House Document 117-63 — 2021 Annual Report, Old-Age and Survivors and Disability Insurance Trust Funds
Summary
House Document 117-63 is the 2021 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 September 23, 2021. The report covers trust fund financial operations, assumptions about the future, and short-range and long-range actuarial estimates for Social Security. Its index points to the year of depletion, trust fund ratios 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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“House Document 117-63 — 2021 Annual Report, Old-Age and Survivors and Disability Insurance Trust Funds.”
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117th Congress, 1st Session – – – – – – – – – – – – – – House Document 117-63
THE 2021 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 2021 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE
FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL
DISABILITY INSURANCE TRUST FUNDS
September 23, 2021—Referred to the Committee on Ways and Means
and ordered to be printed
U.S. GOVERNMENT PUBLISHING OFFICE
45-614 WASHINGTON: 2021
CONTENTS
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
II. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
A. HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
B. TRUST FUND FINANCIAL OPERATIONS IN 2020 . . . . . . . 7
C. ASSUMPTIONS ABOUT THE FUTURE . . . . . . . . . . . . . . . . 9
D. PROJECTIONS OF FUTURE FINANCIAL STATUS . . . . . . . 11
E. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND
LEGISLATIVE CHANGES IN THE LAST YEAR . . . . . . . . . . 27
A. OPERATIONS OF THE OLD-AGE AND SURVIVORS
INSURANCE (OASI) AND DISABILITY INSURANCE (DI)
TRUST FUNDS, IN CALENDAR YEAR 2020 . . . . . . . . . . . . 27
1. OASI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2. DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
3. OASI and DI Trust Funds, Combined . . . . . . . . . . . . . . . . . . 34
B. SOCIAL SECURITY AMENDMENTS SINCE THE
2020 REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
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 Year’s Report . . . . . . . . . . . . . . . . . . . 51
B. LONG-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . 53
1. Annual Income Rates, Cost Rates, and Balances . . . . . . . . . . 54
2. Comparison of Workers to Beneficiaries . . . . . . . . . . . . . . . . 64
3. Trust Fund Ratios and Test of Long-Range
Close Actuarial Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
4. Summarized Income Rates, Summarized Cost Rates,
and Actuarial Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
A. DEMOGRAPHIC ASSUMPTIONS AND METHODS . . . . . . . 85
1. Fertility Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
2. Mortality Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
3. Immigration Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 91
4. Total Population Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 98
5. Life Expectancy Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 100
B. ECONOMIC ASSUMPTIONS AND METHODS . . . . . . . . . . . 104
1. Productivity Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 105
2. Price Inflation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . 105
3. Average Earnings Assumptions . . . . . . . . . . . . . . . . . . . . . . 107
4. Assumed Real Wage Differential . . . . . . . . . . . . . . . . . . . . . 109
5. Labor Force, Employment, and Unemployment Projections . . 112
6. Gross Domestic Product Projections . . . . . . . . . . . . . . . . . . . 115
7. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS . . . 120
1. Automatically Adjusted Program Parameters . . . . . . . . . . . . . 120
2. Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
3. Insured Population . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
4. Old-Age and Survivors Insurance Beneficiaries . . . . . . . . . . . 132
5. Disability Insurance Beneficiaries . . . . . . . . . . . . . . . . . . . . . 138
6. Covered and Taxable Earnings, Taxable Payroll, and
Payroll Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 148
7. Income From Taxation of Benefits . . . . . . . . . . . . . . . . . . . . 153
8. Average Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
9. Scheduled Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
10. Illustrative Scheduled Benefit Amounts . . . . . . . . . . . . . . . . 155
11. Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 157
12. Railroad Retirement Financial Interchange . . . . . . . . . . . . . . 158
VI. APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159
A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS . . 159
B. HISTORY OF ACTUARIAL STATUS ESTIMATES . . . . . . . . 170
C. FISCAL YEAR HISTORICAL AND PROJECTED
TRUST FUND OPERATIONS THROUGH 2030 . . . . . . . . . . . 177
D. LONG-RANGE SENSITIVITY ANALYSIS . . . . . . . . . . . . . . 184
1. Total Fertility Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
2. Death Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186
3. Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
4. Real Wage Differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
5. Consumer Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190
6. Real Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
(VI)
7. Taxable Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
8. Disability Incidence Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 194
9. Disability Termination Rates . . . . . . . . . . . . . . . . . . . . . . . . 195
E. STOCHASTIC PROJECTIONS AND UNCERTAINTY . . . . . . 197
1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
2. Stochastic Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197
3. Stochastic Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
4. Comparison of Results: Stochastic to Low-Cost,
Intermediate, and High-Cost Alternative Scenarios . . . . . . . . 201
F. INFINITE HORIZON PROJECTIONS . . . . . . . . . . . . . . . . . . 208
G. ESTIMATES FOR OASDI AND HI, SEPARATE AND
COMBINED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212
1. Estimates as a Percentage of Taxable Payroll . . . . . . . . . . . . . 212
2. Estimates as a Percentage of Gross Domestic Product . . . . . . 218
3. Estimates in Dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
H. ANALYSIS OF BENEFIT PAYMENTS FROM THE
OASI TRUST FUND WITH RESPECT TO DISABLED
BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
I. GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240
LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258
LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263
INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265
STATEMENT OF ACTUARIAL OPINION . . . . . . . . . . . . . . . 270
(VII)
THE 2021 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 2021 report is the 81st such report.
Overview
II. OVERVIEW
A. HIGHLIGHTS
This section summarizes the report’s 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 and the ensuing recession, which were not reflected in last year’s
report.
Employment, earnings, interest rates, and GDP dropped substantially in the
second calendar quarter of 2020 and are assumed to rise gradually thereafter
toward recovery by 2023, with the level of worker productivity and thus
GDP assumed to be permanently lowered by 1 percent. In addition, the pan-
demic and recession are assumed to lead to elevated mortality rates over the
period 2020 through 2023 and delays in births and immigration in the near
term. Taken together, these data and assumptions cause the reserve depletion
date for the combined OASI and DI Trust Funds under the intermediate
assumptions to change from 2035, shown in the 2020 report, to 2034 for this
report. These changes also result in a small but significant reduction in the
actuarial balance for the OASDI program.
The pandemic and precipitous recession have clearly had significant effects
on the actuarial status of the OASI and DI Trust Funds, and the future course
of the pandemic is still uncertain. The Trustees will continue to monitor
developments and modify the projections in later reports.
In 2020
At the end of 2020, the OASDI program was providing benefit payments 1 to
about 65 million people: 49 million retired workers and dependents of retired
workers, 6 million survivors of deceased workers, and 10 million disabled
workers and dependents of disabled workers. During the year, an estimated
175 million people had earnings covered by Social Security and paid payroll
taxes on those earnings. The total cost of the program in 2020 was
$1,107 billion. Total income was $1,118 billion, which consisted of
$1,042 billion in non-interest income and $76 billion in interest earnings.
Asset reserves held in special issue U.S. Treasury securities grew from
$2,897 billion at the beginning of the year to $2,908 billion at the end of the
year. The total cost and asset reserve accumulation shown for 2020 reflect
1 The definitions of “benefit payments” and other terms appear in the Glossary.
2
Highlights
the twelve months of benefits scheduled for payment, and exclude the bene-
fits scheduled for payment on January 3, 2021, which were actually paid on
December 31, 2020 as required by the law. 1
Short-Range Results (2021-30)
Under the Trustees’ intermediate assumptions, Social Security’s total cost is
projected to be higher than its total income in 2021 and all later years. Social
Security’s 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 $2,908 billion at the
beginning of 2021 to $1,336 billion at the end of 2030, 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 253 percent at the beginning of
2021 to 85 percent at the beginning of 2030. 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 and DI Trust Funds also fail this test. For
last year’s report, the Trustees projected that combined reserves would be
248 percent of annual cost at the beginning of 2021 and 94 percent at the
beginning of 2030.
Long-Range Results (2021-95)
Under the Trustees’ intermediate assumptions, OASDI cost is projected to
exceed total income in 2021, and the dollar level of the hypothetical com-
bined trust fund reserves declines until reserves become depleted in 2034.
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 2033 and the DI Trust Fund reserves become
1 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.
3
Overview
depleted in 2057. 1 In last year’s report, the projected reserve depletion years
were 2035 for OASDI, 2034 for OASI, and 2065 for DI.
For the third year in a row, there has been a significant change in the DI
reserve depletion date because the DI reserve depletion date is very sensitive
to changes in program cash flows, and there is now less revenue projected in
the near term for the DI program than was expected in last year’s report.
Nevertheless, the DI program has continued to have low levels of disability
applications and benefit awards for 2020. 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 applications 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 5.0 per thousand exposed by the end of the short-range
projection period, the same ultimate rate as was assumed in last year’s report.
OASDI cost has been 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 cov-
ered 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 increase at more similar rates
as the cost rate (the ratio of program cost to taxable payroll) roughly stabi-
lizes, 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 2095, 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 2021-95, the projected OASDI annual
cost rate increases from 14.11 percent of taxable payroll for 2021 to
18.38 percent for 2078, and then decreases to 17.70 percent for 2095. The
projected cost rate for 2095 is 4.34 percent of taxable payroll more than the
projected income rate (the ratio of non-interest income to taxable payroll) for
2095. For last year’s report, the Trustees estimated the OASDI cost for 2095
at 17.97 percent, or 4.55 percent of payroll more than the annual income rate
for that year. Expressed in relation to the projected gross domestic product
1 If the OASI Trust Fund reserves were to become depleted in 2033 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. Implicitly, 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.
4
Highlights
(GDP), OASDI cost rises from 5.1 percent of GDP for 2021 to a peak of
about 6.2 percent for 2077, and then declines to 5.9 percent by 2095.
For the 75-year projection period, the actuarial deficit is 3.54 percent of tax-
able payroll, increased from 3.21 percent of taxable payroll in last year’s
report. The closely-related open-group unfunded obligation for OASDI over
the 75-year period is 3.35 percent of taxable payroll, increased from
3.03 percent of payroll in last year’s report. The open-group unfunded obli-
gation for OASDI over the 75-year period is $19.8 trillion in present value
and is $3.0 trillion more than the measured level of $16.8 trillion a year ago.
The actuarial deficit and unfunded obligation both round to 1.2 percent of
GDP over the 75-year period, increased from 1.1 percent and 1.0 percent,
respectively, in last year’s report.
If the assumptions, methods, starting values, and the law had all remained
unchanged, the actuarial deficit would have increased to 3.27 percent of tax-
able payroll, and the unfunded obligation would have risen to about
3.09 percent of taxable payroll and $17.5 trillion in present value due to the
change in the valuation date. These measures increased significantly in this
year’s report due to changes in methodology and near-term interest rates,
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: (1) revenue would have to increase by an
amount equivalent to an immediate and permanent payroll tax rate increase
of 3.36 percentage points 1 to 15.76 percent; (2) scheduled benefits would
have to be reduced by an amount equivalent to an immediate and permanent
reduction of about 21 percent applied to all current and future beneficiaries,
or about 25 percent if the reductions were applied only to those who become
initially eligible for benefits in 2021 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 2034.
For example, maintaining 75-year solvency with changes that begin in 2034
would require: (1) an increase in revenue by an amount equivalent to a per-
1 The 3.36 percentage point increase in the payroll tax rate required to achieve 75-year solvency differs
somewhat from the 3.54 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 3.54 percent
actuarial deficit incorporates an ending trust fund reserve equal to one year’s 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
manent 4.20 percentage point payroll tax rate increase to 16.60 percent start-
ing in 2034, (2) a reduction in scheduled benefits by an amount equivalent to
a permanent 26 percent reduction in all benefits starting in 2034, 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 2034. At the time of depletion
of these combined reserves, continuing income to the combined trust funds
would be sufficient to pay 78 percent of scheduled benefits. The OASI Trust
Fund reserves are projected to become depleted in 2033, at which time OASI
income would be sufficient to pay 76 percent of OASI scheduled benefits. DI
Trust Fund asset reserves are projected to become depleted in 2057, at which
time continuing income to the DI Trust Fund would be sufficient to pay
91 percent of DI scheduled benefits.
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 65 million beneficiaries and
176 million covered workers and their families during 2021. With informed
discussion, creative thinking, and timely legislative action, Social Security
can continue to protect future generations.
6
Calendar Year 2020 Operations
B. TRUST FUND FINANCIAL OPERATIONS IN 2020
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 2020.
Table II.B1.—Summary of 2020 Trust Fund Financial Operations
[In billions]
OASI DI OASDI
Asset reserves at the end of 2019. . . . . . . . . . . . . . . . . . . . $2,804.3 $93.1 $2,897.4
Total income in 2020 a . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968.3 149.7 1,118.1
Net payroll tax contributions . . . . . . . . . . . . . . . . . . . . . 856.0 145.3 1,001.3
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.3 2.8 76.1
Taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.0 1.7 40.7
Total cost in 2020b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 961.0 146.3 1,107.2
Benefit paymentsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952.4 143.6 1,095.9
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 3.7 2.6 6.3
Railroad Retirement financial interchange . . . . . . . . . . 4.8 .1 5.0
Net increase in asset reserves in 2020b . . . . . . . . . . . . . . . 7.4 3.5 10.9
Asset reserves at the end of 2020b . . . . . . . . . . . . . . . . . . . 2,811.7 96.6 2,908.3
a Includes less than $50 million in reimbursements from the General Fund of the Treasury and gifts. See sec-
tion III.A for details.
b 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.
Note: Components may not sum to totals because of rounding.
In 2020, net payroll tax contributions accounted for 89.6 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 $137,700 in 2020. Table II.B2 shows the payroll
tax rates for 2020.
Table II.B2.—Payroll Tax Contribution Rates for 2020
[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
6.8 percent of OASI and DI combined trust fund income in 2020. 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 3.6 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 2020, the combined
trust fund reserves (the excess of all past income over all past expenditures)
earned interest at an effective annual rate of 2.6 percent.
Retirement, survivor, and disability benefits accounted for 99.0 percent of
OASI and DI combined trust fund cost in 2020. 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 0.5 percent of
total OASDI cost.
Trust fund reserves provide the basis for paying benefits. Combined trust
fund reserves increased by $10.9 billion during 2020 because income to each
fund, including interest earned on trust fund reserves, exceeded total cost. 1
In last year’s report, combined reserves were projected to increase by $4.4
billion in 2020, and then start declining in 2021. 2 At the end of 2020, the
combined reserves of the OASI and the DI Trust Funds were $2,908 billion,
or 253 percent of estimated cost 2 for 2021. In comparison, the combined
reserves at the end of 2019 were 262 percent of actual cost for 2020.
