7 90.0 22.5 24.7 80.1 84.7 19.7 22.1 92.8 94.9 25.8 27.6
2085 . . . . 87.0 90.3 22.7 24.9 80.3 84.9 19.8 22.2 93.2 95.2 26.2 27.9
2090 . . . . 87.3 90.5 23.0 25.1 80.5 85.0 19.9 22.3 93.6 95.4 26.5 28.2
2095 . . . . 87.6 90.7 23.2 25.3 80.6 85.1 20.0 22.4 93.9 95.7 26.8 28.5
2100 . . . . 87.9 91.0 23.5 25.5 80.8 85.3 20.1 22.5 94.3 96.0 27.2 28.8
a The cohort life expectancy at a given age for a given year is the average remaining number of years
expected prior to death for a person at that exact age, born on January 1, using the mortality rates for the
series of years in which the individual will actually reach each succeeding age if he or she survives.
b Cohort life expectancy at birth for those born in the calendar year is based on a combination of actual, esti-
mated, and projected death rates for birth years 1940 through 2019. For birth years after 2019, these values
depend on estimated and projected death rates.
c Age 65 cohort life expectancy for those attaining age 65 in calendar years 1940 through 2018 depends on
actual death rates or on a combination of actual, estimated, and projected death rates. After 2018, these val-
ues depend on estimated and projected death rates.
101
Assumptions and Methods
B. ECONOMIC ASSUMPTIONS AND METHODS
The three alternative sets of economic assumptions provide a reasonable
range for estimating the financial status of the trust funds. The intermediate
assumptions reflect the Trustees consensus expectation of sustained moder-
ate economic growth after completion of the recovery from the pandemic-
induced recession that started in the first quarter of 2020, and their best esti-
mate for other economic parameters. The low-cost assumptions represent a
more optimistic outlook with a faster recovery to a higher level of economic
output, stronger long-term economic growth, and relatively optimistic levels
for other parameters. The high-cost assumptions represent a more pessimistic
scenario with a recession in 2022, slower economic growth in the long term,
and relatively pessimistic levels for other parameters.
Actual economic data were generally available through the end of 2021 at
the time the assumptions for this report were set; some values for the fourth
quarter of 2021 are preliminary estimates. The data indicate that economic
activity reached a peak in the fourth quarter of 2019. 1 The recession started
in the first quarter of 2020 due to the precipitous decline in economic activity
in March of 2020, continuing in April of 2020, leading to the gross domestic
product (GDP) in the second quarter of 2020 being more than 10 percent
below the peak in the fourth quarter of 2019, expressed in constant 2012 dol-
lars. GDP recovered rapidly and in the fourth quarter of 2021 exceeded the
fourth quarter 2019 peak by about 3 percent.
Under the intermediate assumptions, the economy is projected to reach its
sustainable trend level of output in the third quarter of 2023. Under the low-
cost assumptions, the economy is projected to recover at a faster rate and
return to a higher sustainable trend level of output, also in the third quarter of
2023. Under the high-cost assumptions, the sustainable trend level is lower,
and the GDP was already above it in the second half of 2021. GDP falls to
3 percent below that lower sustainable trend level in the fourth quarter of
2022, and then recovers fully by the first quarter of 2027. Complete eco-
nomic cycles have little effect on the long-range estimates of financial status
of the trust funds, so the assumptions do not include cycles beyond the short-
range period (2022 through 2031).
The key economic assumptions underlying the three sets of projections of the
future financial status of the OASI and DI Trust Funds are discussed in the
remainder of this section.
1 On a monthly basis, economic activity peaked in February 2020, but the decline in March was sharp
enough that the output in the first quarter of 2020 was substantially below the output in the fourth quarter of
2019. See www.nber.org/news/business-cycle-dating-committee-announcement-june-8-2020.
102
Economic Assumptions and Methods
1. Productivity Assumptions
Total U.S. economy productivity is defined as the ratio of real GDP to hours
worked by all workers. 1 The rate of change in total-economy productivity is
a major determinant of the growth of average earnings. Over the last six
complete economic cycles (1969-73, 1973-79, 1979-90, 1990-2001,
2001-07, and 2007-19, measured peak to peak), the annual increases in total-
economy productivity averaged 2.66, 1.07, 1.41, 1.85, 2.18, and
1.08 percent, respectively. For the period from 1969 to 2019, covering those
last six complete economic cycles, the annual increase in total-economy pro-
ductivity averaged 1.58 percent.
The assumed ultimate annual increases in total-economy productivity are
1.93, 1.63, and 1.33 percent for the low-cost, intermediate, and high-cost
assumptions, respectively. 2 These rates of increase are unchanged from the
2021 report.
The annual change in total-economy productivity was 2.63 percent for 2020,
because employment declined more than GDP during the recession, and is
estimated to be 0.98 percent for 2021 under the intermediate assumptions,
because employment and hours worked recovered substantially. For the
intermediate assumptions, the annual rate of change in productivity is
0.69 percent for 2022, averages 1.98 percent for 2023 through 2025,
1.65 percent for 2026 through 2029, and reaches its ultimate value of
1.63 percent for 2030 and thereafter. For the low-cost assumptions, the
annual rate of change in productivity is 0.85 percent for 2022, averages
2.22 percent for 2023 through 2025, and reaches its ultimate value of
1.93 percent for 2026 and thereafter. For the high-cost assumptions, the
assumed recession lowers the annual rate of change in productivity to
0.03 percent for 2022. The growth rate rebounds to 2.16 percent for 2023,
averages 1.28 percent for 2024 through 2029, and stabilizes at its ultimate
value of 1.33 percent thereafter.
2. Price Inflation Assumptions
Changes in the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI) directly affect the OASDI program through the automatic
cost-of-living benefit increases. Changes in the GDP price index (GDP defla-
1 Historical levels of real GDP are from the National Income and Product Accounts (NIPA) produced by the
Bureau of Economic Analysis (BEA). Historical total hours worked are provided by the Bureau of Labor
Statistics (BLS) and cover all U.S. Armed Forces and civilian employment.
2 These assumptions for total-economy productivity are consistent with ultimate annual increases in private
nonfarm business productivity of 2.36, 2.00, and 1.63 percent. Private nonfarm business productivity
excludes the farm, government, nonprofit institution, and private household sectors.
103
Assumptions and Methods
tor) affect the nominal levels of GDP, wages, self-employment income, aver-
age earnings, and taxable payroll. For a given real rate of growth in average
earnings, a higher price inflation rate immediately results in a higher nominal
rate of growth in both earnings and revenues, while the resulting added
growth in nominal benefit levels occurs with a delay, causing an overall
increase (improvement) in the actuarial balance. Similarly, a lower price
inflation rate causes an overall decrease in the actuarial balance.
The annual increases in the CPI averaged 4.91, 8.54, 5.30, 2.73, 2.63, and
1.73 percent over the economic cycles 1969-73, 1973-79, 1979-90,
1990-2001, 2001-07, and 2007-19, respectively. 1 The annual increases in the
GDP deflator averaged 5.04, 7.54, 4.61, 2.08, 2.52, and 1.61 percent for the
respective economic cycles. For the period from 1969 to 2019, covering the
last six complete economic cycles, the annual increases in the CPI and the
GDP deflator averaged 3.89 and 3.45 percent, respectively. The annual rate
of change for 2020, which was affected by the recession, was 1.21 percent
for the CPI and 1.30 percent for the GDP deflator. During the subsequent
recovery, demand for goods increased while supply has been constrained,
leading to 2021 growth rates of 5.26 percent for the CPI and 4.16 percent for
the GDP deflator.
The assumed ultimate annual increases in the CPI are 3.00, 2.40, and
1.80 percent for the low-cost, intermediate, and high-cost assumptions,
respectively. These values are unchanged from the 2021 report.
For the intermediate assumptions, the annual rate of change in the CPI is
4.54 percent for 2022, 2.33 percent for 2023, and reaches the ultimate
growth rate of 2.40 percent for 2024 and thereafter. For the low-cost assump-
tions, the annual rate of change in the CPI is 5.14 percent for 2022, and
reaches its ultimate growth rate of 3.00 percent for 2023 and thereafter. For
the high-cost assumptions, the annual rate of change in the CPI is
3.92 percent for 2022, averages 1.45 percent for 2023 through 2025, and
reaches its ultimate growth rate of 1.80 percent for 2026 and thereafter.
The annual increase in the GDP deflator differs from the annual increase in
the CPI because the two indices are constructed using different computa-
tional methods and coverage (the set of goods and services used in the mea-
surement). The difference between the rate of change in the CPI and the rate
1 BLS produces a series called the Consumer Price Index Research Series Using Current Methods
(CPI-U-RS) that approximates the measured rate of inflation since 1978 had the method currently used been
in effect since then. BLS does not revise the CPI values published in earlier years, for which different meth-
ods were used. These CPI published values are shown in table V.B1. The Trustees use an adjusted CPI series
based on the CPI-U-RS when setting the ultimate price inflation assumption because it provides a time series
that is consistent with the current method for computing the CPI.
104
Economic Assumptions and Methods
of change in the GDP deflator is called the price differential in this report.
For the period including 1969 through 2019, covering the last six complete
economic cycles, the average annual price differential was 0.46 percentage
point. For 2020, the annual price differential was -0.09 percentage point, and
for 2021 it is estimated to be 1.10 percentage points.
The fluctuations in the price differential for 2020-21 primarily reflect a
decline and subsequent rebound in oil prices, as well as price increases con-
centrated in consumer goods categories during the economic recovery.
Changes in oil prices affect the CPI much more than the GDP deflator
because oil represents a much larger share of U.S. consumption than of U.S.
production. Oil prices are assumed to grow at a relatively stable rate after
2022. For the intermediate assumptions, the price differential is
0.05 percentage point for 2022, 0.22 percentage point for 2023, and
0.35 percentage point for 2024 and later.
The assumed ultimate price differentials are 0.25, 0.35, and 0.45 percentage
point for the low-cost, intermediate, and high-cost alternatives, respectively.
Varying the ultimate projected price differential across alternatives recog-
nizes the historical variation in this measure. Accordingly, the assumed ulti-
mate annual increases in the GDP deflator are 2.75 (3.00 less 0.25), 2.05
(2.40 less 0.35), and 1.35 (1.80 less 0.45) percent for the low-cost, intermedi-
ate, and high-cost alternatives, respectively. The ultimate price differentials
for the three alternatives are unchanged from the 2021 report.
3. Average Earnings Assumptions
The average level of nominal earnings in OASDI covered employment for
each year has a direct effect on the size of the taxable payroll and on the
future level of average benefits. In addition, under the automatic adjustment
provisions in the law, growth in the average wage in the U.S. economy
directly affects certain parameters used in the OASDI benefit formulas, as
well as the contribution and benefit base, the exempt amounts under the
retirement earnings test, the amount of earnings required for a quarter of cov-
erage, and in certain circumstances, the automatic cost-of-living benefit
increases.
Projected growth rates in average covered earnings are derived from projec-
tions of average U.S. earnings. Average U.S. earnings is defined as the ratio
of the sum of total U.S. wages and net proprietors income to the sum of total
U.S. civilian employment and Armed Forces. The growth rate in average
U.S. earnings for any period is equal to the combined growth rates for total
U.S. economy productivity, average hours worked, the ratio of earnings to
105
Assumptions and Methods
total labor compensation (which includes fringe benefits), the ratio of total
labor compensation to GDP, and the GDP deflator.
The average annual change in average hours worked was -0.21 percent over
the last six complete economic cycles covering the period from 1969 to
2019. The annual change in average hours worked averaged -0.89, -0.55,
-0.11, 0.10, -0.50, and -0.05 percent over the economic cycles 1969-73,
1973-79, 1979-90, 1990-2001, 2001-07, and 2007-19, respectively. From
2019 to 2021, the first two years after the peak of the last complete cycle, the
average annual change in average hours worked per week is estimated to be
an increase of 0.84 percent, as a result of unusual effects on employment
during the pandemic period.
The assumed ultimate annual rates of change for average hours worked are
0.05, -0.05, and -0.15 percent for the low-cost, intermediate, and high-cost
assumptions, respectively. These values are unchanged from the 2021 report.
The average annual change in the ratio of earnings to total labor compensa-
tion was -0.14 percent from 1969 to 2019. Most of this decrease was due to
the relative increase in the cost of employer-sponsored group health insur-
ance (ESGHI) for wage workers. Assuming that the level of total employee
compensation is not affected by the amount of ESGHI, any increase or
decrease in the cost of ESGHI leads to a commensurate decrease or increase
in other components of employee compensation, including wages. Projec-
tions of future ratios of earnings to total labor compensation follow this prin-
ciple. The Trustees assume that the total amount of future ESGHI premiums
will be affected by provisions of the Affordable Care Act of 2010 (ACA). A
key provision of ACA affecting the projected growth in ESGHI premiums,
the excise tax on ESGHI premiums (commonly referred to as the Cadillac
Tax), was repealed in December 2019. As a result, the Trustees have
assumed starting with the 2020 Trustees Report that ESGHI premiums will
increase faster, and wages therefore more slowly, than was assumed in the
2010 through 2019 reports. Data from BEA indicate that the other significant
component of non-wage employee compensation is employer contributions
to retirement plans. This component is assumed to grow faster than employee
compensation in the future as life expectancy and potential time in retirement
increase.
The average annual rate of change in the ratio of wages to employee com-
pensation was -0.17 percent from 1969 to 2019. It increased sharply to
0.35 percent from 2019 to 2021 due to the unusual effects during the pan-
demic period. The average rates from 2021 to 2031 are about 0.02, -0.03, and
-0.09 percent for the low-cost, intermediate, and high-cost assumptions,
respectively. For the long-range period, from 2031 to 2096, the average rates
106
Economic Assumptions and Methods
are about -0.02, -0.12, and -0.22 percent for the low-cost, intermediate, and
high-cost assumptions, respectively. These long-range rates are unchanged
from those assumed for the 2021 report. Under the intermediate assumptions,
the ratio of wages to employee compensation declines from 0.820 for 2021
to 0.758 for 2096.
Because earnings and compensation are the same for self-employed workers,
the ratio of earnings to total labor compensation includes self-employment
income both in the numerator and in the denominator. As a result, the rate of
change in the ratio of earnings to total labor compensation (which, under the
intermediate assumptions, averages -0.10 percent from 2031 to 2096) is
higher (less negative) than the rate of change in the ratio of wages to
employee compensation.
The ratio of total labor compensation (i.e., employee compensation and net
proprietors income) to GDP varies over the economic cycle and with
changes in the relative sizes of different sectors of the economy. Over the last
six complete economic cycles from 1969 to 2019, this ratio has averaged
0.622. The ratio declined from a recent high of 0.649 for 2001 to 0.600 in
2010, increased to 0.610 in 2012, and averaged 0.611 for 2014 through 2019.
This ratio increased to 0.633 for 2020 and 0.626 for 2021 and is assumed to
reach 0.630 by 2031. For years after 2031, the relative sizes of different sec-
tors of the economy are assumed to remain about constant, 1 and therefore
the ratio of total labor compensation to GDP remains at about the 2031 level
for each set of assumptions.
The projected average annual growth rate in average nominal U.S. earnings
from 2031 to 2096 is 3.56 percent for the intermediate assumptions. This
growth rate reflects the projected average annual growth rate of -0.10 percent
for the ratio of earnings to total labor compensation, and also reflects the
assumed ultimate annual growth rates of 1.63 percent for productivity,
-0.05 percent for average hours worked, and 2.05 percent for the GDP defla-
tor. Similarly, the projected average annual growth rates in average nominal
U.S. earnings are 4.77 percent for the low-cost assumptions and 2.36 percent
for the high-cost assumptions.
Over long periods, the average annual growth rate in the average wage in
OASDI covered employment (henceforth the average covered wage) is
expected to be very close to the average annual growth rate in average U.S.
earnings. The estimated annual rate of change in the average covered wage is
1 The sole exception is the employment in the U.S. Armed Forces, which has declined in size over the last
40 years, and is assumed to remain at its 2020 level throughout the 75-year projection period.
107
Assumptions and Methods
5.54 percent for 2021 under the intermediate assumptions. From 2021 to
2031, the annual rate of change in the average covered wage averages 5.46,
4.22, and 2.78 percent for the low-cost, intermediate, and high-cost assump-
tions, respectively. The projected average annual growth rates in the average
covered wage from 2031 to 2096 are 4.77, 3.55, and 2.33 percent for the
low-cost, intermediate, and high-cost assumptions, respectively.
4. Assumed Real Wage Differential
The real increase in the average covered wage has traditionally been
expressed in the form of a real wage differentialthe annual percentage
change in the average covered wage minus the annual percentage change in
the CPI. For the period from 1969 to 2019, covering the last six complete
economic cycles, the real wage differential averaged 0.79 percentage point,
the result of averages of 1.03, 0.04, 0.44, 1.47, 0.83, and 0.76 percentage
points over the economic cycles 1969-73, 1973-79, 1979-90, 1990-2001,
2001-07, and 2007-19, respectively.
For the years 2032 through 2096, the projected average annual real wage dif-
ferentials for OASDI covered employment are 1.77, 1.15, and
0.53 percentage points for the low-cost, intermediate, and high-cost assump-
tions, respectively. The rounded average annual real wage differentials are
unchanged from the 2021 report.
The real wage differential was 1.61 percentage points for 2020 and is esti-
mated to be 0.28 percentage point for 2021 under the intermediate assump-
tions. For the intermediate assumptions, the real wage differential is
projected to increase to 1.98 percentage points in 2022, and then generally
decline to its long-run average of 1.15 percentage points for 2032 through
2096. For the low-cost assumptions, the real wage differential is
1.86 percentage points for 2022, 3.87 percentage points in 2023, and reaches
its long-run average of 1.77 percentage points for 2032 through 2096. For the
high-cost assumptions, the real wage differential is 0.58 percentage point for
2021 and 0.57 percentage point for 2023. It then averages 1.27 percentage
points for 2024 through 2027, and gradually reaches its long-run average of
0.53 percentage point for 2032 through 2096.
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Economic Assumptions and Methods
Table V.B1.Principal Economic Assumptions
Annual percentage changea in
Earnings as Average Real-
Productivity a percent of Average GDP annual wage Consumer wage
(Total U.S. total labor hours price in covered Price differ-
Calendar year economy) compensation worked index employment Index ential b
Historical data:
5-year periods:
1960 to 1965 . . . 3.27 -0.18 0.16 1.36 3.22 1.24 1.98
1965 to 1970 . . . 2.06 -.30 -.68 4.02 5.84 4.23 1.61
1970 to 1975 . . . 2.09 -.49 -.89 6.61 6.58 6.76 -.22
1975 to 1980 . . . .95 -.33 -.18 7.21 8.88 8.91 -.04
1980 to 1985 . . . 1.73 -.36 .01 5.24 6.52 5.22 1.29
1985 to 1990 . . . 1.34 -.20 -.07 3.14 4.79 3.83 .96
1990 to 1995 . . . 1.31 -.11 .33 2.45 3.54 3.03 .51
1995 to 2000 . . . 2.33 .28 .14 1.67 5.31 2.43 2.88
2000 to 2005 . . . 2.63 -.38 -.79 2.32 2.69 2.49 .20
2005 to 2010 . . . 1.86 -.03 -.49 1.91 2.51 2.30 .22
2010 to 2015 . . . .43 .16 .37 1.71 2.94 1.61 1.32
2015 to 2020 . . . 1.27 .11 .01 1.68 2.93 1.70 1.23
Economic cycles:c
1969 to 1973 . . . 2.66 -.34 -.89 5.04 5.94 4.91 1.03
1973 to 1979 . . . 1.07 -.43 -.55 7.54 8.58 8.54 .04
1979 to 1990 . . . 1.41 -.29 -.11 4.61 5.78 5.30 .44
1990 to 2001 . . . 1.85 .05 .10 2.08 4.19 2.73 1.47
2001 to 2007 . . . 2.18 -.18 -.50 2.52 3.45 2.63 .83
2007 to 2019 . . . 1.08 .04 -.05 1.61 2.49 1.73 .76
2019 to 2021 . . . d1.80 d.35 .84 2.72 d4.17 3.22 d.95
Single years:
2011 . . . . . . . . . . .05 .32 .93 2.07 3.15 3.56 -.41
2012 . . . . . . . . . . .48 .47 -.01 1.88 3.33 2.10 1.23
2013 . . . . . . . . . . .61 -.33 .24 1.77 1.22 1.37 -.15
2014 . . . . . . . . . . .39 .27 .29 1.86 3.60 1.50 2.09
2015 . . . . . . . . . . .60 .05 .41 .96 3.42 -.41 3.83
2016 . . . . . . . . . . .38 .10 -.43 1.00 1.23 .98 .26
2017 . . . . . . . . . . .91 .13 .11 1.93 3.46 2.13 1.33
2018 . . . . . . . . . . .98 -.08 .34 2.40 3.58 2.55 1.03
2019 . . . . . . . . . . 1.45 .17 -.30 1.77 3.60 1.66 1.94
2020 . . . . . . . . . . 2.63 .22 .33 1.30 2.82 1.21 1.61
2021 . . . . . . . . . . d.98 d.47 1.36 4.16 d5.54 5.26 d.28
Intermediate:
2022 . . . . . . . . . . .69 .08 .03 4.49 6.52 4.54 1.98
2023 . . . . . . . . . . 1.83 .04 -.58 2.11 4.77 2.33 2.44
2024 . . . . . . . . . . 2.00 e -.58 2.05 4.31 2.40 1.91
2025 . . . . . . . . . . 2.12 -.03 -.32 2.05 4.07 2.40 1.67
2026 . . . . . . . . . . 1.73 -.03 -.05 2.05 3.96 2.40 1.56
2027 . . . . . . . . . . 1.62 -.05 -.05 2.05 3.86 2.40 1.46
2028 . . . . . . . . . . 1.61 -.05 -.05 2.05 3.77 2.40 1.37
2029 . . . . . . . . . . 1.62 -.05 -.05 2.05 3.69 2.40 1.29
2030 . . . . . . . . . . 1.63 -.09 -.05 2.05 3.65 2.40 1.25
2031 . . . . . . . . . . 1.63 -.09 -.05 2.05 3.64 2.40 1.24
2031 to 2096 . . . 1.63 -.10 -.05 2.05 3.55 2.40 1.15
109
Assumptions and Methods
Table V.B1.Principal Economic Assumptions (Cont.)
Annual percentage changea in
Earnings as Average Real-
Productivity a percent of Average GDP annual wage Consumer wage
(Total U.S. total labor hours price in covered Price differ-
Calendar year economy) compensation worked index employment Index ential b
Low-cost:
2022 . . . . . . . . . . 0.85 0.10 0.03 4.90 6.99 5.14 1.86
2023 . . . . . . . . . . 2.46 .06 -.58 2.80 6.87 3.00 3.87
2024 . . . . . . . . . . 2.33 .01 -.38 2.75 5.82 3.00 2.82
2025 . . . . . . . . . . 1.89 e .04 2.75 5.01 3.00 2.01
2026 . . . . . . . . . . 1.93 .01 .05 2.75 5.04 3.00 2.04
2027 . . . . . . . . . . 1.93 e .05 2.75 5.07 3.00 2.07
2028 . . . . . . . . . . 1.93 .01 .05 2.75 5.02 3.00 2.02
2029 . . . . . . . . . . 1.93 .02 .05 2.75 4.95 3.00 1.95
2030 . . . . . . . . . . 1.93 -.01 .05 2.75 4.90 3.00 1.90
2031 . . . . . . . . . . 1.93 -.01 .05 2.75 4.91 3.00 1.91
2031 to 2096 . . . 1.93 -.01 .05 2.75 4.77 3.00 1.77
High-cost:
2022 . . . . . . . . . . .03 .04 -.33 4.03 4.50 3.92 .58
2023 . . . . . . . . . . 2.16 .06 -1.16 .83 1.59 1.02 .57
2024 . . . . . . . . . . 1.50 -.02 -.44 1.08 3.23 1.53 1.70
2025 . . . . . . . . . . 1.10 -.07 e 1.34 2.98 1.79 1.19
2026 . . . . . . . . . . 1.29 -.08 -.05 1.35 3.04 1.80 1.24
2027 . . . . . . . . . . 1.24 -.11 -.15 1.35 2.74 1.80 .94
2028 . . . . . . . . . . 1.24 -.11 -.15 1.35 2.50 1.80 .70
2029 . . . . . . . . . . 1.30 -.12 -.15 1.35 2.43 1.80 .63
2030 . . . . . . . . . . 1.33 -.17 -.15 1.35 2.39 1.80 .59
2031 . . . . . . . . . . 1.33 -.18 -.15 1.35 2.38 1.80 .58
2031 to 2096 . . . 1.33 -.18 -.15 1.35 2.33 1.80 .53
a For rows with a single year listed, the value is the annual percentage change from the prior year. For rows
with a range of years listed, the value is the compound average annual percentage change.
b For rows with a single year listed, the value is the annual percentage change in the average annual wage in
covered employment less the annual percentage change in the Consumer Price Index. For rows with a range
of years listed, the value is the average of annual values of the real wage differential, beginning with the year
following the first year of the range. Values are rounded after all computations.
c Economic cycles are shown from peak to peak, except for the last cycle, which is not yet complete.
d Estimated values for 2021 vary slightly by alternative and are shown for the intermediate assumptions.
e Greater than -0.005 and less than 0.005 percent.
5. Labor Force, Employment, and Unemployment Projections
Employment is a fundamental component of economic output (GDP), tax-
able payroll, and the determination of OASDI benefit eligibility and benefit
levels. U.S. employment is projected in two components: the size of the
labor force (those employed or seeking employment) and the unemployment
rate (the proportion of those in the labor force who are not employed).
Table V.B2 provides the historical and projected rates of change in employ-
ment, which follow from the rates of change in the labor force, adjusted for
the varying unemployment rates from year to year.
The model used by the Office of the Chief Actuary projects the civilian labor
force by age, sex, marital status, and presence of children. Projections of the
labor force participation rates reflect changes in disability prevalence, educa-
110
Economic Assumptions and Methods
tional attainment, marriage patterns, the average level of Social Security
retirement benefits, the state of the economy, and life expectancy.
The annual rate of growth in the size of the labor force decreased from an
average of about 2.6 percent during the 1969-73 economic cycle and
2.7 percent during the 1973-79 cycle to 1.7 percent during the 1979-90 cycle,
1.2 percent during the 1990-2001 cycle, 1.1 percent during the
2001-07 cycle, and 0.5 percent during the 2007-19 cycle. From 2019 to
2021, during the current (incomplete) economic cycle, labor force growth
averaged -0.7 percent per year, reflecting the shrinking of the labor force
during the pandemic-induced recession of 2020 and its aftermath. Going for-
ward, labor force growth is expected to remain subdued due to a slowing of
growth in the working-age populationa consequence of the baby-boom
generation reaching retirement ages and succeeding lower-birth-rate cohorts
reaching working ages. Under the intermediate assumptions, the labor force
is projected to increase by an average of 0.8 percent per year from 2021 to
2031 and 0.4 percent per year from 2031 to 2096.
Labor force participation rates are projected with a model that uses demo-
graphic and economic assumptions specific to each alternative. More opti-
mistic economic assumptions in the low-cost alternative are consistent with
higher labor force participation rates, while demographic assumptions in the
low-cost alternative (such as slower improvement in longevity) are consis-
tent with lower labor force participation rates. These economic and demo-
graphic influences have largely offsetting effects. Therefore, the projected
labor force participation rates do not vary substantially across alternatives.
Historically, labor force participation rates reflect trends in demographics
and pensions. Between the mid-1960s and the mid-1980s, labor force partici-
pation rates at ages 50 and over declined for men but were fairly stable for
women. During this period, the baby-boom generation reached working age
and more women entered the labor force. This increasing supply of labor
allowed employers to offer attractive early retirement options. Between the
mid-1980s and the mid-1990s, participation rates at ages 55 and older
roughly stabilized for men and increased for women. Since the mid-1990s,
however, participation rates for both sexes at ages 50 and over have gener-
ally risen.
Many economic and demographic factors, including longevity, disability
prevalence, the business cycle, incentives for retirement in Social Security
and private pensions, education, and marriage patterns, will influence future
labor force participation rates. The Office of the Chief Actuary models some
of these factors explicitly. In particular for this years report, future disability
prevalence is assumed to be lower than in the 2021 report due to the change
111
Assumptions and Methods
in the ultimate disability incidence assumption from 5.0 to 4.8 per thousand
exposed. This change increases the projected total labor force by 0.2 percent
for 2096. To model the effects of other factors related to increases in life
expectancy, projected participation rates are adjusted upward for mid-career
and older ages to reflect projected increases in life expectancy. For the inter-
mediate projections, this adjustment increases the total labor force by
2.9 percent for 2096.
For men age 16 and over, the projected age-adjusted labor force participation
rates 1 for 2096 are 72.8, 72.5, and 71.9 percent for the low-cost, intermedi-
ate, and high-cost assumptions, respectively. For women age 16 and over, the
projected age-adjusted labor force participation rates for 2096 are 62.5, 62.1,
and 61.7 percent for the low-cost, intermediate, and high-cost assumptions,
respectively. These age-adjusted labor force participation rates for 2096 are
higher under all three alternatives than the age-adjusted rates for 2020 of
70.1 percent for men and 58.6 percent for women (based on actual age-spe-
cific rates published by the Bureau of Labor Statistics), primarily due to the
projected continued recovery from the latest recession and the Trustees pro-
jected increases in life expectancy.
The total civilian unemployment rates are presented in table V.B2. For years
through 2031, the table presents total civilian rates without adjustment for
the changing age-sex distribution of the population. For years after 2031, the
table presents age-sex-adjusted rates, using the age-sex distribution of the
2011 civilian labor force. Age-sex-adjusted rates allow for more meaningful
comparisons across longer time periods.
The total civilian unemployment rate reflects the projected levels of unem-
ployment for various age-sex groups of the population. Each groups unem-
ployment rate gradually approaches an assumed stable value within the first
ten years of the projection period for all alternatives, and thus the total age-
sex-adjusted civilian unemployment rate reaches its ultimate assumed value
within the first ten years of the projection period.
The assumed ultimate age-sex-adjusted unemployment rates are 3.5, 4.5, and
5.5 percent for the low-cost, intermediate, and high-cost assumptions,
respectively. These values are unchanged from the 2021 report. The Trustees
assume that, as the economy continues to recover from the most recent reces-
sion, the unemployment rate will decrease from 5.4 percent for 2021 to the
assumed 4.5 percent for 2026 under the intermediate assumptions. Under the
low-cost assumptions, the ultimate unemployment rate is reached in 2023.
1 The Office of the Chief Actuary adjusts the labor force participation rates to the 2011 age distribution of
the civilian noninstitutional U.S. population.
112
Economic Assumptions and Methods
Under the high-cost assumptions, the unemployment rate declines to
5.3 percent in 2022, then rises to 6.7 percent in 2023, and then gradually
decreases to the ultimate unemployment rate in 2028. 1
6. Gross Domestic Product Projections
The value of real GDP is equal to the product of three components:
(1) productivity (i.e., output per hour worked), (2) average weekly total
employment, 2 and (3) average hours worked per week, times 52. Conse-
quently, the growth rate in real GDP is equal to the combined growth rates
for productivity, total employment, and average hours worked. For the period
from 1969 to 2019, which covers the last six complete economic cycles, the
average annual growth in real GDP was 2.7 percent, combining average
growth rates of 1.6 percent for productivity, 1.3 percent for total employ-
ment, and -0.2 percent for average hours worked
( 1.027 = 1.016 × 1.013 × 0.998 ). The real GDP growth rate was -3.4 percent
for 2020 and is estimated to be 5.7 percent for 2021.
For the intermediate assumptions, the average annual growth in real GDP is
2.3 percent from 2021 to 2031, combining the average growth rates of
1.65 percent for productivity, 0.86 percent for total employment, and
-0.18 percent for average hours worked. The projected average annual
growth in real GDP of 2.3 percent from 2021 to 2031 is higher than the
underlying sustainable trend rate of 2.1 percent, due to the assumed recovery
from the recession. After 2031, the annual growth in real GDP follows the
sustainable trend rate and averages 2.0 percent, which combines the pro-
jected ultimate annual growth rate of 1.63 percent for productivity, average
annual growth rate of 0.40 percent for total employment, and the ultimate
annual growth rate of -0.05 percent for average hours worked per week. The
projected growth rate of real GDP is lower than the past average growth rate
mainly because the working-age population is expected to grow more slowly
than in the past.
For the low-cost assumptions, the annual growth in real GDP averages
3.1 percent from 2021 to 2031 and 2.7 percent from 2031 to 2096. For the
high-cost assumptions, the annual growth in real GDP averages 1.5 percent
from 2021 to 2031 and 1.2 percent from 2031 to 2096.
1 The assumed ultimate unemployment rates are age-sex-adjusted rates. For the intermediate and high-cost
assumptions, the age-sex-adjusted unemployment rate in 2028 through 2031 is 4.5 and 5.5 percent, respec-
tively, while the unadjusted rate is 4.4 and 5.4 percent, respectively, as shown in table V.B2.
2 Total employment is the sum of the U.S. Armed Forces and total civilian employment, which can be
expressed as a product of the total civilian labor force and the complement of the unemployment rate.
113
Assumptions and Methods
7. Interest Rates
Table V.B2 presents average annual nominal and real interest rates for newly
issued trust fund securities. The nominal rate is the average of the nominal
interest rates for special U.S. Government obligations issuable to the trust
funds in each of the 12 months of the year. Interest for these securities is
compounded semiannually, or at redemption if sooner. The real interest rate
is defined as the annual yield rate for investments in these securities divided
by the annual rate of growth in the CPI for the first year after issuance. The
real rate shown for each year reflects the actual realized (historical) or
expected (future) real yield on securities issuable in the prior year.
To develop a reasonable range of assumed ultimate future real interest rates
for the three alternatives, the Office of the Chief Actuary examined historical
experience for the last six complete economic cycles. For the period from
1969 to 2019, the real interest rate averaged 2.4 percent per year. The real
interest rates averaged 1.6, -1.0, 5.1, 4.1, 2.0, and 0.8 percent per year over
the economic cycles 1969-73, 1973-79, 1979-90, 1990-2001, 2001-07, and
2007-19, respectively. The assumed ultimate real interest rates are
2.8 percent, 2.3 percent, and 1.8 percent for the low-cost, intermediate, and
high-cost assumptions, respectively. These rates are unchanged from the
2021 report.
The average annual nominal interest rate was approximately 1.0 percent for
securities newly issuable in 2020, implying an effective annual yield of
1.0 percent for securities held one year. The CPI rose from 2020 to 2021 by
approximately 5.3 percent. The annual real interest rate for 2021 was there-
fore -4.1 percent ( 1.010 ⁄ 1.053 = 0.959 = 1 0.041 ). From 2021 to 2031,
projected nominal interest rates depend on changes in the economic cycle
and in the CPI. When combined with the ultimate CPI assumptions of 3.0,
2.4, and 1.8 percent, the assumed ultimate real interest rates produce ultimate
nominal interest rates of 5.8 percent for the low-cost assumptions,
4.7 percent for the intermediate assumptions, and 3.6 percent for the high-
cost assumptions. These nominal rates for newly issued trust fund securities
reach their ultimate levels by 2031.
114
Economic Assumptions and Methods
Table V.B2.Additional Economic Factors
Average annual Annual percentage changeb in Average annual interest rate
unemployment Labor Total Real
Calendar year rate a force c employment d GDP e Nominal f Real g
Historical data:
5-year periods:
1960 to 1965. . . . . 5.5 1.3 1.6 5.1 4.0 2.5
1965 to 1970. . . . . 3.9 2.2 2.1 3.5 5.9 1.0
1970 to 1975. . . . . 6.1 2.5 1.5 2.7 6.7 h
1975 to 1980. . . . . 6.8 2.7 2.9 3.7 8.5 -.9
1980 to 1985. . . . . 8.3 1.5 1.5 3.3 12.1 6.9
1985 to 1990. . . . . 5.9 1.7 2.0 3.3 8.5 5.1
1990 to 1995. . . . . 6.6 1.0 .9 2.6 7.0 4.3
1995 to 2000. . . . . 4.6 1.5 1.8 4.3 6.2 3.9
2000 to 2005. . . . . 5.4 .9 .7 2.6 4.6 2.4
2005 to 2010. . . . . 6.8 .6 -.4 1.0 3.8 1.8
2010 to 2015. . . . . 7.2 .4 1.3 2.1 2.0 .5
2015 to 2020. . . . . 5.0 .5 -.2 1.1 2.0 .5
Economic cycles: i
1969 to 1973. . . . . 5.3 2.6 1.8 3.6 6.5 1.6
1973 to 1979. . . . . 6.8 2.7 2.4 3.0 7.7 -1.0
1979 to 1990. . . . . 7.1 1.7 1.7 3.0 10.3 5.1
1990 to 2001. . . . . 5.5 1.2 1.2 3.2 6.5 4.1
2001 to 2007. . . . . 5.3 1.1 1.1 2.8 4.5 2.0
2007 to 2019. . . . . 6.4 .5 .6 1.7 2.4 .8
2019 to 2021. . . . . 6.7 j-.7 j-1.6 j1.0 1.2 -1.6
Single years:
2011 . . . . . . . . . . . 8.9 -.2 .6 1.5 2.4 -.7
2012 . . . . . . . . . . . 8.1 .9 1.8 2.3 1.5 .3
2013 . . . . . . . . . . . 7.4 .3 1.0 1.8 1.9 .1
2014 . . . . . . . . . . . 6.2 .3 1.6 2.3 2.3 .4
2015 . . . . . . . . . . . 5.3 .8 1.7 2.7 2.0 2.7
2016 . . . . . . . . . . . 4.9 1.3 1.7 1.7 1.8 1.0
2017 . . . . . . . . . . . 4.4 .7 1.2 2.3 2.3 -.3
2018 . . . . . . . . . . . 3.9 1.1 1.6 2.9 2.9 -.2
2019 . . . . . . . . . . . 3.7 .9 1.1 2.3 2.2 1.2
2020 . . . . . . . . . . . 8.1 -1.7 -6.2 -3.4 1.0 1.0
2021 . . . . . . . . . . . 5.4 j.3 j3.2 j5.7 1.4 -4.1
115
Assumptions and Methods
Table V.B2.Additional Economic Factors (Cont.)
Average annual Annual percentage changeb in Average annual interest rate
unemployment Labor Total Real
Calendar year rate a force c employment d GDP e Nominal f Real g
Intermediate:
2022 . . . . . . . . . . . 4.0 1.7 3.1 3.9 1.8 -3.0
2023 . . . . . . . . . . . 4.0 1.6 1.6 2.8 2.3 -.5
2024 . . . . . . . . . . . 4.2 1.2 1.0 2.4 2.9 -.1
2025 . . . . . . . . . . . 4.4 .6 .4 2.2 3.3 .5
2026 . . . . . . . . . . . 4.5 .4 .4 2.0 3.7 .9
2027 . . . . . . . . . . . 4.5 .4 .5 2.0 4.1 1.3
2028 . . . . . . . . . . . 4.4 .4 .4 2.0 4.3 1.7
2029 . . . . . . . . . . . 4.4 .5 .5 2.0 4.5 1.9
2030 . . . . . . . . . . . 4.4 .4 .4 2.0 4.6 2.1
2031 . . . . . . . . . . . 4.4 .4 .4 2.0 4.7 2.2
2035 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2040 . . . . . . . . . . . 4.5 .3 .3 1.9 4.7 2.3
2045 . . . . . . . . . . . 4.5 .3 .3 1.9 4.7 2.3
2050 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2055 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2060 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2065 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2070 . . . . . . . . . . . 4.5 .3 .3 1.9 4.7 2.3
2075 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2080 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
2085 . . . . . . . . . . . 4.5 .5 .5 2.1 4.7 2.3
2090 . . . . . . . . . . . 4.5 .5 .5 2.1 4.7 2.3
2095 . . . . . . . . . . . 4.5 .5 .5 2.1 4.7 2.3
2100 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3
Low-cost:
2022 . . . . . . . . . . . 3.8 2.0 3.7 4.6 2.4 -3.6
2023 . . . . . . . . . . . 3.5 2.0 2.3 4.2 3.4 -.5
2024 . . . . . . . . . . . 3.5 1.1 1.1 3.1 3.9 .5
2025 . . . . . . . . . . . 3.5 .8 .8 2.8 4.4 .9
2026 . . . . . . . . . . . 3.5 .7 .7 2.7 4.8 1.4
2027 . . . . . . . . . . . 3.5 .7 .7 2.7 5.1 1.8
2028 . . . . . . . . . . . 3.5 .6 .6 2.6 5.4 2.1
2029 . . . . . . . . . . . 3.5 .7 .7 2.7 5.6 2.4
2030 . . . . . . . . . . . 3.5 .6 .6 2.6 5.7 2.6
2031 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.7
2035 . . . . . . . . . . . 3.5 .6 .6 2.5 5.8 2.8
2040 . . . . . . . . . . . 3.5 .5 .5 2.5 5.8 2.8
2045 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8
2050 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8
2055 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8
2060 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8
2065 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8
2070 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8
2075 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8
2080 . . . . . . . . . . . 3.5 .8 .7 2.7 5.8 2.8
2085 . . . . . . . . . . . 3.5 .8 .8 2.8 5.8 2.8
2090 . . . . . . . . . . . 3.5 .8 .8 2.8 5.8 2.8
2095 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8
2100 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8
116
Economic Assumptions and Methods
Table V.B2.Additional Economic Factors (Cont.)
Average annual Annual percentage changeb in Average annual interest rate
unemployment Labor Total Real
Calendar year rate a force c employment d GDP e Nominal f Real g
High-cost:
2022 . . . . . . . . . . . 5.3 0.6 0.7 0.4 1.1 -2.4
2023 . . . . . . . . . . . 6.7 1.2 -.4 .6 1.2 .1
2024 . . . . . . . . . . . 6.2 1.1 1.7 2.8 2.2 -.3
2025 . . . . . . . . . . . 5.8 .7 1.1 2.2 2.6 .4
2026 . . . . . . . . . . . 5.6 .4 .7 1.9 2.9 .8
2027 . . . . . . . . . . . 5.4 .4 .5 1.6 3.1 1.1
2028 . . . . . . . . . . . 5.4 .3 .3 1.4 3.2 1.3
2029 . . . . . . . . . . . 5.4 .3 .3 1.5 3.4 1.4
2030 . . . . . . . . . . . 5.4 .3 .3 1.4 3.6 1.6
2031 . . . . . . . . . . . 5.4 .2 .2 1.4 3.6 1.8
2035 . . . . . . . . . . . 5.5 .2 .2 1.4 3.6 1.8
2040 . . . . . . . . . . . 5.5 .1 .1 1.3 3.6 1.8
2045 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2050 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2055 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2060 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2065 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2070 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8
2075 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8
2080 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8
2085 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8
2090 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2095 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
2100 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
a The Office of the Chief Actuary adjusts the civilian unemployment rates for 2032 and later to the age-sex
distribution of the civilian labor force in 2011. For years through 2031, the values are the total rates without
adjustment for the changing age-sex distribution.
b For rows with a single year listed, the value is the annual percentage change from the prior year. For rows
with a range of years listed, the value is the compounded average annual percentage change.
c The U.S. civilian labor force.
d Total U.S. military and civilian employment.
e The value of the total output of goods and services in 2012 dollars.
f The average of the nominal interest rates, compounded semiannually, for special public-debt obligations
issuable to the trust funds in each of the 12 months of the year.
g The realized or expected annual real yield for each year on securities issuable in the prior year.
h Greater than -0.05 and less than 0.05 percent.
i Economic cycles are shown from peak to peak, except for the last cycle, which is not yet complete.
j Historical data are not available for the full year. Estimated values vary slightly by alternative and are shown
for the intermediate assumptions.
117
Assumptions and Methods
C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS
The Office of the Chief Actuary at the Social Security Administration uses a
set of models to project future income and cost under the OASDI program.
These models rely not only on the demographic and economic assumptions
described in the previous sections, but also on a number of program-specific
assumptions and methods. Values of many program parameters change from
year to year as prescribed by formulas set out in the Social Security Act.
These program parameters affect the level of payroll taxes collected and the
level of benefits paid. The office uses complex models to project the num-
bers of future workers covered under OASDI and the levels of their covered
earnings, as well as the numbers of future beneficiaries and the expected lev-
els of their benefits. The following subsections provide descriptions of these
program-specific assumptions and methods.
1. Automatically Adjusted Program Parameters
The Social Security Act requires that certain parameters affecting the deter-
mination of OASDI benefits and taxes be adjusted annually to reflect
changes in particular economic measures. Formulas prescribed in the law,
applied to reported statistics, change these program parameters annually. The
law bases these automatic adjustments on measured changes in the national
average wage index (AWI) and the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI). 1 This section shows values for program
parameters adjusted using these indices from the time that these adjustments
became effective through 2031. Projected values for future years depend on
the economic assumptions described in the preceding section of this report.
Tables V.C1 and V.C2 present the historical and projected values of the CPI-
based benefit increases, the AWI series, and the values of many of the wage-
indexed program parameters. Each table shows projections under the three
alternative sets of assumptions. Table V.C1 includes:
The annual cost-of-living benefit increase percentages. The automatic
cost-of-living adjustment provisions in the Social Security Act specify
increases in OASDI monthly benefits based on increases in the CPI.
Volatility in oil prices has resulted in substantial volatility in cost-of-liv-
ing adjustments over the last two decades. A large cost-of-living adjust-
ment for December 2008 was followed by no cost-of-living adjustments
for December 2009 and December 2010. More recent volatility in oil
1 The Federal Register publishes details of these indexation procedures annually. Also see
www.ssa.gov/OACT/COLA/.
118
Program Assumptions and Methods
prices again affected the CPI, resulting in no cost-of-living adjustment
for December 2015. Cost-of-living adjustments resumed in December
2016. All three sets of assumptions include annual cost-of-living adjust-
ments for all future years.
The annual levels of and percentage increases in the AWI. Under sec-
tion 215(b)(3) of the Social Security Act, Social Security benefit com-
putations index taxable earnings (for most workers first becoming
eligible for benefits in 1979 or later) using the AWI for each year after
1950. This procedure converts a workers past earnings to approxi-
mately average-wage-indexed equivalent values near the time of his or
her benefit eligibility. Other program parameters presented in this sec-
tion that are subject to the automatic-adjustment provisions also rely on
the AWI.
The wage-indexed contribution and benefit base. For any year, the con-
tribution and benefit base is the maximum amount of earnings subject to
the OASDI payroll tax and creditable toward benefit computation. The
Social Security Act defers any increase in the contribution and benefit
base if there is no cost-of-living adjustment effective for December of
the preceding year. There was no increase in the contribution and bene-
fit base for 2010, 2011, or 2016 because there was no cost-of-living
adjustment for the immediate prior December in each case. Under all
three sets of assumptions, the contribution and benefit base is projected
to increase for all future years.
The wage-indexed retirement earnings test exempt amounts. The
exempt amounts are the annual amount of earnings below which benefi-
ciaries do not have benefits withheld. A lower exempt amount applies
for years prior to the year of attaining normal retirement age. A higher
exempt amount applies beginning with the year in which a beneficiary
attains normal retirement age. Starting in 2000, the retirement earnings
test no longer applies beginning with the month of attaining normal
retirement age. The Social Security Act defers any increase in these
exempt amounts if there is no cost-of-living adjustment effective for
December of the preceding year. There was no increase in these exempt
amounts for 2010, 2011, or 2016 because there was no cost-of-living
adjustment for the immediate prior December. Under all three sets of
assumptions, the exempt amounts increase for all future years.
119
Assumptions and Methods
Table V.C1.Cost-of-Living Benefit Increases, Average Wage Index, Contribution and
Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2031
Cost-of-living Average Retirement earnings
benefit wage index (AWI) b Contribution test exempt amount
increasea Increase and benefit Under
Calendar year (percent) Amount (percent) base c NRAd At NRAe
Historical data:
1975 . . . . . . . . . . . 8.0 $8,630.92 7.5 $14,100 $2,520 $2,520
1976 . . . . . . . . . . . 6.4 9,226.48 6.9 15,300 2,760 2,760
1977 . . . . . . . . . . . 5.9 9,779.44 6.0 16,500 3,000 3,000
1978 . . . . . . . . . . . 6.5 10,556.03 7.9 17,700 3,240 4,000
1979 . . . . . . . . . . . 9.9 11,479.46 8.7 22,900 3,480 4,500
1980 . . . . . . . . . . . 14.3 12,513.46 9.0 25,900 3,720 5,000
1981 . . . . . . . . . . . 11.2 13,773.10 10.1 29,700 4,080 5,500
1982 . . . . . . . . . . . 7.4 14,531.34 5.5 32,400 4,440 6,000
1983 . . . . . . . . . . . 3.5 15,239.24 4.9 35,700 4,920 6,600
1984 . . . . . . . . . . . 3.5 16,135.07 5.9 37,800 5,160 6,960
1985 . . . . . . . . . . . 3.1 16,822.51 4.3 39,600 5,400 7,320
1986 . . . . . . . . . . . 1.3 17,321.82 3.0 42,000 5,760 7,800
1987 . . . . . . . . . . . 4.2 18,426.51 6.4 43,800 6,000 8,160
1988 . . . . . . . . . . . 4.0 19,334.04 4.9 45,000 6,120 8,400
1989 . . . . . . . . . . . 4.7 20,099.55 4.0 48,000 6,480 8,880
1990 . . . . . . . . . . . 5.4 21,027.98 4.6 51,300 6,840 9,360
1991 . . . . . . . . . . . 3.7 21,811.60 3.7 53,400 7,080 9,720
1992 . . . . . . . . . . . 3.0 22,935.42 5.2 55,500 7,440 10,200
1993 . . . . . . . . . . . 2.6 23,132.67 .9 57,600 7,680 10,560
1994 . . . . . . . . . . . 2.8 23,753.53 2.7 60,600 8,040 11,160
1995 . . . . . . . . . . . 2.6 24,705.66 4.0 61,200 8,160 11,280
1996 . . . . . . . . . . . 2.9 25,913.90 4.9 62,700 8,280 12,500
1997 . . . . . . . . . . . 2.1 27,426.00 5.8 65,400 8,640 13,500
1998 . . . . . . . . . . . 1.3 28,861.44 5.2 68,400 9,120 14,500
1999 . . . . . . . . . . . f 2.5 30,469.84 5.6 72,600 9,600 15,500
2000 . . . . . . . . . . . 3.5 32,154.82 5.5 76,200 10,080 17,000
2001 . . . . . . . . . . . 2.6 32,921.92 2.4 80,400 10,680 25,000
2002 . . . . . . . . . . . 1.4 33,252.09 1.0 84,900 11,280 30,000
2003 . . . . . . . . . . . 2.1 34,064.95 2.4 87,000 11,520 30,720
2004 . . . . . . . . . . . 2.7 35,648.55 4.6 87,900 11,640 31,080
2005 . . . . . . . . . . . 4.1 36,952.94 3.7 90,000 12,000 31,800
2006 . . . . . . . . . . . 3.3 38,651.41 4.6 94,200 12,480 33,240
2007 . . . . . . . . . . . 2.3 40,405.48 4.5 97,500 12,960 34,440
2008 . . . . . . . . . . . 5.8 41,334.97 2.3 102,000 13,560 36,120
2009 . . . . . . . . . . . .0 40,711.61 -1.5 106,800 14,160 37,680
2010 . . . . . . . . . . . .0 41,673.83 2.4 106,800 14,160 37,680
2011 . . . . . . . . . . . 3.6 42,979.61 3.1 106,800 14,160 37,680
2012 . . . . . . . . . . . 1.7 44,321.67 3.1 110,100 14,640 38,880
2013 . . . . . . . . . . . 1.5 44,888.16 1.3 113,700 15,120 40,080
2014 . . . . . . . . . . . 1.7 46,481.52 3.5 117,000 15,480 41,400
2015 . . . . . . . . . . . .0 48,098.63 3.5 118,500 15,720 41,880
2016 . . . . . . . . . . . .3 48,642.15 1.1 118,500 15,720 41,880
2017 . . . . . . . . . . . 2.0 50,321.89 3.5 127,200 16,920 44,880
2018 . . . . . . . . . . . 2.8 52,145.80 3.6 128,400 17,040 45,360
2019 . . . . . . . . . . . 1.6 54,099.99 3.7 132,900 17,640 46,920
2020 . . . . . . . . . . . 1.3 55,628.60 2.8 137,700 18,240 48,600
120
Program Assumptions and Methods
Table V.C1.Cost-of-Living Benefit Increases, Average Wage Index, Contribution and
Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2031 (Cont.)