1 As noted in footnote b 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 figures in this overview present outcomes under the intermediate
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 2031
through 2095b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.99 2.19 1.69
Average annual percentage reduction in total age-sex-adjusted
death rates from 2030 to 2095. . . . . . . . . . . . . . . . . . . . . . . . . . .74 .28 1.25
Average annual net lawful permanent resident (LPR) immigration
(in thousands) for 2031 through 2095 . . . . . . . . . . . . . . . . . . . . 788 1,000 595
Average annual net other-than-LPR immigration (in thousands) for
2031 through 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 688 235
Economic:
Average annual percentage change in:
Productivity (total U.S. economy), for 2031 and later . . . . . . . 1.63 1.93 1.33
Average wage in covered employment from 2030 to 2095 . . . 3.55 4.77 2.33
Consumer Price Index (CPI-W), for 2024 and later. . . . . . . . . 2.40 3.00 1.80
Average annual real wage differential (percent) for 2031
through 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.15 1.77 .53
Unemployment rate (percent, age-sex-adjusted), for 2029 and later 4.5 3.5 5.5
Annual trust fund real interest rate (percent), for 2031 and later. 2.3 2.8 1.8
Programmatic:
Average annual disability incidence rate (per 1,000 exposed, age-
sex-adjusted) for 2031 through 2095 . . . . . . . . . . . . . . . . . . . . 5.0 4.0 6.0
Average annual disability recovery rate (per 1,000 beneficiaries,
age-sex-adjusted) for 2031 through 2095 . . . . . . . . . . . . . . . . . 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 new
cohort-based projection approach adopted for this report 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 (2021 through 2030), 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 more—that is, reserves at the beginning
of a year at least equal to projected cost for the year—is 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 2021 through the begin-
ning of 2031) 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 remainder of the 10-year short-range period. The projected
trust fund ratio under the intermediate assumptions for the OASI Trust Fund
declines to 85 percent by the beginning of 2030. Therefore, OASI fails the
Trustees’ test of short-range financial adequacy. The DI Trust Fund also fails
the Trustees’ test of short-range financial adequacy. The Trustees estimate
that the DI trust fund ratio was at 66 percent at the beginning of 2021. The
projected DI trust fund ratio declines to 62 percent at the beginning of 2022,
and then increases to 86 percent by the beginning of 2031. On a combined
basis, OASDI also fails the Trustees’ test of short-range financial adequacy
because the OASDI trust fund ratio declines to 85 percent by the beginning
of 2030. 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 start declining 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]
500%
450%
Historical Projected
400%
350%
300%
250%
200%
150%
Minimum level for short-range test of financial adequacy
100%
50%
0%
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
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 (2021 through 2095): (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 Security’s 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. The
OASI, DI, and combined OASI and DI Trust Funds all fail the test of long-
range close actuarial balance under the intermediate assumptions.
12
Future Financial Status
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 (2021 through 2095). 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 in about 2040 through 2055, rise temporarily between
2055 and 2078, and then decline somewhat by 2095. The projected income
rate is stable at about 13 percent throughout the 75-year period.
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. Beginning in 2021, cost is
projected to exceed total income, and combined OASI and DI Trust Fund
reserves diminish until they become depleted in 2034. After trust fund
reserve depletion, continuing income is sufficient to support expenditures at
a level of 78 percent of program cost for the rest of 2034, declining to
74 percent for 2095. Figure II.D2 depicts OASDI operations as a combined
whole. However, under current law, the differences between scheduled and
payable benefits would begin at different times for the program’s two trust
funds: in 2033 for OASI and in 2057 for DI.
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 2034
Payable benefits as percent
of scheduled benefits:
5%
2021-33: 100%
2034: 78%
2095: 74%
0%
2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
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 2.7 workers
for every OASDI beneficiary in 2020. This ratio had been stable, remaining
between 3.2 and 3.4 from 1974 through 2008, and has declined since then,
initially due to the economic recession of 2007-09 and the beginning of a
notable demographic shift. This shift causes the ratio of workers to beneficia-
ries to decline, as workers of lower-birth-rate generations replace workers of
the baby-boom generation. The decline in the ratio slowed substantially
between 2013 and 2019, with the recovery of the economy offsetting the
demographic shift during that period. The demographic shift will continue to
drive this ratio down over about the next 15 years. The ratio of workers to
beneficiaries reaches 2.3 by 2035 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
Calendar year
Another important way to look at Social Security’s 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 Security’s cost as a percent
of GDP is projected to grow from 5.1 percent in 2021 to a peak of about
6.2 percent for 2077, and then decline to 5.9 percent by 2095. Social Secu-
rity’s non-interest income is projected to rise from 4.5 percent of GDP in
2021 to a peak of about 4.8 percent by 2030. Thereafter, non-interest income
as a percent of GDP declines gradually, to about 4.4 percent for 2095,
because the Trustees expect the share of employee compensation provided 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
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 year’s cost which could be paid solely
with the reserves at the beginning of the year. Table II.D1 displays the pro-
jected 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 max-
imum projected trust fund ratio during the long-range projection period
(2021 through 2095) and the year of trust fund asset reserve depletion. Trust
fund ratios for OASI and combined OASI and DI are projected to decline
from their current levels until reserve depletion. For DI, the trust fund ratio is
projected to rise to 116 in 2040, then decline until reserve depletion.
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). . . . . . 280 116 253
Year attained. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2021 2040 2021
Projected year of trust fund reserve depletion . . . . . . 2033 2057 2034
16
Future Financial Status
Summary Measures
The actuarial balance is a summary measure of the program’s 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 year’s 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. Actuar-
ial balance is expressed as a percentage of the taxable payroll for the 75-year
valuation period. A negative actuarial balance is called an actuarial deficit.
The actuarial deficit represents the average amount of change in income or
cost that is needed throughout the valuation period in order to achieve actuar-
ial balance.
In this report, the actuarial deficit for the combined OASI and DI Trust
Funds under the intermediate assumptions is 3.54 percent of taxable payroll.
The actuarial deficit was 3.21 percent of payroll in the 2020 report. If the
assumptions, methods, starting values, and the law had all remained
unchanged from last year, the actuarial deficit would have increased to
3.27 percent of payroll solely due to advancing the valuation period by
1 year. The actuarial deficit is 1.2 percent of GDP in this year’s report,
increased from 1.1 percent in last year’s 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 2020
to 2095. 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 $2.9 trillion at the end of 2020. The combined trust fund reserves
decline on a present value basis after 2020, but remain positive through
2033. However, after 2033 this cumulative amount becomes negative, which
means that the combined OASI and DI Trust Funds have a net unfunded
obligation through each year after 2033. Through the end of 2095, the com-
bined funds have a present-value unfunded obligation of $19.8 trillion. If the
assumptions, methods, starting values, and the law had all remained
unchanged from last year, the unfunded obligation would have risen to about
$17.5 trillion due to the change in the valuation date.
This unfunded obligation represents 3.35 percent of taxable payroll
(increased from 3.03 percent in last year’s report) and 1.2 percent of GDP
17
Overview
(increased from 1.0 percent in last year’s report) over the 75-year valuation
period. The unfunded obligation as a share of taxable payroll over the period
(3.35 percent) and the actuarial deficit (3.54 percent) are similar measures,
but differ because the actuarial deficit includes the cost of having an ending
trust fund reserve equal to one year’s cost.
Figures II.D2, II.D4, and II.D5 show that the program’s financial condition is
worsening at the end of the projection period. Negative annual balances and
increasing cumulative values 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 pre-
scriptions that do not achieve sustainable solvency. 1
Figure II.D5.—Cumulative Scheduled OASDI Income Less Cost,
From Program Inception Through Years 2020-2095
[Present value as of January 1, 2021, in trillions, under Intermediate Assumptions]
$3 2034
$2
$1
Trust fund
$0 reserves
-$1 (positive)
-$2
-$3
-$4
-$5
-$6
-$7
-$8
-$9
Unfunded
-$10 obligation
-$11 (negative)
-$12
-$13
-$14
-$15
-$16
-$17
-$18
-$19
-$20
2020 2035 2050 2065 2080 2095
Ending year of accumulation
Appendix F presents summary measures over the infinite horizon. The
infinite horizon values provide an additional indication of Social Security’s
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
financial condition for the period beginning with the inception of the pro-
gram and extending indefinitely into the future, but results are subject 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 4.6 percent of future tax-
able 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 2034 under
the intermediate alternative and in 2031 under the high-cost alternative.
Under the low-cost alternative, trust fund reserves are projected to become
depleted in 2061, but the trust funds would have sufficient income by the end
of 2092 to permit full payment of scheduled benefits thereafter and also to
pay in arrears the temporary shortfalls between 2061 and 2092. 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 program’s 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.
19
Overview
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%
I
III II
0%
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
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 for most of the key parameters.
These simulations produce a distribution of projected outcomes and corre-
sponding probabilities that future outcomes will fall within or outside a given
range. The results of the stochastic simulations, discussed 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 2041 with 95-percent confidence. In last year’s report, this
range was between 2031 and 2042.
The stochastic results suggest that trust fund ratios as high as the low-cost
alternative are very unlikely. However, the relationship between the stochas-
tic results and the low-cost and high-cost alternatives has changed as the
20
Future Financial Status
methodology for the stochastic simulations was further developed. As noted
in appendix E, this year’s report contains improvements and refinements and
has expanded the indicated range of uncertainty.
Figure II.D7.—Long-Range OASI and DI Combined Trust Fund Ratios
From Stochastic Modeling
300%
200%
97.5%
90%
100% 50%
10%
2.5%
0%
2021 2031 2041 2051 2061 2071 2081 2091
Calendar year
Changes From Last Year’s Report
The projected long-range OASDI actuarial deficit increased from
3.21 percent of taxable payroll for last year’s report to 3.54 percent of tax-
able payroll for this year’s report. The change in the 75-year projection
period alone would have increased the actuarial deficit to 3.27 percent.
Changes in law, methods, starting values, and assumptions combined to
increase the actuarial deficit by an additional 0.27 percent of taxable payroll.
For a detailed description of the specific changes identified in table II.D2,
see section IV.B.6.
21
Overview
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 year’s report:
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 1.85 13.85
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 1.92 17.06
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21
Changes in actuarial balance due to changes in:
Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . -.01 .00 -.01
Valuation period a . . . . . . . . . . . . . . . . . . . . . . . . . . . . -.05 -.01 -.06
Demographic data and assumptions . . . . . . . . . . . . . . .06 .01 .07
Economic data and assumptions. . . . . . . . . . . . . . . . . .00 .00 .00
Disability data and assumptions . . . . . . . . . . . . . . . . . .00 .00 .00
Methods and programmatic data . . . . . . . . . . . . . . . . -.32 -.01 -.33
Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.32 -.01 -.32
Shown in this report:
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.39 1.92 17.31
a The change in the 75-year valuation period from last year’s report to this report means that the 75-year
actuarial balance now includes the relatively large negative annual balance for 2095. 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 year’s projections of annual balances (non-inter-
est income minus cost) to those in last year’s report. The annual balances in
this year’s report are lower (more negative) in years from 2021 through
2090, and then higher for 2091 through 2095. The differences in annual bal-
ances fluctuate somewhat in the early 2020s during the recovery from the
recession, are small in the late 2020s, generally grow until the late 2050s,
and then decline thereafter and change sign in 2090. For this year’s report,
the annual balance improves from 2021 to 2022, due to the assumed path of
recovery from the COVID-19 pandemic and the ensuing recession, which
were not reflected in last year’s report. The trends later in the projection are
mainly due to the changes made this year to fertility methodology and
assumptions. For the full 75-year projection period, the annual balances are
lower, on average, by 0.23 percentage point.
22
Future Financial Status
Figure II.D8.—OASDI Annual Balances: 2020 and 2021 Trustees Reports
[As a percentage of taxable payroll, under the intermediate assumptions]
0%
-2%
-4%
2020 Report
2021 Report
-6%
2015 2025 2035 2045 2055 2065 2075 2085 2095
Calendar year
23
Overview
E. CONCLUSION
The data and projections presented in this report include the Trustees’ best
estimates of the effects of the COVID-19 pandemic and the ensuing reces-
sion, which were not reflected in last year’s report. The precipitous effects on
the population and economy beginning in the second quarter of 2020, along
with the many related changes made to near-term demographic and eco-
nomic assumptions, combined to change the OASDI reserve depletion date
from 2035 to 2034. The pandemic and recession have clearly had significant
effects on the actuarial status of the OASI and DI Trust Funds, and the future
course of the pandemic is still uncertain. The Trustees will continue to moni-
tor the development of the pandemic and adjust their projections accordingly
in future reports.
Under current law, the projected cost of Social Security 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 subsequent
lower birth-rate generations. While the effects of the aging baby boom and
subsequent lower birth rates will have largely stabilized between about 2040
and 2055, annual cost is projected to grow significantly faster than income
between 2055 and 2078 due to the period of historically low birth rates start-
ing with the recession of 2007-2009. Between 2078 and 2095, cost is pro-
jected to grow somewhat slower than income, reflecting a return to a stable
ultimate birth rate of 2 children per woman for 2056 and thereafter. Based on
the Trustees’ intermediate assumptions, Social Security’s cost exceeds total
income beginning in 2021 and throughout the remainder of the 75-year pro-
jection period.
The OASI Trust Fund and the DI Trust Fund are projected to have sufficient
reserves to pay full benefits on time until 2033 and 2057, respectively. Legis-
lative action will be needed to prevent reserve depletion in those years. In the
absence of such legislation, continuing income to the trust funds at the time
of reserve depletion would be sufficient to pay 76 percent of OASI benefits
and 91 percent of DI benefits.
Social Security’s combined trust funds are projected to cover full payment of
scheduled benefits on a timely basis until the trust fund reserves become
depleted in 2034. (Full payment of benefits until depletion of the hypotheti-
cal combined reserves in 2034 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
24
Conclusion
about 78 percent of the program cost. By 2095, continuing income equals
about 74 percent of the program cost.
The 75-year actuarial deficit for the combined trust funds under the interme-
diate assumptions is 3.54 percent of taxable payroll, increased from the
3.21 percent deficit in last year’s 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: (1) revenue would
have to be increased by an amount equivalent to an immediate and perma-
nent payroll tax rate increase of 3.36 percentage points to 15.76 percent;
(2) scheduled benefits would have to be reduced by an amount equivalent to
an immediate and permanent reduction of about 21 percent applied to all cur-
rent and future beneficiaries, or about 25 percent if the reductions were
applied only to those who become initially eligible for benefits in 2021 or
later; or (3) some combination of these approaches would have to be
adopted. If actions are deferred for several years, the changes necessary to
maintain Social Security solvency become concentrated 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 at the end of the period, and the long-range
sustainability of program financing could still be in doubt. Sustainable sol-
vency for the financing of the program under a specified set of assumptions
is achieved when the projected trust fund ratio is positive throughout the
long-range period and is either stable or rising at the end of the period. Mak-
ing 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
25
Overview
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 65 million beneficiaries and
176 million covered workers and their families during 2021. 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/2021/
• www.ssa.gov/OACT/solvency/provisions/
• www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-
and-Reports/ReportsTrustFunds/
• https://home.treasury.gov/policy-issues/economic-policy/social-security-
and-medicare-trustee-reports
26
Calendar Year 2020 Operations
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 2020
This section presents detailed information on the operations of the OASI and
DI Trust Funds 1 during calendar year 2020. Chapter IV provides projections
for calendar years 2021 through 2095.
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 2020, 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 2020 amounted to
$968.3 billion, while cost totaled $961.0 billion, an increase in trust fund
reserves during 2020 of $7.4 billion. 2
Total income during calendar year 2020 included $859.2 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. The OASI fund paid the General
Fund $3.3 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 $856.0 billion in 2020.
Net reimbursements from the General Fund of the Treasury amounted to
$3 million in 2020. 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
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.