Cost-of-living Average Retirement earnings
benefit wage index (AWI) b Contribution test exempt amount
increasea Increase and benefit Under
Calendar year (percent) Amount (percent) base c NRAd At NRAe
Intermediate:
2021 . . . . . . . . . . . g5.9 $58,743.07 5.6 g$142,800 g$18,960 g $50,520
2022 . . . . . . . . . . . 3.8 62,583.15 6.5 g147,000 g19,560 g51,960
2023 . . . . . . . . . . . 2.5 65,571.72 4.8 155,100 20,640 54,840
2024 . . . . . . . . . . . 2.4 68,371.79 4.3 165,300 21,960 58,440
2025 . . . . . . . . . . . 2.4 71,147.65 4.1 173,400 23,040 61,200
2026 . . . . . . . . . . . 2.4 73,980.60 4.0 180,600 24,000 63,840
2027 . . . . . . . . . . . 2.4 76,857.74 3.9 188,100 24,960 66,360
2028 . . . . . . . . . . . 2.4 79,761.29 3.8 195,600 25,920 69,000
2029 . . . . . . . . . . . 2.4 82,702.63 3.7 203,100 27,000 71,760
2030 . . . . . . . . . . . 2.4 85,713.03 3.6 210,600 27,960 74,400
2031 . . . . . . . . . . . 2.4 88,836.46 3.6 218,400 29,040 77,160
Low-cost:
2021 . . . . . . . . . . . g 5.9 58,757.18 5.6 g 142,800 g18,960 g 50,520
2022 . . . . . . . . . . . 4.6 62,852.52 7.0 g147,000 g19,560 g51,960
2023 . . . . . . . . . . . 3.0 67,130.25 6.8 155,100 20,640 54,840
2024 . . . . . . . . . . . 3.0 70,999.01 5.8 166,200 22,080 58,680
2025 . . . . . . . . . . . 3.0 74,558.14 5.0 177,300 23,520 62,640
2026 . . . . . . . . . . . 3.0 78,330.86 5.1 187,500 24,840 66,240
2027 . . . . . . . . . . . 3.0 82,316.43 5.1 197,100 26,160 69,600
2028 . . . . . . . . . . . 3.0 86,451.88 5.0 207,000 27,480 73,080
2029 . . . . . . . . . . . 3.0 90,722.28 4.9 217,500 28,800 76,800
2030 . . . . . . . . . . . 3.0 95,162.12 4.9 228,300 30,360 80,640
2031 . . . . . . . . . . . 3.0 99,831.80 4.9 239,700 31,800 84,600
High-cost:
2021 . . . . . . . . . . . g5.9 58,728.91 5.6 g142,800 g18,960 g50,520
2022 . . . . . . . . . . . 3.1 61,441.05 4.6 g147,000 g19,560 g51,960
2023 . . . . . . . . . . . 1.1 62,461.55 1.7 155,100 20,640 54,840
2024 . . . . . . . . . . . 1.6 64,422.99 3.1 162,300 21,480 57,360
2025 . . . . . . . . . . . 1.8 66,330.90 3.0 165,000 21,840 58,320
2026 . . . . . . . . . . . 1.8 68,361.44 3.1 170,100 22,560 60,120
2027 . . . . . . . . . . . 1.8 70,254.36 2.8 175,200 23,280 61,920
2028 . . . . . . . . . . . 1.8 72,021.11 2.5 180,600 24,000 63,840
2029 . . . . . . . . . . . 1.8 73,775.14 2.4 185,700 24,600 65,520
2030 . . . . . . . . . . . 1.8 75,544.17 2.4 190,200 25,200 67,200
2031 . . . . . . . . . . . 1.8 77,352.07 2.4 195,000 25,920 68,880
a Effective with benefits payable for June in each year 1975-82, and for December in each year after 1982.
b See table VI.G6 for projected dollar amounts of the AWI for years beyond the last year of this table.
c Public Law 95-216 specified amounts for 1978-81. Public Law 101-239 changed the indexing procedure
and caused slightly higher bases after 1989.
d Normal retirement age. See table V.C3 for specific values.
e In 1955-82, the retirement earnings test did not apply at ages 72 and over. In 1983-99, the test did not apply
at ages 70 and over. Beginning in 2000, the test does not apply beginning with the month of normal retirement
age attainment. In the year of normal retirement age attainment, the higher exempt amount applies to earnings
prior to the month of normal retirement age attainment. Public Law 95-216 specified amounts for 1978-82.
Public Law 104-121 specified amounts for 1996-2002.
f Originally determined as 2.4 percent. Pursuant to Public Law 106-554, effectively 2.5 percent.
g Actual amount, as determined under automatic-adjustment provisions.
Table V.C2 shows values for other wage-indexed parameters. The table pro-
vides historical values from 1978, when indexing of the amount of earnings
required for a quarter of coverage first began, through 2022, and also shows
121
Assumptions and Methods
projected values through 2031. These other wage-indexed program parame-
ters are:
The bend points in the formula for computing the primary insurance
amount (PIA) for workers who reach age 62, become disabled, or die in
a given year. As figure V.C1 illustrates, these two bend points define
three ranges in a workers average indexed monthly earnings (AIME).
The formula for the workers PIA multiplies a 90, 32, or 15 percent fac-
tor by the portion of the workers AIME that falls within the three
respective ranges, and then adds the resulting products together.
Figure V.C1.Primary-Insurance-Amount Formula for Those Newly Eligible in 2022
$3,000
Second
bend point
$2,500 15%
($6,172)
Primary Insurance Amount
$2,000
First 32%
$1,500 bend point
($1,024)
$1,000
$500
90%
$0
$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000
Average Indexed Monthly Earnings
The bend points in the formula for computing the maximum total
amount of monthly benefits payable based on the earnings record of a
retired or deceased worker (maximum family benefit). As figure V.C2
illustrates, these three bend points define four ranges in a workers PIA.
The formula for the maximum family benefit multiplies a 150, 272, 134,
or 175 percent factor by the portion of the workers PIA that falls within
the four respective ranges, and then adds the resulting products together.
122
Program Assumptions and Methods
Figure V.C2.OASI Maximum-Family-Benefit Formula
for Those Newly Eligible in 2022
$6,000
$5,000
Second
Maximum family benefit
175%
bend point 134%
$4,000 ($1,889)
$3,000
First 272%
bend point
$2,000 ($1,308)
Third
bend point
$1,000 ($2,463)
150%
$0
$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000
Primary Insurance Amount
The amount of earnings required in a year to earn a quarter of coverage
(QC). The number and timing of QCs earned determines an individuals
insured statusthe basic requirement for benefit eligibility under
OASDI.
The old-law contribution and benefit basethe contribution and benefit
base that would have been in effect without enactment of the 1977
amendments. This old-law base is used in determining special-mini-
mum benefits for certain workers who have many years of low earnings
in covered employment. Since 1986, the calculation of OASDI benefits
for certain workers who are eligible to receive pensions based on non-
covered employment uses the old-law base. In addition, the Railroad
Retirement program and the Employee Retirement Income Security Act
of 1974 use the old-law base for certain purposes.
123
Assumptions and Methods
Table V.C2.Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2031
AIME bend PIA bend points Earnings Old-law
points in PIA in OASI maximum- required for contribution
formula a family-benefit formula b a quarter of and benefit
Calendar year First Second First Second Third coverage base c
Historical data:
1978 . . . . . . . . . d d d d d e $250 e $17,700
1979 . . . . . . . . . e $180 e $1,085 e $230 e $332 e $433 260 18,900
1980 . . . . . . . . . 194 1,171 248 358 467 290 20,400
1981 . . . . . . . . . 211 1,274 270 390 508 310 22,200
1982 . . . . . . . . . 230 1,388 294 425 554 340 24,300
1983 . . . . . . . . . 254 1,528 324 468 610 370 26,700
1984 . . . . . . . . . 267 1,612 342 493 643 390 28,200
1985 . . . . . . . . . 280 1,691 358 517 675 410 29,700
1986 . . . . . . . . . 297 1,790 379 548 714 440 31,500
1987 . . . . . . . . . 310 1,866 396 571 745 460 32,700
1988 . . . . . . . . . 319 1,922 407 588 767 470 33,600
1989 . . . . . . . . . 339 2,044 433 626 816 500 35,700
1990 . . . . . . . . . 356 2,145 455 656 856 520 38,100
1991 . . . . . . . . . 370 2,230 473 682 890 540 39,600
1992 . . . . . . . . . 387 2,333 495 714 931 570 41,400
1993 . . . . . . . . . 401 2,420 513 740 966 590 42,900
1994 . . . . . . . . . 422 2,545 539 779 1,016 620 45,000
1995 . . . . . . . . . 426 2,567 544 785 1,024 630 45,300
1996 . . . . . . . . . 437 2,635 559 806 1,052 640 46,500
1997 . . . . . . . . . 455 2,741 581 839 1,094 670 48,600
1998 . . . . . . . . . 477 2,875 609 880 1,147 700 50,700
1999 . . . . . . . . . 505 3,043 645 931 1,214 740 53,700
2000 . . . . . . . . . 531 3,202 679 980 1,278 780 56,700
2001 . . . . . . . . . 561 3,381 717 1,034 1,349 830 59,700
2002 . . . . . . . . . 592 3,567 756 1,092 1,424 870 63,000
2003 . . . . . . . . . 606 3,653 774 1,118 1,458 890 64,500
2004 . . . . . . . . . 612 3,689 782 1,129 1,472 900 65,100
2005 . . . . . . . . . 627 3,779 801 1,156 1,508 920 66,900
2006 . . . . . . . . . 656 3,955 838 1,210 1,578 970 69,900
2007 . . . . . . . . . 680 4,100 869 1,255 1,636 1,000 72,600
2008 . . . . . . . . . 711 4,288 909 1,312 1,711 1,050 75,900
2009 . . . . . . . . . 744 4,483 950 1,372 1,789 1,090 79,200
2010 . . . . . . . . . 761 4,586 972 1,403 1,830 1,120 79,200
2011 . . . . . . . . . 749 4,517 957 1,382 1,803 1,120 79,200
2012 . . . . . . . . . 767 4,624 980 1,415 1,845 1,130 81,900
2013 . . . . . . . . . 791 4,768 1,011 1,459 1,903 1,160 84,300
2014 . . . . . . . . . 816 4,917 1,042 1,505 1,962 1,200 87,000
2015 . . . . . . . . . 826 4,980 1,056 1,524 1,987 1,220 88,200
2016 . . . . . . . . . 856 5,157 1,093 1,578 2,058 1,260 88,200
2017 . . . . . . . . . 885 5,336 1,131 1,633 2,130 1,300 94,500
2018 . . . . . . . . . 895 5,397 1,144 1,651 2,154 1,320 95,400
2019 . . . . . . . . . 926 5,583 1,184 1,708 2,228 1,360 98,700
2020 . . . . . . . . . 960 5,785 1,226 1,770 2,309 1,410 102,300
2021 . . . . . . . . . 996 6,002 1,272 1,837 2,395 1,470 106,200
2022 . . . . . . . . . 1,024 6,172 1,308 1,889 2,463 1,510 109,200
Intermediate:
2023 . . . . . . . . . 1,081 6,517 1,382 1,994 2,601 1,590 115,200
2024 . . . . . . . . . 1,152 6,943 1,472 2,125 2,771 1,700 122,700
2025 . . . . . . . . . 1,207 7,275 1,542 2,226 2,903 1,780 128,700
2026 . . . . . . . . . 1,258 7,586 1,608 2,321 3,027 1,850 134,100
2027 . . . . . . . . . 1,310 7,894 1,673 2,415 3,150 1,930 139,500
2028 . . . . . . . . . 1,362 8,208 1,740 2,512 3,276 2,000 145,200
2029 . . . . . . . . . 1,415 8,527 1,808 2,609 3,403 2,080 150,900
2030 . . . . . . . . . 1,468 8,849 1,876 2,708 3,532 2,160 156,600
2031 . . . . . . . . . 1,522 9,176 1,945 2,808 3,662 2,240 162,300
124
Program Assumptions and Methods
Table V.C2.Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2031 (Cont.)
AIME bend PIA bend points Earnings Old-law
points in PIA in OASI maximum- required for contribution
formula a family-benefit formula b a quarter of and benefit
Calendar year First Second First Second Third coverage base c
Low-cost:
2023 . . . . . . . . . $1,081 $6,519 $1,382 $1,995 $2,602 $1,590 $115,200
2024 . . . . . . . . . 1,157 6,973 1,478 2,134 2,783 1,700 123,300
2025 . . . . . . . . . 1,236 7,448 1,579 2,279 2,972 1,820 131,700
2026 . . . . . . . . . 1,307 7,877 1,670 2,410 3,144 1,920 139,200
2027 . . . . . . . . . 1,372 8,272 1,754 2,531 3,301 2,020 146,400
2028 . . . . . . . . . 1,442 8,691 1,842 2,659 3,468 2,120 153,600
2029 . . . . . . . . . 1,515 9,133 1,936 2,795 3,645 2,230 161,400
2030 . . . . . . . . . 1,591 9,592 2,033 2,935 3,828 2,340 169,500
2031 . . . . . . . . . 1,670 10,065 2,134 3,080 4,017 2,460 177,900
High-cost:
2023 . . . . . . . . . 1,081 6,516 1,381 1,994 2,600 1,590 115,200
2024 . . . . . . . . . 1,131 6,817 1,445 2,086 2,720 1,660 120,600
2025 . . . . . . . . . 1,150 6,930 1,469 2,120 2,766 1,690 122,700
2026 . . . . . . . . . 1,186 7,148 1,515 2,187 2,852 1,750 126,300
2027 . . . . . . . . . 1,221 7,359 1,560 2,252 2,937 1,800 130,200
2028 . . . . . . . . . 1,258 7,584 1,608 2,321 3,027 1,850 134,100
2029 . . . . . . . . . 1,293 7,795 1,652 2,385 3,111 1,900 137,700
2030 . . . . . . . . . 1,326 7,991 1,694 2,445 3,189 1,950 141,300
2031 . . . . . . . . . 1,358 8,185 1,735 2,505 3,267 2,000 144,600
a The formula to compute a PIA is: (1) 90% of AIME below the first bend point, plus (2) 32% of AIME in
excess of the first bend point but not in excess of the second, plus (3) 15% of AIME in excess of the second
bend point. The bend points are determined based on the first year a beneficiary becomes eligible for bene-
fits.
b The formula to compute an OASI family maximum is: (1) 150% of PIA below the first bend point, plus
(2) 272% of PIA in excess of the first bend point but not in excess of the second, plus (3) 134% of PIA in
excess of the second bend point but not in excess of the third, plus (4) 175% of PIA in excess of the third
bend point. This formula also determines family maximums for disabled workers first eligible after 1978 and
entitled before July 1980.
c Contribution and benefit base that would have been in effect without enactment of the Social Security
Amendments of 1977. Public Law 101-239 changed the indexing procedure and caused slightly higher bases
after 1989.
d No provision in law for this amount in this year.
e Amount specified by Social Security Amendments of 1977.
In addition to the economic factors that affect the determination of OASDI
benefits, there are certain legislated changes that affect current and future
benefit amounts. Two such changes are the scheduled increases in the normal
retirement age and in the delayed retirement credits. Table V.C3 shows the
scheduled changes in these parameters and the resulting effects on benefit
levels expressed as a percentage of PIA.
125
Assumptions and Methods
Table V.C3.Legislated Changes in Normal Retirement Age and Delayed Retirement
Credits for Persons Attaining Age 62 in Each Year 1986 and Later
Credit for each Benefit, as a percentage of PIA,
Year of Normal year of delayed beginning at age
attainment of retirement retirement after
Year of birth age 62 age (NRA) NRA (percent) 62 65 66 67 70
1924 . . . . . . . . 1986. . . . . . . . 65 . . . . . . . . 3 80 100 103 106 115
1925 . . . . . . . . 1987. . . . . . . . 65 . . . . . . . . 3 1/2 80 100 103 1/2 107 117 1/2
1926 . . . . . . . . 1988. . . . . . . . 65 . . . . . . . . 3 1/2 80 100 103 1/2 107 117 1/2
1927 . . . . . . . . 1989. . . . . . . . 65 . . . . . . . . 4 80 100 104 108 120
1928 . . . . . . . . 1990. . . . . . . . 65 . . . . . . . . 4 80 100 104 108 120
1929 . . . . . . . . 1991. . . . . . . . 65 . . . . . . . . 4 1/2 80 100 104 1/2 109 122 1/2
1930 . . . . . . . . 1992. . . . . . . . 65 . . . . . . . . 4 1/2 80 100 104 1/2 109 122 1/2
1931 . . . . . . . . 1993. . . . . . . . 65 . . . . . . . . 5 80 100 105 110 125
1932 . . . . . . . . 1994. . . . . . . . 65 . . . . . . . . 5 80 100 105 110 125
1933 . . . . . . . . 1995. . . . . . . . 65 . . . . . . . . 5 1/2 80 100 1
105 /2 111 127 1/2
1934 . . . . . . . . 1996. . . . . . . . 65 . . . . . . . . 5 1/2 80 100 1
105 /2 111 127 1/2
1935 . . . . . . . . 1997. . . . . . . . 65 . . . . . . . . 6 80 100 106 112 130
1936 . . . . . . . . 1998. . . . . . . . 65 . . . . . . . . 6 80 100 106 112 130
1937 . . . . . . . . 1999. . . . . . . . 65 . . . . . . . . 6 1/2 80 100 106 1/2 113 132 1/2
1938 . . . . . . . . 2000. . . . . . . . 65, 2 mo . . . 6 1/2 79 1/6 98 8/9 105 5/12 111 11/12 131 5/12
1939 . . . . . . . . 2001. . . . . . . . 65, 4 mo . . . 7 78 1/3 97 7/9 104 2/3 111 2/3 132 2/3
1940 . . . . . . . . 2002. . . . . . . . 65, 6 mo . . . 7 77 1/2 96 2/3 103 1/2 110 1/2 131 1/2
1941 . . . . . . . . 2003. . . . . . . . 65, 8 mo . . . 7 1/2 76 2/3 95 5/9 102 1/2 110 132 1/2
1942 . . . . . . . . 2004. . . . . . . . 65, 10 mo . . 7 1/2 75 5/6 94 4/9 101 1/4 108 3/4 131 1/4
1943-54 . . . . . 2005-16 . . . . . 66 . . . . . . . . 8 75 93 1/3 100 108 132
1955 . . . . . . . . 2017. . . . . . . . 66, 2 mo . . . 8 74 1/6 92 2/9 98 8/9 106 2/3 130 2/3
1956 . . . . . . . . 2018. . . . . . . . 66, 4 mo . . . 8 73 1/3 91 1/9 97 7/9 105 1/3 129 1/3
1957 . . . . . . . . 2019. . . . . . . . 66, 6 mo . . . 8 72 1/2 90 96 2/3 104 128
1958 . . . . . . . . 2020. . . . . . . . 66, 8 mo . . . 8 71 2/3 88 8/9 95 5/9 102 2/3 126 2/3
1959 . . . . . . . . 2021. . . . . . . . 66, 10 mo . . 8 70 5/6 87 7/9 94 4/9 101 1/3 125 1/3
1960 & later . . 2022 & later . 67 . . . . . . . . 8 70 86 2/3 93 1/3 100 124
2. Covered Employment
Projections of the total U.S. civilian labor force and unemployment rate (see
table V.B2) are based on Bureau of Labor Statistics definitions from the Cur-
rent Population Survey (CPS). These projections represent the average
weekly number of employed and unemployed persons, age 16 and over, in
the U.S. in a calendar year. Covered employment for a calendar year is
defined as the total number of persons who have any OASDI covered earn-
ings (that is, earnings subject to the OASDI payroll tax) at any time during
that year. For those age 16 and over, projected covered employment is the
sum of age-sex groups, each reflecting the growth projected for the groups
total U.S employment and average weeks worked per year. 1 For the short-
range period, the age-sex-adjusted average weeks worked rises slightly as the
age-sex-adjusted unemployment rate declines to its ultimate assumed value
of 4.5 percent. After 2031, the average weeks worked for each age-sex group
1 For those under age 16, projected covered employment is the sum of age-sex components, each of which is
projected as a ratio to the Social Security area population.
126
Program Assumptions and Methods
is assumed to remain constant. The projection method also accounts for
changes in non-OASDI-covered employment and the increase in coverage of
Federal civilian employment as a result of the 1983 Social Security Amend-
ments. It also reflects changes in the number and employment status of other-
than-LPR immigrants residing within the Social Security coverage area, such
as undocumented immigrants and foreign workers and students with tempo-
rary visas.
The covered-worker rate is the ratio of OASDI covered workers to the Social
Security area population. For men age 16 and over, the projected age-
adjusted covered-worker rates 1 for 2096 are 69.1, 69.3, and 69.5 percent for
the low-cost, intermediate, and high-cost assumptions, respectively. For
women age 16 and over, the projected age-adjusted covered-worker rates for
2096 are 66.8, 66.4, and 66.1 percent for the low-cost, intermediate, and
high-cost assumptions, respectively. An important factor in the variation
among the projected rates for the three alternatives is the portion of the men
and women in the population that is projected to be other-than-LPR immi-
grants. For men, the intermediate projected rate for 2096 is lower than the
2020 age-adjusted rate of 70.7 percent primarily due to the projected
increase in the portion of the Social Security area population that consists of
other-than-LPR immigrants. For women, the intermediate projected rate for
2096 is higher than the 2020 age-adjusted rate of 63.7 percent because the
projected increase in the age-adjusted labor force participation rate more
than offsets the projected increase in the portion of the population that will
be other-than-LPR immigrants.
3. Insured Population
Eligibility for worker benefits under the OASDI program requires some
threshold level of work in covered employment. A worker satisfies this
requirement by his or her accumulation of quarters of coverage (QCs). Prior
to 1978, a worker earned one QC for each calendar quarter in which he or
she earned at least $50. In 1978, when annual earnings reporting replaced
quarterly reporting, the amount required to earn a QC (up to a maximum of
four per year) was set at $250. As specified in the law, the Social Security
Administration has adjusted this amount each year since then according to
changes in the AWI. Its value in 2022 is $1,510.
There are three types of insured status that a worker can earn under the
OASDI program. The number and recency of QCs earned determine each
1 Age-adjusted covered-worker rates are adjusted to the 2011 age distribution of the Social Security area
population.
127
Assumptions and Methods
status. A worker is fully insured when his or her total number of QCs is
greater than or equal to the number of years elapsed after the year of attain-
ment of age 21 (but not less than six). After a worker has accumulated
40 QCs, he or she remains permanently fully insured. A worker is disability
insured if he or she is: (1) a fully insured worker who has accumulated 20
QCs during the 40-quarter period ending with the current quarter, (2) a fully
insured worker aged 24-30 who has accumulated QCs during one-half of the
quarters elapsed after the quarter of attainment of age 21 and up to and
including the current quarter, or (3) a fully insured worker under age 24 who
has accumulated six QCs during the 12-quarter period ending with the cur-
rent quarter. A worker is currently insured when he or she has accumulated
six QCs during the 13-quarter period ending with the current quarter. Periods
of disability reduce the number of quarters required for insured status, but
not below the minimum of six QCs.
There are many types of benefits payable to workers and their family mem-
bers under the OASDI program. A worker must be fully insured to be eligi-
ble for a primary retirement benefit and for his or her spouse or children to
be eligible for auxiliary retirement benefits. A deceased worker must have
been either currently insured or fully insured at the time of death for his or
her children (and their mother or father) to be eligible for benefits. If there
are no eligible surviving children, the deceased worker must have been fully
insured at the time of death for his or her surviving spouse to be eligible. A
worker must be disability insured to be eligible for a primary disability bene-
fit and for his or her spouse or children to be eligible for auxiliary disability
benefits.
The Office of the Chief Actuary estimates the fully insured population, as a
percentage of the Social Security area population, by single year of age and
sex starting in 1969. The short-range model extrapolates the historical trend
in these rates from data in the Continuous Work History Sample (CWHS).
The model uses information on quarters of coverage earned due to employ-
ment covered by Social Security derived from tabulations of the CWHS. The
model also uses historical administrative data on beneficiaries in force and
estimated historical mortality rates. The model combines this information to
estimate the proportion of individuals who were alive and fully insured as of
the end of each historical year. Using projected mortality rates and covered
workers, the model extrapolates these rates into the future and applies them
to the historical and projected population to arrive at the fully insured popu-
lation by age and sex through the end of the short-range period.
The long-range fully insured model uses 30,000 simulated work histories for
each sex and birth cohort, representing everyone except the other-than-LPR
128
Program Assumptions and Methods
immigrant population. 1 For the other-than-LPR immigrant population, the
model generates substantially lower percentages attaining fully insured sta-
tus. The model constructs simulated work histories using past coverage rates,
earnings distributions, and amounts required for crediting QCs, and develops
them in a manner that replicates historical individual variations in work pat-
terns. The probability of covered employment in any year is assumed to be
higher for those who have worked more consistently in the recent past.
Model parameters are selected so that simulated fully insured percentages
are consistent with the fully insured percentages estimated by the short-range
model for the recent historical period.
The Office of the Chief Actuary estimates the disability insured population,
as a percentage of the fully insured population, by age and sex starting
in 1969. The office bases historical values on a tabulation of the disability
insured population from the CWHS and estimates of the fully insured popu-
lation. The short-range model projects these percentages by using the rela-
tionship between the historical percentages and covered-worker rates. The
long-range model projects these percentages by using the same simulated
work histories used to project the fully insured percentages. The long-range
model makes additional adjustments to the model simulations in order to
bring the disability insured percentages in the historical and short-range peri-
ods into close agreement with those estimated from the CWHS and the short-
range model.
The office does not project the currently insured population because the
number of beneficiaries who are entitled to benefits based solely on currently
insured status has been very small recently and is likely to remain small in
the future.
Using these insured models, the percentage of the Social Security area popu-
lation aged 62 and over that is fully insured is projected to change from its
estimated level of 88.4 for December 31, 2019, to 86.6, 88.5, and 90.9 for
December 31, 2100, under the low-cost, intermediate, and high-cost alterna-
tives, respectively. Over the projection period, the percentages for both men
and women change significantly. The percentage for men declines, reflect-
ing, in part, increases in the percent of the population that is classified as
other-than-LPR immigrants and is thus less likely to have earnings reported
and credited to them. The percentage for women increases, reflecting the
past substantial growth in the employment of younger cohorts of women.
Under the intermediate assumptions, for example, the percentage for men
1 Those granted legal work authorization through the 2012 Deferred Action for Childhood Arrivals program
are included in the simulations.
129
Assumptions and Methods
decreases from 94.1 to 87.5, and the percentage for women increases from
83.6 to 89.4.
4. Old-Age and Survivors Insurance Beneficiaries
The Office of the Chief Actuary projects the number of OASI beneficiaries
for each type of benefit separately by the sex of the worker on whose earn-
ings the benefits are based and by the age of the beneficiary. For the long-
range period, the office also projects the number of beneficiaries by marital
status for several types of benefits. The office uses two separate models in
making these projections. The short-range model makes projections during
the first 10 years of the projection period and the long-range model makes
projections thereafter.
The short-range model develops the number of retired-worker beneficiaries
by applying award rates to the aged fully insured population, excluding those
already receiving retired-worker, disabled-worker, aged-widow(er), or aged-
spouse benefits, and by applying termination rates to the number of retired-
worker beneficiaries.
The long-range model projects the number of retired-worker beneficiaries
who were not previously converted from disabled-worker beneficiary status
as a percentage of the exposed population. 1 For age 62, the model projects
this percentage by using a linear regression based on the historical relation-
ship between this percentage, the employment rate 2 at age 62, and the num-
ber of months from age 62 to normal retirement age. The percentage for ages
70 and over is nearly 100 because delayed retirement credits cannot be
earned after age 70. The long-range model projects the percentage for each
age 63 through 69 based on historical experience with an adjustment for
changes in the portion of the primary insurance amount that is payable at
each age of entitlement. The model adjusts these percentages for ages 62
through 69 to reflect changes in the normal retirement age.
The long-range model calculates the number of retired-worker beneficiaries
previously converted from disabled-worker beneficiary status using an
extension of disabled-worker death rates by age, sex, and duration.
The Office of the Chief Actuary estimates the number of aged-spouse benefi-
ciaries, excluding those who are also receiving a retired-worker benefit, from
the population projected by age and sex. Benefits of aged-spouse beneficia-
1 The exposed population is the fully insured population age 62 and over, excluding persons entitled to or
converted from disabled-worker benefits and fully insured persons entitled only to widow(er) benefits.
2 The employment rate is the ratio of U.S. civilian employment to the civilian noninstitutional population.
130
Program Assumptions and Methods
ries depend on the earnings records of their husbands or wives, who are
referred to as earners. The short-range model projects insured aged-spouse
beneficiaries in conjunction with the retired-worker beneficiaries. This
model projects uninsured aged-spouse beneficiaries by applying award rates
to the aged uninsured male or female population and by applying termination
rates to the population already receiving such benefits.
The long-range model estimates aged-spouse beneficiaries separately for
those married and divorced. The model projects the number of married aged-
spouse beneficiaries, by age and sex, by applying a series of factors to the
number of spouses, aged 62 and over, in the population. These factors are the
probabilities that the spouse and the earner meet all of the conditions of
eligibilitythat is, the probabilities that: (1) the earner is 62 or over, (2) the
earner is insured, (3) the earner is receiving benefits, (4) the spouse is not
receiving a benefit for the care of an entitled child, (5) the spouse is either
not insured or is insured but not receiving benefits, and (6) the spouse is not
eligible to receive a significant government pension based on earnings from
noncovered employment. To calculate the estimated number of aged-spouse
beneficiaries, the model applies a projected prevalence rate to the resulting
number of spouses. Due to the Bipartisan Budget Act of 2015, for those turn-
ing age 62 in 2016 and later, deemed filing now applies to all retired workers
and spouses even after initial entitlement, regardless of age. Thus, spouses
who are insured are no longer eligible to delay their retired-worker benefit
while receiving an aged-spouse benefit.
The long-range model estimates the number of divorced aged-spouse benefi-
ciaries, by age and sex, by applying the same factors to the number of
divorced persons aged 62 and over in the population, with three differences.
First, the model applies a factor to reflect the probability that the earner (for-
mer spouse) is still alive. If the former spouse is not alive, the person may be
entitled to a divorced widow(er) benefit. Second, the model applies a factor
to reflect the probability that the marriage to the former spouse lasted at least
10 years. Third, the model does not apply factor (3) in the previous para-
graph because, effective January 1985, a divorced person is generally no lon-
ger required to wait for the former spouse to receive benefits.
The Office of the Chief Actuary bases the projected numbers of children
under age 18, and students aged 18 and 19, who are eligible for benefits as
children of retired-worker beneficiaries, on the projected number of children
in the population. The short-range model develops the number of entitled
children by applying award rates to the number of children in the population
who have two living parents and by applying termination rates to the number
of children already receiving benefits.
131
Assumptions and Methods
The long-range model projects separately the number of entitled children by
sex of the earner parent. For each age under 18, the model multiplies the pro-
jected number of children with a parent aged 62 and over by the ratio of the
number of retired workers aged 62 to 71 to the number of members of the
population aged 62 to 71. For student beneficiaries, the model multiplies the
number of children aged 18 and 19 in the population by the probabilities that:
(1) the parent is alive, aged 62 or over, insured, and receiving a retired-
worker benefit; and (2) the child is attending high school.
The Office of the Chief Actuary projects the number of disabled children,
aged 18 and over, of retired-worker beneficiaries from the adult population.
The short-range model applies award rates to the population and applies ter-
mination rates to the number of disabled children already receiving benefits.
The long-range model projects the number of disabled children in a manner
similar to that used for student children except for a factor that reflects the
probability of being disabled before age 22.
The short-range model develops the number of spouses of retired workers,
who are entitled to spouse benefits because they are caring for a child who is
under age 16 or disabled, by applying award rates to the number of awards to
children of retired workers and by applying termination rates to the number
of young spouses with a child in their care who are already receiving bene-
fits. The long-range model projects the number of young-spouse beneficia-
ries with a child in their care as a proportion of the number of child
beneficiaries of retired workers, including projected changes in average fam-
ily size.
The Office of the Chief Actuary projects the number of aged-widow(er) ben-
eficiaries, excluding those who are also receiving a retired-worker benefit,
from the population by age and sex. The short-range model projects fully
insured aged-widow(er) beneficiaries in conjunction with the retired-worker
beneficiaries. The model projects the number of uninsured aged-widow(er)
beneficiaries by applying award rates to the aged uninsured male or female
population and by applying termination rates to the population already
receiving such benefits. The long-range model projects uninsured aged-
widow(er) beneficiaries by marital status. The model multiplies the number
of widow(er)s in the population aged 60 and over by the probabilities that:
(1) the deceased earner is fully insured at death, (2) the widow(er) is not
receiving a benefit for the care of an entitled child, (3) the widow(er) is not
fully insured, and (4) the widow(er) benefits are not withheld because of
receipt of a significant government pension based on earnings in noncovered
employment. In addition, the model applies the same factors to the number
of divorced persons aged 60 and over in the population and includes addi-
132
Program Assumptions and Methods
tional factors representing the probability that the persons former earner
spouse has died and that the marriage lasted at least 10 years. The model
projects the number of insured aged-widow(er) beneficiaries who are ages
60 through 70 in a manner similar to that for uninsured aged-widow(er) ben-
eficiaries. In addition, the model assumes that some insured widow(er)s who
had not applied for their retired-worker benefits will receive widow(er) bene-
fits. The model projects insured aged-widow(er) beneficiaries over age 70 by
applying termination rates to the population that started receiving such bene-
fits prior to age 70.
The short-range model develops the number of disabled-widow(er) benefi-
ciaries by applying award rates to the uninsured male or female population
and by applying termination rates to the population already receiving a dis-
abled-widow(er) benefit. The long-range model projects the number for each
cohort by age from 50 to normal retirement age as percentages of the wid-
owed and divorced populations, adjusted for the insured status of the
deceased spouse, the prevalence of disability, and the probability that the dis-
abled spouse is not receiving another type of benefit.
The Office of the Chief Actuary bases the projected number of children
under age 18, and students aged 18 and 19, who are entitled to benefits as
survivors of deceased workers, on the number of children in the population
whose mothers or fathers are deceased. The short-range model develops the
number of entitled children by applying award rates to the number of
orphaned children and by applying termination rates to the number of chil-
dren already receiving benefits.
The long-range model projects the number of surviving-child beneficiaries in
a manner similar to that for student beneficiaries of retired workers, except
that the model replaces the probability that the parent is aged 62 or over with
the probability that the parent is deceased.
The Office of the Chief Actuary projects the number of surviving-disabled-
child beneficiaries, aged 18 and over, from the adult population. The short-
range model applies award rates to the population and applies termination
rates to the number of surviving-disabled-child beneficiaries already receiv-
ing benefits. The long-range model projects the number of surviving-dis-
abled-child beneficiaries in a manner similar to that for surviving-student-
child beneficiaries, except for including an additional factor to reflect the
probability of being disabled before age 22.
The short-range model develops the numbers of entitled surviving-mother
and surviving-father beneficiaries by applying award rates to the number of
awards to surviving-child beneficiaries, in cases where the children are either
133
Assumptions and Methods
under age 16 or disabled, and by applying termination rates to the number of
surviving-mother and surviving-father beneficiaries already receiving bene-
fits. The long-range model estimates the numbers of surviving-mother and
surviving-father beneficiaries, assuming they are not remarried, from the
number of surviving-child beneficiaries.
The Office of the Chief Actuary projects the number of surviving-parent
beneficiaries based on the historical pattern of the number of such beneficia-
ries.
Table V.C4 shows the projected number of beneficiaries under the OASI pro-
gram by type of benefit. The retired-worker beneficiary counts include those
persons who receive a residual auxiliary benefit in addition to their retired-
worker benefit. The office makes estimates of the number and amount of
residual payments separately for spouses and widow(er)s.
Table V.C4.OASI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1945-2100
[In thousands]
Retired workers and auxiliaries Survivors
Widow- Mother-
Calendar year Workera Spouse Child widower father Child Parent Total
Historical data:
1945 . . . . . . . . . . 518 159 13 94 121 377 6 1,288
1950 . . . . . . . . . . 1,771 508 46 314 169 653 15 3,477
1955 . . . . . . . . . . 4,474 1,192 122 701 292 1,154 25 7,961
1960 . . . . . . . . . . 8,061 2,269 268 1,544 401 1,577 36 14,157
1965 . . . . . . . . . . 11,101 2,614 461 2,371 472 2,074 35 19,128
1970 . . . . . . . . . . 13,349 2,668 546 3,227 523 2,688 29 23,030
1975 . . . . . . . . . . 16,589 2,867 643 3,888 582 2,919 21 27,509
1980 . . . . . . . . . . 19,564 3,018 639 4,415 563 2,610 15 30,823
1985 . . . . . . . . . . 22,435 3,069 456 4,862 372 1,918 10 33,122
1990 . . . . . . . . . . 24,841 3,104 421 5,098 304 1,777 6 35,551
1995 . . . . . . . . . . 26,679 3,027 441 5,213 275 1,884 4 37,522
2000 . . . . . . . . . . 28,505 2,798 459 4,901 203 1,878 3 38,747
2005 . . . . . . . . . . 30,461 2,524 488 4,569 178 1,903 2 40,126
2010 . . . . . . . . . . 34,593 2,316 580 4,285 159 1,913 2 43,847
2011 . . . . . . . . . . 35,600 2,291 594 4,239 158 1,907 2 44,791
2012 . . . . . . . . . . 36,720 2,280 612 4,193 154 1,907 1 45,868
2013 . . . . . . . . . . 37,893 2,285 625 4,139 150 1,899 1 46,992
2014 . . . . . . . . . . 39,009 2,303 635 4,092 143 1,892 1 48,075
2015 . . . . . . . . . . 40,089 2,335 648 4,050 140 1,893 1 49,155
2016 . . . . . . . . . . 41,233 2,370 661 4,004 133 1,893 1 50,296
2017 . . . . . . . . . . 42,447 2,375 675 3,961 128 1,904 1 51,491
2018 . . . . . . . . . . 43,721 2,391 690 3,908 121 1,911 1 52,743
2019 . . . . . . . . . . 45,094 2,430 701 3,878 117 1,916 1 54,137
2020 . . . . . . . . . . 46,330 2,323 704 3,823 115 1,936 1 55,231
2021 . . . . . . . . . . 47,293 2,165 687 3,773 114 1,976 1 56,009
Intermediate:
2022 . . . . . . . . . . 48,604 2,009 712 3,728 112 2,005 1 57,171
2025 . . . . . . . . . . 52,821 1,768 763 3,682 108 2,061 1 61,204
2030 . . . . . . . . . . 59,571 1,661 855 3,626 99 2,098 1 67,910
2035 . . . . . . . . . . 63,979 1,606 946 3,405 112 2,136 1 72,185
2040 . . . . . . . . . . 66,331 1,464 1,025 3,150 128 2,186 1 74,284
134
Program Assumptions and Methods
Table V.C4.OASI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1945-2100 (Cont.)
[In thousands]
Retired workers and auxiliaries Survivors
Widow- Mother-
Calendar year Workera Spouse Child widower father Child Parent Total
Intermediate (Cont.):
2045 . . . . . . . . . . 67,460 1,351 1,068 2,989 129 2,214 1 75,212
2050 . . . . . . . . . . 69,155 1,295 1,115 2,863 126 2,200 1 76,755
2055 . . . . . . . . . . 71,607 1,276 1,164 2,766 122 2,157 1 79,092
2060 . . . . . . . . . . 75,017 1,271 1,215 2,685 117 2,088 1 82,393
2065 . . . . . . . . . . 78,172 1,289 1,227 2,646 113 2,030 1 85,479
2070 . . . . . . . . . . 81,273 1,319 1,243 2,633 111 2,009 1 88,589
2075 . . . . . . . . . . 84,359 1,341 1,273 2,618 111 2,013 1 91,716
2080 . . . . . . . . . . 86,359 1,351 1,294 2,577 110 2,014 1 93,705
2085 . . . . . . . . . . 87,320 1,353 1,305 2,520 107 1,995 1 94,602
2090 . . . . . . . . . . 87,738 1,373 1,310 2,480 105 1,966 1 94,972
2095 . . . . . . . . . . 89,252 1,410 1,344 2,457 102 1,939 1 96,505
2100 . . . . . . . . . . 91,997 1,446 1,382 2,454 100 1,917 1 99,296
Low-cost:
2022 . . . . . . . . . . 48,582 2,009 714 3,725 112 2,010 1 57,154
2025 . . . . . . . . . . 52,693 1,770 770 3,676 110 2,085 1 61,106
2030 . . . . . . . . . . 59,091 1,672 878 3,611 104 2,183 1 67,539
2035 . . . . . . . . . . 62,634 1,601 980 3,446 111 2,348 1 71,121
2040 . . . . . . . . . . 64,125 1,455 1,083 3,216 130 2,530 1 72,540
2045 . . . . . . . . . . 64,436 1,326 1,141 3,073 133 2,655 1 72,765
2050 . . . . . . . . . . 65,378 1,256 1,203 2,962 134 2,714 1 73,648
2055 . . . . . . . . . . 67,207 1,221 1,270 2,872 133 2,731 1 75,434
2060 . . . . . . . . . . 69,987 1,195 1,344 2,791 133 2,726 1 78,176
2065 . . . . . . . . . . 72,509 1,186 1,371 2,746 135 2,754 1 80,703
2070 . . . . . . . . . . 74,921 1,188 1,404 2,729 140 2,845 1 83,228
2075 . . . . . . . . . . 77,227 1,181 1,460 2,709 146 2,971 1 85,695
2080 . . . . . . . . . . 78,487 1,161 1,501 2,669 151 3,077 1 87,047
2085 . . . . . . . . . . 78,818 1,139 1,525 2,631 155 3,145 1 87,414
2090 . . . . . . . . . . 79,283 1,155 1,545 2,640 157 3,198 1 87,978
2095 . . . . . . . . . . 81,829 1,194 1,625 2,687 160 3,260 1 90,757
2100 . . . . . . . . . . 86,000 1,235 1,706 2,757 165 3,341 1 95,205
High-cost:
2022 . . . . . . . . . . 48,630 2,009 711 3,730 112 2,001 1 57,195
2025 . . . . . . . . . . 52,978 1,767 759 3,690 107 2,038 1 61,339
2030 . . . . . . . . . . 60,183 1,654 835 3,650 93 2,008 1 68,423
2035 . . . . . . . . . . 65,705 1,645 905 3,345 106 1,891 1 73,599
2040 . . . . . . . . . . 69,275 1,512 952 3,053 116 1,796 1 76,705
2045 . . . . . . . . . . 71,647 1,417 979 2,859 113 1,732 1 78,747
2050 . . . . . . . . . . 74,522 1,386 1,008 2,707 106 1,661 1 81,391
2055 . . . . . . . . . . 77,957 1,397 1,034 2,589 97 1,578 1 84,653
2060 . . . . . . . . . . 82,171 1,415 1,050 2,491 87 1,475 1 88,689
2065 . . . . . . . . . . 86,059 1,451 1,034 2,444 78 1,375 1 92,443
2070 . . . . . . . . . . 89,970 1,495 1,023 2,419 72 1,298 1 96,278
2075 . . . . . . . . . . 93,814 1,531 1,017 2,399 66 1,243 1 100,071
2080 . . . . . . . . . . 96,526 1,557 1,010 2,349 62 1,198 1 102,702
2085 . . . . . . . . . . 97,956 1,558 1,002 2,259 57 1,150 1 103,983
2090 . . . . . . . . . . 97,875 1,563 984 2,166 52 1,099 1 103,740
2095 . . . . . . . . . . 97,398 1,577 973 2,073 48 1,049 1 103,119
2100 . . . . . . . . . . 97,390 1,610 969 2,021 44 1,002 1 103,037
a Retired-worker beneficiaries include persons who also receive a residual benefit consisting of the excess of
an auxiliary benefit over their retired-worker benefit.
Notes:
1. The number of beneficiaries does not include uninsured individuals who receive benefits under
section 228 of the Social Security Act. Transfers from the General Fund of the Treasury reimburse the OASI
Trust Fund for the cost of most of these individuals.
2. Components may not sum to totals because of rounding.
135
Assumptions and Methods
5. Disability Insurance Beneficiaries
The DI Trust Fund pays for benefits to disabled workers who: (1) satisfy the
disability insured requirements, (2) are unable to engage in any substantial
gainful activity due to a medically determinable physical or mental impair-
ment severe enough to satisfy the requirements of the program, and (3) have
not yet attained normal retirement age. Spouses and children of such disabled
workers may also receive DI benefits provided they satisfy certain criteria,
primarily age and earnings requirements.
The Office of the Chief Actuary projects the number of disabled-worker ben-
eficiaries in current-payment status (disability prevalence) for each future
year. The projections start with the number in current-payment status as of
December 2021. Projections of the number of new beneficiaries awarded
benefits each year (disability incidence) and the number of beneficiaries
leaving the disability rolls each year then determine the number in current-
payment status in later years. Beneficiaries leave the rolls due to death and
recovery (disability terminations) and due to conversion from disabled-
worker to retired-worker beneficiary status at normal retirement age, after
which the OASI Trust Fund pays for benefits. The remainder of this section
describes the concepts of disability incidence, termination, and prevalence.
a. Disability Incidence
The disability incidence rate is the ratio of the number of new beneficiaries
awarded benefits each year to the number of individuals who meet insured
requirements but are not yet receiving benefits (the disability-exposed popu-
lation 1 ). The Office of the Chief Actuary projects the number of newly
awarded beneficiaries for each future year by multiplying assumed age-sex-
specific disability incidence rates and the projected disability-exposed popu-
lation by age and sex.
Figure V.C3 illustrates the projected incidence rates under the three alterna-
tives along with historical rates. Incidence rates have varied substantially
during the historical period since 1970 due to a variety of demographic and
economic factors, along with changes in legislation and program administra-
tion. The solid lines in figure V.C3 show the age-sex-adjusted incidence rate
consistent with the age-sex distribution of the disability-exposed population
for 2000. This adjustment allows a meaningful comparison of incidence rates
over time by focusing on the likelihood of being awarded disabled worker
1 The disability-exposed population excludes those receiving benefits, while the disability insured popula-
tion includes them. Section V.C.3 of this report describes the projection of the disability insured population.
136
Program Assumptions and Methods
benefits, excluding the effects of a changing distribution of the population
toward ages where disability is more or less likely.
The dashed lines in figure V.C3 represent the gross (unadjusted) incidence
rates. The changing age-sex distribution of the exposed population over time
influences these unadjusted rates. The gross incidence rate fell below the
age-sex-adjusted rate between 1975 and 2000 as the baby-boom generation
increased the size of the younger working-age population, where disability
incidence is lower than in older populations. After 1990, the gross rate gener-
ally increased relative to the age-sex-adjusted rate as the baby-boom genera-
tion moved into an age range where disability incidence peaks. The projected
gross incidence rate generally declines relative to the age-sex-adjusted rate
as the baby-boom generation moves above the normal retirement age and the
lower-birth-rate cohorts of the 1970s enter prime disability ages (50 to nor-
mal retirement age). As these smaller cohorts age beyond normal retirement
age, by about 2050, the gross incidence rate returns to a higher relative level
under the intermediate assumptions. Thereafter, the gross rate remains higher
than the age-sex-adjusted rate, and reflects the persistently higher average
age of the working-age population, which is largely due to lower birth rates
since 1965, and to the increase in the normal retirement age.
For the first 10 years of the projection period (through 2031), incidence rates
reflect several factors following on the experience since the recession of
2007-09. At the beginning of the period of high unemployment that began in
2007, disability incidence rates were well above the general trend level, with
rates reaching a peak in 2010. Over the period through 2019, incidence rates
subsided as the economy recovered, and have persisted at levels well below
those expected over the long-term. A portion of the elevation of disability
incidence rates experienced during the recession that began in 2007 and the
lowering of incidence rates experienced during the recovery were likely due
to many individuals applying for disability benefits earlier than they would
have otherwise. However, the continuing decline in disability incidence since
2010 far exceeds the effect of individuals having filed earlier due to the
2007-09 recession.
For 2021, the actual incidence rate (3.0 per thousand) was below the level
projected in last years report (4.1 per thousand). In this years report, inci-
dence rates under the intermediate alternative are projected to rise more
slowly early in the projection period than in last years report, consistent with
the low levels experienced recently and the lower assumed ultimate inci-
dence rate. Incidence rates are projected to rise to a temporary peak level for
2027 as some of the reduced levels of applications in the pandemic period
are realized in the next few years. After 2027, incidence rates gradually
137
Assumptions and Methods
decline through the rest of the short-range period to the ultimate assumed
level of incidence.
This projected pattern of incidence over the next several years is based on the
expectation that disability applications will increase to pre-pandemic levels
as the COVID-19 pandemic recedes and the economy fully recovers from the
2020 recession. In 2031, at the end of the short-range period, age-sex-spe-
cific incidence rates are assumed to reach the ultimate rates assumed for the
long-range projections. These ultimate age-sex-specific disability incidence
rates were selected based on careful analysis of historical levels and patterns
and expected future conditions, including the impact of scheduled increases
in the normal retirement age. 1 The ultimate incidence rates represent the
expected average rates of incidence for the future.
For the intermediate alternative, the Trustees assume that the ultimate age-
sex-adjusted incidence rate (adjusted to the disability-exposed population for
the year 2000) will be 4.8 awards per thousand exposed, which is 0.2 per
thousand lower than was assumed in last years report. Figure V.C3 illus-
trates that the age-sex-adjusted incidence rate averaged 5.0 per thousand over
the historical period 1970 through 2021, but has dropped substantially below
that level since 2013. The rates seen in recent years are not consistent with an
assumption of a full rise back to longer-term past historical averages, and, as
a result, the Trustees reduced the ultimate disability incidence rate for this
report from 5.0 to 4.8 per thousand exposed.
The Trustees assume that the ultimate age-sex-adjusted incidence rates for
the low-cost and high-cost alternatives will be 3.9 and 5.8 awards per thou-
sand exposed, or about 20 percent lower and higher, respectively, than the
ultimate incidence rate for the intermediate alternative. These ultimate low-
cost and high-cost incidence rates are lower than those in last years report
by roughly 0.1 and 0.2 awards per thousand exposed, respectively.
1 Projected incidence rates are adjusted upward to account for additional workers who are expected to file
for disability benefits (rather than retirement benefits) in response to reductions in retirement benefits as the
normal retirement age rises.
138
Program Assumptions and Methods
Figure V.C3.DI Disability Incidence Rates, 1970-2100
[Awards per thousand disability-exposed]
9
8
III
7
6 II
III
5
I II
4
I
3 Historical Projected
Gross incidence rates
2
Age-sex-adjusted
incidence rates
1
0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
b. Disability Termination
Beneficiaries stop receiving disability benefits when they die, experience an
improvement in their medically-determinable impairment such that they are
deemed able to engage in substantial gainful activity, or return to substantial
work. Disabled-worker beneficiaries who return to substantial work for an
extended period are deemed to have recovered, and their benefits are then
terminated. The termination rate is the ratio of the number of terminations
for these reasons to the average number of disabled-worker beneficiaries
during the year.
The Office of the Chief Actuary projects termination rates by age, sex, and
reason for termination. In addition, the office projects termination rates by
duration of entitlement to disabled-worker benefits in the long-range period
(post-2031).
In the short-range period (through 2031), the projected age-sex-adjusted
death rate (adjusted to the 2000 disabled-worker beneficiary population)
under the intermediate assumptions declines from the temporarily elevated
rate of 30.0 deaths per thousand beneficiaries for 2021 to about 23.8 per
thousand for 2031. These rates are assumed to remain elevated through 2023
139
Assumptions and Methods
due to the COVID-19 pandemic, and then return to follow the underlying
declining trend in general population mortality. The projected age-sex-
adjusted recovery rate (medical improvement and return to substantial work)
under the intermediate assumptions decreases from the relatively high level
of 17.7 per thousand beneficiaries for 2021 to 10.4 per thousand beneficia-
ries for 2031. The recovery rate has been high in recent years due to an ongo-
ing administrative effort to eliminate a backlog of medical continuing
disability reviews. The recovery rate is expected to increase temporarily
through 2022 as these reviews are completed and the backlog is eliminated
over the next several years. Thereafter, the rate decreases as the backlog is
reduced. Under the low-cost and high-cost assumptions, total age-sex-
adjusted termination rates due to death and recovery are roughly 10 to
20 percent higher or lower, respectively, than under the intermediate assump-
tions.
For the long-range period (post-2031), the Office of the Chief Actuary proj-
ects death and recovery rates by age, sex, and duration of entitlement relative
to the average level of rates experienced over the base period 2011 through
2015. The assumed ultimate age-sex-adjusted recovery rate for disabled
workers is about 10.4 per thousand beneficiaries. The assumed ultimate age-
sex-adjusted recovery rates for the low-cost and high-cost alternatives are
about 12.5 and 8.3 recoveries per thousand beneficiaries, respectively. Death
rates by age and sex change throughout the long-range period at the same
rate as death rates in the general population. The age-sex-adjusted death rate
decreases from 30.0 per thousand beneficiaries in 2021 to 21.9, 12.5, and
6.2 per thousand disabled-worker beneficiaries for 2096 under the low-cost,
intermediate, and high-cost assumptions, respectively.
Figure V.C4 illustrates gross and age-sex-adjusted total termination rates
(including both recoveries and deaths) for disabled-worker beneficiaries for
the historical period since 1970, and for the projection period through 2100.
As with incidence rates, the age-sex-adjusted termination rate illustrates the
real change in the tendency to terminate benefits. Changes in the age-sex dis-
tribution of the beneficiary population influence the gross termination rate. A
shift in the disabled-worker beneficiary population to older ages, as occurred
over the past 20 years when the baby-boom generation moved into pre-retire-
ment ages, increases gross death termination rates relative to the age-sex-
adjusted rates.
140
Program Assumptions and Methods
Figure V.C4.DI Disability Termination Rates, 1970-2100
[Terminations per thousand disabled-worker beneficiaries]
140
Historical Projected
120
100 Gross termination rates
Age-sex-adjusted
80 termination rates
60
40 I
II
20
III
0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
c. Comparison of Incidence, Termination, and Conversion
Incidence and termination rates are the foundation for projecting the number
of disabled-worker beneficiaries in current-payment status. At normal retire-
ment age, all disabled-worker beneficiaries convert to retired-worker status
and leave the DI rolls.
Figure V.C5 compares the historical and projected (intermediate) levels of
incidence, termination, and conversion on both a gross basis and an age-sex-
adjusted basis. Incidence rates have varied widely, and the Trustees expect
the age-sex adjusted rates under the intermediate assumptions to remain near
the middle of the high and low extremes experienced since 1970. Termina-
tion rates have declined and the Trustees expect them to continue to decline,
largely because of declining death rates.
Conversions are a transfer of beneficiaries at normal retirement age from the
DI program to the OASI program. Therefore, the disability conversion rate
is 100 percent for disabled-worker beneficiaries reaching normal retirement
age in a given year and zero at all other ages. After conversion, recovery
from the disabling condition is no longer relevant for benefit eligibility. The
conversion ratio is the number of conversions in a given year (that is, benefi-
141
Assumptions and Methods
ciaries who reach normal retirement age) divided by the average number of
disabled-worker beneficiaries at all ages in that year. The ratio is constant on
an age-sex-adjusted basis, except for the two periods during which normal
retirement age increases under current law. On a gross basis, however, the
conversion ratio rises and falls with the changing proportion of all disabled-
worker beneficiaries who attain normal retirement age in a given year. The
gross conversion ratio generally increases from 2005 to 2030 due to aging of
the beneficiary population.