1 See www.ssa.gov/oact/ProgData/fundsQuery.html.
2 In order to provide values that are comparable with other years, the cost shown for 2020 and the 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 payments on January 3, 2021, which were actually paid on December 31,
2020, as required by the law.
27
Financial Operations and Legislative Changes
Income to the OASI Trust Fund based on the taxation of OASI benefits
amounted to $39.0 billion in 2020. 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 individual’s or couple’s 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 no such adjustments made in 2020. 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 2020, the OASI Trust Fund earned $73.3 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 $182 thousand, consisted of gifts received
under the provisions authorizing the deposit of monetary gifts or bequests in
the trust funds.
28
Calendar Year 2020 Operations
Table III.A1.—Operations of the OASI Trust Fund, Calendar Year 2020
[In millions]
Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,804,322
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $859,244
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,265
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855,979
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78,
and P.L. 112-96a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
a
Net General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 238
All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,794
Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,032
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,333
Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 73,334
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968,348
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsd e. . . . . . . . . . . . . . . . . . . . . . . . . 952,388
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -39
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 13
Net benefit paymentsd e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952,362
Financial interchange with the Railroad Retirement “Social Security Equivalent
Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,844
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,258
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8
f
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . . -2
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,748
Total coste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960,954
Net increase in asset reservese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,394
Total invested assetse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,793,146
Undisbursed balances g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,570
Total asset reserves, December 31, 2020e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,716
a Includes adjustments for prior calendar years.
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 reimbursements to the
trust fund.
d Includes net reductions for the recovery of overpayments.
e 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.
f Reimbursements for costs incurred in performing certain legislatively mandated activities not directly
related to administering the OASI program.
g Primarily consists of benefit payments designated to be paid on January 3, 2021 that were actually paid on
December 31, 2020, as well as a relatively small extension of credit by the Department of Treasury represent-
ing securities to be redeemed within the first few days of the following year.
Note: Components may not sum to totals because of rounding.
29
Financial Operations and Legislative Changes
Of the $961.0 billion in total OASI cost in 2020, $952.4 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
5.5 percent from calendar year 2019 to calendar year 2020. 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 2020 was due in part to the
automatic cost-of-living benefit increase of 1.6 percent which became effec-
tive for December 2019 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 2020.
The remaining $3.7 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 e of table III.A1 and elsewhere in this report, benefit payments shown for 2020 reflect
the 12 months of benefits scheduled for payment in 2020 and thus exclude 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.
30
Calendar Year 2020 Operations
For 2020, the cost incurred by the Social Security Administration to adminis-
ter the OASI program was 87 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 2020. In addition, the Department of the Trea-
sury charged the trust fund $0.5 billion in 2020 for services provided in
administering the OASI program. A relatively small offset to administrative
expenses of $8 million in 2020 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 $1 million in costs
associated with union activities related to administering the OASI program
and $1 million in costs of providing information to participants in certain
pension plans in 2020. These miscellaneous reimbursements totaled
$2 million in 2020.
The asset reserves shown for the OASI Trust Fund at the end of calendar
year 2020 totaled $2,811.7 billion, consisting of $2,793.1 billion in U.S.
Government obligations and cash totaling $18.6 billion that would have been
invested at the end of the year except for the advance payment of benefits
scheduled for payment on January 3, 2021. 1 The effective annual rate of
interest earned by the reserves in the OASI Trust Fund during calendar year
2020 was 2.6 percent, somewhat lower than the 2.8 percent earned during
calendar year 2019. Table VI.A4, presented in appendix A, shows a detailed
listing of OASI Trust Fund holdings by type of security, interest rate, and
year of maturity at the end of calendar years 2019 and 2020.
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
1 As noted in footnote e of table III.A1 and elsewhere in this report, benefit payments shown for 2020 reflect
the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for pay-
ment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.
31
Financial Operations and Legislative Changes
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.
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 2020, the Trust-
ees most recent projection 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 spe-
cial-issue bonds purchased on June 30, 2020, so that the maturity dates of the
total portfolio of special issue securities would be spread evenly to the extent
possible over the 14-year period 2021 through 2034. The bonds purchased on
that date have an interest rate of 0.750 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 additional details on the investment transactions
during 2020, including the amounts of bonds purchased on June 30, 2020.
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 2020, 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 $149.7 billion in total income, $145.3 billion was net payroll tax con-
tributions.
Of the $146.3 billion of total cost, $143.6 billion was net benefit payments. 1
The total level of net benefit payments in 2020 decreased by 1.1 percent
from total net benefit payments paid in 2019, 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 2020.
1 As noted in footnote e of table III.A2 and elsewhere in this report, benefit payments shown for 2020 reflect
the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for pay-
ment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.
32
Calendar Year 2020 Operations
Table III.A2.—Operations of the DI Trust Fund, Calendar Year 2020
[In millions]
Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $93,083
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,846
Payments from the General Fund of the Treasury for payroll tax contributions
subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -553
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,293
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78,
and P.L. 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 withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700
Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,704
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,745
Interest adjustments c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 2,750
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,748
Cost:
Benefit payments:
Monthly benefitsd e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,487
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -21
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 95
Net benefit paymentsd e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,561
Financial interchange with the Railroad Retirement “Social Security Equivalent
Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,453
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Miscellaneous reimbursements from the General Fund f . . . . . . . . . . . . . . . . . . . . . -1
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,555
Total coste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,260
Net increase in asset reservese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,488
Total invested assetse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,703
Undisbursed balancesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,867
Total asset reserves, December 31, 2020e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,570
a Includes adjustments for prior calendar years.
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 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.
f Reimbursements for costs incurred in performing legislatively mandated activities not directly related to
administering the DI program.
g Primarily consists of benefit payments designated to be paid on January 3, 2021 that were actually paid on
December 31, 2020, as well as a relatively small extension of credit by the Department of Treasury repre-
senting securities to be redeemed within the first few days of the following year.
Note: Components may not sum to totals because of rounding.
33
Financial Operations and Legislative Changes
During 2020, the reserves in the DI Trust Fund increased by $3.5 billion,
from $93.1 billion at the end of 2019 to $96.6 billion at the end of 2020. This
$96.6 billion consisted of $90.7 billion in U.S. Government obligations and
cash totaling $5.9 billion that would have been invested at the end of the year
except for the advance payment of benefits scheduled for payment on Janu-
ary 3, 2021. 1 The effective annual rate of interest earned by the asset
reserves in the DI Trust Fund during calendar year 2020 was 2.9 percent,
somewhat lower than the 3.1 percent earned during calendar year 2019.
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 2019
and 2020.
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, 2020, 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 2021-35. The bonds purchased have an
interest rate of 0.750 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 2020.
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 e of table III.A2 and elsewhere in this report, benefit payments and asset reserves
shown for 2020 reflect the 12 months of benefits scheduled for payment in 2020 and thus exclude 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.
34
Calendar Year 2020 Operations
Table III.A3.—Operations of the Combined OASI and DI Trust Funds,
Calendar Year 2020
[In millions]
Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,897,405
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,005,090
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,817
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,001,272
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78,
and P.L. 112-96a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
a
Net General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 242
All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,494
Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,736
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,078
Interest adjustments c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 76,085
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,118,096
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsd e. . . . . . . . . . . . . . . . . . . . . . . . . 1,095,875
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -60
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 108
Net benefit paymentsd e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,095,924
Financial interchange with the Railroad Retirement “Social Security Equivalent
Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,988
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,711
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
f
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . . -4
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,303
Total coste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,107,214
Net increase in asset reservese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,881
Total invested assetse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,883,849
g
Undisbursed balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,437
Total asset reserves, December 31, 2020e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,908,286
a Includes adjustments for prior calendar years.
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 reimbursements to the
trust funds.
d Includes net reductions for the recovery of overpayments.
e 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.
f Reimbursements for costs incurred in performing certain legislatively mandated activities not directly related
to administering the OASI and DI programs.
g Primarily consists of benefit payments designated to be paid on January 3, 2021 that were actually paid on
December 31, 2020, as well as a relatively small extension of credit by the Department of Treasury represent-
ing securities to be redeemed within the first few days of the following year.
Note: Components may not sum to totals because of rounding.
35
Financial Operations and Legislative Changes
Table III.A4 compares estimates of total income and total cost for calendar
year 2020 from the intermediate projections in the 2016 through 2020 Trust-
ees Reports to the corresponding actual amounts for 2020.
Table III.A4.—Comparison of Actual Calendar Year 2020 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 2016 report . . . . . . . . . . . . . . $1,017.1 5.0 $1,001.8 4.2
Estimate in 2017 report . . . . . . . . . . . . . . 1,014.2 4.7 987.8 2.8
Estimate in 2018 report . . . . . . . . . . . . . . 964.4 -.4 971.9 1.1
Estimate in 2019 report . . . . . . . . . . . . . . 961.3 -.7 962.9 .2
Estimate in 2020 report . . . . . . . . . . . . . . 967.0 -.1 962.8 .2
Actual amount . . . . . . . . . . . . . . . . . . . . . 968.3 — 961.0 —
DI Trust Fund:
Estimate in 2016 report . . . . . . . . . . . . . . 154.2 2.9 172.7 18.1
Estimate in 2017 report . . . . . . . . . . . . . . 155.1 3.6 164.7 12.6
Estimate in 2018 report . . . . . . . . . . . . . . 148.1 -1.1 157.2 7.5
Estimate in 2019 report . . . . . . . . . . . . . . 148.1 -1.1 150.9 3.1
Estimate in 2020 report . . . . . . . . . . . . . . 149.4 -.2 149.2 2.0
Actual amount . . . . . . . . . . . . . . . . . . . . . 149.7 — 146.3 —
OASI and DI Trust Funds, combined:
Estimate in 2016 report . . . . . . . . . . . . . . 1,171.3 4.8 1,174.5 6.1
Estimate in 2017 report . . . . . . . . . . . . . . 1,169.3 4.6 1,152.5 4.1
Estimate in 2018 report . . . . . . . . . . . . . . 1,112.5 -.5 1,129.2 2.0
Estimate in 2019 report . . . . . . . . . . . . . . 1,109.4 -.8 1,113.7 .6
Estimate in 2020 report . . . . . . . . . . . . . . 1,116.4 -.2 1,112.0 .4
Actual amount . . . . . . . . . . . . . . . . . . . . . 1,118.1 — 1,107.2 —
a Percentage differences are calculated prior to rounding.
b “Actual” income for 2020 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.
At the end of calendar year 2020, the OASDI program was providing
monthly benefits to about 64.9 million people. The OASI Trust Fund was
providing benefits to about 55.2 million people and the DI Trust Fund was
providing benefits to about 9.6 million people. The number of people receiv-
36
Calendar Year 2020 Operations
ing benefits from the OASI Trust Fund grew by 2.0 percent while the num-
ber of people receiving DI benefits fell by 3.1 percent during calendar year
2020. 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 2019 and 2020, 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 2019 and 2020
[Amounts in millions]
Calendar year 2019 Calendar year 2020
Percentage Percentage
Amount of total Amount of total
Total OASDI benefit payments . . . . . . . . . . $1,047,882 100.0 $1,095,875 100.0
OASI benefit payments . . . . . . . . . . . . . . 902,833 86.2 952,388 86.9
DI benefit payments . . . . . . . . . . . . . . . . . 145,049 13.8 143,487 13.1
OASI benefit payments, total. . . . . . . . . . . . 902,833 100.0 952,388 100.0
Monthly benefits:
Retired workers and auxiliaries . . . . . . 777,258 86.1 823,868 86.5
Retired workers . . . . . . . . . . . . . . . . 737,809 81.7 783,504 82.3
Spouses . . . . . . . . . . . . . . . . . . . . . . . 33,323 3.7 34,023 3.6
Children . . . . . . . . . . . . . . . . . . . . . . 6,127 .7 6,341 .7
Survivors of deceased workers. . . . . . . 125,369 13.9 128,294 13.5
Aged widows and widowers. . . . . . . 100,190 11.1 102,669 10.8
Disabled widows and widowers . . . . 2,362 .3 2,330 .2
Parents . . . . . . . . . . . . . . . . . . . . . . . 20 b 19 b
Children . . . . . . . . . . . . . . . . . . . . . . 21,310 2.4 21,795 2.3
Widowed mothers and fathers
caring for child beneficiaries . . . . 1,488 .2 1,480 .2
Lump-sum death payments . . . . . . . . . . . 206 b 226 b
DI benefit payments, total . . . . . . . . . . . . . . 145,049 100.0 143,487 100.0
Disabled workers . . . . . . . . . . . . . . . . . 136,512 94.1 135,204 94.2
Spouses. . . . . . . . . . . . . . . . . . . . . . . . . 532 .4 509 .4
Children . . . . . . . . . . . . . . . . . . . . . . . . 8,004 5.5 7,774 5.4
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 2020 totaled $6.3 billion, equal to 0.6 percent each of total cost and total
income. Table III.A6 shows corresponding percentages for each trust fund
separately and for OASDI as a whole for the last 5 years.
37
Financial Operations and Legislative Changes
Table III.A6.—Administrative Expenses as a Percentage of Total Income and
of Total Cost, Calendar Years 2016-2020
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
2016 . . . . . . . . . . . 0.4 0.4 1.7 1.9 0.7 0.7
2017 . . . . . . . . . . . .4 .5 1.6 1.9 .6 .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
The acquisition and redemption of securities during calendar year 2020
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 2020
[In millions]
OASI and DI
OASI DI Trust Funds,
Trust Fund Trust Fund combined
Invested asset reserves,
December 31, 2019a . . . . . . . . . . . . . . . . . . $2,804,355 $93,138 $2,897,493
Acquisitions:
Special issue securities:
Certificates of indebtedness . . . . . . . . . . . 911,246 147,305 1,058,551
Bonds b . . . . . . . . . . . . . . . . . . . . . . . . . . . 194,108 11,513 205,621
Total acquisitions . . . . . . . . . . . . . . . . . . . 1,105,354 158,817 1,264,172
Redemptions:
Special issue securities:
Certificates of indebtednessc . . . . . . . . . . 933,736 153,487 1,087,223
Bondsc . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,828 7,764 190,592
Total redemptionsc . . . . . . . . . . . . . . . . . . 1,116,563 161,251 1,277,815
Net increase in invested asset reserves . . . . . . -11,209 -2,434 -13,643
Invested asset reserves,
December 31, 2020a . . . . . . . . . . . . . . . . . . 2,793,146 90,703 2,883,849
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, 2020. The interest rate on these purchases was 0.750 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.
38
Social Security Amendments Since the 2020 Report
B. SOCIAL SECURITY AMENDMENTS SINCE THE 2020 REPORT
Since the Trustees submitted the 2020 report to Congress, there has been one
change in policy that is estimated to have a significant financial effect on the
OASDI program.
The estimates presented in last year’s report reflected the assumption that the
Deferred Action for Childhood Arrivals (DACA) policy would be phased
out, consistent with the Department of Homeland Security’s September 5,
2017 rescission of the 2012 DACA policy directive. This year’s report incor-
porates the effects of two developments during 2020 and early 2021. First,
pursuant to a United States District Court order, the US Citizenship and
Immigration Services resumed accepting first-time applications and renewal
requests for participation in the DACA program, effective December 7,
2020. Second, on January 20, 2021, President Biden issued a memorandum
directing the Secretary of Homeland Security to take appropriate action, in
consultation with the Attorney General, to preserve and fortify DACA con-
sistent with applicable law. This policy change to resume and maintain the
DACA program is estimated to have a small but significant positive financial
effect on the OASDI program over the short-range projection period and a
small but significant negative financial effect over the long-range projection
period. 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.