Figure V.C5.Comparison of DI Disability Incidence Rates, Termination Rates and
Conversion Ratios Under Intermediate Assumptions, 1970-2100
[Awards per thousand disability-exposed;
terminations and conversions per thousand disabled-worker beneficiaries]
8 160
Historical Projected
7 140
Gross incidence rates
6 120
Termination rates &
Age-sex-adjusted incidence rates
5 100
Incidence rates
4 80
Conversion ratios
Gross conversion ratios
3 60
Age-sex-adjusted conversion ratios
2 40
Age-sex-adjusted termination rates
1 20
Gross termination rates
0 0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
d. DI Beneficiaries and Disability Prevalence Rates
The Office of the Chief Actuary makes detailed projections of disabled-
worker awards, terminations, and conversions and combines these to project
the number of disabled workers receiving benefits over the next 75 years.
Table V.C5 presents the projected numbers of disabled workers in current-
payment status. The number of disabled workers in current-payment status
grows from 7.9 million at the end of 2021, to 11.0 million, 12.6 million, and
12.7 million at the end of 2100, under the low-cost, intermediate, and high-
cost assumptions, respectively. Of course, much of this growth results from
142
Program Assumptions and Methods
the growth and aging of the population described earlier in this chapter.
Table V.C5 also presents projected numbers of auxiliary beneficiaries and
disability prevalence rates on both a gross basis and an age-sex-adjusted
basis.
Table V.C5.DI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1960-2100
[Beneficiaries in thousands; prevalence rates per thousand persons insured for disability benefits]
Disability
Disabled- Auxiliary beneficiaries prevalence rates
worker Total Age-sex-
Calendar year beneficiaries Spouse Child beneficiaries Gross adjusteda
Historical data:
1960. . . . . . . . . . . . 455 77 155 687
1965. . . . . . . . . . . . 988 193 558 1,739
1970. . . . . . . . . . . . 1,493 283 889 2,665 20 18
1975. . . . . . . . . . . . 2,488 453 1,411 4,351 29 28
1980. . . . . . . . . . . . 2,856 462 1,359 4,677 28 31
1985. . . . . . . . . . . . 2,653 306 945 3,904 24 26
1990. . . . . . . . . . . . 3,007 266 989 4,261 25 28
1995. . . . . . . . . . . . 4,179 264 1,409 5,852 33 35
2000. . . . . . . . . . . . 5,036 165 1,466 6,667 36 36
2005. . . . . . . . . . . . 6,519 157 1,633 8,309 45 40
2010. . . . . . . . . . . . 8,204 161 1,820 10,185 55 44
2011. . . . . . . . . . . . 8,576 164 1,874 10,614 58 45
2012. . . . . . . . . . . . 8,827 163 1,900 10,890 59 46
2013. . . . . . . . . . . . 8,941 157 1,889 10,987 60 46
2014. . . . . . . . . . . . 8,955 150 1,828 10,932 59 46
2015. . . . . . . . . . . . 8,909 143 1,756 10,808 59 45
2016. . . . . . . . . . . . 8,809 136 1,667 10,612 58 44
2017. . . . . . . . . . . . 8,695 127 1,590 10,412 57 43
2018. . . . . . . . . . . . 8,537 119 1,507 10,164 55 41
2019. . . . . . . . . . . . 8,378 114 1,434 9,927 54 40
2020. . . . . . . . . . . . 8,151 105 1,364 9,620 52 39
2021. . . . . . . . . . . . 7,877 97 1,245 9,219 50 36
Intermediate:
2022. . . . . . . . . . . . 7,663 96 1,201 8,960 48 35
2025. . . . . . . . . . . . 7,729 99 1,219 9,048 48 34
2030. . . . . . . . . . . . 8,004 95 1,371 9,469 49 36
2035. . . . . . . . . . . . 8,295 94 1,475 9,863 50 38
2040. . . . . . . . . . . . 8,786 97 1,635 10,518 52 39
2045. . . . . . . . . . . . 9,522 108 1,810 11,439 55 40
2050. . . . . . . . . . . . 10,030 111 1,929 12,070 58 41
2055. . . . . . . . . . . . 10,411 114 1,996 12,521 59 42
2060. . . . . . . . . . . . 10,501 111 2,012 12,624 59 42
2065. . . . . . . . . . . . 10,670 114 2,018 12,802 59 42
2070. . . . . . . . . . . . 10,824 118 2,054 12,995 59 42
2075. . . . . . . . . . . . 10,788 117 2,127 13,032 58 42
2080. . . . . . . . . . . . 10,884 118 2,217 13,219 57 43
2085. . . . . . . . . . . . 11,139 120 2,293 13,552 57 43
2090. . . . . . . . . . . . 11,740 128 2,350 14,218 58 43
2095. . . . . . . . . . . . 12,270 132 2,396 14,799 59 43
2100. . . . . . . . . . . . 12,626 134 2,446 15,206 60 43
143
Assumptions and Methods
Table V.C5.DI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1960-2100 (Cont.)
[Beneficiaries in thousands; prevalence rates per thousand persons insured for disability benefits]
Disability
Disabled- Auxiliary beneficiaries prevalence rates
worker Total Age-sex-
Calendar year beneficiaries Spouse Child beneficiaries Gross adjusteda
Low-cost:
2022. . . . . . . . . . . . 7,635 96 1,198 8,929 48 34
2025. . . . . . . . . . . . 7,460 99 1,175 8,734 46 32
2030. . . . . . . . . . . . 6,984 93 1,221 8,299 43 31
2035. . . . . . . . . . . . 6,839 76 1,267 8,182 40 30
2040. . . . . . . . . . . . 6,987 74 1,403 8,463 41 31
2045. . . . . . . . . . . . 7,446 79 1,551 9,076 42 31
2050. . . . . . . . . . . . 7,775 79 1,648 9,502 43 31
2055. . . . . . . . . . . . 8,051 80 1,703 9,835 43 32
2060. . . . . . . . . . . . 8,127 77 1,726 9,930 42 32
2065. . . . . . . . . . . . 8,291 78 1,759 10,128 42 32
2070. . . . . . . . . . . . 8,462 81 1,834 10,377 41 32
2075. . . . . . . . . . . . 8,543 80 1,947 10,571 41 32
2080. . . . . . . . . . . . 8,777 81 2,067 10,925 40 32
2085. . . . . . . . . . . . 9,228 84 2,167 11,479 40 32
2090. . . . . . . . . . . . 9,974 92 2,251 12,317 41 32
2095. . . . . . . . . . . . 10,552 96 2,329 12,978 42 32
2100. . . . . . . . . . . . 10,962 98 2,422 13,482 42 33
High-cost:
2022. . . . . . . . . . . . 7,697 96 1,205 8,998 49 35
2025. . . . . . . . . . . . 8,081 100 1,282 9,463 51 36
2030. . . . . . . . . . . . 8,955 96 1,502 10,553 56 41
2035. . . . . . . . . . . . 9,839 114 1,630 11,583 60 45
2040. . . . . . . . . . . . 10,699 124 1,745 12,569 64 47
2045. . . . . . . . . . . . 11,728 143 1,902 13,773 70 50
2050. . . . . . . . . . . . 12,408 150 2,017 14,575 74 51
2055. . . . . . . . . . . . 12,894 156 2,080 15,130 78 52
2060. . . . . . . . . . . . 12,950 151 2,073 15,174 79 53
2065. . . . . . . . . . . . 13,075 151 2,027 15,253 80 53
2070. . . . . . . . . . . . 13,103 156 1,983 15,242 81 53
2075. . . . . . . . . . . . 12,806 152 1,969 14,927 81 53
2080. . . . . . . . . . . . 12,515 151 1,984 14,651 80 54
2085. . . . . . . . . . . . 12,223 146 2,004 14,373 79 54
2090. . . . . . . . . . . . 12,281 149 2,008 14,439 80 54
2095. . . . . . . . . . . . 12,527 154 1,995 14,676 81 54
2100. . . . . . . . . . . . 12,655 156 1,973 14,784 82 54
a Adjusted to the age-sex distribution of the disability insured population for the year 2000.
Note: Components may not sum to totals because of rounding.
The disability prevalence rate is the ratio of the number of disabled-worker
beneficiaries in current-payment status to the number of persons insured for
disability benefits. Figure V.C6 illustrates the historical and projected dis-
ability prevalence rates on both a gross basis and on an age-sex-adjusted
basis (adjusted to the age-sex distribution of the disability insured population
for the year 2000).
Changes in prevalence rates are a direct result of changes in incidence rates
and termination rates. Figure V.C5 depicts patterns for incidence and termi-
144
Program Assumptions and Methods
nation rates, which are helpful for understanding the trend in prevalence
rates. Annual incidence and termination rates are not directly comparable or
combinable because their denominators differ.
Figure V.C6.DI Disability Prevalence Rates, 1970-2100
[Rate per thousand persons insured for disability benefits]
100
Historical Projected
90
80
70 III
60
II III
50
I II
40
I
30
Gross prevalence rates
20
10 Age-sex-adjusted
prevalence rates
0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Calendar year
Age-sex-adjusted prevalence rates have increased primarily because: (1) ter-
mination rates, in particular death termination rates, have declined;
(2) incidence rates at younger ages have increased relative to rates at older
ages (new beneficiaries at younger ages have more potential years on the dis-
ability rolls); (3) incidence rates have increased substantially for women to
parity with men; and (4) the maturation of the DI program (disabled worker
benefits became available to those over age 50 at the start of the program in
1957 and to younger workers in 1960, and disability insured status require-
ments were eased for those under age 31 in 1968). Gross prevalence rates
have increased more than age-sex-adjusted prevalence rates since the baby-
boom generation began to reach ages 45 through normal retirement age, a
time of life when disability incidence rates are relatively high. The Office of
the Chief Actuary projects both gross and age-sex adjusted prevalence rates
to grow at a slower pace based on assumed stabilization in these four factors:
(1) the age distribution of the general population, (2) the age distribution of
the disability insured population, (3) incidence rates by age and sex, and
145
Assumptions and Methods
(4) DI program age and insured requirements. As these factors gradually sta-
bilize, the declining death termination rate continues to have a small influ-
ence toward higher disability prevalence rates.
As mentioned above in the discussion of incidence and termination rates, the
age-sex-adjusted prevalence rate isolates the changing trend in the underly-
ing likelihood of receiving benefits for the insured population, without
reflecting changes in the age distribution of the population. As with inci-
dence rates, gross disability prevalence rates declined relative to the age-sex-
adjusted rate when the baby-boom generation reached working age between
1970 and 1990; this trend reflects the lower disability prevalence rates asso-
ciated with younger ages. Conversely, the gross rate of disability prevalence
has increased relative to the age-sex-adjusted rate after 1990 due to the aging
of the baby-boom generation into ages with higher disability prevalence
rates.
Under the intermediate assumptions, the projected age-sex-adjusted disabil-
ity prevalence rate grows from 36.3 per thousand disability insured workers
at the end of 2021 to 43.3 per thousand at the end of 2100. The projected
age-sex-adjusted disability prevalence rate at the end of 2100 is 32.5 per
thousand under the low-cost assumptions and 54.4 per thousand under the
high-cost assumptions.
Table V.C5 presents projections of the numbers of auxiliary beneficiaries
paid from the DI Trust Fund. As indicated at the beginning of this subsec-
tion, auxiliary beneficiaries are qualifying spouses and children of disabled
workers. A spouse must either be at least age 62 or have an eligible child
beneficiary in his or her care who is either under age 16 or disabled prior to
age 22. A child must be: (1) under age 18, (2) age 18 or 19 and still a student
in high school, or (3) age 18 or older and disabled prior to age 22.
The projection of the number of auxiliary beneficiaries relies on the pro-
jected number of disabled-worker beneficiaries. In the short-range period
(2022 through 2031), the Office of the Chief Actuary projects incidence and
termination rates for each category of auxiliary beneficiary. After 2031, the
office projects child beneficiaries at ages 18 and under in relation to the pro-
jected number of children in the population using the probability that either
of their parents is a disabled-worker beneficiary. The office projects the
remaining categories of children and spouses in a similar manner.
146
Program Assumptions and Methods
6. Covered and Taxable Earnings, Taxable Payroll, and Payroll Tax
Contributions
Covered earnings include both covered wages and covered self-employment
net earnings. The Office of the Chief Actuary projects covered wages for
component sectors of the economy (i.e., private, State and local government,
Federal civilian, and military) based on the projected overall growth of sec-
toral and total wages in the U.S. economy. The projections of covered wages
also reflect changes in covered employment due to a relative increase in non-
covered undocumented immigrants and to the mandatory coverage of new
hires in the Federal civilian sector. The office projects covered self-employ-
ment net earnings based on the growth in net proprietors income in the U.S.
economy.
Taxable earnings are the portion of covered earnings subject to the Social
Security payroll tax. Taxable wages for an employee are total covered wages
from all wage employment up to the contribution and benefit base. Taxable
wages for an employer are the sum of all covered wages paid to each
employee up to the base. Employees with multiple jobs whose total wages
exceed the base are eligible for a refund of excess employee taxes withheld;
employers are not eligible for a refund on this basis. For self-employed
workers with no taxable wages, taxable earnings are the amount of covered
self-employment net earnings up to the base. For self-employed workers
with taxable wages less than the base, covered self-employment net earnings
are taxable up to the difference between the base and their taxable wages.
For projection purposes, the Office of the Chief Actuary computes taxable
earnings based on a proportion of covered earnings that is at or below the
base.
The OASDI taxable payroll (see table VI.G6) for a year is computed as the
amount of earnings which, when multiplied by the combined OASDI
employee-employer payroll tax rate for that year, yields the total amount of
payroll taxes due from wages paid and self-employment net earnings for the
year. The Trustees use taxable payroll to determine income rates, cost rates,
and actuarial balances. Taxable payroll is derived by adjusting total taxable
earnings to account for categories of earnings that are taxed at rates other
than the combined employee-employer rate and to take into account amounts
credited as wages that were not included in normally reported wages. For
1951 and later, taxable earnings are reduced by one-half of the amount of
wages paid to employees with multiple jobs that exceed the contribution and
benefit base. For 1983 through 2001, deemed wage credits for military ser-
vice after 1956 are added to taxable earnings. The self-employment tax rates
for 1951 through 1983 were less than the combined employee-employer
147
Assumptions and Methods
rates; therefore, the self-employment component of taxable payroll for those
years is reduced by multiplying the ratio of the self-employment rate to the
combined employee-employer rate times the taxable self-employment net
earnings. Finally, for 1966 through 1979, employers were exempt from pay-
ing their share of payroll tax on their employees tips and, for 1980 through
1987, employers paid tax on only part of their employees tips. For those
years, the taxable payroll is reduced by half of the amount of tips for which
the employer owed no payroll tax.
The ratio of taxable payroll to covered earnings (the taxable ratio) fell from
88.6 percent for 1984 to 82.6 percent for 2000, mostly due to much larger
increases in wage levels for very high earners than for all other earners. From
2000 to 2010, the taxable ratio varied with the business cycle, rising during
economic downturns and falling during recoveries. Specifically, the taxable
ratio rose to 85.7 percent for 2002, declined to 82.4 percent for 2007, rose to
85.2 percent for 2009, and averaged 83.0 percent for the period 2010 to
2019. The ratio fell to 82.4 percent for 2020 from the previous years
83.1 percent. Unlike previous economic downturns, the pandemic-induced
recession led to a much greater decrease in wage levels for earners at the low
end of the earnings distribution than for those at the high end. This resulted
in a relatively higher proportion of total wages being above the contribution
and benefit base than has typically been the case in other economic down-
turns.
The effect of the pandemic-induced recession on the taxable ratio is pro-
jected to continue through 2022. By 2022, the taxable ratio declines to 80.5,
80.4, and 80.9 percent for the low-cost, intermediate, and high-cost alterna-
tives, respectively. After 2022, the taxable ratios for each alternative gradu-
ally converge to the levels assumed for the end of the short-range period.
For this report, the Trustees assume a level for the taxable ratio at the end of
the short-range period (2031) of 84.0 percent for the low-cost assumptions,
82.5 percent for the intermediate assumptions, and 81.0 percent for the high-
cost assumptions. 1 These are the same assumptions that the Trustees used for
the end of the short-range period (2030) for the 2021 report.
The Office of the Chief Actuary projects payroll tax contributions using the
patterns of tax collection required by Federal laws and regulations. The
office determines payroll tax liabilities by multiplying the scheduled tax rates
for each year by the amount of taxable wages and self-employment net earn-
1 The taxable ratio drifts down slightly after 2031, to 84.0, 82.3, and 80.6 percent for 2096 for the low-cost,
intermediate, and high-cost assumptions, respectively, as self-employment income becomes an increasing
share of total earnings.
148
Program Assumptions and Methods
ings for that year. The office then splits these liabilities into amounts by col-
lection period. For wages, Federal law requires that employers withhold
OASDI and HI payroll taxes and Federal individual income taxes from
employees pay. As an employers accumulation of such taxes (including the
employer share of payroll taxes) meets certain thresholds, which the Depart-
ment of the Treasury determines, the employer must deposit these taxes with
the U.S. Treasury by a specific day, depending on the amount of money
involved. 1 For projection purposes, the office splits the payroll tax contribu-
tions related to wages into amounts paid in the same quarter as incurred and
in the following quarter. Self-employed workers must make estimated tax
payments on their earnings four times during the year and make up any
underestimate on their individual income tax returns. The projection splits
the self-employed tax liabilities by collection quarter to reflect this pattern.
The projected tax contributions also reflect the method used to ensure that
money transferred to the trust funds is adjusted, over time, to equal the actual
liability owed. Because payers generally make tax payments without identi-
fying the separate OASDI contribution amounts, Treasury makes daily trans-
fers of money from the General Fund to the trust funds on an initial
estimated basis. The Social Security Administration periodically certifies the
amounts of wages and self-employment net earnings on which tax contribu-
tions are owed for each year, at which time Treasury determines adjustments
to appropriations to reconcile tax liabilities with deposits in the trust funds.
This process also includes periodic transfers from the trust funds to the Gen-
eral Fund for contributions on wages in excess of the contribution and bene-
fit base.
Table V.C6 shows the payroll tax contribution rates applicable under current
law in each calendar year and the allocation of these rates between the OASI
and DI Trust Funds. 2 It also shows the contribution and benefit base for each
year through 2022.
1 Generally, the higher the amount of liability, the sooner the taxes must be paid. For smaller employers,
payment is due by the middle of the month following when the liability was incurred. Medium-size employ-
ers have three banking days in which to make their deposits. Larger employers must make payment on the
next business day after paying their employees.
2 Table VI.G1 shows the payroll tax contribution rates for the Hospital Insurance (HI) program.
149
Assumptions and Methods
Table V.C6.Contribution and Benefit Base and Payroll Tax Contribution Rates
Payroll tax contribution rates (percent)
Contribution Employees and employers,
and benefit combineda Self-employedb
Calendar years base OASDI OASI DI OASDI OASI DI
1937-49 . . . . . . . . . $3,000 2.00 2.00
1950. . . . . . . . . . . . 3,000 3.00 3.00
1951-53 . . . . . . . . . 3,600 3.00 3.00 2.2500 2.2500
1954. . . . . . . . . . . . 3,600 4.00 4.00 3.0000 3.0000
1955-56 . . . . . . . . . 4,200 4.00 4.00 3.0000 3.0000
1957-58 . . . . . . . . . 4,200 4.50 4.00 0.50 3.3750 3.0000 0.3750
1959. . . . . . . . . . . . 4,800 5.00 4.50 .50 3.7500 3.3750 .3750
1960-61 . . . . . . . . . 4,800 6.00 5.50 .50 4.5000 4.1250 .3750
1962. . . . . . . . . . . . 4,800 6.25 5.75 .50 4.7000 4.3250 .3750
1963-65 . . . . . . . . . 4,800 7.25 6.75 .50 5.4000 5.0250 .3750
1966. . . . . . . . . . . . 6,600 7.70 7.00 .70 5.8000 5.2750 .5250
1967. . . . . . . . . . . . 6,600 7.80 7.10 .70 5.9000 5.3750 .5250
1968. . . . . . . . . . . . 7,800 7.60 6.65 .95 5.8000 5.0875 .7125
1969. . . . . . . . . . . . 7,800 8.40 7.45 .95 6.3000 5.5875 .7125
1970. . . . . . . . . . . . 7,800 8.40 7.30 1.10 6.3000 5.4750 .8250
1971. . . . . . . . . . . . 7,800 9.20 8.10 1.10 6.9000 6.0750 .8250
1972. . . . . . . . . . . . 9,000 9.20 8.10 1.10 6.9000 6.0750 .8250
1973. . . . . . . . . . . . 10,800 9.70 8.60 1.10 7.0000 6.2050 .7950
1974. . . . . . . . . . . . 13,200 9.90 8.75 1.15 7.0000 6.1850 .8150
1975. . . . . . . . . . . . 14,100 9.90 8.75 1.15 7.0000 6.1850 .8150
1976. . . . . . . . . . . . 15,300 9.90 8.75 1.15 7.0000 6.1850 .8150
1977. . . . . . . . . . . . 16,500 9.90 8.75 1.15 7.0000 6.1850 .8150
1978. . . . . . . . . . . . 17,700 10.10 8.55 1.55 7.1000 6.0100 1.0900
1979. . . . . . . . . . . . 22,900 10.16 8.66 1.50 7.0500 6.0100 1.0400
1980. . . . . . . . . . . . 25,900 10.16 9.04 1.12 7.0500 6.2725 .7775
1981. . . . . . . . . . . . 29,700 10.70 9.40 1.30 8.0000 7.0250 .9750
1982. . . . . . . . . . . . 32,400 10.80 9.15 1.65 8.0500 6.8125 1.2375
1983. . . . . . . . . . . . 35,700 10.80 9.55 1.25 8.0500 7.1125 .9375
1984 c . . . . . . . . . . . 37,800 11.40 10.40 1.00 11.4000 10.4000 1.0000
1985 c . . . . . . . . . . . 39,600 11.40 10.40 1.00 11.4000 10.4000 1.0000
1986 c . . . . . . . . . . . 42,000 11.40 10.40 1.00 11.4000 10.4000 1.0000
1987 c . . . . . . . . . . . 43,800 11.40 10.40 1.00 11.4000 10.4000 1.0000
1988 c . . . . . . . . . . . 45,000 12.12 11.06 1.06 12.1200 11.0600 1.0600
1989 c . . . . . . . . . . . 48,000 12.12 11.06 1.06 12.1200 11.0600 1.0600
1990 . . . . . . . . . . . 51,300 12.40 11.20 1.20 12.4000 11.2000 1.2000
1991. . . . . . . . . . . . 53,400 12.40 11.20 1.20 12.4000 11.2000 1.2000
1992. . . . . . . . . . . . 55,500 12.40 11.20 1.20 12.4000 11.2000 1.2000
1993. . . . . . . . . . . . 57,600 12.40 11.20 1.20 12.4000 11.2000 1.2000
1994. . . . . . . . . . . . 60,600 12.40 10.52 1.88 12.4000 10.5200 1.8800
1995. . . . . . . . . . . . 61,200 12.40 10.52 1.88 12.4000 10.5200 1.8800
1996. . . . . . . . . . . . 62,700 12.40 10.52 1.88 12.4000 10.5200 1.8800
1997. . . . . . . . . . . . 65,400 12.40 10.70 1.70 12.4000 10.7000 1.7000
1998. . . . . . . . . . . . 68,400 12.40 10.70 1.70 12.4000 10.7000 1.7000
1999. . . . . . . . . . . . 72,600 12.40 10.70 1.70 12.4000 10.7000 1.7000
2000. . . . . . . . . . . . 76,200 12.40 10.60 1.80 12.4000 10.6000 1.8000
2001. . . . . . . . . . . . 80,400 12.40 10.60 1.80 12.4000 10.6000 1.8000
2002. . . . . . . . . . . . 84,900 12.40 10.60 1.80 12.4000 10.6000 1.8000
2003. . . . . . . . . . . . 87,000 12.40 10.60 1.80 12.4000 10.6000 1.8000
2004. . . . . . . . . . . . 87,900 12.40 10.60 1.80 12.4000 10.6000 1.8000
2005. . . . . . . . . . . . 90,000 12.40 10.60 1.80 12.4000 10.6000 1.8000
150
Program Assumptions and Methods
Table V.C6.Contribution and Benefit Base and Payroll Tax Contribution Rates (Cont.)
Payroll tax contribution rates (percent)
Contribution Employees and employers,
and benefit combineda Self-employedb
Calendar years base OASDI OASI DI OASDI OASI DI
2006. . . . . . . . . . . . $94,200 12.40 10.60 1.80 12.4000 10.6000 1.8000
2007. . . . . . . . . . . . 97,500 12.40 10.60 1.80 12.4000 10.6000 1.8000
2008. . . . . . . . . . . . 102,000 12.40 10.60 1.80 12.4000 10.6000 1.8000
2009. . . . . . . . . . . . 106,800 12.40 10.60 1.80 12.4000 10.6000 1.8000
2010d . . . . . . . . . . . 106,800 12.40 10.60 1.80 12.4000 10.6000 1.8000
2011d . . . . . . . . . . . 106,800 10.40 8.89 1.51 10.4000 8.8900 1.5100
2012d . . . . . . . . . . . 110,100 10.40 8.89 1.51 10.4000 8.8900 1.5100
2013. . . . . . . . . . . . 113,700 12.40 10.60 1.80 12.4000 10.6000 1.8000
2014. . . . . . . . . . . . 117,000 12.40 10.60 1.80 12.4000 10.6000 1.8000
2015. . . . . . . . . . . . 118,500 12.40 10.60 1.80 12.4000 10.6000 1.8000
2016. . . . . . . . . . . . 118,500 12.40 10.03 2.37 12.4000 10.0300 2.3700
2017. . . . . . . . . . . . 127,200 12.40 10.03 2.37 12.4000 10.0300 2.3700
2018. . . . . . . . . . . . 128,400 12.40 10.03 2.37 12.4000 10.0300 2.3700
2019. . . . . . . . . . . . 132,900 12.40 10.60 1.80 12.4000 10.6000 1.8000
2020. . . . . . . . . . . . 137,700 12.40 10.60 1.80 12.4000 10.6000 1.8000
2021. . . . . . . . . . . . 142,800 12.40 10.60 1.80 12.4000 10.6000 1.8000
2022. . . . . . . . . . . . 147,000 12.40 10.60 1.80 12.4000 10.6000 1.8000
2023 and later . . . . e 12.40 10.60 1.80 12.4000 10.6000 1.8000
a Except as noted below, the combined employee/employer rate is divided equally between employees and
employers.
b Beginning in 1990, self-employed persons receive a deduction, for purposes of computing their net earn-
ings, equal to half of the combined OASDI and HI contributions that would be payable without regard to the
contribution and benefit base. The OASDI contribution rate then applies to net earnings after this deduction,
but subject to the OASDI base.
c In 1984 only, employees received an immediate credit of 0.3 percent of taxable wages against their OASDI
payroll tax contributions. The self-employed received similar credits of 2.7 percent, 2.3 percent, and
2.0 percent against their combined OASDI and Hospital Insurance (HI) contributions on net earnings from
self-employment in 1984, 1985, and 1986-89, respectively. The General Fund of the Treasury reimbursed the
trust funds for these credits.
d Public Law 111-147 exempted most employers from paying the employer share of OASDI payroll tax on
wages paid during the period March 19, 2010 through December 31, 2010 to certain qualified individuals
hired after February 3, 2010. Public Law 111-312 reduced the OASDI payroll tax rate for 2011 by
2 percentage points for employees and for self-employed workers. Public Law 112-96 extended the 2011
rate reduction through 2012. These laws require that the General Fund of the Treasury reimburse the OASI
and DI Trust Funds for these temporary reductions in 2010 through 2012 payroll tax revenue, in order to
replicate to the extent possible revenue that would have been received if the combined employee/employer
payroll tax rates had remained at 12.4 percent for OASDI (10.6 percent for OASI and 1.8 percent for DI).
e Subject to automatic adjustment based on increases in average wages.
7. Income From Taxation of Benefits
Under current law, the OASI and DI Trust Funds are credited with income
tax revenue from the taxation of up to the first 50 percent of taxpayers OASI
and DI benefit payments. (The HI Trust Fund receives the remainder of the
income tax revenue from the taxation of up to 85 percent of taxpayers OASI
and DI benefit payments.) Benefits are partially subject to federal income tax
for beneficiaries with income (defined for this purpose as adjusted gross
income excluding Social Security benefits, plus half of their Social Security
benefits and all of their non-taxable interest income) in excess of specified
151
Assumptions and Methods
threshold amounts. The threshold amounts are $25,000 for single filers,
$32,000 for joint filers, and $0 for those married individuals filing separately.
For the short-range period, the Office of the Chief Actuary estimates the
income to the OASI and DI Trust Funds from taxation of benefits by apply-
ing the following two factors (projected by the Office of Tax Analysis,
Department of the Treasury) to total OASI and DI scheduled benefits: (1) the
percentage of taxpayers scheduled benefits (limited to 50 percent) that is
taxable and (2) the average marginal tax rate applicable to those benefits. Up
to 85 percent of benefits may be subject to federal income tax, with any tax
on more than 50 percent of a taxpayers benefits credited to the Medicare
Hospital Insurance Trust Fund.
For the long-range period, the office estimates the income to the trust funds
from taxation of benefits by applying projected ratios of taxation of OASI
and DI benefits to total OASI and DI scheduled benefits. These tax ratios
rely on estimates from the Office of Tax Analysis in the Department of the
Treasury. The Office of the Chief Actuarys estimates reflect the following
assumptions: (1) The income thresholds used for benefit taxation are speci-
fied in the Internal Revenue Code to be constant in the future, and have never
been changed, while income and benefit levels continue to rise. Accordingly,
projected ratios of income from taxation of benefits to the amount of benefits
increase gradually. (2) A permanent level shift upward in the ratios is pro-
jected for 2026 and beyond due to the expiration of the personal income tax
provisions in Public Law 115-97, the Tax Cuts and Jobs Act of 2017. (3)
Because indexation of income tax brackets is not specified in the Social
Security Act, and because periodic changes have been made in the past to
avoid indefinite compression of the income tax brackets relative to income
levels (bracket creep), the Trustees assume that such periodic changes will
occur in the future. As a result, after the tenth year of the projection period,
income tax brackets are assumed to rise with average wages, rather than with
the C-CPI-U as specified under current law. Thus, the income tax brackets
are projected to roughly maintain their levels relative to the income distribu-
tion.
8. Average Benefits
Projections of average benefits for each benefit type reflect recent historical
averages, projected average primary insurance amounts (PIAs), and pro-
jected ratios of average benefits to average PIAs. Calculations of average
PIAs are based on projected distributions of beneficiaries by duration from
year of initial entitlement, average PIAs at initial entitlement, and increases
in PIAs after initial entitlement. Projected increases in average PIAs after ini-
152
Program Assumptions and Methods
tial entitlement depend on automatic benefit increases, recomputations to
reflect additional covered earnings, and differences in mortality by level of
lifetime earnings. Calculations of future average PIAs at initial entitlement
are based on projected earnings histories, which in turn reflect a combination
of the actual earnings histories associated with a sample of 2018 initial enti-
tlements and more recent actual earnings levels by age and sex for covered
workers.
For retired-worker, aged-spouse, and aged-widow(er) benefits, the percent-
age of the PIA that is payable depends on the age at initial entitlement to
benefits. Projected ratios of average benefits to average PIAs for these types
of benefits are based on projections of age distributions at initial entitlement.
9. Scheduled Benefits
For each type of benefit, scheduled benefits are the product of the number of
beneficiaries and the corresponding average monthly benefit. The short-
range model calculates scheduled benefits on a quarterly basis. The long-
range model calculates all scheduled benefits on an annual basis, using the
number of beneficiaries at the beginning and end of the year. Adjustments to
these annual scheduled benefits include retroactive payments to newly
awarded beneficiaries and other amounts not reflected in the regular monthly
scheduled benefits.
Scheduled lump-sum death benefits are estimated as the product of: (1) the
number of lump-sum death payments projected on the basis of the assumed
death rates, the projected fully insured population, and the estimated percent-
age of the fully insured population that will qualify for lump-sum death pay-
ments; and (2) the amount of the lump-sum death payment, which is $255
(unindexed since 1973).
10. Illustrative Scheduled Benefit Amounts
Table V.C7 shows, under the intermediate assumptions, future benefit
amounts payable upon retirement at the normal retirement age and at age 65,
for various hypothetical workers attaining age 65 in 2022 and subsequent
years. The illustrative benefit amounts in table V.C7 are presented in CPI-
indexed 2022 dollarsthat is, adjusted to 2022 levels by the CPI indexing
series shown in table VI.G6. As a point of comparison, table V.C7 also
shows the national average wage index (AWI) for 2022 and subsequent years
in CPI-indexed 2022 dollars.
The normal retirement age was 65 for individuals who reached age 62 before
2000. It increased to age 66 during the period 2000 through 2005, at a rate of
2 months per year as workers attained age 62. Under current law, the normal
153
Assumptions and Methods
retirement age increases to age 67 during the period 2017 through 2022, also
by 2 months per year as workers attain age 62. The illustrative benefit
amounts shown in table V.C7 for retirees at age 65 are lower than the
amounts shown for retirees at normal retirement age because the statute
requires an actuarial reduction for monthly benefits taken before normal
retirement age to reflect the expected additional years benefits will be col-
lected. For example, those who collect benefits starting in 2027 at age 65 will
receive benefits for two more years than if they instead claim benefits at the
normal retirement age (age 67) unless they die between the ages of
65 and 67.
Table V.C7 shows five different pre-retirement earnings patterns. Four of
these patterns assume the earnings history of workers with scaled-earnings
patterns 1 and reflect very low, low, medium, and high career-average levels
of pre-retirement earnings starting at age 21. The fifth pattern assumes the
earnings history of a steady maximum earner starting at age 22. The four
scaled-earnings patterns derive from earnings experienced by insured work-
ers during calendar years 1999 through 2018. These earnings levels differ by
age. The career-average level of earnings for each scaled case targets a per-
cent of the AWI.
For the scaled medium earner, the career-average earnings level is about
equal to the AWI (estimated to be $62,583 for 2022). For the scaled very
low, low, and high earners, the career-average earnings level, wage-indexed
to the year before starting benefits, is about 25 percent, 45 percent, and
160 percent of the AWI, respectively (estimated to be $15,646, $28,162, and
$100,133, respectively, for 2022). The steady maximum earner has earnings
at or above the contribution and benefit base ($147,000 for 2022) for each
year starting at age 22 through the year prior to retirement.
Table V.C7.Annual Scheduled Benefit Amounts for Retired Workers
With Various Pre-Retirement Earnings Patterns
Based on Intermediate Assumptions, Calendar Years 2022-2100
National
Scaled very Scaled Steady Average Wage
Year attain Age at low Scaled low medium Scaled high maximum Index in 2022
age 65a retirement earningsb earningsc earningsd earningse earningsf dollarsg
Benefits in 2022 dollarsh with retirement at normal retirement age
2022 . . . . 66:6 $11,781 $15,429 $25,465 $33,685 $41,206 $62,583
2025 . . . . 67:0 11,851 15,539 25,680 33,878 41,680 66,308
2030 . . . . 67:0 13,231 17,332 28,599 37,816 46,549 70,950
2035 . . . . 67:0 14,155 18,538 30,578 40,450 49,825 75,381
2040 . . . . 67:0 15,035 19,685 32,490 42,973 52,902 79,937
1 Actuarial Note 2022.3 has more details on scaled-earnings patterns.
See www.ssa.gov/OACT/NOTES/ran3/.
154
Program Assumptions and Methods
Table V.C7.Annual Scheduled Benefit Amounts for Retired Workers
With Various Pre-Retirement Earnings Patterns
Based on Intermediate Assumptions, Calendar Years 2022-2100 (Cont.)
National
Scaled very Scaled Steady Average Wage
Year attain Age at low Scaled low medium Scaled high maximum Index in 2022
age 65a retirement earningsb earningsc earningsd earningse earningsf dollarsg
2045 . . . . 67:0 $15,948 $20,876 $34,443 $45,563 $56,131 $84,434
2050 . . . . 67:0 16,841 22,050 36,375 48,129 59,234 89,058
2055 . . . . 67:0 17,764 23,262 38,372 50,764 62,385 94,081
2060 . . . . 67:0 18,769 24,575 40,544 53,633 65,860 99,505
2065 . . . . 67:0 19,853 25,995 42,881 56,724 69,633 105,304
2070 . . . . 67:0 21,011 27,506 45,378 60,030 73,701 111,411
2075 . . . . 67:0 22,230 29,106 48,012 63,514 77,980 117,829
2080 . . . . 67:0 23,508 30,780 50,774 67,169 82,471 124,514
2085 . . . . 67:0 24,843 32,526 53,652 70,980 87,152 131,500
2090 . . . . 67:0 26,237 34,351 56,666 74,963 92,042 138,963
2095 . . . . 67:0 27,729 36,304 59,886 79,224 97,265 147,006
2100 . . . . 67:0 29,334 38,407 63,354 83,810 102,895 155,515
Benefits in 2022 dollarsh with retirement at age 65
2022 . . . . 65:0 10,328 13,519 22,306 29,517 36,030 62,583
2025 . . . . 65:0 10,253 13,425 22,166 29,293 35,792 66,308
2030 . . . . 65:0 11,456 15,000 24,743 32,745 40,051 70,950
2035 . . . . 65:0 12,261 16,053 26,467 35,033 42,892 75,381
2040 . . . . 65:0 13,025 17,046 28,116 37,217 45,547 79,937
2045 . . . . 65:0 13,808 18,076 29,819 39,464 48,334 84,434
2050 . . . . 65:0 14,592 19,095 31,495 41,684 51,018 89,058
2055 . . . . 65:0 15,387 20,145 33,222 43,971 53,735 94,081
2060 . . . . 65:0 16,260 21,279 35,097 46,451 56,727 99,505
2065 . . . . 65:0 17,194 22,510 37,121 49,130 59,974 105,304
2070 . . . . 65:0 18,197 23,820 39,284 51,996 63,478 111,411
2075 . . . . 65:0 19,253 25,203 41,563 55,011 67,167 117,829
2080 . . . . 65:0 20,363 26,654 43,958 58,179 71,037 124,514
2085 . . . . 65:0 21,518 28,167 46,450 61,479 75,071 131,500
2090 . . . . 65:0 22,727 29,748 49,056 64,928 79,283 138,963
2095 . . . . 65:0 24,018 31,438 51,845 68,615 83,782 147,006
2100 . . . . 65:0 25,408 33,259 54,846 72,589 88,629 155,515
a Attains age 65 on January 1 of the year.
b Career-average earnings at about 25 percent of the AWI.
c Career-average earnings at about 45 percent of the AWI.
d Career-average earnings at about 100 percent of the AWI. Such a worker would have career-average earn-
ings at approximately the 56th percentile of all new retired-worker beneficiaries.
e Career-average earnings at about 160 percent of the AWI.
f Earnings for each year at or above the contribution and benefit base.
g Average Wage Index from table VI.G6, adjusted to be in 2022 dollars by using the CPI indexing series
from table VI.G6.
h Annual amounts are the total for the 12-month period starting with the month of retirement, adjusted to be
in 2022 dollars by using the CPI indexing series from table VI.G6.
Note: Benefits shown at age 65 reflect adjustments for early retirement. For early retirement as early as
age 62, the benefit amount is reduced 5/9 of one percent for each month before normal retirement age, up to
36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per
month. For example, if the number of reduction months is 60 (the maximum number for retirement at 62
when normal retirement age is 67), then the benefit is reduced by 30 percent. Delayed retirement credit is
generally given for retirement after the normal retirement age. The delayed retirement credit is 2/3 of one
percent per month for persons born in 1943 and later. No credit is given for delaying benefits after attaining
age 70. See table V.C3 for additional details, including adjustments applying to other birth years.
155
Assumptions and Methods
11. Administrative Expenses
The projection of administrative expenses through the short-range period is
based on historical experience and the projected growth in average wages.
The Office of Budget of the Social Security Administration provides esti-
mates for the first several years of the projection. For years after the short-
range period, projected administrative expenses reflect increases in the num-
ber of beneficiaries in current-payment status, and increases in the average
wage. However, the increases in average wage are partially offset by
assumed administrative productivity gains.
12. Railroad Retirement Financial Interchange
Railroad workers are covered under a separate multi-tiered benefit plan, with
a first tier of coverage similar to OASDI coverage. An annual financial inter-
change between the Railroad Retirement fund and the OASI and DI Trust
Funds is made to resolve the difference between: (1) the amount of OASDI
benefits that would be paid to railroad workers and their families if railroad
employment had been covered under the OASDI program, plus administra-
tive expenses associated with these benefits; and (2) the amount of OASDI
payroll tax and income tax that would be received with allowances for inter-
est from railroad workers.
The Office of the Chief Actuarys projection of future amounts for the finan-
cial interchange with the Railroad Retirement fund reflects trends similar to
those used in estimating the cost of OASDI benefits. The annual short-range
net cost for the OASI and DI Trust Funds is about $5 to $6 billion and the
long-range summarized net cost for the OASI and DI Trust Funds is
0.05 percent of taxable payroll.
156
History of Trust Fund Operations
VI. APPENDICES
A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS
The Federal Old-Age and Survivors Insurance (OASI) Trust Fund was estab-
lished on January 1, 1940 as a separate account in the United States Treasury.
The Federal Disability Insurance (DI) Trust Fund, another separate account
in the United States Treasury, was established on August 1, 1956. These
funds conduct the financial operations of the OASI and DI programs. The
Board of Trustees is responsible for overseeing the financial operations of
these funds. The following paragraphs describe the various components of
trust fund income and cost. Following this description, tables VI.A1 and
VI.A2 present the historical operations of the separate trust funds since their
inception, and table VI.A3 presents the operations of the hypothetical com-
bined trust funds 1 during the period when they have co-existed.
The primary income of these two funds comes from appropriations under
permanent authority on the basis of payroll tax contributions. Federal law
requires that all employees who work in OASDI covered employment, and
their employers, make payroll tax contributions on their wages up to a speci-
fied annual maximum amount (the contribution and benefit base). Employ-
ees and their employers must also make payroll tax contributions on monthly
cash tips if such tips are at least $20. Self-employed persons must make pay-
roll tax contributions on their covered net earnings from self-employment
subject to the annual contribution and benefit base. The Federal Government
pays amounts equivalent to the combined employer and employee contribu-
tions that would be paid on deemed wage credits attributable to military ser-
vice performed between 1957 and 2001, if such wage credits were covered
wages. Treasury initially deposits payroll tax contributions to the trust funds
each day on an estimated basis. Subsequently, Treasury makes adjustments
based on the certified amount of wages and self-employment earnings in the
records of the Social Security Administration.
Income also includes various reimbursements from the General Fund of the
Treasury, such as: (1) the cost of noncontributory wage credits for military
service before 1957, and periodic adjustments to previous determinations of
this cost; (2) the cost in 1971 through 1982 of deemed wage credits for mili-
tary service performed after 1956; (3) the cost of benefits to certain unin-
sured persons who attained age 72 before 1968; (4) the cost of payroll tax
credits provided to employees in 1984 and self-employed persons in 1984
through 1989 by Public Law 98-21; (5) the cost in 2009 through 2017 of
excluding certain self-employment earnings from SECA taxes under Public
1 The OASI and DI Trust Funds are distinct legal entities which operate independently. To illustrate the
actuarial status of the program as a whole, the fund operations are often combined on a hypothetical basis.
157
Appendices
Law 110-246; and (6) payroll tax revenue forgone under the provisions of
Public Laws 111-147, 111-312, 112-78, and 112-96.
Beginning in 1984, Federal law subjected up to 50 percent of an individuals
or couples OASDI benefits to Federal income taxation under certain circum-
stances. Effective for taxable years beginning after 1993, the law increased
the maximum percentage from 50 percent to 85 percent. Treasury credits the
proceeds from this taxation of up to 50 percent of benefits to the OASI and
DI Trust Funds in advance, on an estimated basis, at the beginning of each
calendar quarter, with no reimbursement to the General Fund for interest
costs attributable to the advance transfers. 1 Treasury makes subsequent
adjustments based on the actual amounts shown on annual income tax
records. Each of the OASI and DI Trust Funds receives the income taxes
paid on the benefits from that trust fund. 2
Another source of income to the trust funds is interest received on invest-
ments held by the trust funds. On a daily basis, Treasury invests trust fund
income in interest-bearing obligations of the U.S. Government. These invest-
ments include the special public-debt obligations described in the next para-
graph. The Social Security Act also authorizes the trust funds to hold
obligations guaranteed as to both principal and interest by the United States.
The act therefore permits the trust funds to hold certain Federally sponsored
agency obligations and marketable obligations. 3 The trust funds may acquire
any of these obligations on original issue at the issue price or by purchase of
outstanding obligations at their market price.
The Social Security Act authorizes the issuance of special public-debt obli-
gations for purchase exclusively by the trust funds. The act provides that the
interest rate for special obligations newly issued in any month is the average
market yield, as of the last business day of the prior month, on all of the out-
standing marketable U.S. obligations that are due or callable more than
4 years in the future. This rate is rounded to the nearest one-eighth of one
percent. Beginning January 1999, in calculating the average market yield
rate for this purpose, the Treasury incorporates the yield to the call date when
a callable bonds market price is above par.
Although the Social Security Act does not authorize the purchase or sale of
special issue securities in the open market, Treasury redeems special issue
securities prior to maturity at par value when needed to meet current operat-
1 The HI Trust Fund receives the additional tax revenue resulting from the increase to 85 percent.
2 A special provision applies to benefits paid to nonresident aliens. Effective for taxable years beginning
after 1994, Public Law 103-465 subjects benefits to a flat-rate tax, usually 25.5 percent, before they are
paid. Therefore, this tax remains in the trust funds. From 1984 to 1994, the flat-rate tax was usually
15 percent.
3 The Social Security Act requires the trust funds to acquire special-issue obligations unless the Managing
Trustee determines that the purchase of marketable obligations is in the public interest. The purchase of mar-
ketable obligations has been quite limited and has not occurred since 1980.
158
History of Trust Fund Operations
ing expenses. As a result, changes in market yield rates after issuance of spe-
cial issue securities do not cause fluctuations in the value of these securities.
As is true for marketable Treasury securities held by the public, the full faith
and credit of the U.S. Government backs all of the investments held by the
trust funds.
Annual cost for the OASI and DI Trust Funds primarily consists of:
(1) OASDI benefit payments 1 , net of any reimbursements from the General
Fund of the Treasury for unnegotiated benefit checks; and (2) expenses
incurred by the Social Security Administration and the Department of the
Treasury in administering the OASDI program and the provisions of the
Internal Revenue Code relating to the collection of contributions. Such
administrative expenses include, among other items, the cost of (1) payroll;
(2) construction, rental, lease, or purchase of office buildings and related
facilities for the Social Security Administration; and (3) information technol-
ogy systems. The Social Security Act prohibits payments from the OASI and
DI Trust Funds for any purpose not related to the payment of benefits or
administrative costs for the OASDI program.
Annual cost also includes: (1) the costs of vocational rehabilitation services
furnished to disabled persons receiving cash benefits because of their disabil-
ities, where such services contributed to their successful rehabilitation; and
(2) net costs of the provisions of the Railroad Retirement Act that provide for
a system of coordination and financial interchange between the Railroad
Retirement program and the Social Security program. Under the financial
interchange provisions, the Railroad Retirement programs Social Security
Equivalent Benefit Account and the trust funds interchange amounts on an
annual basis so that each trust fund is in the same position it would have been
had railroad employment always been covered under Social Security.
The statements of the operations of the trust funds in this report do not
include the net worth of facilities and other fixed capital assets because the
value of fixed capital assets is not available in the form of a financial asset
redeemable for the payment of benefits or administrative costs. As a result of
this unavailability, the actuarial status of the trust funds does not take these
assets into account.
1 Periodically, benefit payments which were scheduled to be paid on January 3 were actually paid on
December 31 of the preceding year as required by the statutory provision included in the 1977 Social Secu-
rity Amendments for early delivery of benefit payments when the normal payment delivery date is a Satur-
day, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for
benefits scheduled for January 3, 1982. The most recent such accelerated payment affected benefits sched-
uled to be paid on January 3, 2021. For comparability with the values for historical years and the projections
in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for pay-
ment each year without regard to the accelerated payments described above.
159
Appendices
Table VI.A1. Operations of the OASI Trust Fund, Calendar Years 1937-2021
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb mentsc benefitsb interest d Totala mentsa e costs change year of year ratio f
1937g. . $0.8 $0.8 h h h $0.8 $0.8
1938g. . .4 .4 h h h .4 1.1 7,660
1939g. . .6 .6 h h h .6 1.7 8,086
1940 . . .4 .3 h $0.1 h h .3 2.0 2,781
1941 . . .8 .8 $0.1 .1 $0.1 h .7 2.8 1,782
1942 . . 1.1 1.0 .1 .2 .1 h .9 3.7 1,737
1943 . . 1.3 1.2 .1 .2 .2 h 1.1 4.8 1,891
1944 . . 1.4 1.3 .1 .2 .2 h 1.2 6.0 2,025
1945 . . 1.4 1.3 .1 .3 .3 h 1.1 7.1 1,975
1946 . . 1.4 1.3 .2 .4 .4 h 1.0 8.1 1,704
1947 . . 1.7 1.6 h .2 .5 .5 h 1.2 9.4 1,592
1948 . . 2.0 1.7 h .3 .6 .6 $0.1 1.4 10.7 1,542
1949 . . 1.8 1.7 h .1 .7 .7 .1 1.1 11.8 1,487
1950 . . 2.9 2.7 h .3 1.0 1.0 .1 1.9 13.7 1,156
1951 . . 3.8 3.4 h .4 2.0 1.9 .1 1.8 15.5 698
1952 . . 4.2 3.8 .4 2.3 2.2 .1 1.9 17.4 681
1953 . . 4.4 3.9 .4 3.1 3.0 .1 1.3 18.7 564
1954 . . 5.6 5.2 .4 3.7 3.7 .1 h 1.9 20.6 500
1955 . . 6.2 5.7 .5 5.1 5.0 .1 h 1.1 21.7 405
1956 . . 6.7 6.2 .5 5.8 5.7 .1 h .9 22.5 371
1957 . . 7.4 6.8 .6 7.5 7.3 .2 h -.1 22.4 300
1958 . . 8.1 7.6 .6 8.6 8.3 .2 $0.1 -.5 21.9 259
1959 . . 8.6 8.1 .5 10.3 9.8 .2 .3 -1.7 20.1 212
1960 . . 11.4 10.9 .5 11.2 10.7 .2 .3 .2 20.3 180
1961 . . 11.8 11.3 .5 12.4 11.9 .2 .3 -.6 19.7 163
1962 . . 12.6 12.1 .5 14.0 13.4 .3 .4 -1.4 18.3 141
1963 . . 15.1 14.5 .5 14.9 14.2 .3 .4 .1 18.5 123
1964 . . 16.3 15.7 .6 15.6 14.9 .3 .4 .6 19.1 118
1965 . . 16.6 16.0 .6 17.5 16.7 .3 .4 -.9 18.2 109
1966 . . 21.3 20.6 $0.1 .6 19.0 18.3 .3 .4 2.3 20.6 96
1967 . . 24.0 23.1 .1 .8 20.4 19.5 .4 .5 3.7 24.2 101
1968 . . 25.0 23.7 .4 .9 23.6 22.6 .5 .4 1.5 25.7 103
1969 . . 29.6 27.9 .4 1.2 25.2 24.2 .5 .5 4.4 30.1 102
1970 . . 32.2 30.3 .4 1.5 29.8 28.8 .5 .6 2.4 32.5 101
1971 . . 35.9 33.7 .5 1.7 34.5 33.4 .5 .6 1.3 33.8 94
1972 . . 40.1 37.8 .5 1.8 38.5 37.1 .7 .7 1.5 35.3 88
1973 . . 48.3 46.0 .4 1.9 47.2 45.7 .6 .8 1.2 36.5 75
1974 . . 54.7 52.1 .4 2.2 53.4 51.6 .9 .9 1.3 37.8 68
1975 . . 59.6 56.8 .4 2.4 60.4 58.5 .9 1.0 -.8 37.0 63
1976 . . 66.3 63.4 .6 2.3 67.9 65.7 1.0 1.2 -1.6 35.4 54
1977 . . 72.4 69.6 .6 2.2 75.3 73.1 1.0 1.2 -2.9 32.5 47
1978 . . 78.1 75.5 .6 2.0 83.1 80.4 1.1 1.6 -5.0 27.5 39
1979 . . 90.3 87.9 .6 1.8 93.1 90.6 1.1 1.4 -2.9 24.7 30
1980 . . 105.8 103.5 .5 1.8 107.7 105.1 1.2 1.4 -1.8 22.8 23
1981 . . 125.4 122.6 .7 2.1 126.7 123.8 1.3 1.6 -1.3 21.5 18
1982 . . 125.2 123.7 .7 .8 142.1 138.8 1.5 1.8 i .6 22.1 15
1983 . . 150.6 138.3 5.5 6.7 153.0 149.2 1.5 2.3 -2.4 19.7 14
1984 . . 169.3 159.5 4.7 $2.8 2.3 161.9 157.8 1.6 2.4 7.4 27.1 j20
1985 . . 184.2 175.1 4.0 3.2 1.9 171.2 167.2 1.6 2.3 i 8.7 35.8 j24
1986 . . 197.4 189.1 1.8 3.4 3.1 181.0 176.8 1.6 2.6 i 3.2 39.1 j28
1987 . . 210.7 201.1 1.7 3.3 4.7 187.7 183.6 1.5 2.6 23.1 62.1 j30
1988 . . 240.8 227.7 2.1 3.4 7.6 200.0 195.5 1.8 2.8 40.7 102.9 j41
1989 . . 264.7 248.1 2.1 2.4 12.0 212.5 208.0 1.7 2.8 52.2 155.1 j59
160
History of Trust Fund Operations
Table VI.A1. Operations of the OASI Trust Fund, Calendar Years 1937-2021 (Cont.)