This report also incorporates the effect of two changes in law that are esti-
mated to have negligible financial effects over the short-range and long-
range projection periods:
• The ALS Disability Insurance Access Act of 2019, Public Law 116-
250, was enacted on December 22, 2020. This law eliminates the five-
month waiting period for disability insurance benefits for individuals
with amyotrophic lateral sclerosis (ALS). Public Law 117-3 was
enacted on March 23, 2021 to make a technical correction to the eligi-
bility criteria specified in Public Law 116-250.
• The American Rescue Plan Act of 2021, Public Law 117-2, was enacted
on March 11, 2021. Section 9674 of the bill requires third party plat-
forms (such as eBay) to provide Forms 1099 to merchants who have at
least $600 in transactions for the provision of goods or services. This
section is expected to have a small effect on the reporting of self-
employment income that might otherwise have been unreported.
Finally, in response to the COVID-19 pandemic and ensuing recession, sev-
eral laws, presidential actions, and other guidance during calendar year 2020
39
Financial Operations and Legislative Changes
authorized the reduction or deferral of employer and employee payroll tax
under certain limited circumstances. In all such cases, there was no reduction
or delay in the payroll tax revenue received by the OASI and DI Trust Funds.
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 (2021 through 2030) first, followed by esti-
mates and measures of actuarial status for the long-range period
(2021 through 2095). 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 year’s 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 2021 through 2030. 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 year’s
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 2021 through 2030 under all three sets of assumptions. Trust fund
ratios are similarly projected to decline throughout the 10-year projection
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 85 at the beginning of 2030.
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
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 2016-2030a
[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 butions mentsc fitsd interest Total benefits costs change year of year ratio e
Historical data:
2016 . . $797.5 $678.8 $0.1 $31.6 $87.0 $776.4 $768.6 $3.5 $4.3 $21.1 $2,801.3 358
2017 . . 825.6 706.5 f 35.9 83.2 806.7 798.7 3.7 4.3 19.0 2,820.3 347
2018 . . 831.0 715.9 f 34.5 80.7 853.5 844.9 3.8 4.8 -22.4 2,797.9 330
2019 . . 917.9 805.1 f 34.9 77.9 911.4 902.8 3.7 4.9 6.5 2,804.3 307
2020 . . 968.3 856.0 f 39.0 73.3 961.0 952.4 3.7 4.8 7.4 2,811.7 292
Intermediate:
2021 . . 930.1 828.5 f 34.1 67.5 1,005.4 996.2 4.1 5.1 -75.3 2,736.4 280
2022 . . 1,013.9 908.6 f 43.6 61.7 1,072.5 1,062.9 4.0 5.6 -58.6 2,677.8 255
2023 . . 1,056.5 952.3 f 47.1 57.1 1,139.6 1,130.0 4.1 5.5 -83.1 2,594.8 235
2024 . . 1,100.9 996.4 f 51.1 53.4 1,211.9 1,202.1 4.2 5.6 -111.0 2,483.7 214
2025 . . 1,146.0 1,039.3 f 55.7 51.0 1,287.8 1,277.8 4.4 5.6 -141.8 2,341.9 193
2026 . . 1,203.8 1,083.3 f 69.5 51.0 1,367.0 1,356.8 4.5 5.8 -163.3 2,178.6 171
2027 . . 1,254.1 1,127.1 f 75.5 51.5 1,450.4 1,440.0 4.6 5.8 -196.3 1,982.3 150
2028 . . 1,306.0 1,174.5 f 81.6 49.9 1,540.4 1,529.8 4.7 5.8 -234.4 1,747.9 129
2029 . . 1,357.0 1,223.1 f 88.0 45.9 1,633.2 1,622.5 4.9 5.9 -276.2 1,471.7 107
2030 . . 1,407.0 1,271.9 f 94.9 40.1 1,728.7 1,717.8 5.0 6.0 -321.8 1,149.9 85
Low-cost:
2021 . . 944.3 842.7 f 34.1 67.6 1,005.0 995.8 4.1 5.1 -60.6 2,751.1 280
2022 . . 1,063.4 956.8 f 43.7 62.9 1,075.5 1,066.0 4.0 5.5 -12.2 2,738.9 256
2023 . . 1,114.2 1,006.9 f 47.5 59.8 1,148.4 1,138.9 4.1 5.4 -34.2 2,704.7 238
2024 . . 1,184.2 1,073.5 f 51.7 59.0 1,227.3 1,217.4 4.3 5.5 -43.1 2,661.6 220
2025 . . 1,254.3 1,137.2 f 56.6 60.5 1,310.4 1,300.3 4.5 5.6 -56.1 2,605.5 203
2026 . . 1,338.2 1,203.0 f 71.0 64.2 1,397.8 1,387.3 4.7 5.8 -59.6 2,545.9 186
2027 . . 1,417.7 1,271.1 f 77.6 69.0 1,490.5 1,479.8 4.9 5.8 -72.8 2,473.1 171
2028 . . 1,502.0 1,345.1 f 84.3 72.7 1,591.2 1,580.2 5.1 5.9 -89.1 2,384.0 155
2029 . . 1,588.8 1,422.4 f 91.4 75.0 1,696.3 1,685.0 5.3 5.9 -107.6 2,276.4 141
2030 . . 1,677.5 1,501.9 f 99.2 76.4 1,805.9 1,794.3 5.5 6.0 -128.4 2,148.1 126
43
Actuarial Estimates
Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2016-2030a (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 butions mentsc fitsd interest Total benefits costs change year of year ratio e
High-cost:
2021 . . $914.6 $813.2 f $34.1 $67.3 $1,005.8 $996.6 $4.1 $5.1 -$91.2 $2,720.5 280
2022 . . 949.2 845.8 f 43.3 60.1 1,066.6 1,056.9 4.0 5.6 -117.3 2,603.2 255
2023 . . 972.4 872.0 f 46.5 53.8 1,125.8 1,116.1 4.1 5.5 -153.4 2,449.8 231
2024 . . 1,001.6 902.7 f 50.2 48.7 1,191.8 1,182.0 4.1 5.6 -190.1 2,259.7 206
2025 . . 1,033.4 934.8 f 54.5 44.1 1,260.7 1,250.9 4.2 5.7 -227.3 2,032.3 179
2026 . . 1,074.9 966.8 f 67.7 40.4 1,332.6 1,322.6 4.3 5.7 -257.6 1,774.7 153
2027 . . 1,107.4 998.2 f 73.3 36.0 1,407.6 1,397.5 4.3 5.7 -300.1 1,474.5 126
2028 . . 1,138.3 1,030.0 f 78.8 29.4 1,488.2 1,478.0 4.4 5.7 -349.9 1,124.6 99
2029 . . 1,164.3 1,058.3 f 84.6 21.4 1,570.3 1,560.1 4.5 5.8 -406.0 718.6 72
2030 . . 1,188.1 1,084.6 f 90.8 12.7 1,654.1 1,643.7 4.5 5.8 -465.9 252.7 43
a 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 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.
d Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the law.
e 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 2031 is projected to be 63 percent for the intermediate, 112 percent for the low-cost,
and 15 percent for the high-cost assumptions.
f Between -$50 million and $50 million.
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]
500%
Historical Projected
450%
400%
350%
300%
DI
OASI
250%
200%
III
150%
I
Minimum level for "short-range financial adequacy" II
100%
I
II
50%
III
0%
2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030
Calendar year
The estimated income shown in table IV.A1 increases annually after 2021
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 2021
through 2030 for all three alternatives, with the exception of small decreases
in covered employment in 2021 and 2022 for the high-cost alternative: the
number of covered workers increases under alternatives I, II, and III from
175 million during calendar year 2020 to about 190 million, 185 million, and
181 million, respectively, in 2030. 1 The total annual amount of taxable pay-
roll increases in years 2021 through 2030 for each alternative, with the
exception of a small decrease in 2022 for the high-cost alternative. Total tax-
able payroll increases from $7,705 billion in 2020 to $14,205 billion,
$12,021 billion, and $10,245 billion in 2030, 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-
1 See table IV.B3.
2 See table VI.G6.
45
Actuarial Estimates
tion and benefit base under the automatic-adjustment provisions; and
(4) growth in employment and average earnings.
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 3 percent of total trust fund
income for 2030, as compared to 8 percent for 2020.
Rising OASI cost from 2020 through 2030 reflects automatic benefit
increases as well as the upward trend in the number of beneficiaries and in
the average monthly earnings underlying benefits. 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 2021 through 2030 under the three sets of
assumptions, together with values for actual experience during 2016 through
2020. Non-interest income for DI was much lower in 2019 and 2020 than in
2016 through 2018, due to the temporary payroll tax rate reallocation from
OASI to DI in 2016 through 2018. For 2020, non-interest income was higher
than DI cost. Non-interest income generally increases throughout the short-
range projection period under each alternative, with the exception of a small
decrease in 2021 under all three sets of assumptions, due to most of the same
factors described previously for the OASI Trust Fund beginning on page 45.
DI cost grows steadily throughout the period under each alternative, with the
exception of small decreases in 2021 for the intermediate and low-cost
assumptions. Under the intermediate assumptions, DI reserves decrease in
2021 and then increase through 2030. Under the low-cost assumptions, DI
reserves increase through 2030. Under the high-cost assumptions, DI
reserves decline until depletion in the fourth quarter of 2027.
46
Short-Range Estimates
Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2016-2030a
[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 butions mentsc fitsd interest Total benefits costs change year of year ratio e
Historical data:
2016 . . . $160.0 $157.4 f $1.2 $1.4 $145.9 $142.8 $2.8 $0.4 $14.1 $46.3 22
2017 . . . 171.0 167.1 f 2.0 1.9 145.8 142.8 2.8 .2 25.1 71.5 32
2018 . . . 172.3 169.2 f .5 2.6 146.8 143.7 2.9 .2 25.6 97.1 49
2019 . . . 143.9 139.4 f 1.6 2.9 147.9 145.1 2.7 .1 -4.0 93.1 66
2020 . . . 149.7 145.3 f 1.7 2.8 146.3 143.6 2.6 .1 3.5 96.6 64
Intermediate:
2021 . . . 143.7 140.7 f .4 2.6 145.7 142.8 2.8 .2 -2.0 94.5 66
2022 . . . 158.2 154.3 f 1.5 2.4 153.6 150.6 2.9 .1 4.7 99.2 62
2023 . . . 165.6 161.7 f 1.7 2.3 159.9 157.0 2.8 .1 5.7 104.9 62
2024 . . . 173.3 169.2 f 1.8 2.4 166.0 163.0 3.0 .1 7.3 112.2 63
2025 . . . 181.0 176.5 f 1.9 2.6 171.9 168.8 3.1 .1 9.1 121.3 65
2026 . . . 189.3 184.0 f 2.3 3.1 179.5 176.2 3.3 .1 9.8 131.1 68
2027 . . . 197.5 191.4 f 2.5 3.6 187.4 183.8 3.5 .1 10.2 141.3 70
2028 . . . 206.5 199.5 f 2.6 4.4 193.8 190.0 3.6 .1 12.7 154.0 73
2029 . . . 215.7 207.7 f 2.8 5.2 200.5 196.6 3.8 .1 15.1 169.1 77
2030 . . . 225.1 216.0 f 3.0 6.2 207.7 203.6 4.0 .1 17.4 186.5 81
Low-cost:
2021 . . . 146.1 143.1 f .4 2.6 144.9 142.0 2.8 .2 1.2 97.8 67
2022 . . . 166.7 162.5 f 1.5 2.7 150.9 147.9 2.9 .1 15.8 113.5 65
2023 . . . 175.5 171.0 f 1.6 2.9 155.8 152.9 2.8 .1 19.7 133.3 73
2024 . . . 187.7 182.3 f 1.7 3.7 160.3 157.2 3.0 f 27.4 160.7 83
2025 . . . 200.0 193.1 f 1.8 5.1 164.4 161.2 3.2 f 35.6 196.2 98
2026 . . . 213.6 204.3 f 2.2 7.2 169.9 166.5 3.4 f 43.7 239.9 115
2027 . . . 228.2 215.9 f 2.3 10.1 175.7 172.1 3.6 .1 52.5 292.5 137
2028 . . . 244.6 228.4 f 2.5 13.8 180.2 176.3 3.8 .1 64.5 356.9 162
2029 . . . 262.3 241.5 f 2.6 18.2 185.2 181.2 4.0 .1 77.1 434.0 193
2030 . . . 281.1 255.0 f 2.7 23.4 191.0 186.7 4.2 .1 90.1 524.1 227
47
Actuarial Estimates
Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2016-2030a (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 butions mentsc fitsd interest Total benefits costs change year of year ratio e
High-cost:
2021 . . .$141.0 $138.1 f $0.4 $2.6 $146.3 $143.3 $2.8 $0.2 -$5.2 $91.4 66
2022 . . . 147.3 143.6 f 1.6 2.1 155.8 152.8 2.9 .1 -8.4 82.9 59
2023 . . . 151.5 148.1 f 1.7 1.7 163.6 160.7 2.8 .1 -12.2 70.7 51
2024 . . . 156.5 153.3 f 1.8 1.4 171.9 168.8 2.9 .1 -15.3 55.4 41
2025 . . . 161.8 158.7 f 2.0 1.1 179.1 175.9 3.1 .1 -17.3 38.1 31
2026 . . . 167.2 164.2 f 2.5 .6 188.6 185.3 3.2 .1 -21.4 16.7 20
2027 . . . g 169.5 f 2.6 g 198.3 194.8 3.4 .1 g g 8
2028 . . . g 174.9 f 2.8 g 206.2 202.6 3.5 .1 g g g
2029 . . . g 179.7 f 3.0 g 214.3 210.5 3.7 .1 g g g
2030 . . . g 184.2 f 3.2 g 222.5 218.5 3.8 .1 g g g
a The DI Trust Fund reserves become depleted in the fourth quarter of 2027 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 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 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.
d Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the
law.
e 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 2031 is projected to be 86 percent for the intermediate and 265 percent for
the low-cost assumptions.
f Between -$50 million and $50 million.
g While 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.
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 2020, the number of DI
beneficiaries in current-payment status continued the declining trend of the
prior six years. Under the intermediate assumptions, that number of DI bene-
ficiaries is projected to drop further through the end of 2021, then increase
through the end of 2026 to a level slightly below 10 million, which it remains
near through the rest of the short-range projection period. The rate of
increase after 2021 is much slower than was experienced on average from
1990 to 2010, when the population with the highest disability prevalence
48
Short-Range Estimates
rates was growing rapidly due to the aging of the baby-boom generation. See
section V.C.5 for further details.
At the beginning of calendar year 2021, the reserves of the DI Trust Fund rep-
resented 66 percent of estimated annual cost. Under the intermediate assump-
tions, DI trust fund reserves decrease in 2021 and then increase throughout the
rest of the short-range projection period. The trust fund ratio drops to 62 per-
cent of annual cost at the beginning of 2022, then increases throughout the rest
of the short-range projection period, reaching 84 percent of annual cost at the
beginning of 2030.
Because the reserves of the DI Trust Fund at the beginning of 2021 were less
than the estimated annual cost for 2021, and are projected to remain below
annual cost throughout the short-range period under the intermediate assump-
tions, the DI Trust Fund fails the Trustees’ test of short-range financial ade-
quacy.
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 2021 through 2030 under the three alter-
natives, together with actual experience in 2016 through 2020. Income and cost
for the OASI Trust Fund represent over 80 percent of the corresponding
amounts for the combined OASI and DI Trust Funds. Therefore, based on the
relative strength of the OASI Trust Fund over the next 10 years, 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. However, the combined OASI and DI Trust
Funds do not satisfy the test of short-range financial adequacy because trust
fund reserves drop below 100 percent of annual cost during 2029, to a trust
fund ratio of 85 percent at the beginning of 2030.
Table IV.A3.—Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2016-2030a
[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 butions mentsc fitsd interest Total benefits costschange year of year ratio e
Historical data:
2016 . . $957.5 $836.2 $0.1 $32.8 $88.4 $922.3 $911.4 $6.2 $4.7 $35.2 $2,847.7 305
2017 . . 996.6 873.6 f 37.9 85.1 952.5 941.5 6.5 4.5 44.1 2,891.8 299
2018 . . 1,003.4 885.1 f 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 f 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 f 40.7 76.1 1,107.2 1,095.9 6.3 5.0 10.9 2,908.3 262
49
Actuarial Estimates
Table IV.A3.—Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2016-2030a (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 butions mentsc fitsd interest Total benefits costschange year of year ratio e
Intermediate:
2021 . . $1,073.8 $969.2 f $34.5 $70.1 $1,151.0 $1,139.0 $6.8 $5.2 -$77.3 $2,831.0 253
2022 . . 1,172.1 1,062.9 f 45.1 64.1 1,226.1 1,213.5 6.9 5.7 -53.9 2,777.1 231
2023 . . 1,222.1 1,114.0 f 48.8 59.3 1,299.5 1,287.0 7.0 5.5 -77.4 2,699.7 214
2024 . . 1,274.2 1,165.6 f 52.9 55.8 1,378.0 1,365.1 7.2 5.6 -103.7 2,595.9 196
2025 . . 1,327.0 1,215.8 f 57.5 53.6 1,459.7 1,446.5 7.5 5.7 -132.7 2,463.2 178
2026 . . 1,393.1 1,267.3 f 71.8 54.0 1,546.6 1,533.0 7.8 5.8 -153.5 2,309.8 159
2027 . . 1,451.6 1,318.5 f 78.0 55.1 1,637.8 1,623.9 8.1 5.8 -186.2 2,123.6 141
2028 . . 1,512.5 1,374.0 f 84.2 54.2 1,734.2 1,719.9 8.4 5.9 -221.7 1,901.9 122
2029 . . 1,572.7 1,430.8 f 90.8 51.1 1,833.8 1,819.1 8.7 6.0 -261.1 1,640.8 104
2030 . . 1,632.1 1,487.9 f 97.9 46.3 1,936.5 1,921.4 9.0 6.1 -304.4 1,336.4 85
Low-cost:
2021 . . 1,090.4 985.8 f 34.4 70.2 1,149.9 1,137.8 6.8 5.2 -59.4 2,848.9 253
2022 . . 1,230.1 1,119.3 f 45.2 65.6 1,226.4 1,213.9 6.9 5.7 3.6 2,852.5 232
2023 . . 1,289.7 1,177.9 f 49.1 62.8 1,304.2 1,291.8 7.0 5.5 -14.5 2,838.0 219
2024 . . 1,371.9 1,255.8 f 53.5 62.6 1,387.6 1,374.7 7.3 5.6 -15.7 2,822.3 205
2025 . . 1,454.3 1,330.3 f 58.4 65.5 1,474.8 1,461.5 7.7 5.7 -20.6 2,801.7 191
2026 . . 1,551.9 1,407.3 f 73.2 71.3 1,567.7 1,553.8 8.1 5.8 -15.9 2,785.8 179
2027 . . 1,645.9 1,487.0 f 79.9 79.0 1,666.2 1,651.8 8.5 5.8 -20.2 2,765.6 167
2028 . . 1,746.6 1,573.5 f 86.7 86.4 1,771.3 1,756.5 8.9 5.9 -24.7 2,740.9 156
2029 . . 1,851.1 1,663.9 f 94.0 93.2 1,881.5 1,866.2 9.3 6.0 -30.5 2,710.4 146
2030 . . 1,958.7 1,757.0 f 101.9 99.8 1,996.9 1,981.0 9.7 6.1 -38.2 2,672.2 136
High-cost:
2021 . . 1,055.6 951.3 f 34.5 69.8 1,152.0 1,140.0 6.8 5.2 -96.4 2,811.9 252
2022 . . 1,096.5 989.4 f 44.9 62.2 1,222.3 1,209.7 6.9 5.7 -125.8 2,686.1 230
2023 . . 1,123.9 1,020.1 f 48.2 55.5 1,289.4 1,276.8 6.9 5.6 -165.5 2,520.6 208
2024 . . 1,158.1 1,055.9 f 52.1 50.1 1,363.6 1,350.8 7.1 5.7 -205.5 2,315.1 185
2025 . . 1,195.2 1,093.5 f 56.5 45.2 1,439.8 1,426.8 7.3 5.7 -244.7 2,070.4 161
2026 . . 1,242.2 1,130.9 f 70.2 41.0 1,521.2 1,507.9 7.5 5.8 -279.1 1,791.4 136
2027 . . 1,279.6 1,167.7 f 75.9 36.1 1,605.8 1,592.3 7.7 5.8 -326.2 1,465.2 112
2028 . . 1,315.2 1,204.9 f 81.7 28.6 1,694.4 1,680.6 7.9 5.8 -379.2 1,085.9 86
2029 . . 1,345.1 1,238.1 f 87.6 19.4 1,784.6 1,770.6 8.1 5.9 -439.5 646.4 61
2030 . . 1,372.3 1,268.8 f 94.0 9.5 1,876.5 1,862.2 8.3 5.9 -504.3 142.2 34
a 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 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.
d Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the law.
e 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 2031 is projected to be 66 percent for the intermediate, 127 percent for the low-
cost, and 7 percent for the high-cost assumptions.
f Between -$50 million and $50 million.
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 Year’s 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 year’s report to this report.
In the 2020 report under the intermediate assumptions, the trust fund ratio for
OASI reached 115 percent at the beginning of 2029—the tenth projection
year for that report. The change in the short-range valuation period alone,
from 2020 through 2029 to 2021 through 2030, lowered the estimated trust
fund ratio for the tenth year by 21 percentage points, to 94 percent. All other
changes to reflect modifications in law and regulations since last year’s
report, the most recent data, adjustments to the assumptions for future years,
and changes in projection methods combined for a net decrease in the ratio
for the tenth projection year of 9 percentage points. Therefore, the total
change in the tenth year projected trust fund ratio from last year’s report to
this year’s report is a reduction of 30 percentage points to 85 percent.
The changes in policy for the Deferred Actions for Childhood Arrivals pro-
gram discussed in III.B, which affect the Social Security program in the first
ten years primarily by increasing payroll tax income, increased the tenth year
OASI trust fund ratio by 1 percentage point. Changes in demographic
assumptions over the short-range period, primarily increased mortality due to
the COVID-19 pandemic, increased the projected tenth year trust fund ratio
for OASI by 6 percentage points. Several changes in economic data and
assumptions combined to cause a net reduction in the OASI trust fund ratio
of 6 percentage points by the beginning of 2030. Incorporating recent pro-
grammatic data and assumptions, including actual average benefits and bene-
ficiary counts for 2020 and lower estimated near-term revenue from taxation
of benefits income, resulted in a decrease of 8 percentage points in the tenth
year OASI trust fund ratio. Finally, retired worker modeling was improved to
better reflect age at initial entitlement, decreasing the tenth year trust fund
ratio by 1 percentage point in 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 6-percentage-point decrease in the
DI trust fund ratio from the beginning of 2029 in last year’s report to the
beginning of 2030 in this year’s report is the net effect of increases and
decreases from the factors described above for the OASI Trust Fund, the
largest of which was the decrease caused by changes in economic data and
assumptions.
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 year’s report for calendar year 2029 . 115 87 112
Change in trust fund ratio due to changes in:
Legislation and regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1
Valuation period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21 6 -18
Demographic data and assumptions. . . . . . . . . . . . . . . . . . . . . . . 6 a 5
Economic data and assumptions . . . . . . . . . . . . . . . . . . . . . . . . . -6 -9 -7
Programmatic data and assumptions . . . . . . . . . . . . . . . . . . . . . . -8 -4 -8
Projection methods and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1 a -1
Total change in trust fund ratio -30 -6 -27
Trust fund ratio shown in this report for calendar year 2030. . . . . . . 85 81 85
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 year’s 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 decrease from 11.62 percent of payroll for 2020 to
10.58 percent of payroll for 2021. The income rate in 2020 is relatively high
because the numerator (credited payroll tax contributions in 2020) is based
on estimates that did not anticipate the COVID-19 pandemic and ensuing
recession, while the denominator (2020 taxable payroll) does reflect the
actual lower-than-expected experience. The income rate then decreases in
2021 because of a negative adjustment to payroll tax contributions made in
June 2021 reflecting the excess amounts credited in 2020. The OASI income
rate rises to 11.11 percent in 2022 and then generally gradually rises thereaf-
ter, reaching 11.52 percent of taxable payroll for 2095. 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 154.
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.
54
Long-Range Estimates
The OASI cost rate declines from 12.47 percent of payroll for 2020 to
12.33 percent for 2021 1 due primarily to a relatively large increase in taxable
payroll in 2021, with 2020 taxable payroll being lower than expected
because of the COVID-19 pandemic and ensuing recession. From 2021 to
2038, the OASI cost rate rises rapidly because the retirement of the baby-
boom generation will continue to increase the number of beneficiaries much
faster than the number of workers increases, as subsequent lower-birth-rate
generations replace the baby-boom generation at working ages. From 2041
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 15.10 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 15.70 percent in
2095.
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 generally rises from 12.03 percent in
2021 until it peaks in 2034 at 12.87 percent of payroll. The cost rate then
declines to 12.02 percent for 2055, rises to 12.11 percent for 2068, and then
mostly declines to 10.97 percent in 2095, at which point the income rate
reaches 11.23 percent. For the high-cost assumptions, the OASI cost rate
rises through 2087 and then declines gradually through 2095. The cost rate
rises relatively rapidly through about 2038 because of the aging of the baby-
boom generation. The OASI cost rate reaches 24.67 percent of payroll for
2095, at which point the income rate reaches 12.06 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 increases significantly in 2021 because of the adjustment for
lower-than-expected payroll tax revenue in 2020 mentioned earlier. After
2022, the annual deficit mostly rises to 3.72 percent for 2041. It then declines
1 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.
55
Actuarial Estimates
to 3.65 percent of payroll for 2046, rises to 4.89 percent for 2078, and
declines thereafter, reaching 4.18 percent of taxable payroll for 2095.
Under the low-cost assumptions, the OASI annual deficit decreases from
1.54 percent of payroll for 2021 to 0.84 percent in 2022, and then rises to
1.58 percent of payroll for 2034. After 2034, the annual deficit declines to
0.74 percent of payroll for 2055, and rises to 0.81 percent for 2067. After
2067, the OASI annual balance generally improves, turning positive in 2088,
and reaching 0.26 percent of payroll for 2095. Under the high-cost assump-
tions, the OASI annual deficit rises from 1.97 percent for 2021 to
12.87 percent for 2087, then declines relatively modestly to 12.62 percent for
2095.