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb mentsc benefitsb interest d Totala mentsa e costs change year of year ratio f
1990. . . $286.7 $266.1 -$0.7 $4.8 $16.4 $227.5 $223.0 $1.6 $3.0 $59.1 $214.2 j78
1991. . . 299.3 272.5 .1 5.9 20.8 245.6 240.5 1.8 3.4 53.7 267.8 87
1992. . . 311.2 281.1 -.1 5.9 24.3 259.9 254.9 1.8 3.1 51.3 319.1 103
1993. . . 323.3 290.9 h 5.3 27.0 273.1 267.8 2.0 3.4 50.2 369.3 117
1994. . . 328.3 293.3 h 5.0 29.9 284.1 279.1 1.6 3.4 44.1 413.5 130
1995. . . 342.8 304.7 -.2 5.5 32.8 297.8 291.6 2.1 4.1 45.0 458.5 139
1996. . . 363.7 321.6 h 6.5 35.7 308.2 302.9 1.8 3.6 55.5 514.0 149
1997. . . 397.2 349.9 h 7.4 39.8 322.1 316.3 2.1 3.7 75.1 589.1 160
1998. . . 424.8 371.2 h 9.1 44.5 332.3 326.8 1.9 3.7 92.5 681.6 177
1999. . . 457.0 396.4 h 10.9 49.8 339.9 334.4 1.8 3.7 117.2 798.8 201
2000. . . 490.5 421.4 h 11.6 57.5 358.3 352.7 2.1 3.5 132.2 931.0 223
2001. . . 518.1 441.5 h 11.9 64.7 377.5 372.3 2.0 3.3 140.6 1,071.5 247
2002. . . 539.7 455.2 .4 12.9 71.2 393.7 388.1 2.1 3.5 146.0 1,217.5 272
2003. . . 543.8 456.1 h 12.5 75.2 406.0 399.8 2.6 3.6 137.8 1,355.3 300
2004. . . 566.3 472.8 h 14.6 79.0 421.0 415.0 2.4 3.6 145.3 1,500.6 322
2005. . . 604.3 506.9 -.3 13.8 84.0 441.9 435.4 3.0 3.6 162.4 1,663.0 340
2006. . . 642.2 534.8 h 15.6 91.8 461.0 454.5 3.0 3.5 181.3 1,844.3 361
2007. . . 675.0 560.9 h 17.2 97.0 495.7 489.1 3.1 3.6 179.3 2,023.6 372
2008. . . 695.5 574.6 h 15.6 105.3 516.2 509.3 3.2 3.6 179.3 2,202.9 392
2009. . . 698.2 570.4 h 19.9 107.9 564.3 557.2 3.4 3.7 133.9 2,336.8 390
2010. . . 677.1 544.8 2.0 22.1 108.2 584.9 577.4 3.5 3.9 92.2 2,429.0 400
2011. . . 698.8 482.4 87.8 22.2 106.5 603.8 596.2 3.5 4.1 95.0 2,524.1 402
2012. . . 731.1 503.9 97.7 26.7 102.8 645.5 637.9 3.4 4.1 85.6 2,609.7 391
2013. . . 743.8 620.8 4.2 20.7 98.1 679.5 672.1 3.4 3.9 64.3 2,674.0 384
2014. . . 769.4 646.2 .4 28.0 94.8 714.2 706.8 3.1 4.3 55.2 2,729.2 374
2015. . . 801.6 679.5 .3 30.6 91.2 750.5 742.9 3.4 4.3 51.0 2,780.3 364
2016. . . 797.5 678.8 .1 31.6 87.0 776.4 768.6 3.5 4.3 21.1 2,801.3 358
2017. . . 825.6 706.5 h 35.9 83.2 806.7 798.7 3.7 4.3 19.0 2,820.3 347
2018. . . 831.0 715.9 h 34.5 80.7 853.5 844.9 3.8 4.8 -22.4 2,797.9 330
2019. . . 917.9 805.1 h 34.9 77.9 911.4 902.8 3.7 4.9 6.5 2,804.3 307
161
Appendices
Table VI.A1. Operations of the OASI Trust Fund, Calendar Years 1937-2021 (Cont.)
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb mentsc benefitsb interest d Totala mentsa e costs change year of year ratio f
2020 . . $968.3 $856.0 h $39.0 $73.3 $961.0 $952.4 $3.7 $4.8 $7.4 $2,811.7 292
2021 . . 942.9 838.2 h 37.2 67.5 1,001.9 993.1 4.0 4.8 -59.1 2,752.6 281
a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on
December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security
Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday,
or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for
January 3, 1982. For comparability with other historical years and the projections in this report, all trust fund oper-
ations and asset reserves reflect the 12 months of benefits scheduled for payment in each year without regard to the
accelerated payments described above.
b Includes adjustments for prior calendar years. For example, in June 2021, an unusually large negative adjustment
to payroll tax contributions in the amount of $30.4 billion was made because payroll tax revenue credited to the
trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
c Includes net reimbursements from the General Fund of the Treasury to the OASI Trust Fund for: (1) the cost of
noncontributory wage credits for military service before 1957; (2) the cost in 1971-82 of deemed wage credits for
military service performed after 1956; (3) the cost of benefits to certain uninsured persons who attained age 72
before 1968; (4) the cost of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-
89 by Public Law 98-21; (5) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes
under Public Law 110-246; and (6) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-
312, 112-78, and 112-96.
d Net interest includes net profits or losses on marketable investments. Beginning in 1967, the trust fund pays
administrative expenses on an estimated basis, with a final adjustment including interest made in the following fis-
cal year. Net interest includes the amounts of these interest adjustments. The 1970 report describes the accounting
for administrative expenses for years prior to 1967. Beginning in October 1973, figures include relatively small
amounts of gifts to the fund. Net interest for 1983-86 reflects payments for interest on amounts owed under the
interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements paid from the trust
fund to the General Fund on advance tax transfers.
e Beginning in 1966, includes payments for vocational rehabilitation services furnished to disabled persons receiv-
ing benefits because of their disabilities. Beginning in 1983, net benefit amounts include reimbursements paid
from the General Fund to the trust fund for unnegotiated benefit checks. Excluding the portion attributable to voca-
tional rehabilitation services and unnegotiated benefit checks, amounts are the same as benefits scheduled under
law at that time for all historical years.
f The Trust fund ratio column represents asset reserves at the beginning of a year as a percentage of cost during
the year. The table shows no ratio for 1937 because no reserves existed at the beginning of the year.
g Operations prior to 1940 are for the Old-Age Reserve Account established by the original Social Security Act.
The 1939 Amendments transferred the asset reserves of the Account to the OASI Trust Fund effective January 1,
1940.
h Between -$50 million and $50 million.
i Reflects interfund borrowing of $17.5 billion by the OASI Trust Fund from the DI and HI Trust Funds in 1982
and the subsequent repayment of those loans in 1985 ($4.4 billion) and 1986 ($13.2 billion).
j Reserves used for the trust fund ratio calculation include January advance tax transfers.
Note: Components may not sum to totals because of rounding.
162
History of Trust Fund Operations
Table VI.A2. Operations of the DI Trust Fund, Calendar Years 1957-2021
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb ments c benefitsb interest d Totala ments a e costs change year of year ratio f
1957 . . $0.7 $0.7 g $0.1 $0.1 g $0.6 $0.6
1958 . . 1.0 1.0 g .3 .2 g .7 1.4 249
1959 . . .9 .9 g .5 .5 g g .4 1.8 284
1960 . . 1.1 1.0 $0.1 .6 .6 g g .5 2.3 304
1961 . . 1.1 1.0 .1 1.0 .9 $0.1 g .1 2.4 239
1962 . . 1.1 1.0 .1 1.2 1.1 .1 g -.1 2.4 206
1963 . . 1.2 1.1 .1 1.3 1.2 .1 g -.1 2.2 183
1964 . . 1.2 1.2 .1 1.4 1.3 .1 g -.2 2.0 159
1965 . . 1.2 1.2 .1 1.7 1.6 .1 g -.4 1.6 121
1966 . . 2.1 2.0 g .1 1.9 1.8 .1 g .1 1.7 82
1967 . . 2.4 2.3 g .1 2.1 1.9 .1 g .3 2.0 83
1968 . . 3.5 3.3 g .1 2.5 2.3 .1 g 1.0 3.0 83
1969 . . 3.8 3.6 g .2 2.7 2.6 .1 g 1.1 4.1 111
1970 . . 4.8 4.5 g .3 3.3 3.1 .2 g 1.5 5.6 126
1971 . . 5.0 4.6 $0.1 .4 4.0 3.8 .2 g 1.0 6.6 140
1972 . . 5.6 5.1 .1 .4 4.8 4.5 .2 g .8 7.5 140
1973 . . 6.4 5.9 .1 .5 6.0 5.8 .2 g .5 7.9 125
1974 . . 7.4 6.8 .1 .5 7.2 7.0 .2 g .2 8.1 110
1975 . . 8.0 7.4 .1 .5 8.8 8.5 .3 g -.8 7.4 92
1976 . . 8.8 8.2 .1 .4 10.4 10.1 .3 g -1.6 5.7 71
1977 . . 9.6 9.1 .1 .3 11.9 11.5 .4 g -2.4 3.4 48
1978 . . 13.8 13.4 .1 .3 13.0 12.6 .3 g .9 4.2 26
1979 . . 15.6 15.1 .1 .4 14.2 13.8 .4 g 1.4 5.6 30
1980 . . 13.9 13.3 .1 .5 15.9 15.5 .4 g -2.0 3.6 35
1981 . . 17.1 16.7 .2 .2 17.7 17.2 .4 g -.6 3.0 21
1982 . . 22.7 22.0 .2 .5 18.0 17.4 .6 g h -.4 2.7 17
1983 . . 20.7 18.0 1.1 1.6 18.2 17.5 .6 g 2.5 5.2 15
1984 . . 17.3 15.5 .4 $0.2 1.2 18.5 17.9 .6 g -1.2 4.0 i35
1985 . . 19.3 17.0 1.2 .2 .9 19.5 18.8 .6 g h 2.4 6.3 i27
1986 . . 19.4 18.2 .2 .2 .8 20.5 19.9 .6 $0.1 h 1.5 7.8 i38
1987 . . 20.3 19.5 .2 g .6 21.4 20.5 .8 .1 -1.1 6.7 i44
1988 . . 22.7 21.8 .2 .1 .6 22.5 21.7 .7 .1 .2 6.9 i38
1989 . . 24.8 23.8 .2 .1 .7 23.8 22.9 .8 .1 1.0 7.9 i38
1990 . . 28.8 28.4 -.6 .1 .9 25.6 24.8 .7 .1 3.2 11.1 i40
1991 . . 30.4 29.1 g .2 1.1 28.6 27.7 .8 .1 1.8 12.9 39
1992 . . 31.4 30.1 g .2 1.1 32.0 31.1 .8 .1 -.6 12.3 40
1993 . . 32.3 31.2 g .3 .8 35.7 34.6 1.0 .1 -3.4 9.0 35
1994 . . 52.8 51.4 g .3 1.2 38.9 37.7 1.0 .1 14.0 22.9 23
1995 . . 56.7 54.4 -.2 .3 2.2 42.1 40.9 1.1 .1 14.6 37.6 55
1996 . . 60.7 57.3 g .4 3.0 45.4 44.2 1.2 g 15.4 52.9 83
1997 . . 60.5 56.0 g .5 4.0 47.0 45.7 1.3 .1 13.5 66.4 113
1998 . . 64.4 59.0 g .6 4.8 49.9 48.2 1.6 .2 14.4 80.8 133
1999 . . 69.5 63.2 g .7 5.7 53.0 51.4 1.5 .1 16.5 97.3 152
2000 . . 77.9 71.1 -.8 .7 6.9 56.8 55.0 1.6 .2 21.1 118.5 171
2001 . . 83.9 74.9 g .8 8.2 61.4 59.6 1.7 g 22.5 141.0 193
2002 . . 87.4 77.3 g .9 9.2 67.9 65.7 2.0 .2 19.5 160.5 208
2003 . . 88.1 77.4 g .9 9.7 73.1 70.9 2.0 .2 15.0 175.4 219
2004 . . 91.4 80.3 g 1.1 10.0 80.6 78.2 2.2 .2 10.8 186.2 218
2005 . . 97.4 86.1 g 1.1 10.3 88.0 85.4 2.3 .3 9.4 195.6 212
2006 . . 102.6 90.8 g 1.2 10.6 94.5 91.7 2.3 .4 8.2 203.8 207
2007 . . 109.9 95.2 g 1.4 13.2 98.8 95.9 2.5 .4 11.1 214.9 206
2008 . . 109.8 97.6 g 1.3 11.0 109.0 106.0 2.5 .4 .9 215.8 197
2009 . . 109.3 96.9 g 2.0 10.5 121.5 118.3 2.7 .4 -12.2 203.5 178
163
Appendices
Table VI.A2. Operations of the DI Trust Fund, Calendar Years 1957-2021 (Cont.)
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb ments c benefitsb interest d Totala ments a e costs change year of year ratio f
2010 . . $104.0 $92.5 $0.4 $1.9 $9.3 $127.7 $124.2 $3.0 $0.5 -$23.6 $179.9 159
2011 . . 106.3 81.9 14.9 1.6 7.9 132.3 128.9 2.9 .5 -26.1 153.9 136
2012 . . 109.1 85.6 16.5 .6 6.4 140.3 136.9 2.9 .5 -31.2 122.7 110
2013 . . 111.2 105.4 .7 .4 4.7 143.4 140.1 2.8 .6 -32.2 90.4 86
2014 . . 114.9 109.7 .1 1.7 3.4 145.1 141.7 2.9 .4 -30.2 60.2 62
2015 . . 118.6 115.4 g 1.1 2.1 146.6 143.4 2.8 .4 -28.0 32.3 41
2016 . . 160.0 157.4 g 1.2 1.4 145.9 142.8 2.8 .4 14.1 46.3 22
2017 . . 171.0 167.1 g 2.0 1.9 145.8 142.8 2.8 .2 25.1 71.5 32
2018 . . 172.3 169.2 g .5 2.6 146.8 143.7 2.9 .2 25.6 97.1 49
2019 . . 143.9 139.4 g 1.6 2.9 147.9 145.1 2.7 .1 -4.0 93.1 66
2020 . . 149.7 145.3 g 1.7 2.8 146.3 143.6 2.6 .1 3.5 96.6 64
2021 . . 145.5 142.4 g .5 2.6 142.6 140.1 2.5 .1 2.8 99.4 68
a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on
December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security
Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sun-
day, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits sched-
uled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust
fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year without
regard to the accelerated payments described above.
b Includes adjustments for prior calendar years. For example, in June 2021, an unusually large negative adjust-
ment to payroll tax contributions in the amount of $5.2 billion was made because payroll tax revenue credited to
the trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
c Includes net reimbursements from the General Fund of the Treasury to the DI Trust Fund for: (1) the cost of
noncontributory wage credits for military service before 1957; (2) the cost in 1971-82 of deemed wage credits
for military service performed after 1956; (3) the cost of payroll tax credits provided to employees in 1984 and
self-employed persons in 1984-89 by Public Law 98-21; (4) the cost in 2009-17 of excluding certain self-
employment earnings from SECA taxes under Public Law 110-246; and (5) payroll tax revenue forgone under
the provisions of Public Laws 111-147, 111-312, 112-78, and 112-96.
d Net interest includes net profits or losses on marketable investments. Beginning in 1967, the trust fund pays
administrative expenses on an estimated basis, with a final adjustment including interest made in the following
fiscal year. Net interest includes the amounts of these interest adjustments. The 1970 report describes the
accounting for administrative expenses for years prior to 1967. Beginning in July 1974, figures include relatively
small amounts of gifts to the fund. Net interest for 1983-86 reflects payments for interest on amounts owed under
the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements paid from the
trust fund to the General Fund on advance tax transfers.
e Beginning in 1966, includes payments for vocational rehabilitation services furnished to disabled persons
receiving benefits because of their disabilities. Beginning in 1983, net benefit amounts include reimbursements
paid from the General Fund to the trust fund for unnegotiated benefit checks. Excluding the portion attributable
to vocational rehabilitation services and unnegotiated benefit checks, amounts are the same as benefits scheduled
under law at that time for all historical years.
f The Trust fund ratio column represents asset reserves at the beginning of a year as a percentage of cost during
the year. The table shows no ratio for 1957 because no reserves existed at the beginning of the year.
g Between -$50 million and $50 million.
h Reflects interfund borrowing by the OASI Trust Fund from the DI Trust Fund in 1982 of $5.1 billion and the
subsequent repayment of that loan in 1985 ($2.5 billion) and 1986 ($2.5 billion).
i Reserves used for the trust fund ratio calculation include January advance tax transfers.
Note: Components may not sum to totals because of rounding.
164
History of Trust Fund Operations
Table VI.A3. Operations of the Combined OASI and DI Trust Funds,
Calendar Years 1957-2021
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb mentscbenefitsb interestd Totala mentsa e costs change year of year ratio f
1957. . . $8.1 $7.5 $0.6 $7.6 $7.4 $0.2 g $0.5 $23.0 298
1958 9.1 8.5 .6 8.9 8.6 .2 $0.1 .2 23.2 259
1959. . . 9.5 8.9 .6 10.8 10.3 .2 .3 -1.3 22.0 215
1960. . . 12.4 11.9 .6 11.8 11.2 .2 .3 .6 22.6 186
1961. . . 12.9 12.3 .6 13.4 12.7 .3 .3 -.5 22.2 169
1962. . . 13.7 13.1 .6 15.2 14.5 .3 .4 -1.5 20.7 146
1963. . . 16.2 15.6 .6 16.2 15.4 .3 .4 g 20.7 128
1964. . . 17.5 16.8 .6 17.0 16.2 .4 .4 .5 21.2 122
1965. . . 17.9 17.2 .7 19.2 18.3 .4 .5 -1.3 19.8 110
1966. . . 23.4 22.6 $0.1 .7 20.9 20.1 .4 .5 2.5 22.3 95
1967. . . 26.4 25.4 .1 .9 22.5 21.4 .5 .5 3.9 26.3 99
1968. . . 28.5 27.0 .4 1.0 26.0 25.0 .6 .5 2.5 28.7 101
1969. . . 33.3 31.5 .5 1.3 27.9 26.8 .6 .5 5.5 34.2 103
1970. . . 37.0 34.7 .5 1.8 33.1 31.9 .6 .6 3.9 38.1 103
1971. . . 40.9 38.3 .5 2.0 38.5 37.2 .7 .6 2.4 40.4 99
1972. . . 45.6 42.9 .5 2.2 43.3 41.6 .9 .7 2.3 42.8 93
1973. . . 54.8 51.9 .5 2.4 53.1 51.5 .8 .8 1.6 44.4 80
1974. . . 62.1 58.9 .5 2.7 60.6 58.6 1.1 .9 1.5 45.9 73
1975. . . 67.6 64.3 .5 2.9 69.2 67.0 1.2 1.0 -1.5 44.3 66
1976. . . 75.0 71.6 .7 2.7 78.2 75.8 1.2 1.2 -3.2 41.1 57
1977. . . 82.0 78.7 .7 2.5 87.3 84.7 1.4 1.2 -5.3 35.9 47
1978. . . 91.9 88.9 .8 2.3 96.0 93.0 1.4 1.6 -4.1 31.7 37
1979. . . 105.9 103.0 .7 2.2 107.3 104.4 1.5 1.5 -1.5 30.3 30
1980. . . 119.7 116.7 .7 2.3 123.5 120.6 1.5 1.4 -3.8 26.5 25
1981. . . 142.4 139.4 .8 2.2 144.4 141.0 1.7 1.6 -1.9 24.5 18
1982. . . 147.9 145.7 .9 1.4 160.1 156.2 2.1 1.8 h .2 24.8 15
1983. . . 171.3 156.3 6.7 8.3 171.2 166.7 2.2 2.3 .1 24.9 14
1984. . . 186.6 175.0 5.2 $3.0 3.4 180.4 175.7 2.3 2.4 6.2 31.1 i21
1985. . . 203.5 192.1 5.2 3.4 2.7 190.6 186.1 2.2 2.4 h 11.1 42.2 i24
1986. . . 216.8 207.4 1.9 3.7 3.9 201.5 196.7 2.2 2.7 h 4.7 46.9 i29
1987. . . 231.0 220.6 1.9 3.2 5.3 209.1 204.1 2.4 2.6 21.9 68.8 i31
1988. . . 263.5 249.5 2.3 3.4 8.2 222.5 217.1 2.5 2.9 41.0 109.8 i41
1989. . . 289.4 271.9 2.3 2.5 12.7 236.2 230.9 2.4 2.9 53.2 163.0 i57
1990. . . 315.4 294.5 -1.3 5.0 17.2 253.1 247.8 2.3 3.0 62.3 225.3 i75
1991. . . 329.7 301.6 .1 6.1 21.9 274.2 268.2 2.6 3.5 55.5 280.7 82
1992. . . 342.6 311.3 -.1 6.1 25.4 291.9 286.0 2.7 3.2 50.7 331.5 96
1993. . . 355.6 322.0 .1 5.6 27.9 308.8 302.4 3.0 3.4 46.8 378.3 107
1994. . . 381.1 344.7 g 5.3 31.1 323.0 316.8 2.7 3.5 58.1 436.4 117
1995. . . 399.5 359.1 -.4 5.8 35.0 339.8 332.6 3.1 4.1 59.7 496.1 128
1996. . . 424.5 378.9 g 6.8 38.7 353.6 347.0 3.0 3.6 70.9 567.0 140
1997. . . 457.7 406.0 g 7.9 43.8 369.1 362.0 3.4 3.7 88.6 655.5 154
1998. . . 489.2 430.2 g 9.7 49.3 382.3 375.0 3.5 3.8 106.9 762.5 171
1999. . . 526.6 459.6 g 11.6 55.5 392.9 385.8 3.3 3.8 133.7 896.1 194
2000. . . 568.4 492.5 -.8 12.3 64.5 415.1 407.6 3.8 3.7 153.3 1,049.4 216
2001. . . 602.0 516.4 g 12.7 72.9 438.9 431.9 3.7 3.3 163.1 1,212.5 239
2002. . . 627.1 532.5 .4 13.8 80.4 461.7 453.8 4.2 3.6 165.4 1,378.0 263
2003. . . 631.9 533.5 g 13.4 84.9 479.1 470.8 4.6 3.7 152.8 1,530.8 288
2004. . . 657.7 553.0 g 15.7 89.0 501.6 493.3 4.5 3.8 156.1 1,686.8 305
2005. . . 701.8 592.9 -.3 14.9 94.3 529.9 520.7 5.3 3.9 171.8 1,858.7 318
2006. . . 744.9 625.6 g 16.9 102.4 555.4 546.2 5.3 3.8 189.5 2,048.1 335
2007. . . 784.9 656.1 g 18.6 110.2 594.5 584.9 5.5 4.0 190.4 2,238.5 345
2008. . . 805.3 672.1 g 16.9 116.3 625.1 615.3 5.7 4.0 180.2 2,418.7 358
2009. . . 807.5 667.3 g 21.9 118.3 685.8 675.5 6.2 4.1 121.7 2,540.3 353
165
Appendices
Table VI.A3. Operations of the Combined OASI and DI Trust Funds,
Calendar Years 1957-2021 (Cont.)
[Dollar amounts in billions]
Income Cost Asset Reservesa
Net pay- GF Admin- Net
roll tax reim- Taxa- Benefit istra- RRB increase Amount Trust
Calendar contri- burse- tion of Net pay- tive inter- during at end fund
year Total butionsb mentscbenefitsb interestd Totala mentsa e costs change year of year ratio f
2010 . . $781.1 $637.3 $2.4 $23.9 $117.5 $712.5 $701.6 $6.5 $4.4 $68.6 $2,609.0 357
2011 . . 805.1 564.2 102.7 23.8 114.4 736.1 725.1 6.4 4.6 69.0 2,677.9 354
2012 . . 840.2 589.5 114.3 27.3 109.1 785.8 774.8 6.3 4.7 54.4 2,732.3 341
2013 . . 855.0 726.2 4.9 21.1 102.8 822.9 812.3 6.2 4.5 32.1 2,764.4 332
2014 . . 884.3 756.0 .5 29.6 98.2 859.2 848.5 6.1 4.7 25.0 2,789.5 322
2015 . . 920.2 794.9 .3 31.6 93.3 897.1 886.3 6.2 4.7 23.0 2,812.5 311
2016 . . 957.5 836.2 .1 32.8 88.4 922.3 911.4 6.2 4.7 35.2 2,847.7 305
2017 . . 996.6 873.6 g 37.9 85.1 952.5 941.5 6.5 4.5 44.1 2,891.8 299
2018 . . 1,003.4 885.1 g 35.0 83.3 1,000.2 988.6 6.7 4.9 3.1 2,894.9 289
2019 . . 1,061.8 944.5 g 36.5 80.8 1,059.3 1,047.9 6.4 4.9 2.5 2,897.4 273
2020 . . 1,118.1 1,001.3 g 40.7 76.1 1,107.2 1,095.9 6.3 5.0 10.9 2,908.3 262
2021 . . 1,088.3 980.6 g 37.6 70.1 1,144.6 1,133.2 6.5 4.9 -56.3 2,852.0 254
a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on
December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security
Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sun-
day, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits sched-
uled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust
fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year without
regard to the accelerated payments described above.
b Includes adjustments for prior calendar years. For example, in June 2021, an unusually large negative adjust-
ment to payroll tax contributions in the amount of $35.5 billion was made because payroll tax revenue credited to
the trust funds in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
c Includes net reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds for: (1) the
cost of noncontributory wage credits for military service before 1957; (2) the cost in 1971-82 of deemed wage
credits for military service performed after 1956; (3) the cost of benefits to certain uninsured persons who attained
age 72 before 1968; (4) the cost of payroll tax credits provided to employees in 1984 and self-employed persons
in 1984-89 by Public Law 98-21; (5) the cost in 2009-17 of excluding certain self-employment earnings from
SECA taxes under Public Law 110-246; and (6) payroll tax revenue forgone under the provisions of Public Laws
111-147, 111-312, 112-78, and 112-96.
d Net interest includes net profits or losses on marketable investments. Beginning in 1967, the trust funds pay
administrative expenses on an estimated basis, with a final adjustment including interest made in the following
fiscal year. Net interest includes the amounts of these interest adjustments. The 1970 report describes the account-
ing for administrative expenses for years prior to 1967. Beginning in October 1973, figures include relatively
small amounts of gifts to the funds. Net interest for 1983-86 reflects payments for interest on amounts owed under
the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements paid from the
trust funds to the General Fund on advance tax transfers.
e Beginning in 1966, includes payments for vocational rehabilitation services furnished to disabled persons
receiving benefits because of their disabilities. Beginning in 1983, net benefit amounts include reimbursements
paid from the General Fund to the trust funds for unnegotiated benefit checks. Excluding the portion attributable
to vocational rehabilitation services and unnegotiated benefit checks, amounts are the same as benefits scheduled
under law at that time for all historical years.
f The Trust fund ratio column represents asset reserves at the beginning of a year as a percentage of cost during
the year.
g Between -$50 million and $50 million.
h Reflects interfund borrowing by the OASI Trust Fund from the HI Trust Fund in 1982 of $12.4 billion and the
subsequent repayment of that loan in 1985 ($1.8 billion) and 1986 ($10.6 billion).
i Reserves used for the trust fund ratio calculation include January advance tax transfers.
Note: Components may not sum to totals because of rounding.
Tables VI.A4 and VI.A5 show the total asset reserves of the OASI Trust
Fund and the DI Trust Fund, respectively, at the end of calendar years 2020
and 2021. The tables show the invested asset reserves by interest rate and
year of maturity. Bonds issued to the trust funds in 2021 had an interest rate
of 1.500 percent, compared with an interest rate of 0.750 percent for bonds
issued in 2020.
166
History of Trust Fund Operations
Table VI.A4.OASI Trust Fund Asset Reserves, End of
Calendar Years 2020 and 2021
[In thousands]
December 31, 2020 December 31, 2021
Obligations sold only to the trust funds (special issue securi-
ties):
Certificates of indebtedness:
0.875 percent, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $31,409,192
1.500 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $53,944,023
Bonds:
0.750 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,931,408
0.750 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 44,794,224 44,794,224
0.750 percent, 2026-33 . . . . . . . . . . . . . . . . . . . . . . . . . . 119,451,256 119,451,256
1.375 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,693,020
1.375 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 20,079,060 20,079,060
1.375 percent, 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,693,019 6,693,019
1.375 percent, 2027 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173,240,401 173,240,401
1.500 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 38,088,537
1.500 percent, 2026-32 . . . . . . . . . . . . . . . . . . . . . . . . . . 88,873,260
1.500 percent, 2033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,696,179
1.750 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,908,185
1.750 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 14,724,555 14,724,555
1.750 percent, 2026-27 . . . . . . . . . . . . . . . . . . . . . . . . . . 9,816,372 9,816,372
1.750 percent, 2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178,148,587 178,148,587
1.875 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,320,956
1.875 percent, 2023-27 . . . . . . . . . . . . . . . . . . . . . . . . . . 11,604,780 11,604,780
1.875 percent, 2028-30 . . . . . . . . . . . . . . . . . . . . . . . . . . 6,962,865 6,962,865
1.875 percent, 2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,111,583 188,111,583
2.000 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,655,628
2.000 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 10,966,884 10,966,884
2.000 percent, 2026-29 . . . . . . . . . . . . . . . . . . . . . . . . . . 14,622,516 14,622,516
2.000 percent, 2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,790,628 185,790,628
2.250 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,582,927
2.250 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 16,748,781 16,748,781
2.250 percent, 2026-27 . . . . . . . . . . . . . . . . . . . . . . . . . . 11,165,852 11,165,852
2.250 percent, 2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,582,927 5,582,927
2.250 percent, 2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183,731,514 183,731,514
2.250 percent, 2030-31 . . . . . . . . . . . . . . . . . . . . . . . . . . 3,193,030 3,193,030
2.250 percent, 2032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,708,097 189,708,097
2.250 percent, 2033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,818,538 12,818,538
2.250 percent, 2034 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177,899,339 177,899,339
2.500 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,971,787
2.500 percent, 2023-25 . . . . . . . . . . . . . . . . . . . . . . . . . . 17,915,361 17,915,361
2.500 percent, 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166,547,382 166,547,382
2.875 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,264,432
2.875 percent, 2023-24 . . . . . . . . . . . . . . . . . . . . . . . . . . 14,528,864 14,528,864
2.875 percent, 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,575,595 160,575,595
2.875 percent, 2032 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1
2.875 percent, 2033 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176,889,560 176,889,560
3.250 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,628,270
3.250 percent, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,628,270 10,628,270
3.250 percent, 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,311,163 153,311,163
4.000 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,075,192
4.000 percent, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,682,893 142,682,893
5.000 percent, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,010,036
5.000 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 130,607,701 130,152,459
5.125 percent, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118,153,469
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,793,146,100 2,752,688,355
Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,569,550 -52,566
Total asset reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,715,650 2,752,635,789
a A negative amount for a given year represents a situation where actual program cost exceeded the amount of
invested securities of the OASI Trust Fund that were redeemed to cover such cost. In this situation, future
redemption of additional invested securities will be required to pay for this shortfall. For 2020 and other cal-
endar years where January 3 of the following year is a Sunday, a positive amount is shown on a liability basis
for benefits scheduled to be paid on January 3 of the following year that were, by law, actually paid on the pre-
ceding December 31.
Note: Amounts of special issue securities are at par value. The trust fund purchases and redeems special
issue securities at par value. The table groups equal amounts that mature in two or more years at a given
interest rate.
167
Appendices
Table VI.A5.DI Trust Fund Asset Reserves, End of Calendar Years 2020 and 2021
[In thousands]
December 31, 2020 December 31, 2021
Obligations sold only to the trust funds (special issue securi-
ties):
Certificates of indebtedness:
0.875 percent, 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . $110,721
1.500 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,651,929
1.625 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . 352,540
Bonds:
0.750 percent, 2024-26 . . . . . . . . . . . . . . . . . . . . . . . . 1,438,419 1,438,419
0.750 percent, 2027-29 . . . . . . . . . . . . . . . . . . . . . . . . 1,438,422 1,438,422
0.750 percent, 2030-34 . . . . . . . . . . . . . . . . . . . . . . . . 2,397,365 2,397,365
0.750 percent, 2035 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,348,270 5,348,270
1.500 percent, 2024-29 . . . . . . . . . . . . . . . . . . . . . . . . 845,268
1.500 percent, 2030-35 . . . . . . . . . . . . . . . . . . . . . . . . 845,274
1.500 percent, 2036 . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,489,148
1.875 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . 595,277
2.250 percent, 2024-25 . . . . . . . . . . . . . . . . . . . . . . . . 2,489,358 2,489,358
2.250 percent, 2026 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,244,680 1,244,680
2.250 percent, 2027-32 . . . . . . . . . . . . . . . . . . . . . . . . 7,468,074 7,468,074
2.250 percent, 2033-34 . . . . . . . . . . . . . . . . . . . . . . . . 9,737,594 9,737,594
2.875 percent, 2024-25 . . . . . . . . . . . . . . . . . . . . . . . . 7,248,238 7,248,238
2.875 percent, 2026-32 . . . . . . . . . . . . . . . . . . . . . . . . 25,368,826 25,368,826
4.000 percent, 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,675,554 14,675,554
5.000 percent, 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,142,596 5,398,822
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,703,394 99,437,781
Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,866,965 -43,640
Total asset reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,570,359 99,394,141
a A negative amount for a given year represents a situation where actual program cost exceeded the amount
of invested securities of the DI Trust Fund that were redeemed to cover such cost. In this situation, future
redemption of additional invested securities will be required to pay for this shortfall. For 2020 and other cal-
endar years where January 3 of the following year is a Sunday, a positive amount is shown on a liability
basis for benefits scheduled to be paid on January 3 of the following year that were, by law, actually paid on
the preceding December 31.
Note: Amounts of special issue securities are at par value. The trust fund purchases and redeems special
issue securities at par value. The table groups equal amounts that mature in two or more years at a given
interest rate.
168
History of Actuarial Status
B. HISTORY OF ACTUARIAL STATUS ESTIMATES
This appendix chronicles the history of the long-range OASDI actuarial bal-
ance and the year of combined OASI and DI Trust Fund reserve depletion
since 1982 under the intermediate assumptions. The actuarial balance is the
principal summary measure of actuarial status for the long-range period as a
whole. The year of trust fund reserve depletion is also critical, as it indicates
the year by which legislative action would be needed in order to maintain
timely payment of scheduled benefits.
The 1983 report was the last report for which the actuarial balance was posi-
tive. The two basic components of actuarial balance are the summarized
income rate and the summarized cost rate, both of which are expressed as
percentages of taxable payroll over the period. Section IV.B.4 defines the
summarized income rate, summarized cost rate, and actuarial balance in
detail. For any given period, the actuarial balance includes the difference
between the present value of non-interest income for the period and the pres-
ent value of the cost for the period, each divided by the present value of tax-
able payroll for all years in the period. The computation of the actuarial
balance also includes:
In the reports for 1988 and later, the amount of the trust fund asset
reserves on hand at the beginning of the valuation period; and
In the reports for 1991 and later, the present value of a target trust fund
asset reserve equal to 100 percent of the annual cost to be reached and
maintained at the end of the valuation period.
Reports of 1973-87 used the average-cost method, a simpler method which
approximates the results of the present-value approach for computing the
actuarial balance. Under the average-cost method, the sum of the annual cost
rates over the 75-year projection period was divided by the total number of
years, 75, to obtain the average cost rate per year. A similar computation pro-
duced the average income rate. The actuarial balance was the difference
between the average income rate and the average cost rate.
When the 1973 report introduced the average-cost method, the financing of
the program was more nearly on a pay-as-you-go basis over the long-range.
Also, the long-range demographic and economic assumptions in that report
produced an annual rate of growth in total taxable payroll which was about
the same as the annual rate at which the trust funds earned interest. In either
circumstance (i.e., pay-as-you-go financing, where the annual income rate is
the same as the annual cost rate, or an annual rate of growth in total taxable
payroll equal to the annual interest rate), the average-cost method produces
169
Appendices
the same result as the present-value method. However, by 1988, neither of
these circumstances still existed.
After the 1977 and 1983 Social Security Amendments, projections indicated
substantial increases in the trust fund reserves continuing well into the 21st
century. These laws changed the programs financing from essentially pay-
as-you-go to partial advance funding through the 75-year period. Also, for
the reports from 1973 through 1987, long-range fertility rates and average
real wage growth assumptions were gradually reduced, resulting in an annual
rate of growth in taxable payroll that was significantly lower than the
assumed interest rate by 1987. As a result of the difference between this rate
of growth and the assumed interest rate, the results of the average-cost
method and the present-value method began to diverge in the reports for
1973 through 1987, and by 1988 they were quite different. While the aver-
age-cost method reflected most of the effects of assumed interest rates, it no
longer reflected all interest effects. The present-value method, by contrast,
accurately reflects the implications of assumed interest rates. As a result, the
1988 report reintroduced the present-value method of calculating the actuar-
ial balance.
A positive actuarial balance indicates that estimated income (plus starting
reserves, beginning with the 1988 report) is more than sufficient to meet esti-
mated trust fund obligations (plus the ending target fund, beginning with the
1991 report) for the period as a whole. Even with a positive actuarial bal-
ance, it is possible for reserves to become temporarily depleted within the
long-range period. An actuarial balance of zero indicates that the estimated
income (plus starting reserves, beginning with the 1988 report) exactly
matches estimated trust fund obligations (plus the ending target fund, begin-
ning with the 1991 report) for the period as a whole. A negative actuarial bal-
ance indicates that estimated income (plus starting reserves, beginning with
the 1988 report) is insufficient to meet estimated trust fund obligations (plus
the ending target fund, beginning with the 1991 report) for the entire period.
Table VI.B1 contains the long-range OASDI actuarial balances, summarized
income rates, and summarized cost rates for the 1982 report through the cur-
rent report. The reports presented these values on the basis of the intermedi-
ate assumptions, which recent reports refer to as alternative II and reports
from 1982 to 1990 referred to as alternative II-B.
170
History of Actuarial Status
Table VI.B1.Long-Range OASDI Actuarial Balances and Trust Fund Reserve
Depletion Dates as Shown in the Trustees Reports for 1982-2022
under Intermediate Assumptionsa
[As a percentage of taxable payroll]
Year of
combined trust
Summarized Summarized Actuarial Change from fund reserve
Year of report income rate cost rate balanceb previous yearc depletion
1982 . . . . . . . . . . . 12.27 14.09 -1.82 d 1983
1983 . . . . . . . . . . . 12.87 12.84 +.02 +1.84 solvent
1984 . . . . . . . . . . . 12.90 12.95 -.06 -.08 solvent
1985 . . . . . . . . . . . 12.94 13.35 -.41 -.35 2049
1986 . . . . . . . . . . . 12.96 13.40 -.44 -.03 2051
1987 . . . . . . . . . . . 12.89 13.51 -.62 -.18 2051
1988 . . . . . . . . . . . 12.94 13.52 -.58 +.04 2048
1989 . . . . . . . . . . . 13.02 13.72 -.70 -.13 2046
1990 . . . . . . . . . . . 13.04 13.95 -.91 -.21 2043
1991 . . . . . . . . . . . 13.11 14.19 -1.08 -.17 2041
1992 . . . . . . . . . . . 13.16 14.63 -1.46 -.38 2036
1993 . . . . . . . . . . . 13.21 14.67 -1.46 d 2036
1994 . . . . . . . . . . . 13.24 15.37 -2.13 -.66 2029
1995 . . . . . . . . . . . 13.27 15.44 -2.17 -.04 2030
1996 . . . . . . . . . . . 13.33 15.52 -2.19 -.02 2029
1997 . . . . . . . . . . . 13.37 15.60 -2.23 -.03 2029
1998 . . . . . . . . . . . 13.45 15.64 -2.19 +.04 2032
1999 . . . . . . . . . . . 13.49 15.56 -2.07 +.12 2034
2000 . . . . . . . . . . . 13.51 15.40 -1.89 +.17 2037
2001 . . . . . . . . . . . 13.58 15.44 -1.86 +.03 2038
2002 . . . . . . . . . . . 13.72 15.59 -1.87 -.01 2041
2003 . . . . . . . . . . . 13.78 15.70 -1.92 -.04 2042
2004 . . . . . . . . . . . 13.84 15.73 -1.89 +.03 2042
2005 . . . . . . . . . . . 13.87 15.79 -1.92 -.04 2041
2006 . . . . . . . . . . . 13.88 15.90 -2.02 -.09 2040
2007 . . . . . . . . . . . 13.92 15.87 -1.95 +.06 2041
2008 . . . . . . . . . . . 13.94 15.63 -1.70 +.26 2041
2009 . . . . . . . . . . . 14.02 16.02 -2.00 -.30 2037
2010 . . . . . . . . . . . 14.01 15.93 -1.92 +.08 2037
2011 . . . . . . . . . . . 14.02 16.25 -2.22 -.30 2036
2012 . . . . . . . . . . . 14.02 16.69 -2.67 -.44 2033
2013 . . . . . . . . . . . 13.88 16.60 -2.72 -.05 2033
2014 . . . . . . . . . . . 13.89 16.77 -2.88 -.16 2033
2015 . . . . . . . . . . . 13.86 16.55 -2.68 +.20 2034
2016 . . . . . . . . . . . 13.84 16.50 -2.66 +.02 2034
2017 . . . . . . . . . . . 13.84 16.67 -2.83 -.17 2034
2018 . . . . . . . . . . . 13.84 16.69 -2.84 -.02 2034
2019 . . . . . . . . . . . 13.81 16.60 -2.78 +.06 2035
2020 . . . . . . . . . . . 13.85 17.06 -3.21 -.43 2035
2021 . . . . . . . . . . . 13.78 17.31 -3.54 -.32 2034
2022 . . . . . . . . . . . 13.78 17.20 -3.42 +.12 2035
a This table shows the actuarial balance and year of trust fund reserve depletion based on the intermediate
assumptions, which the 1982-90 reports referred to as alternative II-B and the 1991 and later reports refer to
as alternative II.
b The definition and method of calculating the actuarial balance were changed in 1988 and 1991. See text
for details.
c A detailed year-by-year breakdown of the reasons for the changes in the actuarial balance since the 1983
Trustees Report may be found in Actuarial Note 2022.8 at www.ssa.gov/OACT/NOTES/ran8/.
d Between -0.005 and 0.005 percent of taxable payroll.
Note: Components may not sum to totals because of rounding.
171
Appendices
For several of the years included in the table, significant legislative changes
or definitional changes affected the actuarial balance. The Social Security
Amendments of 1983 account for the largest single change shown in the
table: the actuarial balance of -1.82 for the 1982 report improved to +0.02 for
the 1983 report. In 1985, the actuarial balance changed largely because of an
adjustment made to the method for estimating the age distribution of immi-
grants.
Rebenchmarking of the National Income and Product Accounts and changes
in demographic assumptions contributed to the change in the actuarial bal-
ance for 1987. Various changes in assumptions and methods for the 1988
report had roughly offsetting effects on the actuarial balance. In 1989 and
1990, changes in economic assumptions accounted for most of the changes
in the actuarial balance.
In 1991, the effect of legislation, changes in economic assumptions, and the
introduction of the cost of reaching and maintaining an ending target trust
fund level combined to produce the change in the actuarial balance. In 1992,
changes in disability assumptions and the method for projecting average ben-
efit levels accounted for most of the change in the actuarial balance. In 1993,
numerous small changes in assumptions and methods had offsetting effects
on the actuarial balance. In 1994, changes in the real wage assumptions, dis-
ability rates, and the earnings sample used for projecting average benefit lev-
els accounted for most of the change in the actuarial balance. In 1995,
numerous small changes had largely offsetting effects on the actuarial bal-
ance, including a substantial reallocation of the payroll tax rate, which
reduced the OASI actuarial balance, but increased the DI actuarial balance.
In 1996, a change in the method of projecting dually-entitled beneficiaries
produced a large increase in the actuarial balance, which almost totally offset
decreases produced by changes in the valuation period and in the demo-
graphic and economic assumptions. Various changes in assumptions and
methods for the 1997 report had roughly offsetting effects on the actuarial
balance. In 1998, increases caused by changes in the economic assumptions,
although partially offset by decreases produced by changes in the valuation
period and in the demographic assumptions, accounted for most of the
changes in the actuarial balance. In 1999, increases caused by changes in the
economic assumptions (related to improvements in the CPI by the Bureau of
Labor Statistics) accounted for most of the changes in the actuarial balance.
For the 2000 report, changes in economic assumptions and methodology
caused increases in the actuarial balance, although reductions in the balance
caused by the change in valuation period and changes in demographic
assumptions partially offset these increases.
172
History of Actuarial Status
For the 2001 report, increases caused by changes in the demographic starting
values, although partially offset by a decrease produced by the change in the
valuation period, accounted for most of the changes in the actuarial balance.
For the 2002 report, changes in the valuation period and the demographic
assumptionsboth decreases in the actuarial balancewere offset by
changes in the economic assumptions, while an increase due to disability
assumptions was slightly more than offset by a decrease due to changes in
the projection methods and data. For the 2003 report, an increase due to the
change in program assumptions was more than offset by decreases due to the
change in valuation period and changes in demographic assumptions. In the
2004 report, increases due to changing the method of projecting benefit lev-
els for higher earners more than offset decreases in the actuarial balance aris-
ing from the change in the valuation period and the net effect of other
changes in programmatic data and methods. For the 2005 report, an increase
due to changing the method of projecting future average benefit levels was
more than offset by decreases due to changes in the valuation period, updated
starting values for the economic assumptions, and other methodological
changes.
In 2006, decreases in the actuarial balance due to the change in the valuation
period, a reduction in the ultimate annual real interest rate, and improve-
ments in calculating mortality for disabled workers, were greater in aggre-
gate than increases in the actuarial balance due to changes in demographic
starting values and the ultimate total fertility rate, as well as other program-
matic data and method changes. For the 2007 report, increases in the actuar-
ial balance arising from revised disability incidence rate assumptions,
improvements in average benefit level projections, and changes in near-term
economic projections, more than offset decreases in the balance due to the
valuation period change and updated historical mortality data. For the 2008
report, the large increase in the actuarial balance was primarily due to
changes in immigration projection methods and assumptions. These changes
more than offset the decreases in the actuarial balance due to the change in
the valuation period and the lower starting and ultimate mortality rates. In
2009, changes in starting values and near-term economic assumptions due to
the economic recession, faster ultimate rates of decline in death rates for
ages 65-84, and the change in the valuation period accounted for most of the
large decrease in the actuarial balance. Legislative changes, in particular the
estimated effects of the Patient Protection and Affordable Care Act and the
Health Care and Education Reconciliation Act of 2010, were the main reason
for the increase in the actuarial balance for the 2010 report. The change in
the valuation period partially offset this increase; there were also changes in
173
Appendices
several assumptions, methods, and recent data which had largely offsetting
effects.
For the 2011 report, changes in mortality projections, due to new starting
values and revised methods, were the most significant of several factors con-
tributing to the increase in the deficit. In 2012, changes in economic assump-
tions and starting values accounted for about half of the decrease in actuarial
balance. Other factors worsening the actuarial balance were the change in
valuation period, changes to starting demographic values, changes to ulti-
mate disability incidence assumptions, and methodology changes and data
updates. For the 2013 report, the change in valuation period accounted for
the entire net change in the actuarial balance. The effects of substantially
lower death rates for 2009 than previously projected and the American Tax-
payer Relief Act of 2012 (which lowered the Federal marginal income tax
rates) were offset by updates of program-specific data and methodology
improvements. In 2014, changes in economic data and assumptions
accounted for the majority of the net change in the actuarial balance. Other
factors worsening the actuarial balance were the change in the valuation
period and various methodology improvements and data updates. For the
2015 report, methodological improvements and updates of programmatic
data accounted for the majority of the net increase in the actuarial balance.
Also increasing the actuarial balance were a lower assumed ultimate average
wage differential and changes in near-term economic assumptions. These
increases were offset somewhat by the change in the valuation period and
updates to historical and near-term projected birth rates.
For the 2016 report, the actuarial balance increased primarily due to the
effects of the Bipartisan Budget Act of 2015 and improvements made to
immigration methods. The most notable immigration change was a revision
to the method for projecting emigration of the never-authorized population to
reflect lower rates of emigration for those who have resided here longer.
These increases in the actuarial balance were largely offset by the effects of
changes in ultimate economic assumptions, including a lower real interest
rate and a lower annual increase in the rate of price inflation. In 2017, the
change in the valuation period and various methodology improvements
accounted for most of the net reduction in the actuarial balance. Other eco-
nomic factors also contributed to worsening the actuarial balance, including
a lower real wage differential assumption and an assumed weaker recovery
from the recent recession. These reductions were offset somewhat by lower
estimated disability incidence rates over the short-range period. For the 2018
report, incorporating the effects of lower-than-expected birth rates, lower
near-term fertility assumptions, and the change in the valuation period
174
History of Actuarial Status
decreased the actuarial balance. Offsetting these factors to a large degree
were the effects of higher-than-expected death rates and several methods
improvements, most notably an update to the sample used to project average
benefit levels for newly-entitled worker beneficiaries. For the 2019 report,
the actuarial balance increased primarily due to higher-than-expected death
rates and lower near-term and ultimate disability incidence rate assumptions.
Partially offsetting these factors were the effects of a lower ultimate real
interest rate assumption and the change in the valuation period. For the 2020
report, the actuarial balance decreased primarily due to the following factors.
First, the repeal of the Affordable Care Acts excise tax on employer-spon-
sored group health insurance premiums reduced projected earnings as a share
of employee compensation, having a significant negative financial effect on
the trust funds. In addition, lower assumed values for the ultimate total fertil-
ity rate, the ultimate rate of price inflation, and the ultimate real interest rate,
as compared to the rates assumed for the 2019 report, decreased the actuarial
balance.
In 2021, the actuarial balance decreased due to the change in the valuation
period and three main additional factors. First, economic assumptions were
updated to reflect experience during and following the COVID-19 pandemic.
In particular, the levels of productivity and potential GDP were assumed to
be roughly 1 percent lower beginning with the second quarter of 2020. Sec-
ond, the data and methodology used for projecting average benefit levels
were updated and improved. Third, data and estimates provided by the
Office of Tax Analysis at the Department of the Treasury indicated lower
near-term and ultimate levels of taxation of benefits.
Section IV.B.6 describes changes affecting the actuarial balance shown for
the 2022 report.
175
Appendices
C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND
OPERATIONS THROUGH 2031
Tables VI.C1, VI.C2, and VI.C3 contain details of the fiscal year 2021 opera-
tions of the OASI, DI, and the combined OASI and DI Trust Funds, respec-
tively. The fiscal year for the U.S. Government is the 12-month period
ending September 30. Fiscal year 2021 is the most recent fiscal year for
which complete information is available. The descriptions of the values in
these tables are similar to the corresponding descriptions and values in the
calendar year operations tables in section III.A. Please see that section for a
description of the various items of income and cost.
176
Fiscal Year Operations and Projections
Table VI.C1.Operations of the OASI Trust Fund, Fiscal Year 2021
[In millions]
Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,811,181
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $837,537
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -6,413
Net payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831,124
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . 2
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Net General Fund reimbursements a 2
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 242
All other, not subject to withholdinga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,081
Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,323
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,535
Interest adjustments c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 70,536
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 935,985
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . 982,706
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -48
Payment for costs of vocational rehabilitation services for disabled beneficiaries 14
d
Net benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 982,673
Financial interchange with the Railroad Retirement Social Security Equivalent
Benefit Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,792
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,390
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 524
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7
e
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . -4
Net administrative expenses 3,902
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 991,367
Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -55,383
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,755,785
Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Total asset reserves, September 30, 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,755,799
a Includes adjustments for prior years. In June 2021, an unusually large negative adjustment to payroll tax
contributions in the amount of $30,380 million was made because payroll tax revenue credited to the trust
fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
b Between -$0.5 and $0.5 million.
c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and
the General Fund account for the Supplemental Security Income program, (2) interest arising from the
revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimburse-
ments to the trust fund.
d Includes net reductions for the recovery of overpayments.
e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly
related to administering the OASI program.
f A positive balance represents a situation where the invested securities of the OASI Trust Fund that were
redeemed to make cash payments exceeded actual program cash payments. In this situation, this excess
amount will be used to partially offset future redemption of additional invested securities.
Note: Components may not sum to totals because of rounding.
177
Appendices
Table VI.C2.Operations of the DI Trust Fund, Fiscal Year 2021
[In millions]
Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $97,063
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $142,280
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1,085
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141,195
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . b
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 4
All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 475
Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 479
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,716
Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 2,719
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,392
Cost:
Benefit payments:
Monthly benefitsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,676
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -26
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 92
Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,742
Financial interchange with the Railroad Retirement Social Security Equivalent
Benefit Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,439
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Miscellaneous reimbursements from the General Fund e . . . . . . . . . . . . . . . . . . . . . -1
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,543
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,393
Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 999
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,032
Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Total asset reserves, September 30, 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98,063
a Includes adjustments for prior years. In June 2021, an unusually large negative adjustment to payroll tax
contributions in the amount of $5,155 million was made because payroll tax revenue credited to the trust fund
in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
b Between -$0.5 and $0.5 million.
c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and
the General Fund account for the Supplemental Security Income program, (2) interest arising from the
revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimburse-
ments to the trust fund.
d Includes net reductions for the recovery of overpayments.
e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly
related to administering the DI program.
f A positive balance represents a situation where the invested securities of the OASI Trust Fund that were
redeemed to make cash payments exceeded actual program cash payments. In this situation, this excess
amount will be used to partially offset future redemption of additional invested securities.
Note: Components may not sum to totals because of rounding.
178
Fiscal Year Operations and Projections
Table VI.C3.Operations of the Combined OASI and DI Trust Funds, Fiscal Year 2021
[In millions]
Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,908,245
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $979,817
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7,499
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 972,318
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . 2
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Net General Fund reimbursementsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 245
All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,556
Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,801
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,252
Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 73,255
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,080,377
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . 1,123,382
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -73
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 107
Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,123,415
Financial interchange with the Railroad Retirement Social Security Equivalent
Benefit Account. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,900
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,829
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 617
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -7
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
e
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . . -5
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,445
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,134,760
Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54,383
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,853,817
Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Total asset reserves, September 30, 2021. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,853,862
a Includes adjustments for prior years. In June 2021, unusually large negative adjustments to payroll tax con-
tributions in the amount of $35,536 million were made because payroll tax revenue credited to the trust funds
in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
b Between -$0.5 and $0.5 million.
c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust funds
and the General Fund account for the Supplemental Security Income program, (2) interest arising from the
revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimburse-
ments to the trust funds.
d Includes net reductions for the recovery of overpayments.
e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly
related to administering the OASI and DI programs.
f A positive balance represents a situation where the invested securities of the OASI Trust Fund that were
redeemed to make cash payments exceeded actual program cash payments. In this situation, this excess
amount will be used to partially offset future redemption of additional invested securities.