56
Long-Range Estimates
Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2095
[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 12.83 13.92 -1.09
2016 . . . . . 10.70 11.70 -.99 2.39 2.20 .19 13.09 13.90 -.80
2017 . . . . . 10.64 11.56 -.92 2.42 2.09 .33 13.06 13.65 -.59
2018 . . . . . 10.28 11.69 -1.41 2.32 2.01 .31 12.60 13.70 -1.10
2019 . . . . . 10.98 11.91 -.93 1.84 1.93 -.09 12.82 13.84 -1.02
2020 . . . . . 11.62 12.47 -.86 1.91 1.90 .01 13.52 14.37 -.85
Intermediate:
2021 . . . . . 10.58 12.33 -1.75 1.73 1.79 -.06 12.31 14.11 -1.81
2022 . . . . . 11.11 12.51 -1.40 1.82 1.79 .03 12.93 14.30 -1.38
2023 . . . . . 11.10 12.65 -1.56 1.81 1.78 .04 12.91 14.43 -1.52
2024 . . . . . 11.13 12.87 -1.75 1.82 1.76 .05 12.94 14.64 -1.69
2025 . . . . . 11.14 13.11 -1.96 1.82 1.75 .07 12.96 14.86 -1.90
2026 . . . . . 11.26 13.35 -2.09 1.82 1.75 .07 13.08 15.10 -2.03
2027 . . . . . 11.28 13.61 -2.32 1.82 1.76 .06 13.10 15.36 -2.26
2028 . . . . . 11.32 13.88 -2.56 1.82 1.75 .08 13.14 15.62 -2.49
2029 . . . . . 11.35 14.14 -2.79 1.82 1.74 .09 13.17 15.87 -2.70
2030 . . . . . 11.37 14.38 -3.01 1.82 1.73 .09 13.19 16.11 -2.92
2035 . . . . . 11.42 14.98 -3.56 1.82 1.76 .06 13.24 16.74 -3.49
2040 . . . . . 11.44 15.15 -3.70 1.83 1.83 c 13.27 16.98 -3.71
2045 . . . . . 11.45 15.11 -3.66 1.83 1.94 -.11 13.28 17.05 -3.77
2050 . . . . . 11.46 15.14 -3.68 1.83 2.00 -.17 13.29 17.14 -3.85
2055 . . . . . 11.47 15.27 -3.79 1.83 2.03 -.19 13.31 17.29 -3.99
2060 . . . . . 11.50 15.55 -4.06 1.83 2.00 -.16 13.33 17.55 -4.22
2065 . . . . . 11.52 15.82 -4.31 1.83 1.98 -.15 13.35 17.80 -4.45
2070 . . . . . 11.54 16.09 -4.56 1.83 1.98 -.14 13.37 18.07 -4.70
2075 . . . . . 11.56 16.37 -4.82 1.83 1.94 -.11 13.39 18.32 -4.93
2080 . . . . . 11.56 16.43 -4.87 1.83 1.92 -.09 13.40 18.35 -4.96
2085 . . . . . 11.55 16.22 -4.67 1.83 1.92 -.08 13.38 18.14 -4.75
2090 . . . . . 11.53 15.84 -4.31 1.83 1.98 -.14 13.36 17.81 -4.45
2095 . . . . . 11.52 15.70 -4.18 1.84 2.00 -.17 13.36 17.70 -4.34
First year balance becomes
negative and remains negative
throughout the 75-year
projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2040 . . . . . . . . . . . . . . . . 2010
57
Actuarial Estimates
Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2095 (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:
2021 . . . . . 10.50 12.03 -1.54 1.72 1.74 -0.02 12.22 13.77 -1.55
2022 . . . . . 11.17 12.01 -.84 1.83 1.69 .15 13.00 13.69 -.69
2023 . . . . . 11.07 12.06 -.99 1.81 1.64 .18 12.88 13.70 -.81
2024 . . . . . 11.08 12.09 -1.01 1.81 1.58 .23 12.89 13.66 -.77
2025 . . . . . 11.10 12.18 -1.08 1.81 1.53 .28 12.91 13.71 -.80
2026 . . . . . 11.20 12.29 -1.09 1.81 1.49 .32 13.01 13.78 -.77
2027 . . . . . 11.21 12.39 -1.18 1.81 1.46 .35 13.02 13.85 -.83
2028 . . . . . 11.24 12.51 -1.27 1.82 1.42 .40 13.05 13.93 -.87
2029 . . . . . 11.26 12.62 -1.36 1.82 1.38 .44 13.07 13.99 -.92
2030 . . . . . 11.27 12.71 -1.44 1.81 1.34 .47 13.09 14.06 -.97
2035 . . . . . 11.30 12.86 -1.56 1.82 1.29 .53 13.12 14.15 -1.04
2040 . . . . . 11.30 12.70 -1.40 1.82 1.30 .51 13.12 14.00 -.88
2045 . . . . . 11.29 12.35 -1.06 1.82 1.35 .47 13.11 13.71 -.60
2050 . . . . . 11.28 12.12 -.84 1.82 1.37 .45 13.10 13.49 -.38
2055 . . . . . 11.28 12.02 -.74 1.82 1.37 .45 13.10 13.39 -.28
2060 . . . . . 11.29 12.08 -.79 1.82 1.33 .49 13.11 13.41 -.30
2065 . . . . . 11.30 12.11 -.81 1.82 1.32 .50 13.12 13.42 -.31
2070 . . . . . 11.30 12.11 -.81 1.82 1.31 .52 13.12 13.42 -.30
2075 . . . . . 11.30 12.09 -.79 1.82 1.28 .54 13.12 13.37 -.25
2080 . . . . . 11.29 11.87 -.58 1.82 1.27 .55 13.11 13.13 -.03
2085 . . . . . 11.26 11.45 -.19 1.82 1.28 .54 13.08 12.73 .35
2090 . . . . . 11.24 11.03 .20 1.82 1.33 .49 13.06 12.36 .70
2095 . . . . . 11.23 10.97 .26 1.82 1.34 .48 13.06 12.32 .74
First year balance becomes
negative and remains negative
throughout the 75-year
projection period . . . . . . . . . . . d ................ d ................ d
High-cost:
2021 . . . . . 10.56 12.53 -1.97 1.73 1.82 -.10 12.28 14.36 -2.07
2022 . . . . . 11.19 13.42 -2.23 1.83 1.96 -.13 13.01 15.38 -2.37
2023 . . . . . 11.14 13.65 -2.51 1.82 1.98 -.17 12.96 15.64 -2.68
2024 . . . . . 11.18 13.98 -2.80 1.82 2.02 -.20 13.00 16.00 -3.00
2025 . . . . . 11.20 14.27 -3.07 1.82 2.03 -.21 13.01 16.29 -3.28
2026 . . . . . 11.33 14.59 -3.26 1.82 2.07 -.24 13.15 16.66 -3.50
2027 . . . . . 11.36 14.92 -3.56 1.82 2.10 -.28 13.18 17.02 -3.84
2028 . . . . . 11.40 15.30 -3.90 1.83 2.12 -.29 13.23 17.42 -4.19
2029 . . . . . 11.44 15.72 -4.28 1.83 2.14 -.32 13.27 17.86 -4.59
2030 . . . . . 11.47 16.15 -4.67 1.83 2.17 -.34 13.30 18.32 -5.01
58
Long-Range Estimates
Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,
Calendar Years 1990-2095 (Cont.)
[As a percentage of taxable payroll]
OASI DI OASDI
Calendar Income Cost Income Cost Income Cost
year rate a b
rate Balance b rate a rateb Balanceb rate a rateb Balanceb
High-cost (Cont.):
2035 . . . . . 11.55 17.33 -5.78 1.83 2.34 -0.50 13.39 19.67 -6.28
2040 . . . . . 11.61 18.07 -6.47 1.84 2.49 -.65 13.44 20.56 -7.12
2045 . . . . . 11.65 18.68 -7.03 1.84 2.69 -.85 13.49 21.38 -7.88
2050 . . . . . 11.70 19.34 -7.65 1.84 2.83 -.98 13.54 22.17 -8.63
2055 . . . . . 11.74 20.04 -8.30 1.85 2.92 -1.07 13.59 22.96 -9.37
2060 . . . . . 11.80 20.87 -9.07 1.85 2.91 -1.07 13.65 23.78 -10.13
2065 . . . . . 11.85 21.68 -9.83 1.85 2.92 -1.07 13.70 24.61 -10.90
2070 . . . . . 11.91 22.58 -10.66 1.85 2.93 -1.08 13.76 25.51 -11.75
2075 . . . . . 11.98 23.59 -11.61 1.85 2.89 -1.04 13.83 26.48 -12.65
2080 . . . . . 12.03 24.42 -12.39 1.85 2.83 -.98 13.88 27.25 -13.37
2085 . . . . . 12.06 24.88 -12.82 1.85 2.77 -.92 13.91 27.66 -13.74
2090 . . . . . 12.06 24.83 -12.76 1.85 2.82 -.97 13.91 27.64 -13.73
2095 . . . . . 12.06 24.67 -12.62 1.85 2.86 -1.01 13.91 27.54 -13.63
First year balance becomes
negative and remains negative
throughout the 75-year
projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2021 . . . . . . . . . . . . . . . . 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 -0.005 and 0 percent of taxable payroll.
d The annual balance is projected to be negative for a temporary period and return to positive levels before
the end of the 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
1.90 percent for 2020 to 1.79 percent for 2021 due primarily to a relatively
large increase in taxable payroll for 2021, with 2020 taxable payroll being
lower than expected because of the COVID-19 pandemic and ensuing reces-
sion. After 2022, the cost rate generally declines more gradually to 1.73 per-
cent for 2031. Then the DI cost rate increases gradually to 2.03 percent for
2055. Thereafter, the cost rate remains relatively stable, decreasing slowly to
1.91 percent for 2083, and then increasing to 2.00 percent for 2095. Except
for the decline in payroll tax contributions in 2021 from the adjustment
reflecting lower-than-expected 2020 payroll tax contributions, the projected
DI income rate is relatively stable throughout the projection period, reaching
1.84 percent for 2095. The annual balance is negative in 2021 and turns posi-
tive in 2022, reaching a peak of 0.10 percent of payroll for 2031. The annual
balance then declines and becomes negative in 2040. After 2040, the DI
annual deficit increases to 0.19 percent in 2055, generally decreases to
0.08 percent in 2083, and then increases to 0.17 percent of payroll for 2095.
59
Actuarial Estimates
Under the low-cost assumptions, the projected DI cost rate declines from
1.74 percent of payroll for 2021 to 1.29 percent for 2037, and increases to
1.37 percent for 2052. The cost rate then declines through 2081 and increases
slowly thereafter, reaching 1.34 percent for 2095. The annual balance is neg-
ative for 2021 and positive throughout the remainder of the long-range
period. Under the high-cost assumptions, the DI cost rate rises from
1.82 percent of payroll in 2021 to 2.93 percent in 2056 and fluctuates there-
after, reaching 2.86 percent for 2095. The annual balance is negative
throughout the projection period, with annual deficits rising from
0.10 percent of payroll for 2021 to 1.08 percent in 2056, and attaining
1.01 percent for 2095.
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 2020.
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-
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.
60
Long-Range Estimates
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
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 5.1 percent of GDP for 2021 to
about 6.0 percent for 2039. After 2039, OASDI cost as a percentage of GDP
declines slightly through 2051, increases to a peak of 6.2 percent for 2077,
and thereafter decreases slowly, reaching about 5.9 percent by 2095. 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-
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 154.
61
Actuarial Estimates
Table IV.B2.—Components of Annual Income Rates, Calendar Years 1990-2095
[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
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 10.37 .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 12.83
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 10.28 2.32 .01 d 2.32 12.12 .48 d 12.60
2019 . . 10.52 .46 d 10.98 1.82 .02 d 1.84 12.34 .48 d 12.82
2020 . . 11.11 .51 d 11.62 1.89 .02 d 1.91 12.99 .53 d 13.52
Intermediate:
2021 . . 10.16 .42 d 10.58 1.73 d d 1.73 11.88 .42 d 12.31
2022 . . 10.60 .51 d 11.11 1.80 .02 d 1.82 12.40 .53 d 12.93
2023 . . 10.58 .52 d 11.10 1.80 .02 d 1.81 12.37 .54 d 12.91
2024 . . 10.58 .54 d 11.13 1.80 .02 d 1.82 12.38 .56 d 12.94
2025 . . 10.58 .57 d 11.14 1.80 .02 d 1.82 12.37 .59 d 12.96
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 .76 d 11.35 1.80 .02 d 1.82 12.38 .79 d 13.17
2030 . . 10.58 .79 d 11.37 1.80 .02 d 1.82 12.38 .81 d 13.19
2035 . . 10.58 .84 d 11.42 1.80 .03 d 1.82 12.38 .87 d 13.24
2040 . . 10.58 .86 d 11.44 1.80 .03 d 1.83 12.38 .89 d 13.27
2045 . . 10.58 .87 d 11.45 1.80 .03 d 1.83 12.38 .90 d 13.28
2050 . . 10.58 .88 d 11.46 1.80 .03 d 1.83 12.38 .91 d 13.29
2055 . . 10.58 .89 d 11.47 1.80 .04 d 1.83 12.38 .93 d 13.31
2060 . . 10.58 .91 d 11.50 1.80 .04 d 1.83 12.38 .95 d 13.33
2065 . . 10.58 .94 d 11.52 1.80 .04 d 1.83 12.38 .97 d 13.35
2070 . . 10.58 .95 d 11.54 1.80 .04 d 1.83 12.38 .99 d 13.37
2075 . . 10.58 .97 d 11.56 1.80 .04 d 1.83 12.38 1.01 d 13.39
2080 . . 10.58 .98 d 11.56 1.80 .04 d 1.83 12.38 1.02 d 13.40
2085 . . 10.58 .97 d 11.55 1.80 .04 d 1.83 12.38 1.01 d 13.38
2090 . . 10.58 .95 d 11.53 1.80 .04 d 1.83 12.38 .99 d 13.36
2095 . . 10.58 .94 d 11.52 1.80 .04 d 1.84 12.38 .98 d 13.36
Low-cost:
2021 . . 10.09 .41 d 10.50 1.71 d d 1.72 11.80 .41 d 12.22
2022 . . 10.68 .49 d 11.17 1.81 .02 d 1.83 12.50 .50 d 13.00
2023 . . 10.57 .50 d 11.07 1.80 .02 d 1.81 12.37 .52 d 12.88
2024 . . 10.57 .51 d 11.08 1.80 .02 d 1.81 12.37 .53 d 12.89
2025 . . 10.57 .53 d 11.10 1.79 .02 d 1.81 12.37 .54 d 12.91
2026 . . 10.57 .62 d 11.20 1.80 .02 d 1.81 12.37 .64 d 13.01
2027 . . 10.57 .64 d 11.21 1.79 .02 d 1.81 12.36 .66 d 13.02
2028 . . 10.57 .66 d 11.24 1.80 .02 d 1.82 12.37 .68 d 13.05
2029 . . 10.58 .68 d 11.26 1.80 .02 d 1.82 12.38 .70 d 13.07
2030 . . 10.57 .70 d 11.27 1.80 .02 d 1.81 12.37 .72 d 13.09
62
Long-Range Estimates
Table IV.B2.—Components of Annual Income Rates, Calendar Years 1990-2095 (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 tax fitsa mentsb Totalc tax fitsa mentsb Totalc tax fitsa mentsb Totalc
Low-cost (Cont.):
2035 . . 10.58 0.72 d 11.30 1.80 0.02 d 1.82 12.37 0.74 d 13.12
2040 . . 10.58 .73 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12
2045 . . 10.57 .72 d 11.29 1.80 .02 d 1.82 12.37 .74 d 13.11
2050 . . 10.57 .71 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10
2055 . . 10.57 .71 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10
2060 . . 10.57 .72 d 11.29 1.80 .02 d 1.82 12.37 .74 d 13.11
2065 . . 10.57 .72 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12
2070 . . 10.57 .72 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12
2075 . . 10.57 .72 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12
2080 . . 10.57 .71 d 11.29 1.80 .02 d 1.82 12.37 .74 d 13.11
2085 . . 10.57 .69 d 11.26 1.80 .03 d 1.82 12.37 .71 d 13.08
2090 . . 10.57 .66 d 11.24 1.80 .03 d 1.82 12.37 .69 d 13.06
2095 . . 10.57 .66 d 11.23 1.80 .03 d 1.82 12.37 .69 d 13.06
High-cost:
2021 . . 10.13 .42 d 10.56 1.72 d d 1.73 11.85 .43 d 12.28
2022 . . 10.64 .55 d 11.19 1.81 .02 d 1.83 12.45 .56 d 13.01
2023 . . 10.57 .56 d 11.14 1.80 .02 d 1.82 12.37 .59 d 12.96
2024 . . 10.59 .59 d 11.18 1.80 .02 d 1.82 12.39 .61 d 13.00
2025 . . 10.58 .62 d 11.20 1.80 .02 d 1.82 12.38 .64 d 13.01
2026 . . 10.58 .74 d 11.33 1.80 .03 d 1.82 12.38 .77 d 13.15
2027 . . 10.58 .78 d 11.36 1.80 .03 d 1.82 12.38 .80 d 13.18
2028 . . 10.59 .81 d 11.40 1.80 .03 d 1.83 12.39 .84 d 13.23
2029 . . 10.59 .85 d 11.44 1.80 .03 d 1.83 12.39 .88 d 13.27
2030 . . 10.59 .89 d 11.47 1.80 .03 d 1.83 12.38 .92 d 13.30
2035 . . 10.59 .97 d 11.55 1.80 .04 d 1.83 12.38 1.00 d 13.39
2040 . . 10.59 1.02 d 11.61 1.80 .04 d 1.84 12.39 1.06 d 13.44
2045 . . 10.59 1.06 d 11.65 1.80 .04 d 1.84 12.39 1.11 d 13.49
2050 . . 10.59 1.11 d 11.70 1.80 .05 d 1.84 12.39 1.16 d 13.54
2055 . . 10.59 1.16 d 11.74 1.80 .05 d 1.85 12.39 1.21 d 13.59
2060 . . 10.59 1.21 d 11.80 1.80 .05 d 1.85 12.39 1.26 d 13.65
2065 . . 10.59 1.27 d 11.85 1.80 .05 d 1.85 12.39 1.32 d 13.70
2070 . . 10.59 1.32 d 11.91 1.80 .05 d 1.85 12.39 1.38 d 13.76
2075 . . 10.59 1.39 d 11.98 1.80 .05 d 1.85 12.39 1.44 d 13.83
2080 . . 10.59 1.44 d 12.03 1.80 .05 d 1.85 12.39 1.49 d 13.88
2085 . . 10.59 1.47 d 12.06 1.80 .05 d 1.85 12.39 1.53 d 13.91
2090 . . 10.59 1.47 d 12.06 1.80 .05 d 1.85 12.39 1.53 d 13.91
2095 . . 10.59 1.47 d 12.06 1.80 .05 d 1.85 12.39 1.52 d 13.91
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.