Note: Components may not sum to totals because of rounding.
179
Appendices
Tables VI.C4, VI.C5, and VI.C6 show estimates of the operations and status of
the OASI, DI, and the hypothetical combined OASI and DI Trust Funds,
respectively, during fiscal years 2017 through 2031.
Table VI.C4.Operations of the OASI Trust Fund, Fiscal Years 2017-2031
[Dollar amounts in billions]
Income Cost Asset Reserves
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Fiscal contri- burse- bene- Net uled tive inter- during at end fund
year Total butionsa mentsb fitsa c interest Total benefits costs change year of year ratio d
Historical data:
2017. . $822.4 $702.1 e $35.4 $84.9 $799.0 $791.1 $3.6 $4.3 $23.5 $2,820.1 350
2018. . 822.4 706.1 e 34.7 81.6 841.5 833.0 3.7 4.8 -19.0 2,801.1 335
2019. . 900.1 785.6 e 34.9 79.6 896.8 888.1 3.9 4.9 3.2 2,804.3 312
2020. . 955.6 841.7 e 37.9 76.0 948.7 940.2 3.7 4.8 6.9 2,811.2 296
2021. . 936.0 831.1 e 34.3 70.5 991.4 982.7 3.9 4.8 -55.4 2,755.8 284
Intermediate:
2022. . 1,033.4 922.0 e 46.7 64.7 1,072.5 1,063.4 3.9 5.3 -39.1 2,716.7 257
2023. . 1,088.9 980.7 e 48.8 59.4 1,158.2 1,148.7 4.1 5.4 -69.3 2,647.4 235
2024. . 1,133.9 1,024.3 e 53.2 56.4 1,236.1 1,226.1 4.3 5.8 -102.2 2,545.1 214
2025. . 1,182.8 1,071.3 e 58.0 53.5 1,313.1 1,302.8 4.4 5.8 -130.2 2,414.9 194
2026. . 1,243.2 1,121.1 e 69.6 52.5 1,394.1 1,383.6 4.6 5.9 -150.9 2,264.0 173
2027. . 1,298.2 1,167.1 e 77.9 53.3 1,478.0 1,467.4 4.7 5.9 -179.8 2,084.2 153
2028. . 1,362.4 1,225.2 e 84.5 52.7 1,568.2 1,557.4 4.8 6.0 -205.9 1,878.3 133
2029. . 1,414.9 1,273.5 e 91.5 50.0 1,661.6 1,650.6 5.0 6.0 -246.7 1,631.7 113
2030. . 1,471.4 1,326.1 e 99.2 46.1 1,757.8 1,746.5 5.1 6.1 -286.4 1,345.3 93
2031. . 1,526.5 1,378.6 e 107.4 40.4 1,856.2 1,844.8 5.2 6.2 -329.7 1,015.6 72
Low-cost:
2022. . 1,036.0 924.5 e 46.7 64.8 1,072.1 1,062.9 3.9 5.3 -36.0 2,719.8 257
2023. . 1,117.9 1,007.3 e 49.0 61.6 1,163.2 1,153.7 4.1 5.4 -45.3 2,674.5 234
2024. . 1,181.6 1,067.5 e 53.7 60.4 1,247.2 1,237.2 4.3 5.7 -65.7 2,608.8 214
2025. . 1,253.2 1,133.2 e 58.8 61.2 1,330.8 1,320.6 4.5 5.8 -77.6 2,531.2 196
2026. . 1,340.0 1,206.1 e 70.8 63.0 1,419.5 1,408.8 4.7 5.9 -79.5 2,451.6 178
2027. . 1,422.5 1,275.8 e 79.7 67.0 1,511.7 1,500.8 4.9 6.0 -89.2 2,362.5 162
2028. . 1,517.4 1,360.0 e 86.8 70.6 1,611.0 1,599.9 5.1 6.0 -93.7 2,268.8 147
2029. . 1,602.9 1,435.7 e 94.4 72.8 1,714.7 1,703.2 5.3 6.1 -111.9 2,156.9 132
2030. . 1,696.0 1,518.4 e 102.8 74.8 1,822.6 1,810.8 5.6 6.2 -126.6 2,030.3 118
2031. . 1,791.1 1,603.3 e 111.9 75.9 1,934.5 1,922.4 5.8 6.3 -143.4 1,887.0 105
High-cost:
2022. . 1,023.7 912.4 e 46.7 64.5 1,073.1 1,063.9 3.9 5.3 -49.4 2,706.4 257
2023. . 1,014.8 908.8 e 48.7 57.4 1,154.4 1,144.8 4.1 5.4 -139.6 2,566.8 234
2024. . 1,052.0 948.1 e 52.5 51.4 1,218.7 1,208.6 4.3 5.8 -166.7 2,400.0 211
2025. . 1,085.4 981.4 e 56.7 47.3 1,284.1 1,274.0 4.3 5.8 -198.7 2,201.3 187
2026. . 1,126.2 1,016.1 e 67.7 42.4 1,356.5 1,346.2 4.4 5.9 -230.3 1,971.0 162
2027. . 1,160.5 1,045.1 e 75.4 40.0 1,431.7 1,421.3 4.5 5.8 -271.1 1,699.9 138
2028. . 1,197.7 1,080.7 e 81.5 35.5 1,512.4 1,502.0 4.5 5.9 -314.7 1,385.2 112
2029. . 1,222.6 1,106.3 e 87.8 28.5 1,595.3 1,584.8 4.6 5.9 -372.7 1,012.5 87
2030. . 1,249.5 1,134.3 e 94.8 20.4 1,679.7 1,669.1 4.7 5.9 -430.2 582.2 60
2031. . 1,274.7 1,160.9 e 102.1 11.7 1,765.0 1,754.3 4.7 6.0 -490.3 92.0 33
a Includes adjustments for prior years. For example, in June 2021, an unusually large negative adjustment to
payroll tax contributions in the amount of $30.4 billion was made because payroll tax revenue credited to the
trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
b Includes reimbursements from the General Fund of the Treasury to the OASI Trust Fund for: (1) the cost of
payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21;
(2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public Law 110-
246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and
112-96.
c Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in law.
d The Trust fund ratio column represents asset reserves at the beginning of a year (which are identical to
reserves at the end of the prior year shown in the Amount at end of year column) as a percentage of cost for
the year.
e Between -$50 million and $50 million.
Note: Components may not sum to totals because of rounding.
180
Fiscal Year Operations and Projections
Table VI.C5.Operations of the DI Trust Fund, Fiscal Years 2017-2031
[Dollar amounts in billions]
Income Cost Asset Reserves
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Fiscal contri- burse- bene- Net uled tive inter- during at end fund
year Total butionsa mentsb fitsa c interest Total benefits costs change year of year ratio d
Historical data:
2017 . $169.5 $165.9 e $2.0 $1.6 $145.8 $142.9 $2.7 $0.2 $23.7 $69.4 31
2018 . 170.3 167.0 e 1.0 2.2 146.6 143.6 2.8 .2 23.7 93.1 47
2019 . 151.0 146.8 e 1.2 2.9 147.7 144.9 2.8 .1 3.3 96.4 63
2020 . 147.4 142.9 e 1.7 2.8 146.7 144.1 2.5 .1 0.7 97.1 66
2021 . 144.4 141.2 e .5 2.7 143.4 140.7 2.5 .1 1.0 98.1 68
Intermediate:
2022 . 160.7 156.6 e 1.5 2.6 145.1 142.2 2.8 .1 15.7 113.7 68
2023 . 170.7 166.5 e 1.6 2.6 150.8 147.8 3.0 .1 19.9 133.6 75
2024 . 178.6 173.9 e 1.7 3.0 157.2 154.0 3.1 .1 21.5 155.1 85
2025 . 187.5 181.9 e 1.9 3.7 166.0 162.7 3.3 .1 21.5 176.5 93
2026 . 197.2 190.4 e 2.2 4.6 175.4 171.8 3.4 .1 21.8 198.4 101
2027 . 206.3 198.2 e 2.5 5.6 185.0 181.3 3.6 .1 21.3 219.6 107
2028 . 217.4 208.1 e 2.7 6.7 192.9 188.9 3.8 .1 24.6 244.2 114
2029 . 227.1 216.3 e 2.8 8.0 199.2 195.0 4.0 .2 28.0 272.2 123
2030 . 237.8 225.2 e 3.0 9.6 205.0 200.6 4.2 .2 32.8 305.0 133
2031 . 248.7 234.1 e 3.2 11.5 211.8 207.3 4.4 .2 36.9 341.9 144
Low-cost:
2022 . 161.2 157.0 e 1.5 2.6 144.5 141.6 2.8 .1 16.7 114.8 68
2023 . 175.6 171.0 e 1.6 3.0 149.8 146.7 3.0 .1 25.8 140.6 77
2024 . 187.0 181.3 e 1.7 4.0 155.0 151.9 3.1 .1 31.9 172.5 91
2025 . 199.7 192.4 e 1.8 5.5 162.1 158.7 3.3 .1 37.7 210.2 106
2026 . 214.5 204.8 e 2.1 7.5 169.1 165.6 3.5 .1 45.3 255.5 124
2027 . 229.1 216.6 e 2.4 10.1 175.9 172.1 3.7 .1 53.2 308.7 145
2028 . 246.8 230.9 e 2.5 13.3 180.8 176.8 3.9 .1 66.0 374.7 171
2029 . 263.9 243.8 e 2.6 17.5 184.5 180.2 4.2 .1 79.4 454.1 203
2030 . 283.2 257.8 e 2.7 22.6 187.9 183.3 4.4 .2 95.3 549.4 242
2031 . 303.9 272.3 e 2.9 28.8 192.4 187.6 4.7 .2 111.5 660.9 286
High-cost:
2022 . 159.1 155.0 e 1.6 2.6 145.8 143.0 2.8 .1 13.3 111.4 67
2023 . 158.2 154.3 e 1.6 2.3 152.8 149.8 3.0 .1 5.4 116.7 73
2024 . 164.9 161.0 e 1.7 2.1 160.5 157.4 3.1 .1 4.3 121.1 73
2025 . 170.8 166.7 e 1.9 2.3 171.1 167.7 3.2 .1 -.2 120.8 71
2026 . 177.2 172.5 e 2.3 2.3 182.4 178.9 3.4 .1 -5.2 115.6 66
2027 . 182.4 177.5 e 2.6 2.3 194.2 190.6 3.6 .1 -11.9 103.7 60
2028 . 188.4 183.5 e 2.8 2.1 203.5 199.6 3.7 .1 -15.1 88.7 51
2029 . 192.6 187.9 e 3.0 1.8 210.6 206.6 3.8 .2 -18.0 70.7 42
2030 . 197.2 192.6 e 3.2 1.4 217.0 212.8 4.0 .2 -19.8 50.8 33
2031 . 201.4 197.1 e 3.4 .9 224.2 219.9 4.1 .2 -22.9 27.9 23
a Includes adjustments for prior years. For example, in June 2021, an unusually large negative adjustment to
payroll tax contributions in the amount of $5.2 billion was made because payroll tax revenue credited to the
trust fund in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
b Includes reimbursements from the General Fund of the Treasury to the DI Trust Fund for: (1) the cost of pay-
roll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21;
(2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public
Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312,
112-78, and 112-96.
c Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in law.
d The Trust fund ratio column represents asset reserves at the beginning of a year (which are identical to
reserves at the end of the prior year shown in the Amount at end of year column) as a percentage of cost for
the year.
e Between -$50 million and $50 million.
Note: Components may not sum to totals because of rounding.
181
Appendices
Table VI.C6.Operations of the Combined OASI and DI Trust Funds,
Fiscal Years 2017-2031
[Dollar amounts in billions]
Income Cost Asset Reserves
Net pay- GF Taxa- Admin- Net
roll tax reim- tion of Sched- istra- RRB increase Amount Trust
Fiscal contri- burse- bene- Net uled tive inter- during at end fund
year a
Total butions ments b a c
fits interest Total benefits costs change year of year ratio d
Historical data:
2017. . $991.9 $868.0 e $37.4 $86.5 $944.7 $934.0 $6.2 $4.5 $47.2 $2,889.5 301
2018. . 992.7 873.2 e 35.7 83.8 988.0 976.7 6.4 4.9 4.7 2,894.2 292
2019. . 1,051.1 932.4 e 36.1 82.5 1,044.5 1,033.0 6.6 4.9 6.5 2,900.7 277
2020. . 1,103.0 984.6 e 39.6 78.8 1,095.4 1,084.3 6.2 5.0 7.5 2,908.2 265
2021. . 1,080.4 972.3 e 34.8 73.3 1,134.8 1,123.4 6.4 4.9 -54.4 2,853.9 256
Intermediate:
2022. . 1,194.2 1,078.6 e 48.3 67.3 1,217.6 1,205.6 6.6 5.4 -23.4 2,830.4 234
2023. . 1,259.6 1,147.2 e 50.4 62.0 1,309.0 1,296.5 7.1 5.5 -49.4 2,781.0 216
2024. . 1,312.5 1,198.2 e 54.9 59.4 1,393.3 1,380.1 7.4 5.8 -80.8 2,700.2 200
2025. . 1,370.3 1,253.2 e 59.9 57.2 1,479.1 1,465.5 7.7 5.9 -108.8 2,591.4 183
2026. . 1,440.4 1,311.4 e 71.8 57.1 1,569.5 1,555.4 8.0 6.0 -129.1 2,462.3 165
2027. . 1,504.5 1,365.2 e 80.4 58.9 1,663.0 1,648.6 8.3 6.0 -158.5 2,303.8 148
2028. . 1,579.8 1,433.3 e 87.2 59.4 1,761.1 1,746.3 8.7 6.1 -181.3 2,122.6 131
2029. . 1,642.1 1,489.8 e 94.3 58.0 1,860.8 1,845.6 9.0 6.2 -218.7 1,903.9 114
2030. . 1,709.2 1,551.3 e 102.2 55.8 1,962.7 1,947.2 9.3 6.3 -253.5 1,650.3 97
2031. . 1,775.2 1,612.7 e 110.6 51.9 2,068.0 2,052.1 9.6 6.4 -292.8 1,357.5 80
Low-cost:
2022. . 1,197.2 1,081.6 e 48.2 67.4 1,216.5 1,204.6 6.6 5.4 -19.3 2,834.6 235
2023. . 1,293.5 1,178.3 e 50.6 64.6 1,313.0 1,300.4 7.1 5.4 -19.5 2,815.0 216
2024. . 1,368.5 1,248.7 e 55.4 64.4 1,402.3 1,389.1 7.4 5.8 -33.7 2,781.3 201
2025. . 1,453.0 1,325.6 e 60.6 66.7 1,492.9 1,479.3 7.8 5.9 -39.9 2,741.4 186
2026. . 1,554.4 1,410.9 e 73.0 70.5 1,588.6 1,574.4 8.2 6.0 -34.2 2,707.2 173
2027. . 1,651.6 1,492.4 e 82.0 77.1 1,687.6 1,672.9 8.6 6.1 -36.0 2,671.2 160
2028. . 1,764.1 1,591.0 e 89.3 83.9 1,791.8 1,776.6 9.1 6.2 -27.7 2,643.5 149
2029. . 1,866.7 1,679.5 e 97.0 90.3 1,899.2 1,883.4 9.5 6.3 -32.4 2,611.0 139
2030. . 1,979.3 1,776.3 e 105.6 97.4 2,010.5 1,994.2 10.0 6.4 -31.3 2,579.8 130
2031. . 2,095.1 1,875.6 e 114.8 104.7 2,126.9 2,110.0 10.4 6.5 -31.9 2,547.9 121
High-cost:
2022. . 1,182.8 1,067.3 e 48.3 67.1 1,218.9 1,206.9 6.6 5.4 -36.1 2,817.8 234
2023. . 1,173.0 1,063.1 e 50.3 59.7 1,307.3 1,294.6 7.1 5.5 -134.3 2,683.5 216
2024. . 1,216.9 1,109.1 e 54.2 53.6 1,379.3 1,366.0 7.4 6.0 -162.4 2,521.1 195
2025. . 1,256.3 1,148.0 e 58.7 49.6 1,455.2 1,441.7 7.6 5.9 -199.0 2,322.1 173
2026. . 1,303.4 1,188.6 e 70.0 44.8 1,538.9 1,525.1 7.8 6.0 -235.5 2,086.6 151
2027. . 1,342.9 1,222.6 e 78.0 42.3 1,625.9 1,611.9 8.0 6.0 -283.0 1,803.6 128
2028. . 1,386.1 1,264.3 e 84.3 37.6 1,715.9 1,701.6 8.2 6.0 -329.8 1,473.8 105
2029. . 1,415.3 1,294.2 e 90.8 30.3 1,806.0 1,791.4 8.4 6.1 -390.7 1,083.1 82
2030. . 1,446.6 1,326.9 e 98.0 21.8 1,896.7 1,881.9 8.6 6.1 -450.1 633.1 57
2031. . 1,476.1 1,358.0 e 105.5 12.5 1,989.2 1,974.2 8.9 6.2 -513.2 119.9 32
a Includes adjustments for prior years. For example, in June 2021, unusually large negative adjustments to pay-
roll tax contributions in the amount of $35.5 billion were made because payroll tax revenue credited to the trust
funds in 2020 was based on estimates that did not anticipate effects of the pandemic and recession.
b Includes reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds for: (1) the
cost of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law
98-21; (2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public
Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-
78, and 112-96.
c Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in law.
d The Trust fund ratio column represents asset reserves at the beginning of a year (which are identical to
reserves at the end of the prior year shown in the Amount at end of year column) as a percentage of cost for
the year.
e Between -$50 million and $50 million.
Note: Components may not sum to totals because of rounding.
182
Long-Range Sensitivity Analysis
D. LONG-RANGE SENSITIVITY ANALYSIS
This appendix presents estimates that illustrate the sensitivity of the long-
range actuarial status of the OASDI program to changes in selected individ-
ual assumptions. The estimates based on the three alternative sets of assump-
tions, which were presented earlier in this report, illustrate the effects of
varying all of the principal assumptions simultaneously, in order to portray a
significantly more optimistic or pessimistic future. For each sensitivity anal-
ysis presented in this appendix, the intermediate alternative II projection is
the reference point, and one assumption is varied within that alternative. The
variation used for each individual assumption is the same as the level used
for that assumption in the low-cost alternative I and high-cost alternative III
projections.
Each table in this section shows the effects of changing a particular assump-
tion on the OASDI summarized income rates, summarized cost rates, and
actuarial balances for 25-year, 50-year, and 75-year valuation periods. Fol-
lowing each table is a discussion of the estimated changes in cost rates. The
change in each of the actuarial balances is approximately equal to the change
in the corresponding cost rate, but in the opposite direction. This appendix
does not discuss income rates following each table because income rates
vary only slightly with changes in assumptions that affect revenue from taxa-
tion of benefits.
1. Total Fertility Rate
Table VI.D1 shows OASDI income rates, cost rates, and actuarial balances
on the basis of alternative II with three different assumptions for the future
paths of total fertility rates. Under the Trustees assumptions, the average
annual total fertility rate for the period 2032 through 2096 is 1.69, 1.99, and
2.19 children per woman under alternatives III, II, and I, respectively. The
ultimate total fertility rate is reached in 2056 under all three alternatives.
183
Appendices
Table VI.D1.Sensitivity of OASDI Measures to Fertility Assumptions
[As a percentage of taxable payroll]
Average total fertility rate a b
Valuation period 1.69 1.99 2.19
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.38 14.38 14.38
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.94 13.91 13.89
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.85 13.78 13.73
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.61 16.62 16.63
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.26 16.93 16.71
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.98 17.20 16.69
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.23 -2.24 -2.25
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.32 -3.02 -2.82
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.13 -3.42 -2.96
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.59 -4.25 -2.97
Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
a The total fertility rate for any year is the average number of children that would be born to a woman if she
were to experience, at each age of her life, the birth rate observed in, or assumed for, the selected year, and if
she were to survive the entire childbearing period. The average total fertility rate shown is for the period
2032 through 2096. The ultimate total fertility rate is reached in 2056 under all three alternatives.
b Total fertility rates used for this analysis are consistent with those assumed for the three alternative scenar-
ios; the average total fertility rate for 2032 through 2096 is 1.69 under the alternative III assumptions, 1.99
under the alternative II assumptions, and 2.19 under the alternative I assumptions. All other assumptions
used for this analysis are from alternative II.
For the 25-year period, the cost rate for the three fertility assumptions varies
by only about 0.02 percent of taxable payroll. In contrast, the 75-year cost
rate varies over a wide range, decreasing from 17.98 to 16.69 percent, as the
average total fertility rate for the period 2032 through 2096 increases from
1.69 for alternative III to 2.19 for alternative I. Similarly, while the 25-year
actuarial balance varies by only 0.02 percent of taxable payroll, the 75-year
actuarial balance varies over a much wider range, from -4.13 to
-2.96 percent.
During the 25-year period, the very slight increases in the working-age popu-
lation and tax income resulting from higher fertility (than that experienced in
an alternative scenario) are more than offset by the effects of decreases in
female labor force participation and increases in the number of child benefi-
ciaries. Therefore, program cost as a percent of taxable payroll increases
slightly with higher fertility. For the 75-year long-range period, however,
changes in fertility have a relatively greater effect on the working-age popu-
lation than on the beneficiary population. As a result, an increase in fertility
significantly reduces the cost rate. Each increase of 0.1 in the average total
fertility rate increases the long-range actuarial balance by about 0.24 percent
of taxable payroll.
184
Long-Range Sensitivity Analysis
2. Death Rates
Table VI.D2 shows OASDI income rates, cost rates, and actuarial balances
on the basis of alternative II with three different assumptions about future
reductions in death rates for the period from 2031 to 2096. These assump-
tions are described in section V.A.2. Under the Trustees assumptions, the
age-sex-adjusted death rates decline at average annual rates of 0.28 percent,
0.74 percent, and 1.25 percent for alternatives I, II, and III, respectively.
Table VI.D2.Sensitivity of OASDI Measures to Death-Rate Assumptions
[As a percentage of taxable payroll]
Average annual death-rate reduction a b
Valuation period 0.28 percent 0.74 percent 1.25 percent
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.38 14.38 14.37
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.90 13.91 13.93
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.75 13.78 13.81
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.45 16.62 16.83
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.49 16.93 17.47
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.50 17.20 17.99
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.07 -2.24 -2.46
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.59 -3.02 -3.54
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.75 -3.42 -4.17
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -2.81 -4.25 -5.71
Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
a The average annual death-rate reduction is the average annual geometric rate of decline in the age-sex-
adjusted death rate for the period from 2031 to 2096. The overall age-sex-adjusted death rate decreases from
2031 to 2096 by 16 percent, 38 percent, and 56 percent for alternatives I, II, and III, respectively.
b The death-rate reductions used for this analysis are consistent with those assumed for the three alternative
scenarios; the average annual death-rate reduction from 2031 to 2096 is 0.28 percent from the alternative I
assumptions, 0.74 percent from the alternative II assumptions, and 1.25 percent from the alternative III
assumptions. All other assumptions used for this analysis are from alternative II.
The variation in cost for the 25-year period is less pronounced than the varia-
tion for the 75-year period because decreases in death rates have cumulative
effects. The 25-year cost rate increases from 16.45 percent (for an average
annual death-rate reduction of 0.28 percent from 2031 to 2096) to
16.83 percent (for an average annual death-rate reduction of 1.25 percent
from 2031 to 2096). The 75-year cost rate increases from 16.50 to
17.99 percent. The actuarial balance decreases from -2.07 to -2.46 percent
for the 25-year period, and from -2.75 to -4.17 percent for the 75-year
period.
Lower death rates raise both the income (through increased taxable payroll)
and the cost of the OASDI program. The relative increase in cost, however,
exceeds the relative increase in taxable payroll. For any given year, reduc-
185
Appendices
tions in the death rates for people who are age 62 and over (ages at which
death rates are the highest) increase the number of retired-worker beneficia-
ries (and, therefore, the amount of retirement benefits paid) without adding
significantly to the number of covered workers (and, therefore, to the taxable
payroll). Reductions in death rates for people at age 50 to retirement eligibil-
ity age result in significant increases to the taxable payroll. However, those
increases are not large enough to offset the sum of the additional retirement
benefits mentioned above and the disability benefits paid to additional bene-
ficiaries at these pre-retirement ages, which are ages of high disability inci-
dence. At ages under 50, death rates are so low that even substantial
reductions in death rates do not result in significant increases in the numbers
of covered workers or beneficiaries. Consequently, if death rates decline by
about the same relative amount for all ages, the cost increases faster than the
rate of growth in payroll, which results in higher cost rates and lower actuar-
ial balances. Each additional 0.1-percentage-point increase in the average
annual rate of decline in the death rate decreases the long-range actuarial bal-
ance by about 0.15 percent of taxable payroll.
3. Immigration
Table VI.D3 shows OASDI income rates, cost rates, and actuarial balances
under alternative II with three different assumptions about the magnitude of
total net immigration (sum of net lawful permanent resident (LPR) immigra-
tion and net other-than-LPR immigration). See section V.A.3 for more infor-
mation on immigration assumptions and methods. Under the Trustees
assumptions, total net annual immigration averages 829,000 persons,
1,246,000 persons, and 1,684,000 persons for the period 2032 through 2096
under alternatives III, II, and I, respectively.
186
Long-Range Sensitivity Analysis
Table VI.D3.Sensitivity of OASDI Measures to Total Net Immigration Assumptions
[As a percentage of taxable payroll]
Average annual total net immigrationa b
Valuation period 829,000 1,246,000 1,684,000
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.41 14.38 14.34
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.91 13.87
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.83 13.78 13.73
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.85 16.62 16.39
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.28 16.93 16.59
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.65 17.20 16.77
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.44 -2.24 -2.05
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.33 -3.02 -2.71
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.82 -3.42 -3.04
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -5.06 -4.25 -3.57
Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2035
a Average annual total net immigration is the annual total net immigration to the Social Security area, includ-
ing both LPR and other-than-LPR immigration, averaged for 2032 through 2096.
b The total net immigration assumptions used for this analysis are consistent with those assumed for the
three alternative scenarios; average annual total net immigration for 2032 through 2096 is 829,000 from the
alternative III assumptions, 1,246,000 from the alternative II assumptions, and 1,684,000 from the alterna-
tive I assumptions. All other assumptions used for this analysis are from alternative II.
For all three periods, when total net immigration increases, the cost rate
decreases. For the 25-year period, the cost rate decreases from 16.85 percent
of taxable payroll (for average annual total net immigration of 829,000 per-
sons for 2032 through 2096) to 16.39 percent (for an average annual total net
immigration of 1,684,000 persons for 2032 through 2096). For the 50-year
period, it decreases from 17.28 percent to 16.59 percent, and for the 75-year
period, it decreases from 17.65 percent to 16.77 percent. The actuarial bal-
ance increases from -2.44 to -2.05 percent for the 25-year period, from -3.33
to -2.71 percent for the 50-year period, and from -3.82 to -3.04 percent for
the 75-year period.
The cost rate decreases with an increase in total net immigration because
immigration occurs at relatively young ages, thereby increasing the numbers
of covered workers earlier than the numbers of beneficiaries. Increasing
average annual total net immigration by 100,000 persons improves the long-
range actuarial balance by about 0.09 percent of taxable payroll.
4. Real Wage Differential
Table VI.D4 shows OASDI income rates, cost rates, and actuarial balances
on the basis of alternative II with three different assumptions about the real
wage differential. Under the Trustees assumptions, the average annual real
187
Appendices
wage differential for the period 2032 through 2096 is 0.53 percentage point,
1.15 percentage points, and 1.77 percentage points under alternatives III, II,
and I, respectively. In each case, the ultimate annual increase in the CPI is
2.40 percent (consistent with alternative II). Therefore, the average annual
percentage increase in the average wage in covered employment from 2031
to 2096 is 2.93, 3.55, and 4.17 percent under alternatives III, II, and I,
respectively.
For the 25-year period, the cost rate decreases from 17.44 percent (for a real
wage differential of 0.53 percentage point) to 15.81 percent (for a differential
of 1.77 percentage points). For the 50-year period, it decreases from 18.12 to
15.76 percent, and for the 75-year period it decreases from 18.53 to
15.88 percent. The actuarial balance increases from -2.94 to -1.55 percent for
the 25-year period, from -4.05 to -2.00 percent for the 50-year period, and
from -4.58 to -2.26 percent for the 75-year period.
Table VI.D4.Sensitivity of OASDI Measures to Real Wage Assumptions
[As a percentage of taxable payroll]
Average annual percentage increase in wages-
CPI a b
Valuation period 2.93-2.40 3.55-2.40 4.17-2.40
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.49 14.38 14.26
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.06 13.91 13.77
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.78 13.62
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.44 16.62 15.81
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.12 16.93 15.76
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.53 17.20 15.88
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.94 -2.24 -1.55
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.05 -3.02 -2.00
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.58 -3.42 -2.26
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.24 -4.25 -2.50
Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2036
a The first value in each pair is the average annual percentage increase in the average wage in covered
employment from 2031 to 2096. The second value is the ultimate annual percentage increase in the Con-
sumer Price Index. The difference between the two values is the average annual real wage differential for
2032 through 2096.
b The real wage assumptions used for this analysis are consistent with those assumed for the three alternative
scenarios; the average annual real wage differential for 2032 through 2096 is 0.53 percentage point from the
alternative III assumptions, 1.15 percentage points from the alternative II assumptions, and 1.77 percentage
points from the alternative I assumptions. All other assumptions used for this analysis are from alternative II.
The cost rate decreases with increasing real wage differentials. Higher wages
increase taxable payroll immediately, but they increase benefit levels only
gradually as new beneficiaries become entitled. In addition, cost-of-living
adjustments (COLAs) to benefits depend not on changes in wages, but on
188
Long-Range Sensitivity Analysis
changes in prices. Each 0.1-percentage-point increase in the real wage differ-
ential increases the long-range actuarial balance by about 0.19 percent of
taxable payroll.
5. Consumer Price Index
Table VI.D5 shows OASDI income rates, cost rates, and actuarial balances
on the basis of alternative II with three different assumptions about the rate
of increase for the Consumer Price Index (CPI). Under the Trustees assump-
tions, the annual increase in the CPI is 3.00 percent, 2.40 percent, and
1.80 percent under alternatives I, II, and III, respectively. These ultimate
rates of increase are reached by 2026 under all three alternatives. In each
case, the average annual real wage differential for 2032 through 2096 is
1.15 percentage points (consistent with alternative II), yielding average
annual percentage increases in the average wage in covered employment
from 2031 to 2096 of 4.15, 3.55, and 2.95 percent under alternatives I, II, and
III, respectively.
Table VI.D5.Sensitivity of OASDI Measures to CPI-Increase Assumptions
[As a percentage of taxable payroll]
Average annual percentage increase in wages-
CPI a b
Valuation period 4.15-3.00 3.55-2.40 2.95-1.80
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.36 14.38 14.40
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.90 13.91 13.93
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.76 13.78 13.79
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.52 16.62 16.73
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.80 16.93 17.08
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.05 17.20 17.36
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.17 -2.24 -2.33
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.90 -3.02 -3.15
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.29 -3.42 -3.56
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.09 -4.25 -4.43
Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
a The first value in each pair is the average annual percentage increase in the average wage in covered
employment from 2031 to 2096. The second value is the ultimate annual percentage increase in the Con-
sumer Price Index. The difference between the two values is the average annual real wage differential for
2032 through 2096.
b The CPI assumptions used for this analysis are consistent with those assumed for the three alternative sce-
narios; the ultimate CPI increase is 3.00 percent from the alternative I assumptions, 2.40 percent from the
alternative II assumptions, and 1.80 percent from the alternative III assumptions. These ultimate rates of
increase are reached by 2026 under all three alternatives. All other assumptions used for this analysis are
from alternative II.
189
Appendices
For all three periods, the cost rate increases when the assumed rates of
increase in the CPI are smaller. For the 25-year period, the cost rate increases
from 16.52 (for a CPI increase of 3.00 percent) to 16.73 percent (for a CPI
increase of 1.80 percent). For the 50-year period, it increases from 16.80 to
17.08 percent, and for the 75-year period, it increases from 17.05 to
17.36 percent. The actuarial balance decreases from -2.17 to -2.33 percent
for the 25-year period, from -2.90 to -3.15 percent for the 50-year period,
and from -3.29 to -3.56 percent for the 75-year period.
The time lag between the effects of the CPI changes on taxable payroll and
on scheduled benefits explains these patterns. When the rate of increase in
the CPI is greater and the real wage differential is constant, then: (1) the
effect on taxable payroll due to a greater rate of increase in average wages
occurs immediately and (2) the effect on benefits due to a larger COLA
occurs with a lag of about 1 year. As a result of these effects, the higher tax-
able payrolls have a stronger effect than the higher benefits, which results in
lower cost rates. Each 0.1-percentage-point decrease in the rate of the change
in the CPI decreases the long-range actuarial balance by about 0.02 percent
of taxable payroll.
6. Real Interest Rate
Table VI.D6 shows OASDI income rates, cost rates, and actuarial balances
under alternative II with three different assumptions about the annual real
interest rate (compounded semiannually) for special public-debt obligations
issuable to the trust funds. Under the Trustees assumptions, the ultimate
annual real interest rate is 1.8 percent, 2.3 percent, and 2.8 percent under
alternatives III, II, and I, respectively. These ultimate rates are reached by
2032 under all three alternatives. In each case, the ultimate annual increase in
the CPI is 2.40 percent, which is consistent with alternative II. Therefore, the
ultimate annual yields are 4.2, 4.8, and 5.3 percent, respectively.
190
Long-Range Sensitivity Analysis
Table VI.D6.Sensitivity of OASDI Measures to Real Interest Rate Assumptions
[As a percentage of taxable payroll]
Ultimate annual real interest rate a b
Valuation period 1.8 percent 2.3 percent 2.8 percent
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.33 14.38 14.42
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.86 13.91 13.97
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.72 13.78 13.84
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 16.62 16.56
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.03 16.93 16.84
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.33 17.20 17.07
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.35 -2.24 -2.14
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.17 -3.02 -2.87
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.61 -3.42 -3.23
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.25 -4.25 -4.25
Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
a The ultimate real interest rate is the effective annual yield on asset reserves held by the trust funds divided
by the annual rate of growth in the CPI.
b The real interest rate assumptions used for this analysis are consistent with those assumed for the three
alternative scenarios; the ultimate annual real interest rate is 1.8 percent from the alternative III assumptions,
2.3 percent from the alternative II assumptions, and 2.8 percent from the alternative I assumptions. These
ultimate rates are reached by 2032 under all three alternatives. All other assumptions used for this analysis
are from alternative II.
For the 25-year period, the cost rate decreases with increasing real interest
rates from 16.68 percent (for an ultimate real interest rate of 1.8 percent) to
16.56 percent (for an ultimate real interest rate of 2.8 percent). For the
50-year period, it decreases from 17.03 to 16.84 percent and, for the 75-year
period, it decreases from 17.33 to 17.07 percent. The actuarial balance
increases from -2.35 to -2.14 percent for the 25-year period, from -3.17 to
-2.87 percent for the 50-year period, and from -3.61 to -3.23 percent for the
75-year period. A relatively higher real interest rate has the effect of dis-
counting more distant future years relatively more. To the extent that annual
cost rates and annual deficits are larger in later years, a higher interest rate
decreases the summarized rates, and a lower interest rate increases the sum-
marized rates. Each 0.1-percentage-point increase in the real interest rate
increases the long-range actuarial balance by about 0.04 percent of taxable
payroll.
7. Taxable Ratio
Table VI.D7 shows OASDI income rates, cost rates, and actuarial balances
under alternative II with three different assumptions about the ratio of tax-
able payroll to covered earnings (the taxable ratio). Note that covered earn-
ings are the sum of wages and net self-employment earnings covered by
191
Appendices
Social Security, and taxable payroll is essentially the amount of covered
earnings subject to the Social Security payroll tax up to the contribution and
benefit base ($147,000 for 2022). Under the Trustees assumptions, the tax-
able ratio at the end of the short-range period (2031) is 81.0 percent,
82.5 percent, and 84.0 percent under alternatives III, II, and I, respectively.
Table VI.D7.Sensitivity of OASDI Measures to Taxable Ratio Assumptions
[As a percentage of taxable payroll]
Taxable ratio in 2031 a b
Valuation period 81.0 percent 82.5 percent 84.0 percent
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.41 14.38 14.35
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.93 13.91 13.89
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 13.78 13.76
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.86 16.62 16.39
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.15 16.93 16.72
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 17.20 17.01
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.45 -2.24 -2.04
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.22 -3.02 -2.83
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.60 -3.42 -3.25
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.37 -4.25 -4.14
Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2035
a The taxable ratio is the ratio of taxable payroll to covered earnings. These concepts are described in further
detail in section V.C.6 of this report.
b The taxable ratio assumptions used for this analysis are consistent with those assumed for the three alterna-
tive scenarios; the taxable ratio at the end of the short-range period (2031) is 81.0 percent from the alterna-
tive III assumptions, 82.5 percent from the alternative II assumptions, and 84.0 percent from the alternative I
assumptions. All other assumptions used for this analysis are from alternative II.
Because the combined employee-employer tax rate of 12.4 percent is
unchanged across all alternatives, the income rate changes a relatively small
amount as the taxable ratio increases, due to changes in taxation of benefits
and the initial fund as a percentage of taxable payroll.
For the 25-year period, the cost rate decreases with increasing taxable ratios,
from 16.86 percent (for a taxable ratio in 2031 of 81.0 percent) to
16.39 percent (for a taxable ratio in 2031 of 84.0 percent). For the 50-year
period, it decreases from 17.15 to 16.72 percent and, for the 75-year period,
it decreases from 17.40 to 17.01 percent. The actuarial balance increases
from -2.45 to -2.04 percent for the 25-year period, from -3.22 to
-2.83 percent for the 50-year period, and from -3.60 to -3.25 for the 75-year
period.
The cost rate decreases with an increase in taxable payroll because the
increase in taxable payroll occurs immediately. The increase in benefit
amounts occurs much more gradually as new beneficiaries become entitled.
In addition, the change in the taxable ratio does not affect COLAs or AWIs.
192
Long-Range Sensitivity Analysis
Each 1.0 percentage-point increase in the taxable ratio in 2031 increases
(improves) the long-range actuarial balance by about 0.12 percent of taxable
payroll.
8. Disability Incidence Rates
Table VI.D8 shows OASDI income rates, cost rates, and actuarial balances
on the basis of alternative II with three different assumptions about future
disability incidence rates. Under the Trustees assumptions, the ultimate age-
sex-adjusted 1 incidence rate is 3.9, 4.8, and 5.8 awards per thousand exposed
for alternatives I, II, and III, respectively. Under the Trustees assumptions,
incidence rates by age and sex for all three alternatives vary during the early
years of the projection period before reaching their long-term average values.
Table VI.D8.Sensitivity of OASDI Measures to Disability Incidence Assumptions
[As a percentage of taxable payroll]
Disability incidence ratea
Valuation period 3.9 4.8 5.8
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.37 14.38 14.38
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.91 13.91
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.78 13.78 13.78
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.41 16.62 16.84
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.68 16.93 17.18
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.95 17.20 17.45
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.03 -2.24 -2.46
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.77 -3.02 -3.27
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.17 -3.42 -3.67
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -3.99 -4.25 -4.50
Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
a The disability incidence rates used for this analysis are consistent with those assumed for the three alterna-
tive scenarios; the ultimate age-sex-adjusted incidence rate is 3.9 awards per thousand exposed for the alter-
native I assumptions, 4.8 awards per thousand exposed for the alternative II assumptions, and 5.8 awards per
thousand exposed for the alternative III assumptions. All other assumptions used for this analysis are from
alternative II.
For the 25-year period, the cost rate increases with increasing disability inci-
dence rates, from 16.41 percent (for the relatively low rates assumed for
alternative I) to 16.84 percent (for the relatively high rates assumed for alter-
native III). For the 50-year period, it increases from 16.68 to 17.18 percent,
and for the 75-year period, it increases from 16.95 to 17.45 percent. The
actuarial balance decreases from -2.03 to -2.46 percent for the 25-year
1 Age-sex-adjusted to the disability-exposed population as of the year 2000.
193
Appendices
period, from -2.77 to -3.27 percent for the 50-year period, and from -3.17 to
-3.67 percent for the 75-year period.
9. Disability Termination Rates
Table VI.D9 shows OASDI income rates, cost rates, and actuarial balances
on the basis of alternative II with three different assumptions about future
disability termination rates, including deaths and recoveries.
Under the Trustees assumptions, death rates for disabled-worker beneficia-
ries for all three alternatives decline throughout the long-range period. The
age-sex-adjusted 1 death rate of 30.0 deaths per thousand disabled-worker
beneficiaries in 2021 declines to 21.9, 12.5, and 6.2 deaths per thousand in
2096 for alternatives I, II, and III, respectively. These levels are about
27 percent, 58 percent, and 79 percent lower, respectively, than the level in
2021.
The ultimate age-sex-adjusted1 recovery rate used for this analysis is
12.5 recoveries per thousand disabled-worker beneficiaries for the alterna-
tive I assumptions, 10.4 recoveries per thousand disabled-worker beneficia-
ries for the alternative II assumptions, and 8.3 recoveries per thousand
disabled-worker beneficiaries for the alternative III assumptions.
1 Age-sex-adjusted to the disabled-worker population as of the year 2000.
194
Long-Range Sensitivity Analysis
Table VI.D9.Sensitivity of OASDI Measures to Disability Termination Assumptions
[As a percentage of taxable payroll]
Disability termination rates
(death; recovery)a
Valuation period 21.9; 12.5 12.5; 10.4 6.2; 8.3
Summarized income rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.38 14.38 14.37
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.91 13.91
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.78 13.78 13.78
Summarized cost rate:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.59 16.62 16.65
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.90 16.93 16.95
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.18 17.20 17.20
Actuarial balance:
25-year: 2022-46 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.22 -2.24 -2.27
50-year: 2022-71 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.99 -3.02 -3.04
75-year: 2022-96 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.40 -3.42 -3.43
Annual balance for 2096 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.25 -4.25 -4.20
Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
a The disability termination rates used for this analysis are consistent with those assumed for the three alter-
native scenarios; the age-sex-adjusted death rate for 2096 is 21.9 deaths per thousand disabled-worker bene-
ficiaries for the alternative I assumptions, 12.5 deaths per thousand disabled-worker beneficiaries for the
alternative II assumptions, and 6.2 deaths per thousand disabled-worker beneficiaries for the alternative III
assumptions; the ultimate age-sex-adjusted recovery rate is 12.5 recoveries per thousand disabled-worker
beneficiaries for the alternative I assumptions, 10.4 recoveries per thousand disabled-worker beneficiaries
for the alternative II assumptions, and 8.3 recoveries per thousand disabled-worker beneficiaries for the
alternative III assumptions. All other assumptions used for this analysis are from alternative II.
For the 25-year period, the cost rate increases with decreasing disability ter-
mination rates, from 16.59 percent (for the relatively high termination rates
assumed for alternative I) to 16.65 percent (for the relatively low termination
rates assumed for alternative III). For the 50-year period, it increases from
16.90 to 16.95 percent, and for the 75-year period, it increases from 17.18 to
17.20 percent. The actuarial balance decreases from -2.22 to -2.27 percent
for the 25-year period, from -2.99 to -3.04 percent for the 50-year period,
and from -3.40 to -3.43 percent for the 75-year period.
195
Appendices
E. STOCHASTIC PROJECTIONS AND UNCERTAINTY
Significant uncertainty surrounds the estimates under the intermediate
assumptions, especially for a period as long as 75 years. This appendix pres-
ents stochastic projections, a way to illustrate the uncertainty of these esti-
mates. The stochastic projections supplement the traditional methods of
examining such uncertainty.
1. Background
The Trustees have traditionally shown estimates using the low-cost and high-
cost sets of specified assumptions to illustrate the potential implications of
uncertainty. These low-cost and high-cost estimates provide a range of possi-
ble outcomes for the projections. However, they do not provide an indication
of the probability that actual future experience will be inside or outside this
range. This appendix presents the results of a stochastic model that estimates
a probability distribution of future outcomes of the financial status of the
combined OASI and DI Trust Funds. This model was introduced in the 2003
report and enhanced in the 2021 report to include parameter uncertainty for
the expected mean for the key variables described in the next section.
2. Stochastic Methodology
Other sections of this report provide estimates of the financial status of the
combined OASI and DI Trust Funds using a scenario-based model. For the
scenario-based model, the Trustees use three alternative scenarios (low-cost,
intermediate, and high-cost) that use specific assumptions for key variables.
In general, the Trustees assume that each of these variables will reach an ulti-
mate value at a specific point during the long-range period, and will maintain
that value throughout the remainder of the period. The three alternative sce-
narios assume separate, specified values for each of these variables. Chapter
V contains more details about each of these assumptions.
This appendix presents estimates of the probability that key measures of
OASDI solvency will fall in certain ranges, based on 5,000 independent sto-
chastic simulations. Each simulation allows key variables to vary throughout
the long-range period. These key variables include total fertility rates,
changes in mortality rates, new arrival lawful permanent resident (LPR) and
other-than-LPR immigration levels, rates of adjustment of status (from other-
than-LPR to LPR), rates of legal emigration (from the population of citizens
and LPRs), changes in the Consumer Price Index, changes in average real
wages, unemployment rates, trust fund real yield rates, and disability inci-
dence and recovery rates. The fluctuation of each variable over time is simu-
196
Stochastic Projections
lated using historical data and standard time-series techniques. Generally,
each variable is modeled using an equation that: (1) captures a relationship
between current and prior years values of the variable, and (2) introduces
random variation based on variation observed in the historical period. For
some variables, the equations also reflect relationships with other variables.
The equations contain parameters that are estimated using historical data for
periods from 20 years to over 110 years, depending on the nature and quality
of the available data. Each time-series equation is designed so that, in the
absence of random variation over time, the value of the variable for each
year equals its value for the intermediate scenario. 1
For each equation in a given simulation, the stochastic model assigns random
variation to (1) year-by-year error term values and (2) simulation-specific
mean term levels that provide variation in the central tendency across simu-
lations. Each simulation produces estimates for all key variables and for the
overall financial status of the combined OASI and DI Trust Funds. This
appendix shows the distribution of results from 5,000 simulations of the
model.
Readers should interpret the results from this model with an understanding of
the models limitations. Results are sensitive to equation specifications,
degrees of interdependence among variables, and the historical periods used
for estimating model coefficients. For some variables, recent historical varia-
tion may not provide a realistic representation of the potential variation for
the future. Also, results would differ if additional variables (such as labor
force participation rates, retirement rates, marriage rates, and divorce rates)
were also allowed to vary randomly. Time-series modeling reflects only what
occurred in the historical period. Future uncertainty exists not only for the
underlying central tendency but also for the frequency and size of occasional
longer-term shifts in the central tendency. Many experts predict, and history
suggests, that the future will likely bring substantial shifts that are not fully
reflected in the historical period used for the current model. As a result, read-
ers should understand that the true range of uncertainty might be larger than
indicated in this appendix.
3. Stochastic Results
This section illustrates the results for the stochastic simulations of two funda-
mental measures of actuarial status: annual cost rates and trust fund ratios.
1 More detail on this model, and stochastic modeling in general, is available at
www.ssa.gov/OACT/stochastic/index.html.
197
Appendices
The latter measure is highlighted in section II.D of this report. Section 4 fol-
lows with a comparison of stochastic results to results from the alternative
scenarios for these and other measures, and an analysis of the differences.
Figure VI.E1 displays the probability distribution of the year-by-year
OASDI cost rates (that is, cost as a percentage of taxable payroll). The range
of the annual cost rates widens as the projections move further into the
future, which reflects increasing uncertainty. Because there is relatively little
variation in income rates across the 5,000 stochastic simulations, the figure
includes only the income rate for the intermediate scenario. The two outer-
most cost rate lines in this figure indicate the range within which future
annual cost rates are projected to occur 95 percent of the time (i.e., a 95-per-
cent confidence interval). In other words, the current model estimates that
there is a 2.5 percent probability that the cost rate for a given year will
exceed the upper end of this range and a 2.5 percent probability that it will
fall below the lower end of this range. Other lines in the figure delineate
additional confidence intervals (80-percent, 60-percent, 40-percent, and
20-percent) around future annual cost rates. The median (50th percentile)
cost rate for each year is the rate for which half of the simulated outcomes
are higher and half are lower for that year. These lines do not represent the
results of individual stochastic simulations. Instead, for each given year, they
represent the percentile distribution of annual cost rates based on all stochas-
tic simulations for that year.
198
Stochastic Projections
Figure VI.E1.Long-Range OASDI Cost Rates From Stochastic Modeling
30%
97.5%
25%
90%
20%
50%
15%
10%
2.5%
Income Rate for the
Intermediate Scenario
10%
5%
2022 2032 2042 2052 2062 2072 2082 2092
Calendar year
Figure VI.E2 presents the simulated probability distribution of the annual
trust fund ratios for the combined OASI and DI Trust Funds. The lines in this
figure display the median set (50th percentile) of estimated annual trust fund
ratios and delineate the 95-percent, 80-percent, 60-percent, 40-percent, and
20-percent confidence intervals estimated for future annual trust fund ratios.
Again, none of these lines represent the path of a single simulation. For each
given year, they represent the percentile distribution of trust fund ratios
based on all stochastic simulations for that year.
Figure VI.E2 shows that the 95-percent confidence interval for the trust fund
reserve depletion year ranges from 2031 to 2043, and that there is a 50-per-
cent probability of trust fund reserve depletion by the end of 2034 (the
median reserve depletion year). The median reserve depletion date is late in
2034; the reserve depletion date for the intermediate scenario is early in
2035. The figure also shows confidence intervals for the trust fund ratio in
each year.
199
Appendices
Figure VI.E2.Long-Range OASDI Trust Fund Ratios From Stochastic Modeling
250%
200%
150%
97.5%
90%
100%
50%
50%
10%
2.5%
0%
2022 2032 2042 2052 2062 2072 2082 2092
Calendar year
4. Comparison of Results: Stochastic to Low-Cost, Intermediate, and
High-Cost Alternative Scenarios
This section compares results from two different approaches for illustrating
ranges of uncertainty in measures of trust fund actuarial status. One approach
uses results from the low-cost, intermediate, and high-cost alternative scenar-
ios. The other approach uses distributions of results from the stochastic simu-
lations. Each of these approaches provides insights into uncertainty.
Comparing the results requires an understanding of fundamental differences
in the approaches.
One fundamental difference relates to the presentation of distributional
results. Figure VI.E3 shows projected OASDI annual cost rates for the low-
cost, intermediate, and high-cost alternative scenarios along with the annual
cost rates at the 2.5th percentile, 50th percentile, and 97.5th percentile for the
stochastic simulations. While all values on each line for the alternative sce-
narios are results from a single specified scenario, the values on each sto-
chastic line may be results from different simulations for different years. The
one stochastic simulation (from the 5,000 simulations) that yields results
200
Stochastic Projections
closest to a particular percentile for one projected year may yield results that
are distant from that percentile in another projected year.
Because each stochastic simulation shows substantial variability from year to
year, the range shown between the 2.5th and 97.5th percentiles is broader
than would be seen if simulations followed a smooth trend like in the alterna-
tive scenarios. Furthermore, with the introduction of parameter uncertainty
for the expected mean for the stochastic simulations in last years report, the
range of the 95-percent confidence interval is generally expanded from the
range in prior years reports.
Both the alternative scenarios and the stochastic results suggest that the
range of potential cost rates above the central levels (those for the intermedi-
ate scenario and for the stochastic median, respectively) is larger than the
range below these central results. The difference between the central results
and the higher cost levels (the high-cost alternative scenario and the upper
end of the 95-percent confidence range, respectively) is about 1.7 to
1.8 times as large as the difference between the central and lower cost levels
for both models by the end of the projection period.
Figure VI.E3.OASDI Cost Rates: Comparison of Stochastic to Low-Cost, Intermediate,
and High-Cost Alternative Scenarios
[As a percentage of taxable payroll]
30%
Low-Cost
Intermediate
High-Cost
25% Stochastic 2.5%
Stochastic 50%
Stochastic 97.5%
20%
15%
10%
2022 2032 2042 2052 2062 2072 2082 2092
Calendar year
201
Appendices
Another fundamental difference between the alternative scenarios and the
stochastic simulations is the method of assigning values for assumptions. For
the alternative scenarios, specific values are assigned for each of the key
demographic, economic, and program-specific variables. The high-cost alter-
native scenario uses parameter values that increase estimated annual cost as a
percent of payroll, while the low-cost alternative scenario uses parameter
values that decrease annual cost as a percent of payroll. (One parameter, the
interest rate, has no effect on annual cost as a percent of payroll for either the
alternative scenarios or the stochastic simulations.) In contrast, the stochastic
method independently assigns random variation to each of the key demo-
graphic and economic variables for each year in each of the 5,000 stochastic
simulations. For each of the stochastic simulations, the assigned values for
different variables result in varying and often offsetting effects on projected
cost as a percent of payroll, with some tending toward higher cost and some
tending toward lower cost. This difference tends to narrow the range of cost
as a percent of payroll across the 95-percent confidence interval.
It is important to understand that the stochastic models 95-percent confi-
dence intervals for any summary measure of trust fund finances would tend
to be narrower than the range produced for the low-cost and high-cost alter-
native scenarios, even if the stochastic models 95-percent confidence inter-
val for annual cost rates were identical to the range defined by the low-cost
and high-cost scenarios. This is true because summary measures of trust fund
finances depend on cost rates for many years, and the probability that annual
cost rates, on average for individual stochastic simulations, will be at least as
low (high) as the 2.5 (97.5) percentile line is significantly lower than
2.5 percent. As a result, the relationship between the ranges presented for
annual cost rates and summary measures of trust fund finances is fundamen-
tally different for the stochastic model than it is for the low-cost and high-
cost alternative scenarios.
Figure VI.E4 compares the ranges of trust fund (unfunded obligation) ratios
for the alternative scenarios to the 95-percent confidence interval of the sto-
chastic simulations. This figure extends figure VI.E2 to show unfunded obli-
gation ratios, expressed as negative values below the zero percent line. An
unfunded obligation ratio is the ratio of the unfunded obligation accumulated
through the beginning of the year to the cost for that year.
202
Stochastic Projections
Figure VI.E4.OASDI Trust Fund (Unfunded Obligation) Ratios: Comparison of
Stochastic to Low-Cost, Intermediate, and High-Cost Alternative Scenariosa
[Trust fund reserves (unfunded obligation) as a percentage of annual cost]
1,000%
500% Trust fund reserves (positive)
0%
-500%
-1,000%
-1,500% Unfunded obligation (negative)
-2,000%
-2,500%
Low-Cost
-3,000%
Intermediate
-3,500% High-Cost
-4,000% Stochastic 2.5%
-4,500% Stochastic 50%
Stochastic 97.5%
-5,000%
-5,500%
-6,000%
2022 2032 2042 2052 2062 2072 2082 2092
Calendar year
a An unfunded obligation, shown as a negative value in this figure, is equivalent to the amount the trust
funds would need to have borrowed to date in order to pay all scheduled benefits (on a timely basis) after
trust fund reserves are depleted. Note that current law does not permit the trust funds to borrow.
As mentioned above, a summary measure that accumulates annual values
tends to smooth the kind of annual fluctuations that occur in stochastic simu-
lations. Therefore, one might expect the range across the stochastic confi-
dence interval for trust fund (unfunded obligation) ratios to be narrower and
fall within the range seen across the high-cost and low-cost alternative sce-
narios, as it does for the actuarial balance measure. But this is not the case,
largely due to the way interest rates are assigned.
For the stochastic model, real interest rates for each simulation are assigned
to be essentially independent of other variables, so the rate for compounding
of trust fund reserves (unfunded obligations) is essentially uncorrelated with
the level of cost as a percent of payroll. On the other hand, real interest rates
are assigned to be higher for the low-cost alternative scenario and lower for
the high-cost alternative scenario. High interest rates raise the level of the
positive trust fund ratio in the low-cost alternative scenario somewhat, but
this effect is limited because the magnitude of reserves is small. However,
low interest rates substantially reduce the magnitude of the unfunded obliga-
tion ratio for the high-cost alternative scenario because the magnitude of
203
Appendices
unfunded obligations is relatively large. As a result, the trust fund (unfunded
obligation) ratios are shifted, albeit unevenly, higher (or less negative) for
both the high-cost and low-cost alternative scenarios relative to those of the
stochastic simulations.
This interest rate effect on the alternative scenarios is not as evident for some
other summary measures of actuarial status, such as the actuarial balance.
Because the actuarial balance reflects the cumulative effects of interest in
both its numerator and denominator, the interest rate effect is much less pro-
nounced. In contrast, cumulative interest affects only the numerator of the
trust fund (unfunded obligation) ratio. There is also no significant interest
rate effect on the trust fund depletion date.
Other factors also contribute, to varying degrees, to the difference in ranges
between the results of the alternative scenarios and the stochastic simula-
tions. The contrasts in results and methods do not mean that either approach
to illustrating ranges of uncertainty is superior to the other. The ranges are
different and explainable.
Table VI.E1 displays long-range actuarial estimates for the combined
OASDI program using the two methods of illustrating uncertainty: alterna-
tive scenarios and stochastic simulations. The table shows scenario-based
estimates for the intermediate, low-cost, and high-cost assumptions. It also
shows stochastic estimates for the median (50th percentile) and for the
80-percent and 95-percent confidence intervals. Each individual stochastic
estimate in the table is the level at that percentile from the distribution of the
5,000 simulations. For each given percentile, the values in the table for each
long-range actuarial measure are generally from different stochastic simula-
tions.
The median stochastic estimates displayed in table VI.E1 are similar to the
intermediate scenario-based estimates. The median estimate of the long-
range actuarial balance is -3.45 percent of taxable payroll, about
0.03 percentage point lower (more negative) than projected in the intermedi-
ate scenario. The median estimate for the open-group unfunded obligation is
$20.6 trillion, about $0.2 trillion larger than the $20.4 trillion estimate in the
intermediate scenario. The median first projected year for which cost
exceeds non-interest income (as it did in 2010 through 2021), and remains in
excess of non-interest income throughout the remainder of the long-range
period, is 2022. This is the same year as projected in the intermediate sce-
nario. The median projected date at which trust fund reserves first become
depleted is late in 2034; the reserve depletion date for the intermediate sce-
nario is early in 2035. The median estimates of the annual cost rate for the
75th year of the projection period are 18.11 percent of taxable payroll and
204
Stochastic Projections
6.01 percent of gross domestic product (GDP). The comparable estimates in
the intermediate scenario are 17.64 percent of payroll and 5.86 percent of
GDP.
For three measures in table VI.E1 (the actuarial balance, the first projected
year cost exceeds non-interest income and remains in excess through 2096,
and the first year trust fund reserves become depleted), the 95-percent sto-
chastic confidence interval falls within the range defined by the low-cost and
high-cost scenarios. For the remaining three measures (the open-group
unfunded obligation, the annual cost in the 75th year as a percent of taxable
payroll, and the annual cost in the 75th year as a percent of GDP), one or
both of the bounds of the 95-percent stochastic confidence interval fall out-
side the range defined by the low-cost and high-cost scenarios.
Table VI.E1.Long-Range Estimates Relating to the Actuarial Status of
the Combined OASDI Program
[Comparison of scenario-based and stochastic results]
Traditional
scenario-based model Stochastic model
80-percent 95-percent
Median confidence interval confidence interval
Interme- Low- High- 50th 10th 90th 2.5th 97.5th
diate cost cost percentile percentile percentile percentile percentile
Actuarial balance . . . . . . -3.42 -0.07 -8.09 -3.45 -5.50 -1.84 -6.88 -1.01
Open-group unfunded
obligation
(in trillions) . . . . . . . . . $20.4 -$.6 $38.6 $20.6 $9.1 $40.4 $4.7 $55.2
First projected year cost
exceeds non-interest
income and remains
in excess
through 2096. . . . . . . . 2022 a 2022 2022 2022 2042 2022 a
First year trust fund
reserves become
depleted b . . . . . . . . . . 2035 2069 2031 2034 2032 2039 2031 2043
Annual cost in 75th year
(percent of taxable
payroll) . . . . . . . . . . . . 17.64 12.29 27.24 18.11 14.17 23.80 12.39 27.85
Annual cost in 75th year
(percent of GDP). . . . . 5.86 4.43 8.34 6.01 4.74 7.82 4.16 9.11
a Cost is projected to exceed non-interest income for a temporary period, before falling below non-interest
income by the end of the projection period.
b For the low-cost scenario and for some stochastic simulations, the first year in which trust fund reserves
become depleted does not indicate a permanent depletion of reserves.
205
Appendices
F. INFINITE HORIZON PROJECTIONS
Another measure of trust fund financial status is the infinite horizon
unfunded obligation, which takes account of all past and future annual bal-
ances, even those after the next 75 years. The extension of the time period
past 75 years assumes that the current law for the OASDI program and the
demographic and economic trends used for the 75-year projection continue
indefinitely.
Table VI.F1 shows that the OASDI open-group unfunded obligation over the
infinite horizon is $61.8 trillion in present value, which is $41.3 trillion
larger than for the 75-year period. The $41.3 trillion increment reflects a sig-
nificant financing gap projected for OASDI for years after 2096 into perpetu-
ity. Of course, the degree of uncertainty associated with estimates increases
substantially for years further in the future.
The $61.8 trillion infinite horizon open-group unfunded obligation is equal
to 4.5 percent of taxable payroll or 1.4 percent of GDP over the same period.
These relative measures of the unfunded obligation over the infinite horizon
express its magnitude in relation to the resources potentially available to
finance the shortfall.
The summarized shortfalls for the 75-year period and through the infinite
horizon both reflect annual cash-flow shortfalls for all years after trust fund
reserve depletion. The annual shortfalls after trust fund reserve depletion rise
slowly and reflect increases in life expectancy. The summarized shortfalls
over the infinite horizon, as percentages of taxable payroll and GDP, are
larger than the shortfalls for the 75-year period.
To illustrate the magnitude of the projected infinite horizon shortfall, con-
sider that it could be eliminated with additional revenue equivalent to an
immediate increase in the combined payroll tax rate from 12.4 percent to
about 16.9 percent, 1 or with cost reductions equivalent to an immediate and
permanent reduction in benefits for all current and future beneficiaries by
about 26.4 percent.
1 While an increase in the payroll tax rate would cause some behavioral changes in earnings and ensuing
changes in benefit levels, such changes are not included in the calculations because they are assumed to have
roughly offsetting effects on OASDI actuarial status over the infinite horizon.
206
Infinite Horizon Projections
Table VI.F1.Unfunded OASDI Obligations Through the Infinite Horizon and
the 75-Year Projection Period, Based on Intermediate Assumptions
[Present values as of January 1, 2022; dollar amounts in trillions]
Expressed as a percentage
of future payroll and GDP
Present Taxable
value payroll GDP
Unfunded obligation through the infinite horizon a . . . . . . . . . . . . $61.8 4.5 1.4
Unfunded obligation through 2096 b . . . . . . . . . . . . . . . . . . . . . . . 20.4 3.2 1.1
a Present value of future cost less future non-interest income, reduced by the amount of trust fund asset
reserves at the beginning of 2022. Expressed as a percentage of payroll and GDP for the period 2022 through
the infinite horizon.
b Present value of future cost less future non-interest income through 2096, reduced by the amount of trust
fund reserves at the beginning of 2022. Expressed as a percentage of payroll and GDP for the period 2022
through 2096.
Notes:
1. The present values of future taxable payroll for 2022-96 and for 2022 through the infinite horizon are
$631.6 trillion and $1,382.3 trillion, respectively.
2. The present values of GDP for 2022-96 and for 2022 through the infinite horizon are $1,817.7 trillion and
$4,521.4 trillion, respectively. Present values of GDP shown in the Medicare Trustees Report differ slightly
due to the use of discount rates that are specific to each programs trust fund holdings.
Last year, the Trustees projected that the infinite horizon unfunded obligation
was $59.8 trillion in present value discounted to January 1, 2021. If the
assumptions, methods, and starting values had not changed, moving the valu-
ation date forward by 1 year to January 1, 2022 would have discounted
future values by 1 year less, thus increasing the measured unfunded obliga-
tion by about $1.5 trillion, to $61.3 trillion. The net effects of changes in
assumptions, methods, law, and starting values increased the infinite horizon
unfunded obligation by an additional $0.5 trillion. The nominal dollar levels
of taxable payroll (and GDP), cost, and thus annual cash-flow shortfalls are
higher in this years report than in last years report. At the same time, the
assumed interest rates used for discounting did not increase to the same
degree, thus increasing the measured present value of the unfunded obliga-
tion in dollars. This increase was partially offset by a reduction in the
assumed ultimate disabled worker incidence rate and changes in economic
data and assumptions. See section IV.B.6 for details regarding changes in
law, data, methods, and assumptions.
Compared to last years report, the unfunded obligation over the infinite
horizon in this years report decreased by 0.1 percentage point as a share of
taxable payroll and remained the same as a share of GDP. The unfunded obli-
gation over the 75-year projection period decreased by 0.2 percentage point
as a share of taxable payroll and decreased by 0.1 percentage point as a share
of GDP.
207
Appendices
a. Unfunded Obligations for Past, Current, and Future Participants
Table VI.F2 separates the components of the infinite horizon unfunded obli-
gation (with the exception of General Fund reimbursements) among past,
current, and future participants. The table does not separate past General
Fund reimbursements among participants because there is no clear basis for
attributing the reimbursements across generations.
Past participants are defined as those no longer alive as of the valuation date.
Current participants are those age 15 and older as of 2022. Future partici-
pants are those under age 15 or not yet born.
The excess of the present value of cost for past and current participants over
the present value of dedicated tax income for past and current participants
produces an unfunded obligation for past and current participants of
$46.4 trillion. Table VI.F2 also shows an unfunded obligation of
$45.7 trillion for past and current participants, including past and future Gen-
eral Fund reimbursements. Future participants are scheduled to pay dedi-
cated taxes of $16.1 trillion less into the system than the cost of their
scheduled benefits ($143.0 trillion of dedicated tax income as compared to
$159.1 trillion of cost). The unfunded obligation for all participants through
the infinite horizon thus equals $61.8 trillion.
Making Social Security solvent over the infinite horizon requires some com-
bination of increased revenue or reduced benefits for current and future par-
ticipants amounting to $61.8 trillion in present value, 4.5 percent of future
taxable payroll, or 1.4 percent of future GDP.
208
Infinite Horizon Projections
Table VI.F2.Present Values Through the Infinite Horizon
for Various Categories of Program Participants, Based on Intermediate Assumptions
[Present values as of January 1, 2022; dollar amounts in trillions]
Expressed as a
percentage of future
payroll and GDP
Present Taxable
value payroll GDP
Present value of past cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $73.4 5.3 1.6
Less present value of past dedicated tax income . . . . . . . . . . . . . . . . . . 75.6 5.5 1.7
Plus present value of future cost for current participants . . . . . . . . . . . 91.0 6.6 2.0
Less present value of future dedicated tax income for current
participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42.4 3.1 .9
Equals unfunded obligation for past and current participants
excluding General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 46.4 3.4 1.0
Less present value of past General Fund reimbursementsa . . . . . . . . . . .7 b c
Less present value of future General Fund reimbursements through
the infinite horizon a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . d b c
Equals unfunded obligation for past and current participants
including General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 45.7 3.3 1.0
Plus present value of cost for future participants through the infinite
horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159.1 11.5 3.5
Less present value of dedicated tax income for future participants
through the infinite horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143.0 10.3 3.2
Equals unfunded obligation for all participants through the infinite
horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.8 4.5 1.4
a Distribution of General Fund reimbursements among past, current, and future participants cannot be deter-
mined.
b Less than 0.05 percent of taxable payroll.
c Less than 0.05 percent of GDP.
d Less than $50 billion.
Notes:
1. The present value of future taxable payroll for 2022 through the infinite horizon is $1,382.3 trillion.
2. The present value of GDP for 2022 through the infinite horizon is $4,521.4 trillion.
3. Components may not sum to totals because of rounding.
209
Appendices
G. ESTIMATES FOR OASDI AND HI, SEPARATE AND COMBINED
In this appendix, the Trustees present long-range actuarial estimates for the
OASDI and Hospital Insurance (HI) programs both separately and on a com-
bined basis. These estimates facilitate analysis of the adequacy of the income
and asset reserves of these programs relative to their cost under current law.
This appendix does not include estimates for the Supplementary Medical
Insurance (SMI) program because adequate financing is guaranteed in the
law and because the SMI program is not financed through a payroll tax. For
more information on Medicare estimates, please see the 2022 Medicare
Trustees Report.
The information in this appendix on combined operations, while significant,
should not obscure the analysis of the financial status of the individual trust
funds, which are legally separate and cannot be commingled. In addition, the
factors which determine the costs of the OASI, DI, and HI programs differ
substantially.
1. Estimates as a Percentage of Taxable Payroll
Comparing cost and income rates for the OASDI and HI programs as per-
centages of taxable payroll requires a note of caution. The taxable payrolls
for the HI program are larger than those for the OASDI program because:
(1) a larger maximum taxable amount was established for the HI program in
1991, with the maximum eliminated altogether for the HI program in 1994;
(2) larger proportions of Federal, State, and local government employees are
covered under the HI program; and (3) the earnings of railroad workers are
included directly in the HI taxable payroll but are not included in the OASDI
taxable payroll. (Railroad worker contributions for the equivalent of OASDI
benefits are accounted for in a net interchange that occurs annually between
the OASDI and Railroad Retirement programs.) As a result, the HI taxable
payroll is 26 percent larger than the OASDI taxable payroll on average over
the long-range period.
As with the OASI and DI Trust Funds, income to the HI Trust Fund comes
primarily from contributions paid by employees, employers, and self-
employed persons. Table VI.G1 shows the OASDI and HI contribution rates
that are authorized in the Federal Insurance Contributions Act.
210
OASDI and HI: Percent of Payroll
Table VI.G1.Payroll Tax Contribution Rates for the OASDI and HI Programs
[In percent]
Employees and employers, Employees
combineda only Self employedb
OASDI HI HI OASDI HI HI
Calendar years up to basec all earningsd over limite up to base c all earnings d over limit e
1966 . . . . . . . . . . . . . 7.70 0.70 5.80 0.35
1967 . . . . . . . . . . . . . 7.80 1.00 5.90 .50
1968 . . . . . . . . . . . . . 7.60 1.20 5.80 .60
1969-70 . . . . . . . . . . 8.40 1.20 6.30 .60
1971-72 . . . . . . . . . . 9.20 1.20 6.90 .60
1973 . . . . . . . . . . . . . 9.70 2.00 7.00 1.00
1974-77 . . . . . . . . . . 9.90 1.80 7.00 .90
1978 . . . . . . . . . . . . . 10.10 2.00 7.10 1.00
1979-80 . . . . . . . . . . 10.16 2.10 7.05 1.05
1981 . . . . . . . . . . . . . 10.70 2.60 8.00 1.30
1982-83 . . . . . . . . . . 10.80 2.60 8.05 1.30
1984f. . . . . . . . . . . . . 11.40 2.60 11.40 2.60
1985 f . . . . . . . . . . . . 11.40 2.70 11.40 2.70
1986-87 f . . . . . . . . . . 11.40 2.90 11.40 2.90
1988-89 f . . . . . . . . . . 12.12 2.90 12.12 2.90
1990-2010g . . . . . . . . 12.40 2.90 12.40 2.90
2011-2012h . . . . . . . . 10.40 2.90 10.40 2.90
2013 and later. . . . . . 12.40 2.90 0.90 12.40 2.90 0.90
a Except as noted below, the combined employee/employer rate is divided equally between employees and
employers.
b Beginning in 1990, self-employed persons receive a deduction, for purposes of computing their net earn-
ings, equal to half of the combined OASDI and HI contributions that would be payable without regard to the
contribution and benefit base. The OASDI contribution rate then applies to net earnings after this deduction,
but subject to the OASDI base.
c The payroll tax on earnings for the OASDI program applies to annual earnings up to a contribution and
benefit base indexed to the average wage level. The base is $147,000 for 2022.
d Prior to 1994, the payroll tax on earnings for the HI program applied to annual earnings up to a contribu-
tion base. The HI contribution base was eliminated beginning in 1994.
e Starting with Federal personal income tax returns for tax year 2013, earned income exceeding $200,000 for
individual filers and $250,000 for married couples filing jointly is subject to an additional HI tax of
0.9 percent. These income limits are not indexed after 2013.
f In 1984 only, employees received an immediate credit of 0.3 percent of taxable wages against their OASDI
payroll tax contributions. The self-employed received similar credits of 2.7 percent, 2.3 percent, and
2.0 percent against their combined OASDI and Hospital Insurance (HI) contributions on net earnings from
self-employment in 1984, 1985, and 1986-89, respectively. The General Fund of the Treasury reimbursed
the trust funds for these credits.
g Public Law 111-147 exempted most employers from paying the employer share of OASDI payroll tax on
wages paid during the period March 19, 2010 through December 31, 2010 to certain qualified individuals
hired after February 3, 2010. The General Fund of the Treasury reimbursed the trust funds for the payroll tax
revenue forgone under this law.
h Public Law 111-312, Public Law 112-78, and Public Law 112-96 reduced the OASDI payroll tax rate for
2011 and 2012 by 2 percentage points for employees and for self-employed workers. The General Fund of
the Treasury reimbursed the trust funds for the payroll tax revenue forgone under these laws.
Table VI.G2 shows the Trustees estimates of annual income rates and cost
rates for the OASDI program and the HI program under the intermediate,
low-cost, and high-cost sets of assumptions described earlier in this report.
The income rates reflect the payroll tax rates shown in table VI.G1, revenue
from taxation of scheduled OASDI benefits for both the OASDI and HI
211
Appendices
Trust Funds, and any reimbursements from the General Fund of the Treasury.
For the HI program, the income rates also reflect: (1) the additional 0.9-per-
cent tax on employees for relatively high earnings and the portion of total
payroll to which the 0.9-percent rate applies, (2) premium revenues, and
(3) monies from fraud and abuse control activities. Annual income and cost
rates indicate the cash-flow operation of the programs. Therefore, income
rates exclude interest earned on trust fund asset reserves. Table VI.G2 also
shows annual balances, which are the differences between annual income
rates and cost rates.
The Trustees project that the OASDI and HI cost rates will rise generally
above current levels under the intermediate and high-cost sets of assump-
tions. The greatest increase occurs from 2022 to about 2038 under the inter-
mediate and high-cost assumptions for OASDI and the intermediate
assumptions for HI, and from 2022 to 2046 under the high-cost assumptions
for HI. Under the intermediate assumptions, the OASDI cost rate increases
by 26 percent from its current level by 2096, while under the high-cost
assumptions, the cost rate increases by 87 percent by 2096. For HI, cost rates
increase by 39 percent and 188 percent from 2022 to 2096 under the interme-
diate and high-cost assumptions, respectively. Under the low-cost assump-
tions, the OASDI and HI cost rates decrease from 2022 to 2096 by
12 percent and 33 percent, respectively.
The Trustees project annual deficits for every year of the projection period
under the intermediate and high-cost assumptions for both the OASDI and
HI programs. Under the low-cost assumptions, OASDI annual balances are
negative through 2080, and are positive and mostly increasing thereafter,
reaching 0.79 percent of payroll for 2096. HI annual balances as a percent of
payroll are positive and mostly increasing throughout the projection period
under the low-cost assumptions, reaching 2.12 percent of HI taxable payroll
by 2096.
212
OASDI and HI: Percent of Payroll
Table VI.G2.OASDI and HI Annual Income Rates, Cost Rates, and Balances,
Calendar Years 2022-2100
[As a percentage of taxable payroll a]
OASDI HI
Income Cost Income Cost
Calendar year rate rateb Balanceb rate rate Balance
Intermediate:
2022 . . . . . . . . . . 12.79 14.05 -1.26 3.40 3.44 -0.04
2023 . . . . . . . . . . 13.04 14.31 -1.27 3.42 3.50 -.08
2024 . . . . . . . . . . 12.95 14.45 -1.49 3.44 3.59 -.15
2025 . . . . . . . . . . 12.97 14.66 -1.69 3.46 3.68 -.22
2026 . . . . . . . . . . 13.08 14.88 -1.80 3.54 3.79 -.25
2027 . . . . . . . . . . 13.10 15.10 -2.00 3.56 3.88 -.32
2028 . . . . . . . . . . 13.14 15.33 -2.19 3.59 3.97 -.38
2029 . . . . . . . . . . 13.17 15.53 -2.35 3.61 4.05 -.44
2030 . . . . . . . . . . 13.20 15.72 -2.52 3.64 4.11 -.47
2031 . . . . . . . . . . 13.23 15.91 -2.67 3.67 4.17 -.50
2035 . . . . . . . . . . 13.27 16.42 -3.15 3.75 4.55 -.80
2040 . . . . . . . . . . 13.30 16.72 -3.42 3.83 4.78 -.95
2045 . . . . . . . . . . 13.31 16.82 -3.51 3.89 4.88 -.99
2050 . . . . . . . . . . 13.32 16.95 -3.63 3.95 4.89 -.94
2055 . . . . . . . . . . 13.34 17.15 -3.81 4.02 4.87 -.85
2060 . . . . . . . . . . 13.36 17.45 -4.09 4.10 4.87 -.77
2065 . . . . . . . . . . 13.38 17.73 -4.35 4.17 4.90 -.73
2070 . . . . . . . . . . 13.40 18.00 -4.60 4.24 4.95 -.71
2075 . . . . . . . . . . 13.42 18.25 -4.83 4.30 4.99 -.69
2080 . . . . . . . . . . 13.43 18.30 -4.87 4.35 4.99 -.63
2085 . . . . . . . . . . 13.42 18.11 -4.69 4.39 4.95 -.56
2090 . . . . . . . . . . 13.40 17.79 -4.39 4.41 4.89 -.47
2095 . . . . . . . . . . 13.39 17.64 -4.25 4.44 4.81 -.37
2100 . . . . . . . . . . 13.39 17.73 -4.33 4.48 4.73 -.25
Low-cost:
2022 . . . . . . . . . . 12.75 13.91 -1.16 3.40 3.35 .05
2023 . . . . . . . . . . 13.04 13.96 -.92 3.41 3.29 .13
2024 . . . . . . . . . . 12.93 13.92 -.99 3.43 3.30 .13
2025 . . . . . . . . . . 12.93 13.93 -1.00 3.45 3.33 .12
2026 . . . . . . . . . . 13.03 13.95 -.92 3.51 3.36 .15
2027 . . . . . . . . . . 13.04 13.97 -.93 3.53 3.37 .16
2028 . . . . . . . . . . 13.07 14.00 -.93 3.56 3.38 .17
2029 . . . . . . . . . . 13.09 14.01 -.92 3.58 3.39 .19
2030 . . . . . . . . . . 13.11 14.02 -.91 3.60 3.36 .24
2031 . . . . . . . . . . 13.13 14.02 -.89 3.62 3.35 .28
2035 . . . . . . . . . . 13.15 14.06 -.91 3.70 3.38 .33
2040 . . . . . . . . . . 13.15 13.91 -.76 3.78 3.21 .57
2045 . . . . . . . . . . 13.14 13.62 -.49 3.85 2.98 .87
2050 . . . . . . . . . . 13.13 13.42 -.29 3.92 2.72 1.20
2055 . . . . . . . . . . 13.13 13.35 -.22 3.99 2.51 1.48
2060 . . . . . . . . . . 13.14 13.40 -.26 4.07 2.37 1.69
2065 . . . . . . . . . . 13.14 13.42 -.28 4.13 2.31 1.82
2070 . . . . . . . . . . 13.14 13.42 -.27 4.19 2.31 1.88
2075 . . . . . . . . . . 13.14 13.37 -.23 4.24 2.32 1.92
2080 . . . . . . . . . . 13.13 13.15 -.02 4.27 2.32 1.95
2085 . . . . . . . . . . 13.11 12.75 .36 4.29 2.30 1.99
2090 . . . . . . . . . . 13.08 12.36 .72 4.31 2.27 2.04
2095 . . . . . . . . . . 13.08 12.27 .80 4.34 2.24 2.10
2100 . . . . . . . . . . 13.09 12.43 .66 4.38 1.92 2.46
213
Appendices
Table VI.G2.OASDI and HI Annual Income Rates, Cost Rates, and Balances,
Calendar Years 2022-2100 (Cont.)
[As a percentage of taxable payroll a]
OASDI HI
Income Cost Income Cost
Calendar year rate rateb Balanceb rate rate Balance
High-cost:
2022 . . . . . . . . . . 12.90 14.53 -1.63 3.41 3.62 -0.21
2023 . . . . . . . . . . 13.02 15.34 -2.31 3.44 3.83 -.39
2024 . . . . . . . . . . 12.99 15.45 -2.46 3.46 3.96 -.49
2025 . . . . . . . . . . 13.02 15.78 -2.76 3.48 4.14 -.66
2026 . . . . . . . . . . 13.14 16.14 -3.00 3.56 4.34 -.77
2027 . . . . . . . . . . 13.17 16.54 -3.37 3.60 4.53 -.94
2028 . . . . . . . . . . 13.22 16.98 -3.76 3.63 4.73 -1.10
2029 . . . . . . . . . . 13.27 17.40 -4.13 3.66 4.91 -1.25
2030 . . . . . . . . . . 13.31 17.82 -4.50 3.69 5.08 -1.38
2031 . . . . . . . . . . 13.36 18.22 -4.87 3.73 5.25 -1.52
2035 . . . . . . . . . . 13.43 19.34 -5.91 3.82 6.18 -2.36
2040 . . . . . . . . . . 13.48 20.28 -6.80 3.91 7.15 -3.25
2045 . . . . . . . . . . 13.53 21.06 -7.53 3.98 8.08 -4.10
2050 . . . . . . . . . . 13.58 21.85 -8.27 4.05 8.92 -4.87
2055 . . . . . . . . . . 13.63 22.65 -9.02 4.13 9.57 -5.44
2060 . . . . . . . . . . 13.69 23.49 -9.80 4.21 10.11 -5.90
2065 . . . . . . . . . . 13.74 24.32 -10.57 4.29 10.53 -6.24
2070 . . . . . . . . . . 13.80 25.21 -11.40 4.37 10.78 -6.41
2075 . . . . . . . . . . 13.87 26.13 -12.27 4.45 10.86 -6.41
2080 . . . . . . . . . . 13.92 26.89 -12.97 4.52 10.85 -6.33
2085 . . . . . . . . . . 13.95 27.31 -13.36 4.58 10.77 -6.18
2090 . . . . . . . . . . 13.96 27.36 -13.41 4.62 10.64 -6.01
2095 . . . . . . . . . . 13.95 27.26 -13.31 4.65 10.47 -5.82
2100 . . . . . . . . . . 13.95 27.25 -13.30 4.71 11.90 -7.19
a The taxable payroll for HI is significantly larger than the taxable payroll for OASDI because the HI taxable
maximum amount was eliminated beginning in 1994, and because HI covers all Federal civilian employees,
all State and local government employees hired after April 1, 1986, and railroad employees.
b OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years
were actually paid on December 31 as required by the statutory provision for early delivery of benefit pay-
ments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For compara-
bility with the values for historical years and the projections in this report, all trust fund operations and asset
reserves reflect the 12 months of benefits scheduled for payment each year.
Notes:
1. The income rate excludes interest income.
2. The Trustees show income and cost estimates generally on a cash basis for the OASDI program and on an
incurred basis for the HI program.
3. Components may not sum to totals because of rounding.
Table VI.G3 shows summarized values over the 25-year, 50-year, and
75-year valuation periods. For each of those periods, the summarized income
rates include beginning trust fund asset reserves, and the summarized cost
rates include the cost of accumulating an ending fund reserve equal to
100 percent of annual cost at the end of the period.
214
OASDI and HI: Percent of Payroll
Table VI.G3.Summarized OASDI and HI Income Rates and Cost Rates for Valuation
Periods,a Calendar Years 2022-2096
[As a percentage of taxable payroll b]
OASDI HI
Valuation Income Cost Actuarial Income Cost Actuarial
period rate ratec balance rate rate balance
Intermediate:
25-year:
2022-46 . . . . . . 14.38 16.62 -2.24 3.75 4.51 -0.76
50-year:
2022-71 . . . . . . 13.91 16.93 -3.02 3.90 4.67 -.77
75-year:
2022-96 . . . . . . 13.78 17.20 -3.42 4.03 4.73 -.70
Low-cost:
25-year:
2022-46 . . . . . . 14.14 14.48 -.34 3.72 3.39 .33
50-year:
2022-71 . . . . . . 13.66 13.93 -.27 3.88 2.93 .95
75-year:
2022-96 . . . . . . 13.50 13.56 -.07 4.00 2.73 1.27
High-cost:
25-year:
2022-46 . . . . . . 14.69 19.29 -4.61 3.82 6.16 -2.34
50-year:
2022-71 . . . . . . 14.25 20.93 -6.68 3.97 7.72 -3.75
75-year:
2022-96 . . . . . . 14.18 22.27 -8.09 4.11 8.41 -4.30
a Income rates include beginning trust fund asset reserves and cost rates include the cost of reaching an end-
ing target trust fund equal to 100 percent of annual cost at the end of the period.
b The taxable payroll for HI is significantly larger than the taxable payroll for OASDI because the HI taxable
maximum amount was eliminated beginning 1994, and because HI covers all Federal civilian employees, all
State and local government employees hired after April 1, 1986, and railroad employees.
c OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years
were actually paid on December 31 as required by the statutory provision for early delivery of benefit pay-
ments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For compara-
bility with the values for historical years and the projections in this report, all trust fund operations and asset
reserves reflect the 12 months of benefits scheduled for payment each year.
Note: Components may not sum to totals because of rounding.
The Trustees project that the OASDI and HI programs will each experience
large actuarial deficits for the 25-year, 50-year, and 75-year valuation periods
under the high-cost assumptions. Actuarial deficits under the intermediate
assumptions are smaller than those for the high-cost assumptions for all three
valuation periods. Under the low-cost assumptions, the OASDI program has
relatively small actuarial deficits for all three valuation periods, while the HI
program has positive actuarial balances for all three valuation periods.
215
Appendices
2. Estimates as a Percentage of Gross Domestic Product
This section presents long-range projections of the operations of the com-
bined Old-Age and Survivors Insurance and Disability Insurance (OASI and
DI) Trust Funds and of the Hospital Insurance (HI) Trust Fund, expressed as
a percentage of gross domestic product (GDP). While expressing fund opera-
tions as a percentage of taxable payroll is a very useful approach for assess-
ing the financial status of the programs (see section IV.B.1), expressing them
as a percentage of the total value of goods and services produced in the
United States provides an additional perspective.
Table VI.G4 shows non-interest income, total cost, and the resulting balance
of the combined OASI and DI Trust Funds, of the HI Trust Fund, and of the
combined OASI, DI, and HI Trust Funds, expressed as percentages of GDP
on the basis of each of the three alternative sets of assumptions. Table VI.G4
also contains estimates of GDP. For OASDI, non-interest income consists of
payroll tax contributions, proceeds from taxation of scheduled OASDI bene-
fits, and any reimbursements from the General Fund of the Treasury. Cost
consists of scheduled benefits, administrative expenses, financial interchange
with the Railroad Retirement program, and payments for vocational rehabili-
tation services for disabled beneficiaries. For HI, non-interest income con-
sists of payroll tax contributions (including contributions from railroad
employment), up to an additional 0.9 percent tax on earned income for rela-
tively high earners, proceeds from taxation of scheduled OASDI benefits,
premium revenues, monies from fraud and abuse control activities, and any
reimbursements from the General Fund of the Treasury. Cost consists of out-
lays (benefits and administrative expenses) for beneficiaries. The Trustees
show income and cost estimates generally on a cash basis for the OASDI
program 1 and on an incurred basis for the HI program.
The Trustees project the OASDI annual balance (non-interest income less
cost) as a percentage of GDP to be negative throughout the projection period
under the intermediate and high-cost assumptions. Under the low-cost
assumptions, the OASDI annual deficit as a percentage of GDP decreases
from 2022 to 2023, increases through 2025, and then slightly decreases in
2026, in part because of a permanent level shift upward in taxation of bene-
fits income due to the expiration of the personal income tax provisions in
Public Law 115-97, the Tax Cuts and Jobs Act. After 2026, deficits fluctuate
1 OASDI benefits paid for entitlement for a particular month are generally paid in the succeeding month.
There are two primary exceptions to this general rule. First, payments can occur with a greater delay when a
benefit award is made after the month of initial benefit entitlement. At the time of benefit award, benefits
owed for months of prior entitlement are then also paid to the beneficiary. For the projections in this report,
such retroactive payments are included in the period where they are paid (at time of award). Second, when
benefit payments scheduled for January 3 are paid on the prior December 31, because January 3 falls on a
Sunday, such payments are shown in this report for the period they were scheduled to be paid.
216
OASDI and HI: Percent of GDP
through 2033 and then decrease through 2055. After 2055, the annual defi-
cits slightly increase through 2063 and then decrease through 2080 before
becoming positive for 2081 and later. Under the intermediate assumptions,
the OASDI annual deficits as a percentage of GDP increase from 2022
through 2078, and decrease thereafter. Under the high-cost assumptions,
annual deficits increase relatively rapidly through 2086, and then slightly
decrease through the end of the projection period.
The Trustees project that the HI annual balance as a percentage of GDP will
be positive and mostly increasing throughout the projection period, under the
low-cost assumptions. Under the intermediate and the high-cost assumptions,
the HI annual balance is negative for all years of the projection period. Under
the intermediate assumptions, annual deficits increase through 2044, and
then decline thereafter. Under the high-cost assumptions, annual deficits
reach a peak in 2070 and decline thereafter.
The combined OASDI and HI annual balance as a percentage of GDP is neg-
ative throughout the projection period under both the intermediate and high-
cost assumptions. Under the low-cost assumptions, the combined OASDI
and HI annual balance is negative through 2040, and then positive and rising
thereafter. Under the intermediate assumptions, the combined OASDI and HI
annual deficits increase through 2077 and then decline thereafter, reaching
1.56 percent of GDP by 2096. Under the high-cost assumptions, combined
annual deficits rise to a peak of 6.68 percent in 2082 and decrease thereafter.
By 2096, the combined OASDI and HI annual balances as percentages of
GDP range from a positive annual balance of 1.22 percent for the low-cost
assumptions to an annual deficit of 6.34 percent for the high-cost assump-
tions. Annual balances differ by a much smaller amount for the tenth projec-
tion year, 2031, ranging from an annual deficit of 0.20 percent for the low-
cost assumptions to an annual deficit of 2.41 percent for the high-cost
assumptions.
The summarized long-range (75-year) actuarial balance as a percentage of
GDP for the combined OASDI and HI programs varies among the three
alternatives by a relatively large amount, from a positive actuarial balance of
0.54 percent under the low-cost assumptions to an actuarial deficit of
4.56 percent under the high-cost assumptions. The 25-year summarized actu-
arial balance varies by a smaller amount, from a positive actuarial balance of
0.02 percent of GDP to an actuarial deficit of 2.67 percent. Summarized rates
are calculated on a present-value basis. They include the trust fund reserve
balances on January 1, 2022 and the cost of reaching a target trust fund level
equal to 100 percent of the following years annual cost at the end of the
period. (See section IV.B.4 for further explanation.)
217
Appendices
Table VI.G4.OASDI and HI Annual and Summarized Income, Cost, and Balance
as a Percentage of GDP, Calendar Years 2022-2100
Percentage of GDP
GDP in
OASDI HI Combined dollars
Calendar year Incomea Costb Balance b Income a Cost Balance Income a Cost b Balance b (billions)
Intermediate:
2022 . . . . . 4.53 4.98 -0.45 1.55 1.57 -0.02 6.08 6.55 -0.46 $24,951
2023 . . . . . 4.63 5.09 -.45 1.56 1.60 -.04 6.19 6.68 -.49 26,194
2024 . . . . . 4.63 5.17 -.53 1.57 1.63 -.07 6.20 6.80 -.60 27,365
2025 . . . . . 4.66 5.26 -.61 1.58 1.68 -.10 6.23 6.94 -.71 28,538
2026 . . . . . 4.71 5.36 -.65 1.61 1.73 -.12 6.32 7.09 -.77 29,720
2027 . . . . . 4.73 5.45 -.72 1.62 1.77 -.15 6.35 7.22 -.87 30,944
2028 . . . . . 4.75 5.54 -.79 1.64 1.81 -.18 6.39 7.35 -.97 32,212
2029 . . . . . 4.77 5.62 -.85 1.65 1.85 -.20 6.42 7.47 -1.05 33,546
2030 . . . . . 4.78 5.69 -.91 1.66 1.87 -.21 6.44 7.56 -1.13 34,924
2031 . . . . . 4.79 5.76 -.97 1.67 1.89 -.23 6.46 7.65 -1.19 36,355
2035 . . . . . 4.77 5.90 -1.13 1.69 2.05 -.36 6.46 7.96 -1.49 42,674
2040 . . . . . 4.73 5.95 -1.22 1.71 2.13 -.42 6.44 8.08 -1.64 51,968
2045 . . . . . 4.69 5.93 -1.24 1.72 2.16 -.44 6.41 8.08 -1.68 63,220
2050 . . . . . 4.65 5.92 -1.27 1.73 2.14 -.41 6.38 8.06 -1.68 77,080
2055 . . . . . 4.62 5.95 -1.32 1.75 2.12 -.37 6.37 8.06 -1.69 94,163
2060 . . . . . 4.60 6.01 -1.41 1.77 2.10 -.33 6.38 8.12 -1.74 115,104
2065 . . . . . 4.58 6.07 -1.49 1.79 2.11 -.31 6.38 8.18 -1.80 140,533
2070 . . . . . 4.57 6.13 -1.57 1.81 2.12 -.30 6.38 8.25 -1.87 171,276
2075 . . . . . 4.55 6.18 -1.64 1.83 2.12 -.29 6.38 8.31 -1.93 208,657
2080 . . . . . 4.52 6.17 -1.64 1.84 2.11 -.27 6.37 8.28 -1.91 254,750
2085 . . . . . 4.50 6.07 -1.57 1.85 2.08 -.23 6.34 8.15 -1.81 312,022
2090 . . . . . 4.47 5.93 -1.47 1.85 2.05 -.20 6.32 7.98 -1.66 382,873
2095 . . . . . 4.45 5.86 -1.41 1.85 2.01 -.15 6.30 7.87 -1.57 469,505
2100 . . . . . 4.44 5.87 -1.44 1.86 1.97 -.10 6.30 7.84 -1.54 574,472
Summarized rates: c
25-year:
2022-46 . . 5.15 5.95 -.80 1.69 2.03 -.35 6.83 7.98 -1.15
50-year:
2022-71 . . 4.90 5.96 -1.06 1.72 2.07 -.34 6.62 8.03 -1.41
75-year:
2022-96 . . 4.79 5.98 -1.19 1.76 2.07 -.31 6.55 8.04 -1.50
Low-cost:
2022 . . . . . 4.51 4.92 -.41 1.54 1.52 .02 6.05 6.44 -.39 25,233
2023 . . . . . 4.62 4.95 -.33 1.55 1.49 .06 6.17 6.44 -.27 27,035
2024 . . . . . 4.62 4.97 -.35 1.56 1.50 .06 6.18 6.48 -.30 28,626
2025 . . . . . 4.66 5.02 -.36 1.57 1.52 .05 6.23 6.53 -.31 30,230
2026 . . . . . 4.72 5.06 -.33 1.60 1.53 .07 6.32 6.59 -.26 31,899
2027 . . . . . 4.75 5.09 -.34 1.61 1.54 .07 6.36 6.63 -.27 33,650
2028 . . . . . 4.78 5.12 -.34 1.62 1.54 .08 6.40 6.67 -.26 35,487
2029 . . . . . 4.81 5.15 -.34 1.63 1.54 .09 6.44 6.69 -.25 37,432
2030 . . . . . 4.83 5.17 -.34 1.64 1.53 .11 6.47 6.70 -.23 39,469
2031 . . . . . 4.85 5.18 -.33 1.65 1.52 .13 6.50 6.71 -.20 41,603
2035 . . . . . 4.84 5.17 -.33 1.68 1.53 .15 6.51 6.70 -.19 51,340
2040 . . . . . 4.80 5.08 -.28 1.70 1.44 .26 6.50 6.52 -.02 66,552
2045 . . . . . 4.76 4.94 -.18 1.72 1.33 .39 6.48 6.27 .21 86,469
2050 . . . . . 4.74 4.84 -.10 1.74 1.21 .53 6.48 6.05 .43 112,884
2055 . . . . . 4.72 4.80 -.08 1.77 1.11 .66 6.49 5.91 .58 147,707
2060 . . . . . 4.72 4.81 -.09 1.80 1.05 .75 6.52 5.86 .66 193,224
2065 . . . . . 4.72 4.82 -.10 1.83 1.02 .80 6.54 5.84 .70 252,250
2070 . . . . . 4.72 4.81 -.10 1.85 1.02 .83 6.56 5.83 .73 328,790
2075 . . . . . 4.72 4.80 -.08 1.87 1.03 .85 6.59 5.82 .76 428,864
2080 . . . . . 4.71 4.72 -.01 1.89 1.03 .86 6.60 5.75 .86 561,361
218
OASDI and HI: Percent of GDP
Table VI.G4.OASDI and HI Annual and Summarized Income, Cost, and Balance
as a Percentage of GDP, Calendar Years 2022-2100 (Cont.)
Percentage of GDP
GDP in
OASDI HI Combined dollars
Calendar year Incomea Costb Balance b Income a Cost Balance a b b
Income Cost Balance (billions)
Low-cost (Cont.):
2085 . . . . . 4.71 4.58 0.13 1.90 1.02 0.88 6.60 5.60 1.01 $737,780
2090 . . . . . 4.70 4.45 .26 1.91 1.01 .90 6.61 5.45 1.16 970,403
2095 . . . . . 4.71 4.42 .29 1.92 .99 .93 6.64 5.42 1.22 1,272,813
2100 . . . . . 4.73 4.49 .24 1.95 .85 1.09 6.67 5.34 1.33 1,663,845
Summarized rates: c
25-year:
2022-46 . . 5.16 5.28 -.12 1.68 1.53 .15 6.83 6.81 .02
50-year:
2022-71 . . 4.95 5.05 -.10 1.73 1.31 .42 6.68 6.36 .32
75-year:
2022-96 . . 4.88 4.90 -.02 1.78 1.22 .57 6.66 6.12 .54
High-cost:
2022 . . . . . 4.60 5.19 -.58 1.56 1.65 -.09 6.16 6.84 -.68 24,002
2023 . . . . . 4.63 5.46 -.82 1.56 1.73 -.17 6.19 7.19 -1.00 24,349
2024 . . . . . 4.64 5.52 -.88 1.57 1.79 -.22 6.21 7.31 -1.10 25,296
2025 . . . . . 4.64 5.63 -.99 1.58 1.88 -.30 6.23 7.51 -1.28 26,204
2026 . . . . . 4.69 5.76 -1.07 1.62 1.97 -.35 6.32 7.74 -1.42 27,076
2027 . . . . . 4.71 5.91 -1.20 1.64 2.07 -.43 6.35 7.98 -1.63 27,880
2028 . . . . . 4.72 6.07 -1.34 1.65 2.15 -.50 6.38 8.22 -1.84 28,655
2029 . . . . . 4.73 6.21 -1.47 1.66 2.24 -.57 6.40 8.44 -2.04 29,466
2030 . . . . . 4.73 6.34 -1.60 1.68 2.30 -.63 6.41 8.64 -2.23 30,293
2031 . . . . . 4.74 6.46 -1.73 1.69 2.38 -.69 6.43 8.84 -2.41 31,140
2035 . . . . . 4.72 6.79 -2.08 1.71 2.77 -1.06 6.43 9.57 -3.14 34,779
2040 . . . . . 4.68 7.03 -2.36 1.73 3.17 -1.44 6.41 10.20 -3.80 39,776
2045 . . . . . 4.63 7.21 -2.58 1.74 3.53 -1.79 6.37 10.74 -4.37 45,209
2050 . . . . . 4.59 7.39 -2.80 1.75 3.86 -2.11 6.34 11.25 -4.90 51,266
2055 . . . . . 4.56 7.57 -3.02 1.76 4.09 -2.33 6.32 11.67 -5.34 58,144
2060 . . . . . 4.53 7.77 -3.24 1.78 4.28 -2.50 6.31 12.05 -5.74 66,006
2065 . . . . . 4.50 7.96 -3.46 1.79 4.41 -2.61 6.29 12.37 -6.07 74,832
2070 . . . . . 4.47 8.16 -3.69 1.81 4.47 -2.66 6.28 12.63 -6.35 84,615
2075 . . . . . 4.44 8.37 -3.93 1.82 4.45 -2.63 6.27 12.82 -6.56 95,432
2080 . . . . . 4.41 8.52 -4.11 1.83 4.40 -2.57 6.24 12.92 -6.68 107,594
2085 . . . . . 4.37 8.55 -4.18 1.84 4.32 -2.48 6.21 12.87 -6.66 121,494
2090 . . . . . 4.32 8.47 -4.15 1.83 4.22 -2.39 6.16 12.70 -6.54 137,507
2095 . . . . . 4.28 8.36 -4.08 1.83 4.12 -2.29 6.11 12.48 -6.37 155,792
2100 . . . . . 4.24 8.28 -4.04 1.84 4.64 -2.80 6.08 12.92 -6.85 176,484
Summarized rates: c
25-year:
2022-46 . . 5.16 6.78 -1.62 1.71 2.76 -1.05 6.87 9.54 -2.67
50-year:
2022-71 . . 4.89 7.18 -2.29 1.74 3.38 -1.64 6.62 10.56 -3.93
75-year:
2022-96 . . 4.76 7.47 -2.72 1.76 3.61 -1.85 6.52 11.08 -4.56
a Income for individual years excludes interest on the trust funds. Interest is implicit in all summarized values.
b OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years were
actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when
the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the val-
ues for historical years and the projections in this report, all trust fund operations and asset reserves reflect the
12 months of benefits scheduled for payment each year.
c Summarized rates are calculated on a present-value basis. They include the value of the trust funds on
January 1, 2022 and the cost of reaching a target trust fund level equal to 100 percent of annual cost at the end
of the period.
Notes:
1. The Trustees show income and cost estimates generally on a cash basis for the OASDI program and on an
incurred basis for the HI program.
2. Components may not sum to totals because of rounding.
219
Appendices
Table VI.G5 displays annual ratios of OASDI taxable payroll to GDP. These
ratios facilitate comparisons of trust fund operations expressed as percent-
ages of taxable payroll and those expressed as percentages of GDP. HI tax-
able payroll is 26 percent larger than the OASDI taxable payroll on average
over the long-range period; see section 1 of this appendix for a detailed
description of the difference. For each year, the cost as a percentage of GDP
is equal to the cost as a percentage of taxable payroll multiplied by the ratio
of taxable payroll to GDP.
Table VI.G5.Ratio of OASDI Taxable Payroll to GDP, Calendar Years 2022-2100
Calendar year Intermediate Low-cost High-cost
2022 . . . . . . . . . . . . . . . . . . . . . . . . . 0.354 0.354 0.357
2023 . . . . . . . . . . . . . . . . . . . . . . . . . .355 .354 .356
2024 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .357 .357
2025 . . . . . . . . . . . . . . . . . . . . . . . . . .359 .360 .357
2026 . . . . . . . . . . . . . . . . . . . . . . . . . .360 .362 .357
2027 . . . . . . . . . . . . . . . . . . . . . . . . . .361 .364 .357
2028 . . . . . . . . . . . . . . . . . . . . . . . . . .362 .366 .357
2029 . . . . . . . . . . . . . . . . . . . . . . . . . .362 .367 .357
2030 . . . . . . . . . . . . . . . . . . . . . . . . . .362 .368 .356
2031 . . . . . . . . . . . . . . . . . . . . . . . . . .362 .370 .355
2035 . . . . . . . . . . . . . . . . . . . . . . . . . .360 .368 .351
2040 . . . . . . . . . . . . . . . . . . . . . . . . . .356 .365 .347
2045 . . . . . . . . . . . . . . . . . . . . . . . . . .352 .363 .342
2050 . . . . . . . . . . . . . . . . . . . . . . . . . .349 .361 .338
2055 . . . . . . . . . . . . . . . . . . . . . . . . . .347 .360 .334
2060 . . . . . . . . . . . . . . . . . . . . . . . . . .345 .359 .331
2065 . . . . . . . . . . . . . . . . . . . . . . . . . .343 .359 .327
2070 . . . . . . . . . . . . . . . . . . . . . . . . . .341 .359 .324
2075 . . . . . . . . . . . . . . . . . . . . . . . . . .339 .359 .320
2080 . . . . . . . . . . . . . . . . . . . . . . . . . .337 .359 .317
2085 . . . . . . . . . . . . . . . . . . . . . . . . . .335 .359 .313
2090 . . . . . . . . . . . . . . . . . . . . . . . . . .334 .360 .310
2095 . . . . . . . . . . . . . . . . . . . . . . . . . .332 .360 .307
2100 . . . . . . . . . . . . . . . . . . . . . . . . . .331 .361 .304
Projections of GDP reflect projected increases in U.S. employment, labor
productivity, average hours worked, and the GDP price index (GDP defla-
tor). Projections of taxable payroll reflect the components of growth in GDP
along with assumed changes in the ratio of total labor compensation to GDP,
the ratio of earnings to total labor compensation, the ratio of OASDI covered
earnings to total earnings, and the ratio of taxable to total covered earnings.
Over the long-range period, the ratio of OASDI taxable payroll to GDP is
projected to decline mostly due to a projected decline in the ratio of wages
and salaries to employee compensation. Over the last six complete economic
cycles, the ratio of wages and salaries to employee compensation declined at
an average annual rate of 0.17 percent. Over the 65-year period ending in
2096, the ratio of wages and salaries to employee compensation is projected
to decline at an average annual rate of 0.02, 0.12, and 0.22 percent for the
low-cost, intermediate, and high-cost assumptions, respectively.
220
OASDI and HI: Estimates in Dollars
3. Estimates in Dollars
This section presents long-range projections, in dollars, of the operations of
the combined OASI and DI Trust Funds and in some cases the HI Trust
Fund. Comparing current dollar values over long periods of time is difficult
because of the effect of inflation. In order to compare dollar values in a
meaningful way, table VI.G6 provides several economic series or indices
which can be used to adjust current dollars for changes in prices, wages, or
other aspects of economic growth during the projection period. Any series of
values can be adjusted by dividing the value for each year by the correspond-
ing index value for the year.
One of the most common forms of standardization is price indexing, which
uses some measure of change in the prices of consumer goods. The Con-
sumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W,
hereafter referred to as CPI), published by the Bureau of Labor Statistics,
Department of Labor, is one such price index. Consistent with the law, the
Social Security Administration (SSA) uses this index to determine the annual
cost-of-living increases for OASDI monthly benefits. The ultimate annual
rate of increase in the CPI is assumed to be 3.0, 2.4, and 1.8 percent for the
low-cost, intermediate, and high-cost sets of assumptions, respectively.
Table VI.G7 provides CPI-indexed dollar values (those adjusted using the
CPI in table VI.G6), which indicate the relative purchasing power of the val-
ues over time.
Wage indexing is another type of standardization. It combines the effects of
price inflation and real wage growth. The wage index presented here is the
national average wage index, as defined in section 209(k)(1) of the Social
Security Act. SSA uses this index to annually adjust the contribution and
benefit base and other earnings-related program amounts. The average wage
is assumed to grow by an average rate of 4.8, 3.6, and 2.3 percent under the
low-cost, intermediate, and high-cost assumptions, respectively, between
2031 and 2096. Wage-indexed values indicate the level of a series of values
relative to the changing standard of living of workers over time.