63
Actuarial Estimates
2. Comparison of Workers to Beneficiaries
Under the intermediate assumptions, the Trustees project that the OASDI
cost rate will rise rapidly between 2021 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 1945-2095
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 . . . . . . . . . 120,441 32,763 3,874 36,636 3.3 30
1990 . . . . . . . . . 133,008 35,255 4,204 39,459 3.4 30
1995 . . . . . . . . . 140,804 37,364 5,731 43,096 3.3 31
2000 . . . . . . . . . 154,713 38,556 6,606 45,162 3.4 29
2005 . . . . . . . . . 159,045 39,961 8,172 48,133 3.3 30
2010 . . . . . . . . . 157,079 43,440 9,958 53,398 2.9 34
2011 . . . . . . . . . 158,622 44,388 10,428 54,816 2.9 35
2012 . . . . . . . . . 160,783 45,377 10,799 56,176 2.9 35
2013 . . . . . . . . . 163,092 46,517 10,954 57,471 2.8 35
2014 . . . . . . . . . 165,484 47,603 10,971 58,574 2.8 35
2015 . . . . . . . . . 168,218 48,663 10,881 59,543 2.8 35
2016 . . . . . . . . . 170,738 49,811 10,728 60,539 2.8 35
2017 . . . . . . . . . 172,966 50,962 10,517 61,480 2.8 36
2018 . . . . . . . . . 175,440 52,168 10,296 62,464 2.8 36
2019 . . . . . . . . . 176,847 53,508 10,063 63,570 2.8 36
2020 . . . . . . . . . 174,836 54,843 9,844 64,686 2.7 37
Intermediate:
2021 . . . . . . . . . 175,723 55,738 9,563 65,301 2.7 37
2025 . . . . . . . . . 182,182 60,844 9,708 70,552 2.6 39
2030 . . . . . . . . . 185,390 67,410 9,890 77,300 2.4 42
2035 . . . . . . . . . 187,712 71,598 10,332 81,930 2.3 44
2040 . . . . . . . . . 189,142 73,804 10,948 84,752 2.2 45
2045 . . . . . . . . . 191,692 74,609 11,815 86,424 2.2 45
64
Long-Range Estimates
Table IV.B3.—Covered Workers and Beneficiaries, Calendar Years 1945-2095 (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.):
2050 . . . . . . . . . 195,083 76,008 12,422 88,430 2.2 45
2055 . . . . . . . . . 198,939 78,164 12,884 91,048 2.2 46
2060 . . . . . . . . . 202,962 81,261 13,009 94,270 2.2 46
2065 . . . . . . . . . 206,690 84,289 13,189 97,478 2.1 47
2070 . . . . . . . . . 210,214 87,370 13,397 100,767 2.1 48
2075 . . . . . . . . . 213,932 90,551 13,468 104,019 2.1 49
2080 . . . . . . . . . 218,321 92,721 13,633 106,354 2.1 49
2085 . . . . . . . . . 223,629 93,662 13,960 107,622 2.1 48
2090 . . . . . . . . . 229,522 93,913 14,710 108,623 2.1 47
2095 . . . . . . . . . 235,468 95,534 15,258 110,792 2.1 47
Low-cost:
2021 . . . . . . . . . 178,378 55,733 9,563 65,295 2.7 37
2025 . . . . . . . . . 185,357 60,763 9,243 70,006 2.6 38
2030 . . . . . . . . . 189,804 67,098 8,714 75,812 2.5 40
2035 . . . . . . . . . 193,191 70,687 8,624 79,310 2.4 41
2040 . . . . . . . . . 196,045 72,247 8,892 81,139 2.4 41
2045 . . . . . . . . . 201,194 72,372 9,449 81,820 2.5 41
2050 . . . . . . . . . 207,730 73,110 9,852 82,962 2.5 40
2055 . . . . . . . . . 214,918 74,693 10,183 84,876 2.5 39
2060 . . . . . . . . . 222,208 77,279 10,296 87,575 2.5 39
2065 . . . . . . . . . 229,275 79,812 10,493 90,305 2.5 39
2070 . . . . . . . . . 236,506 82,353 10,761 93,115 2.5 39
2075 . . . . . . . . . 244,559 84,900 10,985 95,885 2.6 39
2080 . . . . . . . . . 253,988 86,430 11,343 97,773 2.6 38
2085 . . . . . . . . . 264,902 86,883 11,911 98,794 2.7 37
2090 . . . . . . . . . 276,474 87,396 12,805 100,201 2.8 36
2095 . . . . . . . . . 287,718 90,253 13,454 103,707 2.8 36
High-cost:
2021 . . . . . . . . . 174,775 55,746 9,559 65,305 2.7 37
2025 . . . . . . . . . 175,998 60,967 10,200 71,168 2.5 40
2030 . . . . . . . . . 181,089 67,873 11,090 78,963 2.3 44
2035 . . . . . . . . . 182,554 72,806 12,118 84,925 2.1 47
2040 . . . . . . . . . 182,596 75,915 13,057 88,972 2.1 49
2045 . . . . . . . . . 182,252 77,776 14,197 91,973 2.0 50
2050 . . . . . . . . . 182,012 80,154 14,973 95,127 1.9 52
2055 . . . . . . . . . 181,983 83,126 15,525 98,651 1.8 54
2060 . . . . . . . . . 182,157 86,896 15,587 102,483 1.8 56
2065 . . . . . . . . . 181,883 90,547 15,640 106,187 1.7 58
2070 . . . . . . . . . 181,079 94,268 15,620 109,889 1.6 61
2075 . . . . . . . . . 179,837 98,111 15,311 113,422 1.6 63
2080 . . . . . . . . . 178,572 100,929 14,986 115,915 1.5 65
2085 . . . . . . . . . 177,715 102,284 14,661 116,944 1.5 66
2090 . . . . . . . . . 177,226 101,831 14,844 116,674 1.5 66
2095 . . . . . . . . . 177,119 101,277 15,032 116,309 1.5 66
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.
65
Actuarial 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 2020 level
of 37 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. By 2095, this
projected ratio rises further under the intermediate and high-cost assump-
tions, reaching 47 under the intermediate assumptions and 66 under the high-
cost assumptions. Under the low-cost assumptions, this ratio rises to 41 by
2038 and then generally declines, reaching 36 by 2095. 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
I
30
20
10
0
1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
Calendar year
66
Long-Range Estimates
Table IV.B3 also shows the number of covered workers per OASDI benefi-
ciary, which was about 2.7 for 2020. Under the intermediate assumptions,
this ratio declines generally throughout the long-range period, reaching 2.3
for 2038 and 2.1 by 2095. Under the low-cost assumptions, this ratio
declines to 2.4 for 2038, then generally rises to 2.8 by 2095. Under the high-
cost assumptions, this ratio decreases steadily to 1.5 by 2095.
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 280 percent at the beginning of 2021 1 until the trust fund
reserves become depleted in 2033 (one year earlier than projected in last
year’s report), at which time 76 percent of scheduled benefits would be pay-
able. The DI trust fund ratio decreases from 66 percent at the beginning of
2021 to 62 percent in 2022. After 2022, the DI trust fund ratio increases for a
time, reflecting the period of recent and near-term expected low incidence
rates, reaching a peak of 116 percent by 2040. The ratio then declines until
1 For presentation in this report, if the scheduled January 3, 2021 payment, actually paid on December 31,
2020, were a) counted as reducing trust fund reserves at the end of 2020 and b) excluded from the calcula-
tion of 2021 cost, then the OASI trust fund ratio shown for 2021 would be 283 percent.
67
Actuarial Estimates
the trust fund reserves become depleted in 2057 (8 years earlier than pro-
jected in last year’s report). At that time, 91 percent of scheduled benefits
would be payable. The differences in depletion years for both OASI and DI
from last year’s report are largely due to the revenue effects from the 2020
recession.
Under the intermediate assumptions, the trust fund ratio for the combined
OASI and DI Trust Funds declines from 253 percent at the beginning of
2021 until the combined fund reserves become depleted early in 2034 (one
year earlier than projected in last year’s report), at which time 78 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
65 percent at the beginning of 2022 to the extremely high level of
2,981 percent for 2096. For the OASI program, the trust fund ratio declines
steadily, from 280 percent for 2021 until the reserves become depleted in
2040, at which time 88 percent of scheduled benefits would be payable. For
the combined OASDI program, the trust fund ratio declines from 253 percent
for 2021 until the combined fund reserves become depleted in 2061. How-
ever, the trust funds would have sufficient income by the end of 2092 to per-
mit full payment of scheduled benefits thereafter and also to pay in arrears
the temporary shortfalls between 2061 and 2092. By 2093, trust fund
reserves become positive and the trust fund ratio increases thereafter, to a
ratio of 23 percent in 2096. 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
280 percent for 2021 until reserves become depleted in 2031, at which time
68 percent of scheduled benefits would still be payable. The DI trust fund
ratio declines from 66 percent for 2021 until the reserves become depleted in
2027. At that time, 87 percent of scheduled benefits would still be payable.
The combined OASI and DI trust fund ratio declines from 252 percent for
2021 until reserves become depleted in 2031, at which time 70 percent of
scheduled benefits would still be payable.
The Trustees project trust fund reserve depletion within the 75-year projec-
tion period with the exception of the DI Trust Fund under the low-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
trust funds. The stochastic projections discussed in appendix E suggest that
trust fund reserve depletion is highly probable before mid-century.
68
Long-Range Estimates
In the 2020 report, the Trustees projected that the combined trust fund
reserves would become depleted in 2031 and 2035 under the high-cost and
intermediate assumptions, respectively, and would become temporarily
depleted between 2079 and 2088 under the low-cost assumptions.
Table IV.B4.—Trust Fund Ratios, Calendar Years 2021-2095a
[In percent]
Intermediate Low-cost High-cost
Calendar
year OASI DI OASDI OASI DI OASDI OASI DI OASDI
2021 . . . . . . . . . . . . . 280 66 253 280 67 253 280 66 252
2022 . . . . . . . . . . . . . 255 62 231 256 65 232 255 59 230
2023 . . . . . . . . . . . . . 235 62 214 238 73 219 231 51 208
2024 . . . . . . . . . . . . . 214 63 196 220 83 205 206 41 185
2025 . . . . . . . . . . . . . 193 65 178 203 98 191 179 31 161
2026 . . . . . . . . . . . . . 171 68 159 186 115 179 153 20 136
2027 . . . . . . . . . . . . . 150 70 141 171 137 167 126 8 112
2028 . . . . . . . . . . . . . 129 73 122 155 162 156 99 b 86
2029 . . . . . . . . . . . . . 107 77 104 141 193 146 72 b 61
2030 . . . . . . . . . . . . . 85 81 85 126 227 136 43 b 34
2035 . . . . . . . . . . . . . b 105 b 61 429 94 b b b
2040 . . . . . . . . . . . . . b 116 b 4 637 63 b b b
2045 . . . . . . . . . . . . . b 102 b b 812 39 b b b
2050 . . . . . . . . . . . . . b 69 b b 987 23 b b b
2055 . . . . . . . . . . . . . b 26 b b 1,170 12 b b b
2060 . . . . . . . . . . . . . b b b b 1,394 2 b b b
2065 . . . . . . . . . . . . . b b b b 1,628 b b b b
2070 . . . . . . . . . . . . . b b b b 1,869 b b b b
2075 . . . . . . . . . . . . . b b b b 2,142 b b b b
2080 . . . . . . . . . . . . . b b b b 2,410 b b b b
2085 . . . . . . . . . . . . . b b b b 2,629 b b b b
2090 . . . . . . . . . . . . . b b b b 2,756 b b b b
2095 . . . . . . . . . . . . . b b b b 2,939 17 b b b
Trust fund reserves
permanently
become
depleted in . . . . . . 2033 2057 2034 2040 c d 2031 2027 2031
Payable benefits as
percent of sched-
uled benefits:
At the time of
permanent
reserve
depletion . . . . . 76 91 78 88 c d 68 87 70
For 2095 . . . . . 72 92 74 100 c d 46 64 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.
Since 2013, when the Trustees modified the test of long-range close actuarial
balance, the standard for each trust fund requires meeting two conditions:
69
Actuarial Estimates
(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 fails the test of short-range financial adequacy because the trust fund
ratio does not reach 100 percent during the 10-year period. The OASI and
combined OASI and DI Trust Funds fail the test of short-range financial ade-
quacy 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 2033, DI Trust Fund reserves become depleted
in 2057, and the combined OASI and DI Trust Fund reserves become
depleted in 2034. Therefore, the OASI, DI, and combined OASI and DI
Trust Funds all fail 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.
Figure IV.B3.—Long-Range OASI and DI Trust Fund Ratios
[Asset reserves as a percentage of annual cost]
1,000%
800%
Historical Projected
I
600%
400% OASI
DI
200%
III
II
III II I
0%
1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
Calendar year
70
Long-Range Estimates
4. Summarized Income Rates, Summarized Cost Rates, and Actuarial
Balances
Summarized values for the full 75-year period are useful in analyzing the
program’s 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 154.
Summarized cost rates are the sum of the present value of cost for a period
(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 year’s 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 year’s 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
71
Actuarial Estimates
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 -0.37 percent of taxable payroll under the low-cost assumptions,
-2.37 percent under the intermediate assumptions, and -4.66 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 -0.31 percent under the low-cost assumptions, -3.14 percent under the
intermediate assumptions, and -6.79 percent under the high-cost assump-
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 -0.12 percent of taxable payroll under the low-cost
assumptions, -3.54 percent under the intermediate assumptions, and
-8.25 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 15.76 percent (a relative increase of 27.1 percent), 2 cost
could be reduced in a manner equivalent to an immediate and permanent
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 year’s 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 year’s costs, it will be solvent at the end of the period
and yet still have a small negative actuarial balance for that period.
2 The 3.36 percentage point increase in the payroll tax rate required to achieve 75-year solvency differs
somewhat from the 3.54 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 3.54 percent
actuarial deficit incorporates an ending trust fund reserve equal to one year’s 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.
72
Long-Range Estimates
reduction in scheduled benefits of about 21 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
15.94 percent (a relative increase of 28.5 percent), 1 reducing cost in a man-
ner equivalent to an immediate reduction in scheduled benefits of about
22 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 4.34 percent of
payroll for 2095 (see table IV.B1). These large deficits indicate that annual
cost continues to exceed non-interest income after 2095, 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
infinite horizon, the actuarial deficit is 4.6 percent of payroll under the inter-
mediate assumptions.