The taxable payroll series is used as an index to adjust for the effects of
changes in the number of workers and changes in the proportion of earnings
that are taxable, as well as for the effects of price inflation and real wage
growth. The OASDI taxable payroll consists of all earnings subject to
OASDI taxation, with an adjustment for the lower effective tax rate on multi-
ple-employer excess wages. A series of values, divided by the taxable pay-
roll, indicates the percentage of payroll that each value represents, and thus
221
Appendices
the extent to which the series of values increases or decreases as a percent of
payroll over time.
The GDP series is used as an index to adjust for the growth in the aggregate
amount of goods and services produced in the United States. Values adjusted
by GDP (see section 2 of this appendix) indicate their relative share of the
total output of the economy. No direct assumption is made about growth in
taxable payroll or GDP. These series reflect the basic demographic and eco-
nomic assumptions, as discussed in sections V.A and V.B, respectively.
Discounting at the rate of interest is another way of standardizing current
dollars. The compound new-issue interest factor shown in table VI.G6
increases each year by the assumed effective annual nominal yield for spe-
cial public-debt obligations issuable to the trust funds in the 12 months of the
prior year. The compound effective trust-fund interest factor shown in
table VI.G6 uses the effective annual yield on all currently-held securities in
the combined OASI and DI Trust Funds. The reciprocal of the compound
effective trust-fund interest factor approximates the cumulative discount fac-
tor used to convert nominal dollar values to present values as of the start of
the valuation period in order to create summarized values for this report.
222
OASDI and HI: Estimates in Dollars
Table VI.G6.Selected Economic Variables, Calendar Years 2021-2100
[GDP and taxable payroll in billions]
Compound
Compound effective
Gross new-issue trust-fund
Adjusted Average Taxable domestic interest interest
Calendar year CPI a wage index payroll b product factor c factord
Intermediate:
2021 . . . . . . . . 95.66 $58,743.07 $8,223 $22,989 0.9862 0.9879
2022 . . . . . . . . 100.00 62,583.15 8,842 24,951 1.0000 1.0115
2023 . . . . . . . . 102.33 65,571.72 9,310 26,194 1.0184 1.0340
2024 . . . . . . . . 104.78 68,371.79 9,787 27,365 1.0417 1.0563
2025 . . . . . . . . 107.30 71,147.65 10,244 28,538 1.0717 1.0792
2026 . . . . . . . . 109.87 73,980.60 10,698 29,720 1.1078 1.1037
2027 . . . . . . . . 112.51 76,857.74 11,171 30,944 1.1493 1.1306
2028 . . . . . . . . 115.21 79,761.29 11,650 32,212 1.1964 1.1603
2029 . . . . . . . . 117.98 82,702.63 12,145 33,546 1.2485 1.1931
2030 . . . . . . . . 120.81 85,713.03 12,647 34,924 1.3055 1.2295
2031 . . . . . . . . 123.71 88,836.46 13,169 36,355 1.3665 1.2703
2035 . . . . . . . . 136.02 102,530.83 15,347 42,674 1.6454 1.4887
2040 . . . . . . . . 153.14 122,417.01 18,495 51,968 2.0756 1.8737
2045 . . . . . . . . 172.42 145,582.26 22,277 63,220 2.6184 2.3633
2050 . . . . . . . . 194.13 172,887.64 26,928 77,080 3.3030 2.9813
2055 . . . . . . . . 218.57 205,634.94 32,655 94,163 4.1666 3.7608
2060 . . . . . . . . 246.09 244,870.78 39,669 115,104 5.2561 4.7442
2065 . . . . . . . . 277.07 291,767.28 48,142 140,533 6.6304 5.9846
2070 . . . . . . . . 311.95 347,552.77 58,341 171,276 8.3641 7.5495
2075 . . . . . . . . 351.23 413,851.91 70,697 208,657 10.5511 9.5234
2080 . . . . . . . . 395.45 492,391.60 85,839 254,750 13.3099 12.0136
2085 . . . . . . . . 445.24 585,488.00 104,553 312,022 16.7901 15.1548
2090 . . . . . . . . 501.29 696,610.41 127,694 382,873 21.1803 19.1174
2095 . . . . . . . . 564.40 829,710.10 156,054 469,505 26.7183 24.1160
2100 . . . . . . . . 635.46 988,243.75 190,275 574,472 33.7044 30.4217
Low-cost:
2021 . . . . . . . . 95.12 58,757.18 8,225 22,995 0.9862 0.9879
2022 . . . . . . . . 100.00 62,852.52 8,923 25,233 1.0000 1.0116
2023 . . . . . . . . 103.00 67,130.25 9,581 27,035 1.0245 1.0348
2024 . . . . . . . . 106.09 70,999.01 10,229 28,626 1.0602 1.0589
2025 . . . . . . . . 109.28 74,558.14 10,889 30,230 1.1020 1.0847
2026 . . . . . . . . 112.55 78,330.86 11,563 31,899 1.1508 1.1131
2027 . . . . . . . . 115.93 82,316.43 12,260 33,650 1.2065 1.1451
2028 . . . . . . . . 119.41 86,451.88 12,984 35,487 1.2693 1.1812
2029 . . . . . . . . 122.99 90,722.28 13,747 37,432 1.3387 1.2221
2030 . . . . . . . . 126.68 95,162.12 14,541 39,469 1.4146 1.2682
2031 . . . . . . . . 130.48 99,831.80 15,379 41,603 1.4970 1.3203
2035 . . . . . . . . 146.86 120,904.37 18,881 51,340 1.8817 1.5948
2040 . . . . . . . . 170.25 153,141.65 24,290 66,552 2.5043 2.1043
2045 . . . . . . . . 197.36 192,907.89 31,351 86,469 3.3331 2.7984
2050 . . . . . . . . 228.80 242,825.70 40,738 112,884 4.4360 3.7245
2055 . . . . . . . . 265.24 306,381.76 53,146 147,707 5.9040 4.9570
2060 . . . . . . . . 307.49 387,161.85 69,415 193,224 7.8578 6.5973
2065 . . . . . . . . 356.46 489,443.85 90,524 252,250 10.4580 8.7805
2070 . . . . . . . . 413.24 618,371.03 117,944 328,790 13.9188 11.6862
2075 . . . . . . . . 479.05 780,679.71 153,886 428,864 18.5248 15.5534
2080 . . . . . . . . 555.35 984,656.78 201,498 561,361 24.6550 20.7003
2085 . . . . . . . . 643.81 1,241,352.70 264,935 737,780 32.8139 27.5504
2090 . . . . . . . . 746.35 1,565,910.51 348,909 970,403 43.6726 36.6673
2095 . . . . . . . . 865.22 1,977,646.95 458,723 1,272,813 58.1247 48.8013
2100 . . . . . . . . 1,003.03 2,497,177.10 600,836 1,663,845 77.3593 64.9505
223
Appendices
Table VI.G6.Selected Economic Variables, Calendar Years 2021-2100 (Cont.)
[GDP and taxable payroll in billions]
Compound
Compound effective
Gross new-issue trust-fund
Adjusted Average Taxable domestic interest interest
Calendar year CPI a wage index payroll b product factor c factord
High-cost:
2021 . . . . . . . . 96.23 $58,728.91 $8,221 $22,983 0.9862 0.9879
2022 . . . . . . . . 100.00 61,441.05 8,565 24,002 1.0000 1.0114
2023 . . . . . . . . 101.02 62,461.55 8,666 24,349 1.0112 1.0334
2024 . . . . . . . . 102.56 64,422.99 9,035 25,296 1.0231 1.0546
2025 . . . . . . . . 104.40 66,330.90 9,348 26,204 1.0453 1.0757
2026 . . . . . . . . 106.28 68,361.44 9,669 27,076 1.0731 1.0974
2027 . . . . . . . . 108.19 70,254.36 9,963 27,880 1.1049 1.1203
2028 . . . . . . . . 110.14 72,021.11 10,236 28,655 1.1397 1.1446
2029 . . . . . . . . 112.12 73,775.14 10,509 29,466 1.1769 1.1700
2030 . . . . . . . . 114.14 75,544.17 10,773 30,293 1.2176 1.1969
2031 . . . . . . . . 116.19 77,352.07 11,043 31,140 1.2619 1.2260
2035 . . . . . . . . 124.79 85,056.13 12,219 34,779 1.4555 1.4061
2040 . . . . . . . . 136.43 95,717.67 13,794 39,776 1.7398 1.6808
2045 . . . . . . . . 149.16 107,504.03 15,476 45,209 2.0795 2.0090
2050 . . . . . . . . 163.08 120,453.15 17,338 51,266 2.4857 2.4014
2055 . . . . . . . . 178.29 135,019.52 19,441 58,144 2.9711 2.8704
2060 . . . . . . . . 194.93 151,435.04 21,836 66,006 3.5514 3.4310
2065 . . . . . . . . 213.11 169,953.30 24,492 74,832 4.2450 4.1010
2070 . . . . . . . . 233.00 190,743.00 27,398 84,615 5.0741 4.9020
2075 . . . . . . . . 254.73 214,087.58 30,570 95,432 6.0651 5.8594
2080 . . . . . . . . 278.50 240,146.72 34,077 107,594 7.2496 7.0037
2085 . . . . . . . . 304.48 269,209.78 38,036 121,494 8.6654 8.3715
2090 . . . . . . . . 332.89 302,052.35 42,586 137,507 10.3578 10.0065
2095 . . . . . . . . 363.95 339,224.29 47,795 155,792 12.3807 11.9608
2100 . . . . . . . . 397.91 380,998.63 53,643 176,484 14.7987 14.2968
a CPI-W indexed to calendar year 2022.
b Total earnings subject to OASDI contribution rates, adjusted to reflect the lower effective contribution
rates (compared to the combined employee-employer rate) that apply to multiple-employer excess
wages.
c For each alternative, incorporates the average of the assumed annual yield for special public-debt obliga-
tions issuable to the trust funds in the 12 months of the prior year.
d For each alternative, incorporates the annual effective yield for all outstanding special public-debt obliga-
tions held by the trust fund, with a half-years interest effect in each row. The effective yield for a period
equals total interest earned during the period divided by the total exposure to interest on asset reserves and
all income and cost items during the period. The reciprocals of the factors approximate the discounting/
accumulation factors that are used to calculate summarized rates and balances in this report.
Table VI.G7 shows the operations of the combined OASI and DI Trust Funds
in CPI-indexed 2022 dollarsthat is, adjusted by the CPI indexing series as
discussed above. The following items are presented in the table: (1) non-
interest income, (2) interest income, (3) total income, (4) cost, and (5) asset
reserves at the end of the year. Non-interest income consists of payroll tax
contributions, income from taxation of scheduled OASDI benefits, and any
reimbursements from the General Fund of the Treasury. Cost consists of
scheduled benefits, administrative expenses, financial interchange with the
Railroad Retirement program, and payments for vocational rehabilitation
services for disabled beneficiaries. Table VI.G7 shows trust fund operations
under the intermediate, low-cost, and high-cost sets of assumptions.
224
OASDI and HI: Estimates in Dollars
Table VI.G7.Operations of the Combined OASI and DI Trust Funds,
in CPI-indexed 2022 Dollars,a Calendar Years 2022-2100
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costb end of yearb
Intermediate:
2022 . . . . . . . . . . . . . $1,131.2 $64.6 $1,195.8 $1,242.7 $2,805.2
2023 . . . . . . . . . . . . . 1,186.1 58.9 1,245.0 1,301.8 2,684.5
2024 . . . . . . . . . . . . . 1,210.1 55.2 1,265.3 1,349.4 2,537.5
2025 . . . . . . . . . . . . . 1,238.1 53.3 1,291.4 1,399.3 2,370.1
2026 . . . . . . . . . . . . . 1,273.5 52.8 1,326.3 1,449.3 2,191.6
2027 . . . . . . . . . . . . . 1,300.8 52.5 1,353.3 1,499.5 1,994.0
2028 . . . . . . . . . . . . . 1,328.8 51.0 1,379.8 1,549.9 1,777.1
2029 . . . . . . . . . . . . . 1,356.2 48.3 1,404.5 1,598.5 1,541.5
2030 . . . . . . . . . . . . . 1,381.9 44.7 1,426.6 1,645.8 1,286.1
2031c . . . . . . . . . . . . 1,408.5 39.8 1,448.3 1,693.2 1,011.1
Low-cost:
2022 . . . . . . . . . . . . . 1,137.7 65.4 1,203.2 1,241.0 2,814.2
2023 . . . . . . . . . . . . . 1,213.2 62.0 1,275.2 1,299.0 2,708.4
2024 . . . . . . . . . . . . . 1,246.8 61.7 1,308.5 1,342.1 2,596.0
2025 . . . . . . . . . . . . . 1,288.5 62.7 1,351.2 1,387.8 2,483.8
2026 . . . . . . . . . . . . . 1,338.5 65.4 1,404.0 1,432.9 2,382.5
2027 . . . . . . . . . . . . . 1,379.3 69.2 1,448.4 1,477.6 2,283.9
2028 . . . . . . . . . . . . . 1,421.3 72.7 1,494.0 1,522.6 2,188.8
2029 . . . . . . . . . . . . . 1,463.6 76.1 1,539.7 1,566.2 2,098.6
2030 . . . . . . . . . . . . . 1,504.8 79.7 1,584.4 1,609.3 2,012.6
2031 . . . . . . . . . . . . . 1,547.3 82.9 1,630.3 1,652.8 1,931.5
2035 . . . . . . . . . . . . . 1,690.5 86.7 1,777.2 1,807.1 1,609.8
2040 . . . . . . . . . . . . . 1,876.3 73.7 1,950.0 1,984.5 1,233.1
2045 . . . . . . . . . . . . . 2,086.9 57.3 2,144.2 2,164.0 938.3
2050 . . . . . . . . . . . . . 2,337.7 47.3 2,385.0 2,389.2 765.2
2055 . . . . . . . . . . . . . 2,630.6 41.3 2,672.0 2,674.2 653.8
2060 . . . . . . . . . . . . . 2,965.7 33.4 2,999.1 3,024.2 494.7
2065 . . . . . . . . . . . . . 3,337.5 19.6 3,357.1 3,408.1 230.3
2070 . . . . . . . . . . . . . d d d d d
2075 . . . . . . . . . . . . . d d d d d
2080 . . . . . . . . . . . . . d d d d d
2085 . . . . . . . . . . . . . d d d d d
2090 . . . . . . . . . . . . . 6,115.5 52.7 6,168.2 5,779.7 960.0
2095 . . . . . . . . . . . . . 6,932.7 183.0 7,115.7 6,507.2 3,328.6
2100 . . . . . . . . . . . . . 7,839.1 341.6 8,180.7 7,443.3 6,144.9
225
Appendices
Table VI.G7.Operations of the Combined OASI and DI Trust Funds,
in CPI-indexed 2022 Dollars,a Calendar Years 2022-2100 (Cont.)
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costb end of yearb
High-cost:
2022 . . . . . . . . . . . . . $1,104.8 $63.8 $1,168.6 $1,244.6 $2,776.0
2023 . . . . . . . . . . . . . 1,117.1 55.8 1,172.9 1,315.6 2,605.2
2024 . . . . . . . . . . . . . 1,144.5 49.9 1,194.5 1,361.4 2,399.1
2025 . . . . . . . . . . . . . 1,165.9 45.0 1,210.8 1,413.3 2,154.4
2026 . . . . . . . . . . . . . 1,195.5 41.0 1,236.5 1,468.2 1,884.7
2027 . . . . . . . . . . . . . 1,213.2 36.9 1,250.1 1,523.5 1,577.9
2028 . . . . . . . . . . . . . 1,229.1 31.0 1,260.0 1,578.2 1,231.8
2029 . . . . . . . . . . . . . 1,243.8 23.5 1,267.3 1,630.8 846.6
2030c . . . . . . . . . . . . 1,256.3 15.4 1,271.8 1,681.5 421.9
a CPI-indexed 2022 dollars equal current dollars adjusted by the CPI indexing series in table VI.G6.
b Benefit payments which were scheduled to be paid on January 3 for some past and future years were actu-
ally paid on December 31 as required by the statutory provision for early delivery of benefit payments when
the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the
values for historical years and the projections in this report, all trust fund operations and asset reserves
reflect the 12 months of benefits scheduled for payment each year.
c The combined OASI and DI Trust Funds become depleted in 2035 under the intermediate assumptions and
in 2031 under the high-cost assumptions, so estimates for later years are not shown.
d The combined OASI and DI Trust Funds become depleted in 2069 under the low-cost assumptions, but
combined asset reserves become positive again by the beginning of 2089 and remain positive through the
remainder of the projection period. Estimates are not shown for years in which asset reserves are negative.
Note: Components may not sum to totals because of rounding.
Figure VI.G1 compares annual cost with annual total income and annual
non-interest income. The figure shows only the OASDI program under inter-
mediate assumptions, and presents values in CPI-indexed 2022 dollars, con-
sistent with table VI.G7. The difference between the income values for each
year is equal to the trust fund interest earnings. The figure illustrates that,
under intermediate assumptions, annual cost exceeds both total income and
non-interest income for 2022 until trust fund reserves are depleted in 2035.
Estimates after reserve depletion are not shown. For 2022 through 2034 (the
year preceding the year of trust fund reserve depletion), annual cost is cov-
ered by drawing down combined trust fund reserves.
226
OASDI and HI: Estimates in Dollars
Figure VI.G1.Estimated OASDI Income and Cost in CPI-indexed 2022 Dollars,
Based on Intermediate Assumptions
[In billions]
$2,000
$1,800
Cost
$1,600
Total income
$1,400
Non-interest income
$1,200
$1,000
$800
2025 2030 2035
Calendar year
Table VI.G8 presents the operations of the combined OASI and DI Trust
Funds in current, or nominal, dollarsthat is, in dollars unadjusted for infla-
tion. The following items are presented in the table: (1) non-interest income,
(2) interest income, (3) total income, (4) cost, and (5) asset reserves at the
end of the year. These estimates are presented using the intermediate, low-
cost, and high-cost sets of demographic and economic assumptions to facili-
tate independent analysis.
Table VI.G8.Operations of the Combined OASI and DI Trust Funds,
in Current Dollars, Calendar Years 2022-2100
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costa end of year a
Intermediate:
2022 . . . . . . . . . . . . . $1,131.2 $64.6 $1,195.8 $1,242.7 $2,805.2
2023 . . . . . . . . . . . . . 1,213.7 60.2 1,273.9 1,332.1 2,747.0
2024 . . . . . . . . . . . . . 1,267.9 57.9 1,325.8 1,413.9 2,658.9
2025 . . . . . . . . . . . . . 1,328.5 57.2 1,385.7 1,501.5 2,543.1
2026 . . . . . . . . . . . . . 1,399.3 58.0 1,457.3 1,592.4 2,408.0
2027 . . . . . . . . . . . . . 1,463.6 59.0 1,522.6 1,687.1 2,243.4
2028 . . . . . . . . . . . . . 1,530.9 58.7 1,589.6 1,785.6 2,047.4
2029 . . . . . . . . . . . . . 1,600.0 56.9 1,656.9 1,885.8 1,818.6
2030 . . . . . . . . . . . . . 1,669.4 54.0 1,723.4 1,988.3 1,553.7
2031 b . . . . . . . . . . . . 1,742.4 49.3 1,791.7 2,094.7 1,250.8
227
Appendices
Table VI.G8.Operations of the Combined OASI and DI Trust Funds,
in Current Dollars, Calendar Years 2022-2100 (Cont.)
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costa end of year a
Low-cost:
2022 . . . . . . . . . . . . . $1,137.7 $65.4 $1,203.2 $1,241.0 $2,814.2
2023 . . . . . . . . . . . . . 1,249.6 63.9 1,313.5 1,338.0 2,789.7
2024 . . . . . . . . . . . . . 1,322.8 65.5 1,388.3 1,423.8 2,754.2
2025 . . . . . . . . . . . . . 1,408.0 68.5 1,476.5 1,516.5 2,714.1
2026 . . . . . . . . . . . . . 1,506.6 73.6 1,580.2 1,612.8 2,681.5
2027 . . . . . . . . . . . . . 1,599.0 80.2 1,679.2 1,713.0 2,647.7
2028 . . . . . . . . . . . . . 1,697.2 86.9 1,784.0 1,818.1 2,613.7
2029 . . . . . . . . . . . . . 1,800.1 93.6 1,893.7 1,926.3 2,581.1
2030 . . . . . . . . . . . . . 1,906.2 100.9 2,007.2 2,038.6 2,549.6
2031 . . . . . . . . . . . . . 2,019.0 108.2 2,127.2 2,156.5 2,520.2
2035 . . . . . . . . . . . . . 2,482.6 127.3 2,609.9 2,653.8 2,364.1
2040 . . . . . . . . . . . . . 3,194.3 125.5 3,319.8 3,378.6 2,099.3
2045 . . . . . . . . . . . . . 4,118.8 113.1 4,231.9 4,271.0 1,851.9
2050 . . . . . . . . . . . . . 5,348.6 108.3 5,456.9 5,466.4 1,750.9
2055 . . . . . . . . . . . . . 6,977.5 109.6 7,087.2 7,093.2 1,734.0
2060 . . . . . . . . . . . . . 9,119.0 102.7 9,221.8 9,298.9 1,521.1
2065 . . . . . . . . . . . . . 11,896.8 69.9 11,966.7 12,148.5 820.8
2070 . . . . . . . . . . . . . c c c c c
2075 . . . . . . . . . . . . . c c c c c
2080 . . . . . . . . . . . . . c c c c c
2085 . . . . . . . . . . . . . c c c c c
2090 . . . . . . . . . . . . . 45,643.4 393.3 46,036.6 43,136.5 7,164.9
2095 . . . . . . . . . . . . . 59,983.7 1,582.9 61,566.6 56,301.5 28,800.1
2100 . . . . . . . . . . . . . 78,628.5 3,426.5 82,055.0 74,658.8 61,635.4
High-cost:
2022 . . . . . . . . . . . . . 1,104.8 63.8 1,168.6 1,244.6 2,776.0
2023 . . . . . . . . . . . . . 1,128.5 56.4 1,184.9 1,329.1 2,631.8
2024 . . . . . . . . . . . . . 1,173.9 51.2 1,225.0 1,396.3 2,460.6
2025 . . . . . . . . . . . . . 1,217.2 46.9 1,264.1 1,475.5 2,249.2
2026 . . . . . . . . . . . . . 1,270.6 43.6 1,314.2 1,560.4 2,003.0
2027 . . . . . . . . . . . . . 1,312.6 40.0 1,352.5 1,648.3 1,707.2
2028 . . . . . . . . . . . . . 1,353.7 34.1 1,387.8 1,738.3 1,356.7
2029 . . . . . . . . . . . . . 1,394.6 26.3 1,420.9 1,828.5 949.2
2030b . . . . . . . . . . . . 1,434.0 17.6 1,451.6 1,919.2 481.5
a Benefit payments which were scheduled to be paid on January 3 for some past and future years were actu-
ally paid on December 31 as required by the statutory provision for early delivery of benefit payments when
the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the
values for historical years and the projections in this report, all trust fund operations and asset reserves
reflect the 12 months of benefits scheduled for payment each year.
b The combined OASI and DI Trust Funds become depleted in 2035 under the intermediate assumptions and
in 2031 under the high-cost assumptions, so estimates for later years are not shown.
c The combined OASI and DI Trust Funds become depleted in 2069 under the low-cost assumptions, but
combined asset reserves become positive again by the beginning of 2089 and remain positive through the
remainder of the projection period. Estimates are not shown for years in which asset reserves are negative.
Note: Components may not sum to totals because of rounding.
Table VI.G9 presents values in CPI-indexed 2022 dollarsthat is, adjusted
by the CPI indexing series discussed at the beginning of this section. This
table contains the annual non-interest income and cost of the combined
OASI and DI Trust Funds, of the HI Trust Fund, and of the combined OASI,
DI, and HI Trust Funds, based on the intermediate, low-cost, and high-cost
sets of assumptions. For OASDI, non-interest income consists of payroll tax
contributions, proceeds from taxation of scheduled OASDI benefits, and any
228
OASDI and HI: Estimates in Dollars
reimbursements from the General Fund of the Treasury. Cost consists of
scheduled benefits, administrative expenses, financial interchange with the
Railroad Retirement program, and payments for vocational rehabilitation
services for disabled beneficiaries. For HI, non-interest income consists of
payroll tax contributions (including contributions from railroad employ-
ment), up to an additional 0.9 percent tax on earned income for relatively
high earners, proceeds from the taxation of scheduled OASDI benefits, pre-
mium revenues, monies from fraud and abuse control activities, and any
reimbursements from the General Fund of the Treasury. Total cost consists of
scheduled benefits and administrative expenses. The Trustees show income
and cost estimates generally on a cash basis for the OASDI program 1 and on
an incurred basis for the HI program. Table VI.G9 also shows the annual bal-
ance, which equals the difference between non-interest income and cost.
Table VI.G9.OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2022 Dollars,a Calendar Years 2022-2100
[In billions]
OASDI HI Combined
Non- Non- Non-
Calendar interest interest interest
year income Costb Balance b income Cost Balance income Cost b Balance b
Intermediate:
2022 . . . . . $1,131 $1,243 -$111 $387 $391 -$4 $1,518 $1,633 -$116
2023 . . . . . 1,186 1,302 -116 399 408 -10 1,585 1,710 -125
2024 . . . . . 1,210 1,349 -139 409 427 -17 1,619 1,776 -157
2025 . . . . . 1,238 1,399 -161 420 447 -27 1,658 1,846 -188
2026 . . . . . 1,274 1,449 -176 436 467 -31 1,710 1,917 -207
2027 . . . . . 1,301 1,500 -199 447 487 -40 1,748 1,987 -239
2028 . . . . . 1,329 1,550 -221 457 506 -49 1,786 2,056 -270
2029 . . . . . 1,356 1,598 -242 468 525 -57 1,824 2,123 -299
2030 . . . . . 1,382 1,646 -264 479 540 -61 1,861 2,186 -325
2031 . . . . . 1,408 1,693 -285 490 556 -66 1,898 2,249 -351
2035 . . . . . 1,498 1,853 -355 530 644 -113 2,028 2,496 -468
2040 . . . . . 1,606 2,019 -413 579 723 -144 2,185 2,742 -557
2045 . . . . . 1,719 2,173 -454 630 790 -161 2,349 2,964 -615
2050 . . . . . 1,848 2,351 -503 688 850 -163 2,535 3,201 -666
2055 . . . . . 1,992 2,562 -570 754 912 -158 2,746 3,474 -728
2060 . . . . . 2,154 2,813 -659 829 984 -156 2,982 3,797 -815
2065 . . . . . 2,325 3,081 -755 909 1,068 -159 3,234 4,149 -915
2070 . . . . . 2,507 3,367 -860 995 1,162 -167 3,501 4,529 -1,028
2075 . . . . . 2,702 3,674 -972 1,087 1,260 -173 3,789 4,934 -1,146
2080 . . . . . 2,915 3,972 -1,058 1,186 1,359 -172 4,101 5,331 -1,230
1 OASDI benefits paid for entitlement for a particular month are generally paid in the succeeding month.
There are two primary exceptions to this general rule. First, payments can occur with a greater delay when a
benefit award is made after the month of initial benefit entitlement. At the time of benefit award, benefits
owed for months of prior entitlement are then also paid to the beneficiary. For the projections in this report,
such retroactive payments are included in the period where they are paid (at time of award). Second, when
benefit payments scheduled for January 3 are paid on the prior December 31, because January 3 falls on a
Sunday, such payments are shown in this report for the period they were scheduled to be paid.
229
Appendices
Table VI.G9.OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2022 Dollars,a Calendar Years 2022-2100 (Cont.)
[In billions]
OASDI HI Combined
Non- Non- Non-
Calendar interest interest interest
year income Costb Balance b income Cost Balance income Cost b Balance b
Intermediate (Cont.):
2085 . . . . . $3,151 $4,252 -$1,101 $1,294 $1,458 -$164 $4,445 $5,710 -$1,265
2090 . . . . . 3,413 4,532 -1,119 1,411 1,563 -152 4,824 6,095 -1,271
2095 . . . . . 3,702 4,878 -1,176 1,542 1,671 -129 5,244 6,548 -1,305
2100 . . . . . 4,011 5,308 -1,297 1,683 1,778 -95 5,694 7,086 -1,392
Low-cost:
2022 . . . . . 1,138 1,241 -103 389 384 6 1,527 1,625 -98
2023 . . . . . 1,213 1,299 -86 407 392 15 1,620 1,691 -71
2024 . . . . . 1,247 1,342 -95 421 406 16 1,668 1,748 -80
2025 . . . . . 1,288 1,388 -99 434 420 15 1,723 1,807 -85
2026 . . . . . 1,339 1,433 -94 454 434 20 1,792 1,867 -74
2027 . . . . . 1,379 1,478 -98 468 447 21 1,847 1,924 -77
2028 . . . . . 1,421 1,523 -101 482 458 23 1,903 1,981 -78
2029 . . . . . 1,464 1,566 -103 496 469 27 1,960 2,036 -76
2030 . . . . . 1,505 1,609 -105 511 477 34 2,015 2,086 -71
2031 . . . . . 1,547 1,653 -105 525 485 40 2,073 2,138 -65
2035 . . . . . 1,690 1,807 -117 586 534 52 2,276 2,341 -65
2040 . . . . . 1,876 1,985 -108 664 564 100 2,541 2,549 -8
2045 . . . . . 2,087 2,164 -77 753 582 171 2,840 2,746 94
2050 . . . . . 2,338 2,389 -51 859 596 263 3,197 2,985 212
2055 . . . . . 2,631 2,674 -44 985 619 366 3,615 3,293 322
2060 . . . . . 2,966 3,024 -58 1,130 660 470 4,096 3,684 412
2065 . . . . . 3,337 3,408 -71 1,292 722 569 4,629 4,130 499
2070 . . . . . 3,752 3,830 -78 1,472 810 662 5,223 4,639 584
2075 . . . . . 4,222 4,296 -74 1,675 918 757 5,898 5,214 683
2080 . . . . . 4,764 4,771 -7 1,907 1,036 871 6,672 5,807 864
2085 . . . . . 5,394 5,247 147 2,174 1,166 1,008 7,567 6,412 1,155
2090 . . . . . 6,116 5,780 336 2,480 1,308 1,171 8,595 7,088 1,507
2095 . . . . . 6,933 6,507 426 2,832 1,461 1,371 9,764 7,968 1,796
2100 . . . . . 7,839 7,443 396 3,227 1,413 1,815 11,067 8,856 2,211
High-cost:
2022 . . . . . 1,105 1,245 -140 374 396 -23 1,478 1,641 -163
2023 . . . . . 1,117 1,316 -199 375 417 -42 1,492 1,733 -241
2024 . . . . . 1,145 1,361 -217 387 442 -55 1,531 1,804 -272
2025 . . . . . 1,166 1,413 -247 397 472 -75 1,563 1,886 -323
2026 . . . . . 1,196 1,468 -273 413 503 -90 1,609 1,971 -362
2027 . . . . . 1,213 1,524 -310 422 532 -110 1,635 2,056 -420
2028 . . . . . 1,229 1,578 -349 430 560 -130 1,659 2,138 -479
2029 . . . . . 1,244 1,631 -387 437 587 -150 1,681 2,218 -537
2030 . . . . . 1,256 1,681 -425 445 612 -167 1,701 2,293 -592
2031 . . . . . 1,269 1,732 -463 453 637 -184 1,722 2,369 -647
230
OASDI and HI: Estimates in Dollars
Table VI.G9.OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2022 Dollars,a Calendar Years 2022-2100 (Cont.)
[In billions]
OASDI HI Combined
Non- Non- Non-
Calendar interest interest interest
year income Costb Balance b income Cost Balance income Cost b Balance b
High-cost (Cont.):
2035 . . . . . $1,315 $1,893 -$579 $478 $773 -$295 $1,792 $2,666 -$874
2040 . . . . . 1,363 2,050 -687 505 924 -420 1,868 2,975 -1,107
2045 . . . . . 1,404 2,185 -781 528 1,071 -543 1,932 3,256 -1,324
2050 . . . . . 1,444 2,323 -879 551 1,213 -662 1,995 3,536 -1,541
2055 . . . . . 1,486 2,470 -984 575 1,334 -759 2,062 3,805 -1,743
2060 . . . . . 1,533 2,632 -1,098 603 1,448 -846 2,136 4,080 -1,944
2065 . . . . . 1,579 2,795 -1,215 630 1,548 -918 2,210 4,343 -2,133
2070 . . . . . 1,623 2,964 -1,341 657 1,622 -965 2,280 4,586 -2,306
2075 . . . . . 1,664 3,136 -1,472 684 1,668 -985 2,348 4,805 -2,457
2080 . . . . . 1,703 3,290 -1,587 709 1,701 -992 2,412 4,991 -2,579
2085 . . . . . 1,743 3,412 -1,669 733 1,723 -990 2,476 5,135 -2,659
2090 . . . . . 1,785 3,500 -1,715 758 1,744 -986 2,543 5,244 -2,701
2095 . . . . . 1,832 3,580 -1,748 784 1,764 -980 2,615 5,343 -2,728
2100 . . . . . 1,881 3,674 -1,794 814 2,057 -1,243 2,695 5,732 -3,037
a CPI-indexed 2022 dollars equal current dollars adjusted by the CPI indexing series in table VI.G6.
b OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years
were actually paid on December 31 as required by the statutory provision for early delivery of benefit pay-
ments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For compara-
bility with the values for historical years and the projections in this report, all trust fund operations and asset
reserves reflect the 12 months of benefits scheduled for payment each year.
Note: Components may not sum to totals because of rounding.
Table VI.G10 shows values in current, or nominal, dollarsthat is, in dollars
unadjusted for inflation. This table presents the annual non-interest income,
cost, and balance of the combined OASI and DI Trust Funds, of the HI Trust
Fund, and of the combined OASI, DI, and HI Trust Funds, based on the
intermediate, low-cost, and high-cost sets of assumptions.
231
Appendices
Table VI.G10.OASDI and HI Annual Non-interest Income, Cost, and
Balance in Current Dollars, Calendar Years 2022-2100
[In billions]
OASDI HI Combined
Non- Non- Non-
Calendar interest interest interest
year income Costa Balance a income Cost Balance income Cost a Balance a
Intermediate:
2022 . . . . . $1,131 $1,243 -$111 $387 $391 -$4 $1,518 $1,633 -$116
2023 . . . . . 1,214 1,332 -118 408 418 -10 1,622 1,750 -128
2024 . . . . . 1,268 1,414 -146 429 447 -18 1,697 1,861 -164
2025 . . . . . 1,328 1,501 -173 450 479 -29 1,779 1,981 -202
2026 . . . . . 1,399 1,592 -193 479 513 -34 1,878 2,106 -227
2027 . . . . . 1,464 1,687 -224 503 548 -45 1,966 2,235 -269
2028 . . . . . 1,531 1,786 -255 527 583 -56 2,058 2,369 -311
2029 . . . . . 1,600 1,886 -286 552 619 -67 2,152 2,505 -353
2030 . . . . . 1,669 1,988 -319 578 652 -74 2,248 2,641 -393
2031 . . . . . 1,742 2,095 -352 606 688 -82 2,348 2,782 -434
2035 . . . . . 2,037 2,520 -483 721 875 -154 2,758 3,395 -637
2040 . . . . . 2,460 3,092 -633 887 1,107 -220 3,347 4,200 -853
2045 . . . . . 2,965 3,747 -783 1,086 1,363 -277 4,051 5,110 -1,060
2050 . . . . . 3,587 4,564 -977 1,335 1,651 -316 4,921 6,215 -1,293
2055 . . . . . 4,355 5,600 -1,245 1,647 1,993 -346 6,002 7,593 -1,591
2060 . . . . . 5,300 6,923 -1,623 2,039 2,422 -383 7,339 9,344 -2,006
2065 . . . . . 6,443 8,536 -2,093 2,519 2,960 -441 8,961 11,495 -2,534
2070 . . . . . 7,819 10,503 -2,683 3,103 3,626 -522 10,923 14,128 -3,206
2075 . . . . . 9,489 12,905 -3,415 3,818 4,426 -608 13,307 17,331 -4,024
2080 . . . . . 11,527 15,709 -4,182 4,691 5,372 -681 16,218 21,081 -4,864
2085 . . . . . 14,029 18,931 -4,902 5,760 6,492 -732 19,789 25,423 -5,633
2090 . . . . . 17,108 22,720 -5,611 7,075 7,835 -760 24,183 30,554 -6,371
2095 . . . . . 20,893 27,531 -6,638 8,702 9,429 -727 29,595 36,960 -7,365
2100 . . . . . 25,486 33,730 -8,244 10,696 11,297 -601 36,183 45,027 -8,845
Low-cost:
2022 . . . . . 1,138 1,241 -103 389 384 6 1,527 1,625 -98
2023 . . . . . 1,250 1,338 -88 419 404 15 1,669 1,742 -73
2024 . . . . . 1,323 1,424 -101 447 430 16 1,770 1,854 -85
2025 . . . . . 1,408 1,516 -108 475 459 16 1,883 1,975 -93
2026 . . . . . 1,507 1,613 -106 511 488 22 2,017 2,101 -84
2027 . . . . . 1,599 1,713 -114 542 518 25 2,141 2,231 -89
2028 . . . . . 1,697 1,818 -121 575 547 28 2,272 2,365 -93
2029 . . . . . 1,800 1,926 -126 610 577 33 2,410 2,504 -93
2030 . . . . . 1,906 2,039 -132 647 604 42 2,553 2,643 -90
2031 . . . . . 2,019 2,157 -138 686 633 53 2,705 2,790 -85
2035 . . . . . 2,483 2,654 -171 860 784 76 3,343 3,438 -95
2040 . . . . . 3,194 3,379 -184 1,131 961 170 4,325 4,339 -14
2045 . . . . . 4,119 4,271 -152 1,486 1,149 337 5,605 5,420 185
2050 . . . . . 5,349 5,466 -118 1,966 1,363 603 7,314 6,829 485
2055 . . . . . 6,978 7,093 -116 2,612 1,641 971 9,590 8,735 855
2060 . . . . . 9,119 9,299 -180 3,475 2,028 1,446 12,594 11,327 1,266
2065 . . . . . 11,897 12,148 -252 4,604 2,574 2,030 16,501 14,723 1,778
2070 . . . . . 15,503 15,825 -322 6,081 3,346 2,735 21,584 19,171 2,413
2075 . . . . . 20,227 20,582 -355 8,026 4,397 3,628 28,253 24,979 3,274
2080 . . . . . 26,460 26,497 -37 10,592 5,754 4,838 37,052 32,251 4,801
2085 . . . . . 34,725 33,778 946 13,995 7,505 6,490 48,720 41,283 7,437
2090 . . . . . 45,643 43,136 2,507 18,507 9,764 8,743 64,150 52,901 11,249
2095 . . . . . 59,984 56,302 3,682 24,499 12,639 11,860 84,483 68,941 15,542
2100 . . . . . 78,628 74,659 3,970 32,372 14,170 18,203 111,001 88,828 22,172
232
OASDI and HI: Estimates in Dollars
Table VI.G10.OASDI and HI Annual Non-interest Income, Cost, and
Balance in Current Dollars, Calendar Years 2022-2100 (Cont.)
[In billions]
OASDI HI Combined
Non- Non- Non-
Calendar interest interest interest
year income Costa Balance a income Cost Balance income Cost a Balance a
High-cost:
2022 . . . . . $1,105 $1,245 -$140 $374 $396 -$23 $1,478 $1,641 -$163
2023 . . . . . 1,128 1,329 -201 379 421 -42 1,507 1,750 -243
2024 . . . . . 1,174 1,396 -222 397 454 -57 1,571 1,850 -279
2025 . . . . . 1,217 1,476 -258 415 493 -78 1,632 1,969 -337
2026 . . . . . 1,271 1,560 -290 439 535 -95 1,710 2,095 -385
2027 . . . . . 1,313 1,648 -336 457 576 -119 1,769 2,224 -455
2028 . . . . . 1,354 1,738 -385 473 617 -143 1,827 2,355 -528
2029 . . . . . 1,395 1,828 -434 490 659 -168 1,885 2,487 -602
2030 . . . . . 1,434 1,919 -485 508 698 -190 1,942 2,617 -675
2031 . . . . . 1,475 2,013 -538 526 740 -214 2,001 2,753 -752
2035 . . . . . 1,640 2,363 -722 596 964 -368 2,236 3,327 -1,090
2040 . . . . . 1,860 2,797 -937 688 1,261 -572 2,548 4,058 -1,510
2045 . . . . . 2,094 3,259 -1,165 787 1,598 -811 2,881 4,856 -1,975
2050 . . . . . 2,354 3,788 -1,434 898 1,978 -1,080 3,253 5,766 -2,513
2055 . . . . . 2,650 4,404 -1,754 1,026 2,379 -1,353 3,676 6,783 -3,107
2060 . . . . . 2,989 5,129 -2,141 1,175 2,823 -1,648 4,164 7,953 -3,789
2065 . . . . . 3,366 5,956 -2,589 1,343 3,299 -1,956 4,709 9,255 -4,546
2070 . . . . . 3,782 6,906 -3,124 1,531 3,780 -2,249 5,313 10,686 -5,373
2075 . . . . . 4,239 7,989 -3,750 1,741 4,250 -2,509 5,980 12,239 -6,259
2080 . . . . . 4,743 9,162 -4,419 1,974 4,737 -2,763 6,717 13,899 -7,182
2085 . . . . . 5,306 10,388 -5,082 2,233 5,247 -3,014 7,539 15,635 -8,096
2090 . . . . . 5,943 11,652 -5,709 2,523 5,806 -3,283 8,466 17,458 -8,992
2095 . . . . . 6,667 13,028 -6,361 2,852 6,418 -3,567 9,519 19,446 -9,927
2100 . . . . . 7,483 14,620 -7,137 3,239 8,186 -4,947 10,722 22,806 -12,084
a OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years
were actually paid on December 31 as required by the statutory provision for early delivery of benefit pay-
ments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For compara-
bility with the values for historical years and the projections in this report, all trust fund operations and asset
reserves reflect the 12 months of benefits scheduled for payment each year.
Note: Components may not sum to totals because of rounding.
233
Appendices
H. ANALYSIS OF BENEFIT PAYMENTS FROM THE OASI
TRUST FUND WITH RESPECT TO DISABLED BENEFICIARIES
(Required by section 201(c) of the Social Security Act)
Effective January 1957, the OASI Trust Fund pays monthly benefits to dis-
abled children aged 18 and over of retired and deceased workers if the dis-
ability began before age 18. The age by which disability must have begun
was later changed to age 22. Effective February 1968, the OASI Trust Fund
pays reduced monthly benefits to disabled widows and widowers at ages 50
and over. Effective January 1991, the requirements for the disability of the
widow or widower were made less restrictive.
At the end of 2021, the OASI Trust Fund was providing monthly benefit pay-
ments to about 1,136,000 people because of their disabilities or the disabili-
ties of children. This total includes approximately 22,000 mothers and
fathers (wives or husbands under normal retirement age of retired-worker
beneficiaries and widows or widowers of deceased insured workers) who
met all other qualifying requirements and were receiving unreduced benefits
solely because they had disabled-child beneficiaries (or disabled children
aged 16 or 17) in their care. In calendar year 2021, the OASI Trust Fund paid
a total of $12,453 million to the people described above. Table VI.H1 shows
OASI scheduled benefits for disability for selected calendar years during
1960 through 2021 and estimates for 2022 through 2031 based on the inter-
mediate set of assumptions.
234
OASI Benefits for the Disabled
Table VI.H1.Scheduled Benefit Payments From the OASI Trust Fund
With Respect to Disabled Beneficiaries
[Beneficiaries in thousands; scheduled benefits in millions]
Disabled beneficiaries, end of year Amount of scheduled benefitsa b
Widows- Widows-
Calendar year Total Children c widowers d Total Children c widowers e
Historical data:
1960 . . . . . . . . . 117 117 $59 $59
1965 . . . . . . . . . 214 214 134 134
1970 . . . . . . . . . 316 281 36 301 260 $41
1975 . . . . . . . . . 435 376 58 664 560 104
1980 . . . . . . . . . 519 460 59 1,223 1,097 126
1985 . . . . . . . . . 594 547 47 2,072 1,885 187
1990 . . . . . . . . . 662 613 49 2,882 2,649 233
1995 . . . . . . . . . 772 681 91 4,202 3,672 531
2000 . . . . . . . . . 811 707 104 5,203 4,523 680
2005 . . . . . . . . . 836 728 108 6,449 5,556 834
2010 . . . . . . . . . 996 879 117 8,671 7,662 1,008
2011 . . . . . . . . . 1,020 899 121 8,937 7,885 1,050
2012 . . . . . . . . . 1,045 920 125 9,513 8,410 1,102
2013 . . . . . . . . . 1,065 939 126 9,815 8,703 1,109
2014 . . . . . . . . . 1,079 954 125 10,242 9,133 1,108
2015 . . . . . . . . . 1,096 972 124 10,640 9,528 1,109
2016 . . . . . . . . . 1,109 988 121 10,909 9,818 1,087
2017 . . . . . . . . . 1,124 1,006 117 11,222 10,156 1,061
2018 . . . . . . . . . 1,139 1,027 112 11,767 10,729 1,031
2019 . . . . . . . . . 1,144 1,041 103 12,148 11,152 983
2020 . . . . . . . . . 1,147 1,051 95 12,351 11,403 934
2021 . . . . . . . . . 1,136 1,050 86 12,453 11,578 861
Estimates under the intermediate assumptions:
2022 . . . . . . . . . 1,144 1,064 80 13,307 12,447 847
2023 . . . . . . . . . 1,156 1,080 76 14,036 13,198 829
2024 . . . . . . . . . 1,170 1,097 73 14,674 13,842 822
2025 . . . . . . . . . 1,188 1,116 72 15,383 14,546 827
2026 . . . . . . . . . 1,206 1,135 72 16,150 15,288 852
2027 . . . . . . . . . 1,225 1,153 72 16,964 16,071 883
2028 . . . . . . . . . 1,245 1,171 74 17,813 16,874 928
2029 . . . . . . . . . 1,262 1,188 74 18,690 17,709 971
2030 . . . . . . . . . 1,278 1,205 73 19,572 18,571 989
2031 . . . . . . . . . 1,295 1,222 73 20,491 19,460 1,020
a Beginning in 1966, includes payments for vocational rehabilitation services.
b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly
scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as
required by the statutory provision for early benefit payments when the normal delivery date is on a weekend
or holiday. Such shifts in payments across calendar years have occurred in the past, including in 2016, and
will occur periodically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent
perspective on trust fund operations over time, all trust fund operations in each year reflect the 12 months of
benefits that are regularly scheduled for payment in that year.
c Also includes certain mothers and fathers (see text).
d In 1984 and later years, includes only disabled widows and widowers aged 50-59, because disabled wid-
ows and widowers age 60 and older are eligible for the same benefit as a nondisabled aged widow or wid-
ower. Therefore, they are not receiving benefits solely because of a disability.
e In 1983 and prior years, includes the offsetting effect of lower benefits payable to disabled widows and
widowers who continued to receive benefits after attaining age 60 (62, for disabled widowers prior to 1973),
compared to the higher nondisabled widows and widowers benefits that would otherwise be payable. In
1984 and later years, includes only scheduled benefits to disabled widows and widowers aged 50-59 (see
footnote d).
Note: Components may not sum to totals because of rounding.
235
Appendices
Under the intermediate assumptions, estimated total scheduled benefits paid
from the OASI Trust Fund with respect to disabled beneficiaries will
increase from $13,307 million in calendar year 2022 to $20,491 million in
calendar year 2031.
In calendar year 2021, benefit payments (including payments for vocational
rehabilitation services) with respect to disabled persons from the OASI Trust
Fund and from the DI Trust Fund (including payments from the DI fund to
all children and spouses of disabled-worker beneficiaries) totaled
$152,538 million. Of this amount, $12,453 million, or 8.2 percent, repre-
sented payments from the OASI Trust Fund. Table VI.H2 contains these and
similar figures for selected calendar years during 1960 through 2021 and
estimates for calendar years 2022 through 2031.
236
OASI Benefits for the Disabled
Table VI.H2.Scheduled Benefit Paymentsa Under the OASDI Program
With Respect to Disabled Beneficiaries
[Amounts in millions]
OASI Trust Fund
Calendar year Total b DI Trust Fund c Amount d Percentage of total
Historical data:
1960 . . . . . . . . . $627 $568 $59 9.4
1965 . . . . . . . . . 1,707 1,573 134 7.9
1970 . . . . . . . . . 3,386 3,085 301 8.9
1975 . . . . . . . . . 9,169 8,505 664 7.2
1980 . . . . . . . . . 16,738 15,515 1,223 7.3
1985 . . . . . . . . . 20,908 18,836 2,072 9.9
1990 . . . . . . . . . 27,717 24,835 2,882 10.4
1995 . . . . . . . . . 45,140 40,937 4,202 9.3
2000 . . . . . . . . . 60,204 55,001 5,203 8.6
2005 . . . . . . . . . 91,835 85,386 6,449 7.0
2010 . . . . . . . . . 132,916 124,245 8,671 6.5
2011 . . . . . . . . . 137,916 128,979 8,937 6.5
2012 . . . . . . . . . 146,438 136,925 9,513 6.5
2013 . . . . . . . . . 149,970 140,155 9,815 6.5
2014 . . . . . . . . . 151,947 141,705 10,242 6.7
2015 . . . . . . . . . 154,028 143,388 10,640 6.9
2016 . . . . . . . . . 153,709 142,800 10,909 7.1
2017 . . . . . . . . . 154,048 142,826 11,222 7.3
2018 . . . . . . . . . 155,526 143,760 11,767 7.6
2019 . . . . . . . . . 157,289 145,141 12,148 7.7
2020 . . . . . . . . . 155,933 143,582 12,351 7.9
2021 . . . . . . . . . 152,538 140,085 12,453 8.2
Estimates under the intermediate assumptions:
2022 . . . . . . . . . 156,760 143,452 13,307 8.5
2023 . . . . . . . . . 163,693 149,657 14,036 8.6
2024 . . . . . . . . . 170,548 155,875 14,674 8.6
2025 . . . . . . . . . 180,524 165,141 15,383 8.5
2026 . . . . . . . . . 190,260 174,111 16,150 8.5
2027 . . . . . . . . . 200,609 183,645 16,964 8.5
2028 . . . . . . . . . 208,398 190,585 17,813 8.5
2029 . . . . . . . . . 215,136 196,445 18,690 8.7
2030 . . . . . . . . . 221,564 201,993 19,572 8.8
2031 . . . . . . . . . 229,589 209,098 20,491 8.9
a Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly
scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as
required by the statutory provision for early benefit payments when the normal delivery date is on a weekend
or holiday. Such shifts in payments across calendar years have occurred in the past, including in 2016, and
will occur periodically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent
perspective on trust fund operations over time, all trust fund operations in each year reflect the 12 months of
benefits that are regularly scheduled for payment in that year.
b Beginning in 1966, includes payments for vocational rehabilitation services.
c Scheduled benefits for disabled workers and their children and spouses.
d Scheduled benefits for disabled children aged 18 and over, for certain mothers and fathers (see text), and
for disabled widows and widowers (see footnote e, table VI.H1).
Note: Components may not sum to totals because of rounding.
237
Appendices
I. GLOSSARY
Actuarial balance. The difference between the summarized income rate and
the summarized cost rate as a percentage of taxable payroll over a given val-
uation period.
Actuarial deficit. A negative actuarial balance.
Administrative expenses. Expenses incurred by the Social Security Admin-
istration and the Department of the Treasury in administering the OASDI
program and the provisions of the Internal Revenue Code relating to the col-
lection of contributions. Such administrative expenses are paid from the
OASI and DI Trust Funds.
Advance tax transfers. Amounts representing the estimated total OASDI
tax contributions for a given month. From May 1983 through
November 1990, such amounts were credited to the OASI and DI Trust
Funds at the beginning of each month. The trust funds reimbursed the Gen-
eral Fund of the Treasury for the associated loss of interest. Advance tax
transfers are no longer made unless needed in order to pay benefits.
Alternatives I, II, or III. See Assumptions.
Annual balance. The difference between the income rate and the cost rate
for a given year.
Asset reserves. See Trust fund reserves.
Assumptions. Values related to future trends in key factors that affect the
trust funds. Demographic assumptions include fertility, mortality, net immi-
gration, marriage, and divorce. Economic assumptions include unemploy-
ment rates, average earnings, inflation, interest rates, and productivity.
Program-specific assumptions include retirement patterns, and disability
incidence and termination rates. This report presents three sets of demo-
graphic, economic, and program-specific assumptions:
Alternative II is the intermediate set of assumptions, and represents the
Trustees best estimates of likely future demographic, economic, and
program-specific conditions.
Alternative I is a low-cost set of assumptionsit assumes relatively
rapid economic growth, high inflation, and favorable (from the stand-
point of program financing) demographic and program-specific condi-
tions.
Alternative III is a high-cost set of assumptionsit assumes relatively
slow economic growth, low inflation, and unfavorable (from the stand-
point of program financing) demographic and program-specific condi-
tions.
See tables V.A2, V.B1, and V.B2.
Automatic cost-of-living benefit increase. The annual increase in benefits,
effective for December, reflecting the increase, if any, in the cost of living. A
238
Glossary
benefit increase is applicable only after a beneficiary becomes eligible for
benefits. In general, the benefit increase equals the percentage increase in the
Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) measured from the third quarter of the previous year to the third
quarter of the current year. If there is no increase in the CPI-W, there is no
cost-of-living benefit increase. See table V.C1.
Auxiliary benefits. Monthly benefits payable to a spouse or child of a
retired or disabled worker, or to a survivor of a deceased worker.
Average indexed monthly earningsAIME. The measure of lifetime
earnings used in determining the primary insurance amount (PIA) for most
workers who attain age 62, become disabled, or die after 1978. A workers
actual past earnings are adjusted by changes in the average wage index, in
order to bring them up to their approximately equivalent value at the time of
retirement or other eligibility for benefits.
Average wage indexAWI. A series that generally increases with the aver-
age amount of total wages for each year after 1950, including wages in non-
covered employment and wages in covered employment in excess of the
OASDI contribution and benefit base. (See Title 20, Chapter III,
section 404.211(c) of the Code of Federal Regulations for a more precise
definition.) These average wage amounts are used to index the taxable earn-
ings of most workers first becoming eligible for benefits in 1979 or later, and
for automatic adjustments in the contribution and benefit base, bend points,
earnings test exempt amounts, and other wage-indexed amounts. See
tables V.C1 and VI.G6.
Award. An administrative determination that an individual is entitled to
receive a specified type of OASDI benefit. Awards can represent not only
new entrants to the benefit rolls but also persons already on the rolls who
become entitled to a different type of benefit. Awards usually result in the
immediate payment of benefits, although payments may be deferred or with-
held depending on the individuals particular circumstances.
Baby boom. The period from the end of World War II (1946) through 1965
marked by unusually high birth rates.
Bend points. The dollar amounts defining the AIME or PIA brackets in the
benefit formulas. For the bend points for years 1979 and later, see
table V.C2.
Beneficiary. A person who has been awarded benefits on the basis of his or
her own or anothers earnings record. The benefits may be either in current-
payment status or withheld.
Benefit award. See Award.
Benefit conversion. See Disability conversion.
239
Appendices
Benefit payments. The amounts disbursed for OASI and DI benefits by the
Department of the Treasury.
Benefit termination. See Termination.
Best estimate assumptions. See Assumptions.
Board. See Board of Trustees.
Board of Trustees. A Board established by the Social Security Act to over-
see the financial operations of the Federal Old-Age and Survivors Insurance
Trust Fund and the Federal Disability Insurance Trust Fund. The Board is
composed of six members. Four members serve by virtue of their positions
in the Federal Government: the Secretary of the Treasury, who is the Manag-
ing Trustee; the Secretary of Labor; the Secretary of Health and Human Ser-
vices; and the Commissioner of Social Security. The President appoints and
the Senate confirms the other two members to serve as public representa-
tives. Also referred to as the Board or the Trustees.
Cash flow. Actual or projected revenue and costs reflecting the levels of
payroll tax contribution rates and benefits scheduled in the law. Net cash
flow is the difference between non-interest income and cost.
Consumer Price IndexCPI. An official measure of inflation in consumer
prices. In this report, CPI refers to the Consumer Price Index for Urban Wage
Earners and Clerical Workers (CPI-W). The Bureau of Labor Statistics,
Department of Labor, publishes historical values for the CPI-W.
Contribution and benefit base. Annual dollar amount above which earn-
ings in employment covered under the OASDI program are neither taxable
nor creditable for benefit-computation purposes. (Also referred to as maxi-
mum contribution and benefit base, annual creditable maximum, taxable
maximum, and maximum taxable.) See tables V.C1 and V.C6. See Hospital
Insurance (HI) contribution base.
Contributions. See Payroll tax contributions.
Conversion. See Disability conversion.
Cost. The cost shown for a year includes benefits scheduled for payment in
the year, administrative expenses, financial interchange with the Railroad
Retirement program, and payments for vocational rehabilitation services for
disabled beneficiaries.
Cost-of-living adjustment. See Automatic cost-of-living benefit increase.
Cost rate. The cost rate for a year is the ratio of the cost of the program to
the taxable payroll for the year.
Covered earnings. Wages or earnings from self-employment covered by the
OASDI program.
240
Glossary
Covered employment. All employment for which earnings are creditable
for Social Security purposes. The program covers almost all employment.
Some exceptions are:
State and local government employees whose employer has not elected
to be covered under Social Security and who are participating in an
employer-provided pension plan.
Current Federal civilian workers hired before 1984 who have not
elected to be covered.
Self-employed workers earning less than $400 in a calendar year.
Covered worker. A person who has earnings creditable for Social Security
purposes based on services for wages in covered employment or income
from covered self-employment.
CPI-indexed dollars. Amounts adjusted by the CPI to the value of the dollar
in a particular year.
Creditable earnings. Wages or self-employment earnings posted to a
workers earnings record. Such earnings determine eligibility for benefits
and the amount of benefits on that workers record. The contribution and
benefit base is the maximum amount of creditable earnings for each worker
in a calendar year.
Current-cost financing. See Pay-as-you-go financing.
Current dollars. Amounts expressed in nominal dollars with no adjustment
for inflation.
Currently insured status. A worker is currently insured when he or she has
accumulated six quarters of coverage during the 13-quarter period ending
with the current quarter.
Current-payment status. Status of a beneficiary to whom a benefit is being
paid for a given month (with or without deductions, provided the deductions
add to less than a full months benefit).
Deemed filing. Under certain circumstances, a person applying for or receiv-
ing either an aged-spouse benefit or a retired-worker benefit is required to
also file for the other of these two types of benefits. For those first eligible
for benefits before 2016, this requirement applies to any person under normal
retirement age who is eligible for the other benefit as of the starting month
for the first benefit. For those first eligible for benefits in 2016 and later, this
requirement applies whenever the person is eligible for the other benefit.
This can occur at any age, and in months after the starting month of the first
benefit.
Deemed wage credit. See Military service wage credits.
Delayed retirement credits. Increases in the benefit amount for certain indi-
viduals who did not receive benefits for months after attaining normal retire-
ment age but before age 70. Delayed retirement credits apply to benefits for
241
Appendices
January of the year following the year they are earned or for the month of
attainment of age 70, whichever comes first. See table V.C3.
Demographic assumptions. See Assumptions.
Disability. For Social Security purposes, the inability to engage in any sub-
stantial gainful activity (see Substantial gainful activitySGA) by reason
of any medically determinable physical or mental impairment that can be
expected to result in death or to last for a continuous period of not less than
12 months. Special rules apply for workers at ages 55 and over whose dis-
ability is based on blindness.
The law generally requires that a person be disabled continuously for
5 months before he or she can qualify for a disabled-worker benefit.
Disability conversion ratio. For a given year, the ratio of the number of dis-
ability conversions to the average number of disabled-worker beneficiaries at
all ages during the year.
Disability conversion. Upon attainment of normal retirement age, a dis-
abled-worker beneficiary is automatically converted to retired-worker status.
Disability incidence rate. The proportion of workers in a given year,
insured for but not receiving disability benefits, who apply for and are
awarded disability benefits.
Disability Insurance (DI) Trust Fund. See Trust fund.
Disability insured status. A worker is disability insured if he or she is: (1) a
fully insured worker who has accumulated 20 quarters of coverage during
the 40-quarter period ending with the current quarter, (2) a fully insured
worker aged 24-30 who has accumulated quarters of coverage during one-
half of the quarters elapsed after the quarter of attainment of age 21 and up to
and including the current quarter, or (3) a fully insured worker under age 24
who has accumulated six quarters of coverage during the 12-quarter period
ending with the current quarter.
Disability prevalence rate. The proportion of persons insured for disability
benefits who are disabled-worker beneficiaries in current-payment status.
Disability termination rate. The proportion of disabled-worker beneficia-
ries in a given year whose disability benefits terminate as a result of their
recovery or death.
Disabled-worker benefit. A monthly benefit payable to a disabled worker
under normal retirement age and insured for disability. Before
November 1960, disability benefits were limited to disabled workers
aged 50-64.
Dual entitlement. A person may be entitled to more than one benefit at the
same time. For example, a person may be entitled as a retired worker on his
or her own record and as a spouse on another record. However, a person's
benefit amount can never exceed the highest single benefit to which that per-
242
Glossary
son is entitled. Some benefits are calculated independently with the larger
benefit being paid or the smaller benefit being paid plus the excess amount of
the larger one.
Earnings. Unless otherwise qualified, all wages from employment and net
earnings from self-employment, whether or not they are taxable or covered.
Earnings test. The provision requiring the withholding of benefits if benefi-
ciaries under normal retirement age have earnings in excess of certain
exempt amounts. See table V.C1.
Economic assumptions. See Assumptions.
Effective interest rate. See Interest rate.
Excess wages. Wages in excess of the contribution and benefit base on
which a worker initially makes payroll tax contributions, usually as a result
of working for more than one employer during a year. Employee payroll
taxes on excess wages are refundable to affected employees, while the
employer taxes are not refundable.
Expenditures. Actual payments made or expected to be made under current
law, including benefits paid or payable, administrative expenses, financial
interchange with the Railroad Retirement program, and payments for voca-
tional rehabilitation services for disabled beneficiaries.
Exposed population. For any event (such as being awarded a benefit, or
dying), the group that is exposed to the possibility of experiencing the event.
For example, the exposed population for disabled worker awards (incidence)
is the disability insured population less those already receiving benefits.
Federal Insurance Contributions ActFICA. Provision authorizing pay-
roll taxes on the wages of employed persons to provide for Old-Age, Survi-
vors, and Disability Insurance, and for Hospital Insurance. Workers and their
employers generally pay the tax in equal amounts.
Financial interchange. Provisions of the Railroad Retirement Act providing
for transfers between the trust funds and the Social Security Equivalent Ben-
efit Account of the Railroad Retirement program in order to place each trust
fund in the same financial position it would have been had railroad employ-
ment always been covered under Social Security.
Fiscal year. The accounting year of the United States Government. Starting
in 1976, a fiscal year is the 12-month period ending September 30. For
example, fiscal year 2022 began October 1, 2021, and will end September
30, 2022.
Full advance funding. A financing method in which contributions are estab-
lished to match the full cost of future benefits as these costs are incurred
through current service. Such financing methods also provide for amortiza-
tion over a fixed period of any financial obligation that is incurred at the
243
Appendices
beginning of the program (or subsequent modification) as a result of granting
credit for past service.
Fully insured status. A worker is fully insured when his or her total number
of quarters of coverage is greater than or equal to the number of years
elapsed after the year of attainment of age 21 (but not less than six). Once a
worker has accumulated 40 quarters of coverage, he or she remains perma-
nently fully insured.
General Fund of the Treasury. Funds held by the Treasury of the United
States, other than income collected for a specific purpose (such as Social
Security), and maintained in a separate account for that purpose.
General Fund reimbursements. Payments from the General Fund of the
Treasury to the trust funds for specific purposes defined in the law, includ-
ing:
The cost of noncontributory wage credits for military service before
1957, and periodic adjustments of previous determinations.
The cost in 1971-82 of deemed wage credits for military service per-
formed after 1956.
The cost of benefits to certain uninsured persons who attained age 72
before 1968.
The cost of payroll tax credits provided to employees in 1984 and self-
employed persons in 1984-89 by Public Law 98-21.
The cost in 2009-17 of excluding certain self-employment earnings
from SECA taxes under Public Law 110-246.
Payroll tax revenue forgone under the provisions of Public Laws 111-
147, 111-312, 112-78, and 112-96.
The General Fund also reimburses the trust funds for various other items,
including interest on checks which are not negotiated 6 months after the
month of issue and costs incurred in performing certain legislatively man-
dated activities not directly related to administering the OASI and DI pro-
grams.
Gross domestic productGDP. The total dollar value of all goods and ser-
vices produced by labor and property located in the United States, regardless
of who supplies the labor or property.
Hospital Insurance (HI) contribution base. Annual dollar amount above
which earnings in employment covered under the HI program are not tax-
able. (Also referred to as maximum contribution base, taxable maximum,
and maximum taxable.) Beginning in 1994, the HI contribution base was
eliminated.
High-cost assumptions. See Assumptions.
Hospital Insurance (HI) Trust Fund. See Trust fund.
244
Glossary
Immigration. See Lawful permanent resident (LPR) immigration and
Other-than-LPR immigration.
Income. Income for a given year is the sum of tax revenue on a cash basis
(payroll tax contributions and income from the taxation of scheduled bene-
fits), reimbursements from the General Fund of the Treasury, if any, and
interest credited to the trust funds.
Income rate. Ratio of non-interest income to the OASDI taxable payroll for
the year.
Infinite horizon. The period extending indefinitely into the future.
Inflation. An increase in the general price level of goods and services.
Insured status. The state or condition of having sufficient quarters of cover-
age to meet the eligibility requirements for retired-worker or disabled-worker
benefits, or to permit the workers spouse and children or survivors to estab-
lish eligibility for benefits in the event of his or her disability, retirement, or
death. See Quarter of coverage.
Interest. A payment in exchange for the use of money during a specified
period.
Interest rate. Interest rates on new public-debt obligations issuable to Fed-
eral trust funds (see Special public-debt obligation) are determined
monthly. Such rates are equal to the average market yield on all outstanding
marketable U.S. securities not due or callable until after 4 years from the date
the rate is determined. See table V.B2 for historical and assumed future inter-
est rates on new special-issue securities. The effective interest rate for a trust
fund is the ratio of the interest earned by the fund over a given period of time
to the average level of asset reserves held by the fund during the period. The
effective rate of interest thus represents a measure of the overall average
interest earnings on the funds portfolio of investments. See table VI.G6 for
projected compound new-issue interest factors and compound effective trust-
fund interest factors.
Interfund borrowing. The borrowing of asset reserves by a trust fund
(OASI, DI, or HI) from another trust fund when the first fund is in danger of
depletion. The Social Security Act permitted interfund borrowing only
during 1982 through 1987, and required all amounts borrowed to be repaid
prior to the end of 1989. The only exercise of this authority occurred in 1982,
when the OASI Trust Fund borrowed from the DI and HI Trust Funds. The
final repayment of borrowed amounts occurred in 1986.
Intermediate assumptions. See Assumptions.
Lawful permanent resident (LPR) immigration. Persons who enter the
Social Security area population and are granted LPR status, or who are
already in the Social Security area population and adjust their status to
become LPRs. Persons who enter the country with legal visas but without
LPR status, such as temporary foreign workers and students, are not included
in the LPR immigration category.
245
Appendices
Legal emigration. Lawful permanent residents and citizens who leave the
Social Security area population.
Life expectancy. Average remaining number of years expected prior to
death. Period life expectancy is calculated for a given year using the actual or
expected death rates at each age for that year. Cohort life expectancy, some-
times referred to as generational life expectancy, is calculated for individuals
at a specific age in a given year using actual or expected death rates from the
years in which the individuals would actually reach each succeeding age if
they survive.
Long-range. The first 75 projection years. The Trustees make long-range
actuarial estimates for this period because it covers approximately the maxi-
mum remaining lifetime for virtually all current Social Security participants.
Low-cost assumptions. See Assumptions.
Lump-sum death payment. A lump sum, generally $255, payable on the
death of a fully or currently insured worker. The lump sum is payable to the
surviving spouse of the worker, under most circumstances, or to the workers
children.
Maximum family benefit. The maximum monthly amount that can be paid
on a workers earnings record. Whenever the total of the individual monthly
benefits payable to all the beneficiaries entitled on one earnings record
exceeds the maximum, each dependents or survivors benefit is proportion-
ately reduced. Benefits payable to divorced spouses or surviving divorced
spouses are not reduced under the family maximum provision.
Medicare. A nationwide, Federally administered health insurance program
authorized in 1965 under Title XVIII of the Social Security Act to cover the
cost of hospitalization, medical care, and some related services for most per-
sons age 65 and over. In 1972, lawmakers extended coverage to persons
receiving Social Security Disability Insurance payments for 2 years and per-
sons with End-Stage Renal Disease. (For beneficiaries whose primary or sec-
ondary diagnosis is Amyotrophic Lateral Sclerosis, the 2-year waiting period
is waived.) In 2010, persons exposed to environmental health hazards within
areas under a corresponding emergency declaration became Medicare-eligi-
ble. In 2006, prescription drug coverage was added as well. Medicare con-
sists of two separate but coordinated trust fundsHospital Insurance (HI,
Part A) and Supplementary Medical Insurance (SMI). The SMI Trust Fund is
composed of two separate accountsthe Part B account and the Part D
account. Almost all persons who are aged 65 and over or disabled and who
are entitled to HI are eligible to enroll in Part B and Part D on a voluntary
basis by paying monthly premiums.
Military service wage credits. Credits toward OASDI earnings records for
benefit computation purposes, recognizing that military personnel receive
non-wage compensation (such as food and shelter) in addition to their basic
246
Glossary
pay and other cash payments. Military personnel do not pay payroll taxes on
these credits. Noncontributory wage credits of $160 were provided for each
month of active military service from September 16, 1940, through Decem-
ber 31, 1956. For years after 1956, the basic pay of military personnel is cov-
ered under the Social Security program on a contributory basis. In addition to
the contributory credits for basic pay, noncontributory wage credits of $300
were granted for each calendar quarter, from January 1957 through Decem-
ber 1977, in which a person received pay for military service. Noncontribu-
tory wage credits of $100 were granted for each $300 of military wages, up
to a maximum credit of $1,200 per calendar year, from January 1978 through
December 2001.
National average wage indexAWI. See Average wage indexAWI.
Non-interest income. Non-interest income for a given year is the sum of tax
revenue on a cash basis (payroll tax contributions and income from the taxa-
tion of scheduled benefits) and reimbursements from the General Fund of the
Treasury, if any.
Nonresident alien beneficiary. An OASDI beneficiary who is not a U.S.
citizen and who is living abroad while receiving benefits.
Normal retirement ageNRA. The age at which a person may first
become entitled to retirement benefits without reduction based on age. For
persons reaching age 62 before 2000, the normal retirement age is 65. It
increases gradually to 67 for persons reaching age 62 in 2022 or later, begin-
ning with an increase to 65 years and 2 months for persons reaching age 62
in 2000. See table V.C3.
Old-Age and Survivors Insurance (OASI) Trust Fund. See Trust fund.
Old-law base. Amount the contribution and benefit base would have been if
the 1977 amendments had not provided for ad hoc increases. The Social
Security Amendments of 1972 provided for automatic annual indexing of the
contribution and benefit base. The Social Security Amendments of 1977
specified ad hoc bases for 1978-81, with subsequent bases updated in accor-
dance with the normal indexing procedure. See table V.C2.
Open-group unfunded obligation. See Unfunded obligation.
Other-than-LPR emigration. Other-than-LPR immigrants who leave the
Social Security area population or who adjust their status to become LPRs.
Other-than-LPR immigration. Persons who enter the Social Security area
population and stay to the end of the year without being granted LPR status,
such as undocumented immigrants, and foreign workers and students enter-
ing with temporary visas.
Par value. The value printed on the face of a bond. For both public and spe-
cial issues held by the trust funds, par value is also the redemption value at
maturity.
247
Appendices
Partial advance funding. A financing method in which contributions are
established to provide a substantial accumulation of trust fund asset reserves,
thereby generating additional interest income to the trust funds and reducing
the need for payroll tax increases in periods when costs are relatively high.
Higher general contributions or additional borrowing may be required, how-
ever, to support the payment of such interest. While substantial, the trust
fund buildup under partial advance funding is much smaller than it would be
with full advance funding.
Pay-as-you-go financing. A financing method in which contributions are
established to produce just as much income as required to pay current bene-
fits, with trust fund asset reserves built up only to the extent needed to pre-
vent depletion of the fund by random economic fluctuations.
Payroll tax contributions. The amount based on a percent of earnings, up to
an annual maximum, that must be paid by:
employers and employees on wages from employment under the Fed-
eral Insurance Contributions Act,
the self-employed on net earnings from self-employment under the
Self-Employment Contributions Act, and
States on the wages paid in 1986 and earlier to State and local govern-
ment employees covered under the Social Security Act through volun-
tary agreements under section 218 of the act.
Also referred to as payroll taxes.
Population in the Social Security area. See Social Security area popula-
tion.
Present value. The equivalent value, at the present time, of a stream of val-
ues (either income or cost, past or future). Present values are used widely in
calculations involving financial transactions over long periods of time to
account for the time value of money, by discounting or accumulating these
transactions at the rate of interest. Present-value calculations for this report
use the effective yield on trust fund asset reserves.
Primary insurance amountPIA. The monthly amount payable to a
retired worker who begins to receive benefits at normal retirement age or,
generally, to a disabled worker. This amount, which is typically related to the
workers average monthly wage or average indexed monthly earnings, is also
used as a base for computing all types of benefits payable on an individuals
earnings record.
Primary-insurance-amount formula. The mathematical formula relating
the PIA to the AIME for workers who attain age 62, become disabled, or die
after 1978. The PIA is equal to the sum of 90 percent of AIME up to the first
bend point, plus 32 percent of AIME above the first bend point up to the sec-
ond bend point, plus 15 percent of AIME in excess of the second bend point.
248
Glossary
Automatic benefit increases are applied beginning with the year of eligibility.
See table V.C2 for historical and assumed future bend points and table V.C1
for historical and assumed future benefit increases.
Quarter of coverage. Basic unit of measurement for determining insured
status. For 1978, a worker earned one quarter of coverage, up to four, for
each $250 of that workers annual covered earnings. After 1978, the $250
amount increases automatically with increases in the national average wage
index. See table V.C2.
Railroad Retirement. A Federal insurance program, similar to Social Secu-
rity, designed for workers in the railroad industry. The provisions of the Rail-
road Retirement Act provide for a system of coordination and financial
interchange between the Railroad Retirement program and the Social Secu-
rity program.
Reallocation of payroll tax rates. An increase in the payroll tax rate for
either the OASI or DI Trust Fund, with a corresponding reduction in the rate
for the other fund, so that the total OASDI payroll tax rate is not changed.
Real wage differential. The difference between the percentage increases in:
(1) the average annual wage in covered employment and (2) the average
annual Consumer Price Index. See table V.B1.
Recession. A period of adverse economic conditions, generally defined as
two or more successive calendar quarters of negative real growth in gross
domestic product.
Reserves. See Trust fund reserves.
Retired-worker benefit. A monthly benefit payable to a fully insured retired
worker aged 62 or older or to a person entitled under the transitionally
insured status provision in the law.
Retirement earnings test. See Earnings test.
Retirement eligibility age. The age, currently age 62, at which a fully
insured individual first becomes eligible to receive retired-worker benefits.
Scheduled benefits. The level of benefits specified under current law.
Scenario-based model. A model with specified assumptions for and rela-
tionships among variables. Under such a model, any specified set of assump-
tions determines a single outcome directly reflecting the specifications.
Self-employment. Operation of a trade or business by an individual or by a
partnership in which an individual is a member.
Self-Employment Contributions ActSECA. Provision authorizing Social
Security payroll taxes on the net earnings of most self-employed persons.
Short-range. The first 10 projection years. The Social Security Act requires
estimates for 5 years; the Trustees prepare estimates for an additional 5 years
249
Appendices
to help clarify trends that are only starting to develop in the mandated first 5-
year period.
Social Security Act. Provisions of the law governing most operations of the
Social Security program. The original Social Security Act is Public
Law 74-271, enacted August 14, 1935. With subsequent amendments, the
Social Security Act consists of 21 titles, of which three have been repealed.
Title II of the Social Security Act authorizes the Old-Age, Survivors, and
Disability Insurance program.
Social Security area population. The population composed of: (1) residents
of the 50 States and the District of Columbia (adjusted for net census under-
count); (2) civilian residents of Puerto Rico, the Virgin Islands, Guam,
American Samoa, and the Northern Mariana Islands; (3) Federal civilian
employees and persons in the U.S. Armed Forces abroad and their depen-
dents; (4) non-citizens living abroad who are insured for Social Security ben-
efits; and (5) all other U.S. citizens abroad.
Solvency. A program is solvent at a point in time if it is able to pay sched-
uled benefits when due with scheduled financing. For example, the OASDI
program is solvent over any period for which the trust funds maintain a posi-
tive level of asset reserves.
Special public-debt obligation. Securities of the United States Government
issued exclusively to the OASI, DI, HI, and SMI Trust Funds and other Fed-
eral trust funds. Section 201(d) of the Social Security Act provides that the
public-debt obligations issued for purchase by the OASI and DI Trust Funds
shall have maturities fixed with due regard for the needs of the funds. The
usual practice has been to spread the holdings of special issues, as of each
June 30, so that the amounts maturing in each of the next 15 years are
approximately equal. Special public-debt obligations are redeemable at par
value at any time and carry interest rates determined by law (see Interest
rate). See tables VI.A4 and VI.A5 for a listing of the obligations held by the
OASI and DI Trust Funds, respectively.
Stochastic model. A model used for projecting a probability distribution of
potential outcomes. Such models allow for random variation in one or more
variables through time. The random variation is generally based on fluctua-
tions observed in historical data for a selected period. A large number of sim-
ulations, each of which reflects random variation in the variable(s), produce
a distribution of potential outcomes.
Substantial gainful activitySGA. The level of work activity used to
establish disability. A finding of disability requires that a person be unable to
engage in substantial gainful activity. A person who earns more than a cer-
tain monthly amount (net of impairment-related work expenses) is ordinarily
considered to be engaging in SGA. The amount of monthly earnings consid-
ered as SGA depends on the nature of a persons disability. The Social Secu-
rity Act specifies a higher SGA amount for statutorily blind individuals;
250
Glossary
Federal regulations specify a lower SGA amount for non-blind individuals.
Both SGA amounts increase with increases in the national average wage
index.
Summarized balance. The difference between the summarized income rate
and the summarized cost rate, expressed as a percentage of GDP. The differ-
ence between the summarized income rate and cost rate as a percentage of
taxable payroll is referred to as the actuarial balance.
Summarized cost rate. The ratio of the present value of cost to the present
value of the taxable payroll (or GDP) for the years in a given period,
expressed as a percentage. To evaluate the financial adequacy of the pro-
gram, the summarized cost rate is adjusted to include the cost of reaching
and maintaining a target trust fund level. A trust fund level of about 1 years
cost is considered to be an adequate reserve for unforeseen contingencies;
therefore, the targeted trust fund ratio is 100 percent of annual cost. Accord-
ingly, the adjusted summarized cost rate is equal to the ratio of: (1) the sum
of the present value of the cost during the period plus the present value of the
targeted ending trust fund level to (2) the present value of the taxable payroll
(or GDP) during the projection period.
Summarized income rate. The ratio of the present value of scheduled non-
interest income to the present value of taxable payroll (or GDP) for the years
in a given period, expressed as a percentage. To evaluate the financial ade-
quacy of the program, the summarized income rate is adjusted to include
asset reserves on hand at the beginning of the period. Accordingly, the
adjusted summarized income rate equals the ratio of: (1) the sum of the trust
fund reserve at the beginning of the period plus the present value of non-
interest income during the period to (2) the present value of the taxable pay-
roll (or GDP) for the years in the period.
Supplemental Security IncomeSSI. A Federally administered program
(often with State supplementation) of cash assistance for needy aged, blind,
or disabled persons. The General Fund of the Treasury funds Federal expen-
ditures for the SSI program. The Social Security Administration administers
it.
Supplementary Medical Insurance (SMI) Trust Fund. See Trust fund.
Survivor benefit. Benefit payable to a survivor of a deceased worker.
Sustainable solvency. Sustainable solvency for the financing of the program
under a specified set of assumptions is achieved when the projected trust
fund ratio is positive throughout the 75-year projection period and is either
stable or rising at the end of the period.
Taxable earnings. Wages or self-employment income, in employment cov-
ered by the OASDI or HI programs, that is under the applicable annual maxi-
251
Appendices
mum taxable limit. For 1994 and later, no maximum taxable limit applies to
the HI program.
Taxable payroll. A weighted sum of taxable wages and taxable self-employ-
ment income. When multiplied by the combined employee-employer payroll
tax rate, taxable payroll yields the total amount of payroll taxes incurred by
employees, employers, and the self-employed for work during the period.
Taxable self-employment income. The maximum amount of net earnings
from self-employment by an earner which, when added to any taxable
wages, does not exceed the contribution and benefit base. For HI beginning
in 1994, all net earnings from self-employment.
Taxable wages. See Taxable earnings.
Taxation of benefits. Beginning in 1984, Federal law subjected up to
50 percent of an individuals or a couples OASDI benefits to Federal income
taxation under certain circumstances. Treasury allocates the revenue derived
from this provision to the OASI and DI Trust Funds on the basis of the
income taxes paid on the benefits from each fund. Beginning in 1994, the
law increased the maximum percentage from 50 percent to 85 percent. The
HI Trust Fund receives the additional tax revenue resulting from the increase
to 85 percent.
Taxes. See Payroll tax contributions and Taxation of benefits.
Termination. Cessation of payment because the beneficiary is no longer
entitled to receive a specific type of benefit. For example, benefits might ter-
minate as a result of the death of the beneficiary, the recovery of a disabled
beneficiary, or the attainment of age 18 by a child beneficiary. In some cases,
an individual may cease one benefit and this is not a termination because
they become immediately entitled to another type of benefit, such as the con-
version of a disabled-worker beneficiary at normal retirement age to a
retired-worker beneficiary.
Test of long-range close actuarial balance. The conditions required to
meet this test are:
The trust fund satisfies the test of short-range financial adequacy; and
The trust fund ratio stays above zero throughout the 75-year projection
period, such that benefits would be payable in a timely manner through-
out the period.
The Trustees apply the test to OASI, DI, and the combined OASDI program
based on the intermediate set of assumptions.
Test of short-range financial adequacy. The conditions required to meet
this test are:
If the trust fund ratio is at least 100 percent at the beginning of the 10-
year projection period, then it must remain at or above 100 percent
throughout the entire projection period;
252
Glossary
If the ratio is initially less than 100 percent, then it must reach at least
100 percent within 5 years (without reserve depletion at any time during
this period) and then remain at or above 100 percent throughout the
remainder of the 10-year period.
The Trustees apply the test to OASI, DI, and the combined OASDI program
based on the intermediate set of assumptions.
Total-economy productivity. The ratio of real GDP to hours worked by all
workers. Also referred to as labor productivity.
Total fertility rate. The sum of the single-year-of-age birth rates for girls
and women aged 14 through 49, where the rate for age 14 includes births to
girls aged 14 and under, and the rate for age 49 includes births to women
aged 49 and over. The total fertility rate may be interpreted as the average
number of children that would be born to a woman if she were to experience,
at each age of her life, the birth rate observed in, or assumed for, a specified
year, and if she were to survive the entire childbearing period.
Trust fund. Separate accounts in the United States Treasury which hold the
payroll taxes received under the Federal Insurance Contributions Act and the
Self-Employment Contributions Act; payroll taxes resulting from coverage
of State and local government employees; any sums received under the
financial interchange with the railroad retirement account; voluntary hospital
and medical insurance premiums; and reimbursements or payments from the
General Fund of the Treasury. As required by law, the Department of the
Treasury invests funds not required to meet current expenditures in interest-
bearing securities backed by the full faith and credit of the U.S. Government.
The interest earned is also deposited in the trust funds.
Old-Age and Survivors Insurance (OASI). The trust fund used for
paying monthly benefits to retired-worker (old-age) beneficiaries, their
spouses and children, and to survivors of deceased insured workers.
Disability Insurance (DI). The trust fund used for paying monthly ben-
efits to disabled-worker beneficiaries, their spouses and children, and
for providing rehabilitation services to the disabled.
Hospital Insurance (HI). The Medicare trust fund that covers specified
inpatient hospital services, posthospital skilled nursing care, home
health services, and hospice care for aged and disabled individuals who
meet the eligibility requirements. Also known as Medicare Part A.
Supplementary Medical Insurance (SMI). The Medicare trust fund
composed of the Part B Account, the Part D Account, and the Transi-
tional Assistance Account. The Part B Account pays for a portion of the
costs of physicians services, outpatient hospital services, and other
related medical and health services for voluntarily enrolled aged and
disabled individuals. The Part D Account pays private plans to provide
253
Appendices
prescription drug coverage, beginning in 2006. The Transitional Assis-
tance Account paid for transitional assistance under the prescription
drug card program in 2004 and 2005.
The trust funds are distinct legal entities which operate independently. Fund
operations are sometimes combined on a hypothetical basis.
Trust fund ratio. A measure of trust fund adequacy. The asset reserves at
the beginning of a year (equal to the reserves at the end of the prior year),
which do not include advance tax transfers, expressed as a percentage of the
cost for the year. The trust fund ratio represents the proportion of a years
cost which could be paid solely with the reserves at the beginning of the year.
Trust fund reserve depletion. The point at which reserves in a trust fund are
insufficient to pay scheduled benefits in full and on time.
Trust fund reserves. The cumulative excess of trust fund income over trust
fund cost over all years to date. These reserves are held by the trust funds in
the form of Treasury notes and bonds, other securities guaranteed by the Fed-
eral Government, certain Federally sponsored agency obligations, and cash.
Trustees. See Board of Trustees.
Undisbursed balances. In general, refers to the cumulative differences
between the actual cash payments for a month compared to security redemp-
tions from the trust fund reserves made on a preliminary basis to cover such
cash payments during the same month. On a monthly basis, the Social Secu-
rity Administration (SSA) pays benefits and makes payments for other pro-
grammatic expenses associated with the trust funds. During each month,
SSA draws cash from the trust funds on a preliminary basis, which results in
Treasury redeeming invested securities to cover such payments. This
monthly difference can be either positive or negative depending on net
monthly activity, and is added to the balance at the end of the prior month.
A net positive undisbursed balance represents a situation where cumulative
redemptions from the trust funds securities are more than was needed to
cover actual program cash payments through the end of the month. A net
negative balance represents a situation where cumulative program cash pay-
ments exceeded the amount redeemed from the invested securities. A nega-
tive value requires future redemption of additional invested securities.
In addition, about every seven years, when January 3 falls on a Sunday, ben-
efit payments scheduled to be paid on January 3rd are actually paid on
December 31 of the preceding year, as required by the statutory provision
included in the 1977 Social Security Amendments for early delivery of bene-
fit payments when the normal payment delivery date is a Saturday, Sunday,
or legal public holiday. Consistent with practice in prior reports and for com-
parability with other historical years and the projections in this report, all
trust fund operations and asset reserves reflect the 12 months of benefits
scheduled for payment in each year. Therefore, such advance payments are
254
Glossary
included as positive values in the undisbursed balance at the end of the calen-
dar years in which the advance payments are made.
Unfunded obligation. A measure of the shortfall of trust fund income to
fully cover program cost through a specified date after depletion of trust fund
asset reserves. This measure can be expressed in present value dollars, dis-
counted to the beginning of the valuation period, by computing the excess of
the present value of the projected cost of the program through a specified
date over the sum of: (1) the value of trust fund reserves at the beginning of
the valuation period; and (2) the present value of the projected non-interest
income of the program through a specified date, assuming scheduled tax
rates and benefit levels. This measure can apply for all participants through a
specified date, i.e., the open group, or be limited to a specified subgroup of
participants.
Unfunded obligation ratio. The unfunded obligation accumulated through
the beginning of a year expressed as a percentage of the cost for the year.
Unnegotiated check. A check which has not been cashed 6 months after the
end of the month in which the check was issued. When a check has been out-
standing for a year, the Department of the Treasury administratively cancels
the check and reimburses the issuing trust fund separately for the amount of
the check and interest for the period the check was outstanding. The appro-
priate trust fund also receives an interest adjustment for the time the check
was outstanding if it is cashed 6 to 12 months after the month of issue. If a
check is presented for payment after it has been administratively canceled, a
replacement check is issued.
Valuation period. A period of years which is considered as a unit for pur-
poses of calculating the financial status of a trust fund.
Vocational rehabilitation (VR). Services provided to disabled persons to
help them to return to gainful employment. VR services are designed to pro-
vide an individual with the training or other services that are needed to return
to work, to begin working, or to enter a new line of work. The trust funds,
and the General Fund in the case of individuals also receiving Supplemental
Security Income disability benefits, reimburse the providers of such services
only in those cases where the services contributed to the successful rehabili-
tation of the beneficiaries.
255
List of Tables
LIST OF TABLE
II. OVERVIEW
II.B1 Summary of 2021 Trust Fund Financial Operations . . . . . . . . 7
II.B2 Payroll Tax Contribution Rates for 2021 . . . . . . . . . . . . . . . . 7
II.C1 Key Assumptions and Summary Measures
for the Long-Range (75-year) Projection Period . . . . . . . . . . . 10
II.D1 Projected Maximum Trust Fund Ratios During the Long-Range
Period and Trust Fund Reserve Depletion Dates . . . . . . . . . . . 16
II.D2 Reasons for Change in the 75-Year Actuarial Balance,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 23
III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND
LEGISLATIVE CHANGES IN THE LAST YEAR
III.A1 Operations of the OASI Trust Fund, Calendar Year 2021 . . . . 30
III.A2 Operations of the DI Trust Fund, Calendar Year 2021 . . . . . . . 34
III.A3 Operations of the Combined OASI and DI Trust Funds,
Calendar Year 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
III.A4 Comparison of Actual Calendar Year 2021 Trust Fund
Operations With Estimates Made in Prior Reports, Based on
Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 37
III.A5 Distribution of Benefit Payments by Type of Beneficiary or
Payment, Calendar Years 2020 and 2021 . . . . . . . . . . . . . . . . 38
III.A6 Administrative Expenses as a Percentage of Total Income and
of Total Cost, Calendar Years 2016-2021 . . . . . . . . . . . . . . . . 39
III.A7 Trust Fund Investment Transactions, Calendar Year 2021 . . . . 39
IV. ACTUARIAL ESTIMATES
IV.A1 Operations of the OASI Trust Fund,
Calendar Years 2017-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . 43
IV.A2 Operations of the DI Trust Fund,
Calendar Years 2017-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . 47
IV.A3 Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2017-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . 49
IV.A4 Reasons for Change in Trust Fund (Unfunded Obligation) Ratios
at the Beginning of the Tenth Year of Projection Under
Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
IV.B1 Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 56
IV.B2 Components of Annual Income Rates,
Calendar Years 1990-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 61
256
List of Tables
IV.B3 Covered Workers and Beneficiaries,
Calendar Years 1945-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 63
IV.B4 Trust Fund Ratios, Calendar Years 2022-2100 . . . . . . . . . . . . 68
IV.B5 Components of Summarized Income Rates and Cost Rates,
Calendar Years 2022-2096 . . . . . . . . . . . . . . . . . . . . . . . . . . 73
IV.B6 Components of 75-Year Actuarial Balance and
Unfunded Obligation Under Intermediate Assumptions . . . . . 75
IV.B7 Reasons for Change in the 75-Year Actuarial Balance,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 76
V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES
V.A1 Fertility and Mortality Assumptions,
Calendar Years 1940-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 88
V.A2 Immigration Assumptions, Calendar Years 1940-2100 . . . . . . 94
V.A3 Social Security Area Population on July 1 and
Dependency Ratios, Calendar Years 1945-2100 . . . . . . . . . . . 97
V.A4 Period Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
V.A5 Cohort Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
V.B1 Principal Economic Assumptions . . . . . . . . . . . . . . . . . . . . . 109
V.B2 Additional Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . 115
V.C1 Cost-of-Living Benefit Increases, Average Wage Index,
Contribution and Benefit Bases, and Retirement Earnings Test
Exempt Amounts, 1975-2031 . . . . . . . . . . . . . . . . . . . . . . . . 120
V.C2 Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . 124
V.C3 Legislated Changes in Normal Retirement Age and Delayed
Retirement Credits for Persons Attaining Age 62 in Each Year
1986 and Later . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
V.C4 OASI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1945-2100 . . . . . . . . . . . . . . . . 134
V.C5 DI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1960-2100 . . . . . . . . . . . . . . . . 143
V.C6 Contribution and Benefit Base and
Payroll Tax Contribution Rates . . . . . . . . . . . . . . . . . . . . . . . 150
V.C7 Annual Scheduled Benefit Amounts for Retired Workers
With Various Pre-Retirement Earnings Patterns
Based on Intermediate Assumptions,
Calendar Years 2022-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 154
257
List of Tables
VI. APPENDICES
A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS
VI.A1 Operations of the OASI Trust Fund,
Calendar Years 1937-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . 160
VI.A2 Operations of the DI Trust Fund,
Calendar Years 1957-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . 163
VI.A3 Operations of the Combined OASI and DI Trust Funds,
Calendar Years 1957-2021 . . . . . . . . . . . . . . . . . . . . . . . . . . 165
VI.A4 OASI Trust Fund Asset Reserves, End of
Calendar Years 2020 and 2021 . . . . . . . . . . . . . . . . . . . . . . . 167
VI.A5 DI Trust Fund Asset Reserves, End of
Calendar Years 2020 and 2021 . . . . . . . . . . . . . . . . . . . . . . . 168
B. HISTORY OF ACTUARIAL STATUS ESTIMATES
VI.B1 Long-Range OASDI Actuarial Balances and Trust Fund
Reserve Depletion Dates as Shown in the Trustees Reports
for 1982-2022 under Intermediate Assumptions . . . . . . . . . . . 171
C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND OP-
ERATIONS THROUGH 2031
VI.C1 Operations of the OASI Trust Fund, Fiscal Year 2021 . . . . . . . 177
VI.C2 Operations of the DI Trust Fund, Fiscal Year 2021 . . . . . . . . . 178
VI.C3 Operations of the Combined OASI and DI Trust Funds,
Fiscal Year 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179
VI.C4 Operations of the OASI Trust Fund, Fiscal Years 2017-2031 . . 180
VI.C5 Operations of the DI Trust Fund, Fiscal Years 2017-2031 . . . . 181
VI.C6 Operations of the Combined OASI and DI Trust Funds,
Fiscal Years 2017-2031 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182
D. LONG-RANGE SENSITIVITY ANALYSIS
VI.D1 Sensitivity of OASDI Measures to Fertility Assumptions . . . . 184
VI.D2 Sensitivity of OASDI Measures to Death-Rate Assumptions . . 185
VI.D3 Sensitivity of OASDI Measures to
Total Net Immigration Assumptions . . . . . . . . . . . . . . . . . . . 187
VI.D4 Sensitivity of OASDI Measures to Real Wage Assumptions . . 188
VI.D5 Sensitivity of OASDI Measures to
CPI-Increase Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 189
VI.D6 Sensitivity of OASDI Measures to
Real Interest Rate Assumptions . . . . . . . . . . . . . . . . . . . . . . . 191
VI.D7 Sensitivity of OASDI Measures to
Taxable Ratio Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 192
258
List of Tables
VI.D8 Sensitivity of OASDI Measures to
Disability Incidence Assumptions . . . . . . . . . . . . . . . . . . . . . 193
VI.D9 Sensitivity of OASDI Measures to
Disability Termination Assumptions . . . . . . . . . . . . . . . . . . . 195
E. STOCHASTIC PROJECTIONS AND UNCERTAINTY
VI.E1 Long-Range Estimates Relating to the Actuarial Status of
the Combined OASDI Program . . . . . . . . . . . . . . . . . . . . . . . 205
F. INFINITE HORIZON PROJECTIONS
VI.F1 Unfunded OASDI Obligations Through the Infinite Horizon
and the 75-Year Projection Period,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 207
VI.F2 Present Values Through the Infinite Horizon
for Various Categories of Program Participants,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 209
G. ESTIMATES FOR OASDI AND HI, SEPARATE AND COMBINED
VI.G1 Payroll Tax Contribution Rates for
the OASDI and HI Programs . . . . . . . . . . . . . . . . . . . . . . . . 211
VI.G2 OASDI and HI Annual Income Rates, Cost Rates, and Balances,
Calendar Years 2022-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 213
VI.G3 Summarized OASDI and HI Income Rates and Cost Rates for
Valuation Periods, Calendar Years 2022-2096 . . . . . . . . . . . . 215
VI.G4 OASDI and HI Annual and Summarized Income, Cost, and
Balance as a Percentage of GDP,
Calendar Years 2022-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 218
VI.G5 Ratio of OASDI Taxable Payroll to GDP,
Calendar Years 2022-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 220
VI.G6 Selected Economic Variables, Calendar Years 2021-2100 . . . . 223
VI.G7 Operations of the Combined OASI and DI Trust Funds,
in CPI-indexed 2022 Dollars, Calendar Years 2022-2100 . . . . 225
VI.G8 Operations of the Combined OASI and DI Trust Funds,
in Current Dollars, Calendar Years 2022-2100 . . . . . . . . . . . . 227
VI.G9 OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2022 Dollars,
Calendar Years 2022-2100 . . . . . . . . . . . . . . . . . . . . . . . . . . 229
VI.G10 OASDI and HI Annual Non-interest Income, Cost, and
Balance in Current Dollars, Calendar Years 2022-2100 . . . . . . 232
259
List of Tables
H. ANALYSIS OF BENEFIT PAYMENTS FROM THE OASI
TRUST FUND WITH RESPECT TO DISABLED BENEFICIARIES
VI.H1 Scheduled Benefit Payments From the OASI Trust Fund
With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 235
VI.H2 Scheduled Benefit Payments Under the OASDI Program
With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 237
260
List of Figures
LIST OF FIGURES
II. OVERVIEW
II.D1 Short-Range OASI and DI Combined Trust Fund Ratio . . . . . 12
II.D2 OASDI Income, Cost, and Expenditures as Percentages
of Taxable Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
II.D3 Number of Covered Workers Per OASDI Beneficiary . . . . . . . 15
II.D4 OASDI Cost and Non-interest Income
as a Percentage of GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
II.D5 Cumulative Scheduled OASDI Income Less Cost,
From Program Inception Through Years 2021-2096 . . . . . . . . 19
II.D6 Long-Range OASI and DI Combined Trust Fund Ratios
Under Alternative Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . 21
II.D7 Long-Range OASI and DI Combined Trust Fund Ratios
From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 22
II.D8 OASDI Annual Balances: 2021 and 2022 Trustees Reports . . . 24
IV. ACTUARIAL ESTIMATES
IV.A1 Short-Range OASI and DI Trust Fund Ratios . . . . . . . . . . . . . 45
IV.B1 Long-Range OASI and DI Annual Income Rates
and Cost Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
IV.B2 Number of OASDI Beneficiaries Per 100 Covered Workers . . 65
IV.B3 Long-Range OASI and DI Trust Fund Ratios . . . . . . . . . . . . . 70
IV.B4 OASDI Annual Balances: 2021 and 2022 Trustees Reports . . . 81
V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES
V.C1 Primary-Insurance-Amount Formula
for Those Newly Eligible in 2022 . . . . . . . . . . . . . . . . . . . . . 122
V.C2 OASI Maximum-Family-Benefit Formula
for Those Newly Eligible in 2022 . . . . . . . . . . . . . . . . . . . . . 123
V.C3 DI Disability Incidence Rates, 1970-2100 . . . . . . . . . . . . . . . 139
V.C4 DI Disability Termination Rates, 1970-2100 . . . . . . . . . . . . . 141
V.C5 Comparison of DI Disability Incidence Rates,
Termination Rates and Conversion Ratios
Under Intermediate Assumptions, 1970-2100 . . . . . . . . . . . . . 142
V.C6 DI Disability Prevalence Rates, 1970-2100 . . . . . . . . . . . . . . 145
261
List of Figures
VI. APPENDICES
VI.E1 Long-Range OASDI Cost Rates From Stochastic Modeling . . 199
VI.E2 Long-Range OASDI Trust Fund Ratios
From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 200
VI.E3 OASDI Cost Rates: Comparison of Stochastic to Low-Cost,
Intermediate, and High-Cost Alternative Scenarios . . . . . . . . . 201
VI.E4 OASDI Trust Fund (Unfunded Obligation) Ratios:
Comparison of Stochastic to Low-Cost, Intermediate,
and High-Cost Alternative Scenarios . . . . . . . . . . . . . . . . . . . 203
VI.G1 Estimated OASDI Income and Cost in CPI-indexed
2022 Dollars, Based on Intermediate Assumptions . . . . . . . . . 227
262
Index
INDEX
A
Actuarial balance 12, 17, 53, 169, 183
Actuarial deficit 4, 17, 26, 72, 215
Actuarial estimates, LR 53
Actuarial estimates, SR 41
Adjusted program amounts 118
Administrative expenses 7, 38, 54, 156, 159, 177, 216, 224
Advance tax transfers 41, 66, 162
Amendments 40
Annual balance 23, 53, 76
Asset reserves 2, 7, 11, 32, 177, 191, 210
Assumptions 82, 102, 118, 169, 183, 211, 216, 221, 234
Automatic cost-of-living benefit increase 46, 103, 118
Auxiliary benefits 128
Average benefits 152
Average earnings assumptions 105
Average indexed monthly earnings (AIME) 122
Average wage index 118, 221
Award 130
B
Baby-boom generation 25, 54, 63, 111, 137
Bend points 122
Beneficiaries, DI 136
Beneficiary 14, 46, 63, 82, 119, 172, 184, 216, 224, 234
Beneficiary, OASI 130
Benefit payments 7, 54, 153, 159, 177
Benefit termination 9
Best estimate 9, 41, 82
Board of Trustees 41, 102, 157
C
Constant dollars 226
Consumer Price Index 103, 189, 221, 239
Contribution and benefit base 45, 105, 119, 239
Contributions 7, 157, 177, 210, 216, 224, 238
Cost 3, 7, 32, 49
Cost rate 4, 54, 210
Cost-of-living adjustment 118
Covered earnings 7, 118, 220
Covered employment 10, 45, 105, 126, 157, 188
Covered worker 65, 186
Creditable earnings 241
Current dollars 221
263
Index
Current-payment status 48, 141, 142, 143, 239
D
Deemed wage credit 54
Delayed retirement credit 125
Demographic assumptions 9, 23, 41, 83, 111, 118, 169, 222, 238
Deterministic model 196
DI beneficiaries 136
Disability 157, 186, 234
Disability conversion ratio 141
Disability incidence rate 82, 136, 139, 186, 193, 238
Disability Insurance Trust Fund 240
Disability prevalence rate 143, 145
Disability termination rate 194
Disabled-worker benefit 139, 242
Disbursements 41
E
Earnings 2, 7, 54, 105, 119, 157, 170, 210, 220, 221, 238
Earnings test 105, 119, 239
Economic assumptions 9, 23, 41, 51, 102, 111, 118, 169, 222, 238
Excess wages 54, 221
Expenditures 41, 243
Exposed population 4, 130, 138, 193, 243
F
Federal Insurance Contributions Act 210, 248
Fertility assumptions 83
Financial interchange 7, 156, 159
Fiscal year 162, 176
Full advance funding 243
G
General Fund of the Treasury 44, 46, 48, 50, 162, 164, 166, 180, 181, 182,
238
General fund reimbursement 244
Gross domestic product 4, 12, 60, 82, 103, 113, 216
Gross domestic product projections 113
H
High-cost assumptions 10, 19, 41, 55, 82, 102, 140, 183, 204, 211, 221, 238
Hospital Insurance program 149, 210, 246
Hospital Insurance Trust Fund 216
I
Immigration 9, 82, 89, 186, 238, 245
264
Index
Immigration assumptions 89
Income rate 4, 13, 54, 210
Infinite horizon 12
Inflation 9, 82, 103, 221, 238
Inflation assumptions 103
Insured population 9, 127
Insured status 123
Interest 114, 158, 169, 177, 212, 238
Interest rate 82, 169, 190, 238
Interest rate projections 114
Interest rates 9
Interfund borrowing 162, 245
Intermediate assumptions 10, 41, 46, 55, 82, 140, 183, 212, 217, 221, 226,
228, 234, 238
L
Labor force projections 110
Lawful Permanent Resident (LPR) immigration 90
Legal immigration 245, 246
Life expectancy 82, 99, 111, 246
Life expectancy estimates 98
Long range 12, 53, 83, 130, 169, 210, 216
Low-cost assumptions 10, 19, 41, 55, 82, 102, 140, 183, 204, 211, 221, 238
Lump-sum death payment 153
M
Medicare 85, 246
Military service 54, 157, 162, 164, 166
N
National average wage index 221
Normal retirement age 119, 136, 153, 241
O
OASI beneficiaries 130
Old-Age and Survivors Insurance Trust Fund 157, 240
Old-law base 123
Other immigration 247
Other-than-LPR immigration 90
P
Par value 158
Partial advance funding 248
Pay-as-you-go financing 169
Payroll taxes 2, 118, 147, 172, 206, 210, 224
Population estimates 96
265
Index
Population in the Social Security area 45, 65, 96, 126, 187
Present value 169
Primary insurance amount (PIA) 122
Productivity assumptions 103
Q
Quarters of coverage 127
R
Railroad Retirement 54, 71, 123, 156, 159, 177, 178, 179, 210, 216, 224,
240
Reallocation of tax rates 249
Real-wage differential 108, 187
Retired-worker benefit 130, 186, 234
Retirement age 119, 153, 241
Retirement earnings test 105, 119
Retirement eligibility age 186
S
Scenario-based model 249
Scheduled benefits 190, 216, 224, 236, 249
Self-employment 54, 104, 211, 248
Self-Employment Contributions Act 248, 249
Sensitivity analysis 183
Short range 11, 41, 130
Social Security Act 118, 158, 221, 234, 240
Social Security amendments 40
Solvency 250
Special public-debt obligation 117, 158, 190
Stochastic projections 196
Substantial gainful activity 136, 242
Summarized balance 217
Summarized income and cost rates 71, 169, 183, 214, 238
Supplemental Security Income 177
Supplementary Medical Insurance program 210, 246
Survivor benefit 2, 8, 133, 239
Sustainable solvency 66, 67
T
Taxable earnings 45, 65, 119, 170, 239
Taxable payroll 4, 26, 54, 104, 127, 169, 184, 210, 216, 221, 240
Taxable ratio 191
Taxable self-employment income 251
Taxable wages 151, 211, 252
Taxation of benefits 7, 151, 216, 224, 245
266
Index
Taxes 7, 118, 211
Termination 82
Termination rate 9, 130, 194, 238
Test of long-range close actuarial balance 53, 66, 69
Test of short-range financial adequacy 11, 12, 42, 43, 69, 252
Total fertility rate 84, 183
Trust fund financial operations 7, 28, 42, 157
Trust fund ratio 11, 41, 53, 66, 162, 180, 254
Trust fund reserves 41
U
Unemployment projections 110
Unfunded obligation 5, 12, 17, 19, 53, 74, 75, 208, 247, 254, 255
Unnegotiated check 177
V
Valuation period 17, 51, 53, 169, 183, 214, 238
Vocational rehabilitation 54, 159, 178, 216, 224, 236, 240
Y
Year of depletion 13, 16, 53, 68
267
STATEMENT OF ACTUARIAL OPINION
It is my opinion that: (1) the techniques and methodology used herein to
evaluate the actuarial status of the Federal Old-Age and Survivors Insurance
and Disability Insurance Trust Funds are based upon sound principles of
actuarial practice and are generally accepted within the actuarial profession;
and (2) the assumptions used and the resulting actuarial estimates are, indi-
vidually and in the aggregate, reasonable for the purpose of evaluating the
actuarial status of the trust funds, taking into consideration the past experi-
ence and future expectations for the population, the economy, and the pro-
gram. I am a member of the American Academy of Actuaries and I meet the
Qualification Standards of the American Academy of Actuaries to render this
actuarial opinion.
Stephen C. Goss
Associate, Society of Actuaries
Member, American Academy of Actuaries
Chief Actuary, Social Security Administration
268
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