Table IV.B5.—Components of Summarized Income Rates and Cost Rates,
Calendar Years 2021-2095
[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:
2021-45. . . . . 11.34 1.23 12.57 14.35 0.59 14.94 -2.37
2021-70. . . . . 11.42 .66 12.07 14.87 .28 15.15 -3.07
2021-95. . . . . 11.46 .48 11.93 15.23 .16 15.39 -3.46
Low-cost:
2021-45. . . . . 11.25 1.05 12.30 12.56 .51 13.08 -.78
2021-70. . . . . 11.28 .53 11.81 12.34 .23 12.57 -.76
2021-95. . . . . 11.28 .37 11.65 12.10 .14 12.24 -.59
High-cost:
2021-45. . . . . 11.45 1.43 12.88 16.37 .68 17.05 -4.17
2021-70. . . . . 11.59 .81 12.41 18.15 .34 18.49 -6.08
2021-95. . . . . 11.70 .62 12.32 19.60 .20 19.80 -7.48
1 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.
73
Actuarial Estimates
Table IV.B5.—Components of Summarized Income Rates and Cost Rates,
Calendar Years 2021-2095 (Cont.)
[As a percentage of taxable payroll]
Summarized income rate Summarized cost rate
Beginning Ending
Non-interest asset target Actuarial
Valuation period income reservesa Total Cost a funda Total balance
DI:
Intermediate:
2021-45. . . . . 1.82 0.04 1.86 1.79 0.08 1.87 b
2021-70. . . . . 1.83 .02 1.85 1.89 .03 1.92 -.07
2021-95. . . . . 1.83 .02 1.85 1.90 .02 1.92 -.08
Low-cost:
2021-45. . . . . 1.81 .04 1.85 1.39 .06 1.44 .41
2021-70. . . . . 1.82 .02 1.84 1.37 .03 1.39 .45
2021-95. . . . . 1.82 .01 1.83 1.34 .02 1.36 .47
High-cost:
2021-45. . . . . 1.83 .05 1.88 2.27 .10 2.37 -.49
2021-70. . . . . 1.84 .03 1.86 2.54 .04 2.58 -.71
2021-95. . . . . 1.84 .02 1.86 2.61 .02 2.63 -.77
OASDI:
Intermediate:
2021-45. . . . . 13.16 1.27 14.43 16.14 .66 16.80 -2.37
2021-70. . . . . 13.24 .68 13.92 16.76 .31 17.07 -3.14
2021-95. . . . . 13.29 .49 13.78 17.13 .18 17.31 -3.54
Low-cost:
2021-45. . . . . 13.06 1.09 14.15 13.95 .57 14.52 -.37
2021-70. . . . . 13.09 .55 13.65 13.70 .26 13.96 -.31
2021-95. . . . . 13.10 .38 13.48 13.44 .15 13.60 -.12
High-cost:
2021-45. . . . . 13.27 1.48 14.76 18.64 .78 19.42 -4.66
2021-70. . . . . 13.43 .84 14.27 20.68 .38 21.07 -6.79
2021-95. . . . . 13.54 .64 14.18 22.20 .22 22.43 -8.25
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 -0.005 and 0 percent of taxable payroll.
Note: Components may not sum to totals because of rounding.
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 2095. 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
2095.
The open-group unfunded obligation increased from $16.8 trillion shown in
last year's report to $19.8 trillion in this report. If there had been no changes
in starting values, assumptions, laws, or methods for this report, then the
74
Long-Range Estimates
open-group unfunded obligation would have increased to $17.5 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, 2021, rather than to January 1, 2020, which tends to
increase the unfunded obligation by the annual nominal interest rate; and
(2) the unfunded obligation now includes an additional year (2095). How-
ever, changes in the law, assumptions, methods, and starting values resulted
in a net $2.3 trillion increase in the unfunded obligation.
The 75-year unfunded obligation is equivalent to 3.35 percent of OASDI tax-
able payroll and 1.2 percent of GDP for 2021-95. 1 These percentages were
3.03 and 1.0, respectively, for last year’s 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 3.21 percent of payroll in last year’s report, and was
expected to increase to a deficit of 3.27 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 an additional 0.27 percentage
point increase (worsening) in the actuarial deficit to 3.54 percent of payroll.
The actuarial deficit is 1.2 percent of GDP in this year’s report, increased
from 1.1 percent in last year’s report.
As mentioned above, the open-group unfunded obligation expressed in dol-
lars, as well as the actuarial deficit, increased (worsened) more than would
be expected from changing the valuation period alone. This increase
occurred for a variety of reasons described in the next section, primarily
reductions in near-term interest rates and updates to methods and program-
matic data.
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 $19.8 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,
1 The present value of taxable payroll for 2021-95 is $591.5 trillion. The present value of GDP for 2021-95
is $1,698.0 trillion. In last year’s report, the present value of taxable payroll for 2020-94 was $554.6 trillion
and the present value of GDP was $1,614.2 trillion.
75
Actuarial Estimates
plus starting trust fund reserves, minus the present value of the ending target
trust fund, is -$20.9 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, 2021 (in billions):
A. Payroll tax revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,602 $10,631 $73,233
B. Reimbursements from general revenue . . . . . . . . . . . . . . . . . . . a a a
C. Taxation of benefits revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,157 190 5,347
D. Non-interest income (A + B + C) . . . . . . . . . . . . . . . . . . . . . . . 67,759 10,821 78,580
E. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,065 11,256 101,321
F. Cost minus non-interest income (E - D) . . . . . . . . . . . . . . . . . . 22,306 435 22,742
G. Trust fund asset reserves at start of period . . . . . . . . . . . . . . . . 2,812 97 2,908
H. Open-group unfunded obligation (F - G) . . . . . . . . . . . . . . . . . 19,495 339 19,833
I. Ending target trust fundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 964 123 1,087
J. Income minus cost, plus reserves at start of period, minus
ending target trust fund (D - E + G - I = - H - I) . . . . . . . . . . . . -20,459 -462 -20,921
K. Taxable payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591,491 591,491 591,491
Percent of taxable payroll:
Actuarial balance (100 × J ÷ K) . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54
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 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 4.6 percent of
taxable payroll or 1.4 percent of GDP. These percentages were 4.6 and 1.4,
respectively, for last year’s 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 year’s report
and this report.
76
Long-Range Estimates
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 year’s report:
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 1.85 13.85
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 1.92 17.06
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21
Changes in actuarial balance due to changes in:
Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . -.01 .00 -.01
Valuation period a . . . . . . . . . . . . . . . . . . . . . . . . . . . . -.05 -.01 -.06
Demographic data and assumptions . . . . . . . . . . . . . . .06 .01 .07
Economic data and assumptions. . . . . . . . . . . . . . . . . .00 .00 .00
Disability data and assumptions . . . . . . . . . . . . . . . . . .00 .00 .00
Methods and programmatic data . . . . . . . . . . . . . . . . -.32 -.01 -.33
Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.32 -.01 -.32
Shown in this report:
Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54
Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78
Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.39 1.92 17.31
a The change in the 75-year valuation period from last year’s report to this report means that the 75-year
actuarial balance now includes the relatively large negative annual balance for 2095. 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 year’s Trustees Report, the long-range OASDI actuarial balance would
have decreased (become more negative) 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 valua-
tion period, combine to decrease (worsen) the long-range OASDI actuarial
balance by 0.32 percentage point, from -3.21 percent of taxable payroll in
last year’s report to -3.54 percent in this report.
Legislation/Regulation
Changes in law, regulations, and policy result in a decrease in the long-range
OASDI actuarial balance of 0.01 percent of payroll.
Since the last report, there has been one change in policy that is expected to
have a significant financial effect on the long-range actuarial balance. The
estimates presented in last year’s report reflected the assumption that the
Deferred Action for Childhood Arrivals (DACA) policy would be phased
out, consistent with the Department of Homeland Security’s September 5,
2017 rescission of the 2012 DACA policy directive. This year’s report incor-
porates the effects of two developments during 2020 and early 2021. First,
pursuant to a United States District Court order, the US Citizenship and
77
Actuarial Estimates
Immigration Services resumed accepting first-time applications and renewal
requests for participation in the DACA program, effective December 7,
2020. Second, on January 20, 2021, President Biden issued a memorandum
directing the Secretary of Homeland Security to take appropriate action, in
consultation with the Attorney General, to preserve and fortify DACA con-
sistent with applicable law. This change to preserve DACA extends indefi-
nitely the ability of those qualifying to remain in the country and work
lawfully. The effect over the next 75 years is to increase future benefits
slightly more than future payroll tax revenue because: (1) a significant por-
tion of the payroll taxes from this group has already been credited to the trust
funds, while the vast majority of the OASDI benefits they will earn will be in
the future, dependent on their preserving DACA status; and (2) currently
scheduled payroll tax rates are not sufficient to fully finance future benefits
for this group and in general. This change in policy is thus estimated to
decrease the long-range actuarial balance by 0.01 percent of taxable payroll.
Valuation Period
As mentioned above, changing the 75-year valuation period from 2020
through 2094 for last year’s report to 2021 through 2095 for this report
decreases the projected long-range OASDI actuarial balance by 0.06 percent
of taxable payroll. This decrease is mainly the result of including the rela-
tively large negative annual balance for 2095 in this year’s 75-year projec-
tion period. Note that the actuarial balance calculation includes trust fund
reserves at the beginning of the projection period. These reserves reflect the
program’s net financial flows for all past years, including 2020, up to the
start of the valuation period.
Demographic Data and Assumptions
New demographic data and changes in demographic assumptions combine to
increase (improve) the long-range OASDI actuarial balance by 0.07 percent
of taxable payroll.
Two ultimate demographic assumptions were changed for this year’s report.
First, future birth rates are now projected using a cohort-based model. (This
change in methodology is described in detail and quantified separately in the
“Methods and Programmatic Data” section below.) With this new cohort
approach, the Trustees increased the ultimate total fertility rate from 1.95 to
2.00. This ultimate rate will not be realized on a period basis until 2056,
which is about 25 years later than the ultimate rate was reached in last year’s
report. This change in the ultimate fertility assumption, after making the
change in method, increases the actuarial balance by 0.09 percent of taxable
78
Long-Range Estimates
payroll. (As indicated later, this effect due to the change in assumption is
fully offset by the effect of the change in method.)
Second, this year’s report adds an additional cause of death category by sepa-
rating dementia out from the all-other-causes category, due to its very differ-
ent historical trend and prospects for future improvement. At the same time,
ultimate rates of mortality improvement have been updated for cardiovascu-
lar disease for all age groups and for the all-other-causes category at ages 85
and over. These changes to the ultimate mortality assumptions increase the
actuarial balance by 0.04 percent of taxable payroll.
Updates to near-term mortality assumptions to reflect the effects of the
COVID-19 pandemic increase the long-range actuarial balance by 0.04 per-
cent of taxable payroll. Death rates were increased significantly for 2020 and
2021, and to a lesser extent for 2022 and 2023, to account for the elevated
deaths during the pandemic period. Projected death rates for years after 2023
are unchanged from the levels that would have been projected in the absence
of the pandemic.
Several demographic data updates also resulted in significant changes in the
long-range actuarial balance. First, birth data through the third quarter of
2020 indicate somewhat lower fertility rates than were assumed in last year’s
report for 2020. These updated data result in lower birth rates during the
transition period to the ultimate level, decreasing the actuarial balance by
0.04 percent of taxable payroll. Second, new mortality data (final 2018 and
2019 data for ages under 65 from NCHS; final 2017 and preliminary 2018
and 2019 data for ages 65 and older from Medicare experience) were incor-
porated into the projection. Without considering the other changes to death
rates, these new data alone result in slightly lower death rates for all future
years, decreasing the actuarial balance by 0.01 percent of taxable payroll.
Third, updates to lawful permanent resident (LPR) immigration data
decrease the actuarial balance by 0.01 percent of taxable payroll. Finally,
updates to historical population data, other-than-LPR immigration data, mar-
riage and divorce data, and other minor data updates combine to decrease the
actuarial balance by 0.03 percent of taxable payroll.
Economic Data and Assumptions
New economic data and changes in economic assumptions, in combination,
have a negligible net effect on the long-range OASDI actuarial balance.
Two ultimate economic assumptions were changed for this year’s report.
First, the ultimate age-sex-adjusted unemployment rate is reduced from
5.0 percent for last year’s report to 4.5 percent for this year’s report. At the
same time, the labor force projection model was updated to incorporate data
79
Actuarial Estimates
from the latest complete economic cycle (2007-19), and to reflect changes in
the relationships among factors affecting labor force participation and
employment. (This change in methodology is described in more detail and
quantified separately in the “Methods and Programmatic Data” section
below.) As mentioned in last year’s report, the Trustees believe that a struc-
tural shift has occurred in relationships between employment, unemploy-
ment, and the labor force, and thus future long-term unemployment rates and
labor force participation rates will both remain somewhat below long-term
past averages. This change to the ultimate unemployment rate assumption
alone increases the actuarial balance by 0.07 percent of taxable payroll.
Second, the average real wage differential over the last 65 years of the pro-
jection period for this year’s report is 1.15 percentage points per year,
slightly higher than the 1.14 value in last year’s report. The real wage differ-
ential assumptions for the first ten years of the projection period were also
increased. These higher long-term and near-term real wage differential
assumptions are based primarily on updated projections by the Centers for
Medicare and Medicaid Services (CMS) of slower assumed growth in
employer-sponsored group health insurance premiums. Because these premi-
ums are not subject to the payroll tax, slower growth in these premiums
means that a larger share of employee compensation will be in the form of
wages that are subject to the payroll tax. These changes to the real wage dif-
ferential assumptions increase the long-range actuarial balance by
0.04 percent of taxable payroll.
Although the ultimate real interest rate assumption remains at 2.3 percent for
this year’s report, interest rates over the next ten years have been adjusted
downward significantly. Real interest rates are now assumed to be negative
for calendar years 2021 through 2024, with a gradual rise to the ultimate real
interest rate after the economy has fully recovered from the recession. This
change to the near-term real interest rate assumptions decreases the actuarial
balance by 0.03 percent of payroll.
Other changes to historical data and near-term economic assumptions com-
bine for a net decrease in the actuarial balance of 0.09 percent of taxable pay-
roll. The pandemic and ensuing recession have had dramatic effects on
economic experience during 2020 and early 2021, and, in turn, the expected
path of the economy over the next few years. In particular, the level of poten-
tial GDP is assumed to be roughly 1 percent lower than the level in last
year’s report beginning with the second quarter of 2020. This shift to a lower
level of potential GDP reflects the expectation of a permanent level shift due
to the effects of the recession on total economy labor productivity and the
size of the population at ages 16 and over.
80
Long-Range Estimates
Disability Data and Assumptions
New disability data and changes in near-term disability assumptions have a
negligible net effect on the long-range OASDI actuarial balance.
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
decrease the long-range OASDI actuarial balance by 0.33 percent of taxable
payroll. Descriptions of six significant methodological changes and pro-
grammatic data updates follow.
First, as mentioned earlier under the “Demographic Data and Assumptions”
section, future birth rates are now projected using a cohort-based approach,
rather than the period-based approach used in the 2020 and prior reports. The
cohort method provides a direct reflection of the shift in childbearing to older
ages that has been observed since the end of the baby-boom period in 1965,
and results in a much more extended transition to ultimate birth rates from
the current low levels. This methodology improvement decreases the actuar-
ial balance by 0.10 percent of taxable payroll. As mentioned earlier, the net
effect of this change in method and the change in the assumed ultimate total
fertility rate is very small.
The second significant update is to the model used to project the civilian
labor force by age, sex, marital status, and presence of children. As men-
tioned earlier under the “Economic Data and Assumptions” section, the
model was updated to incorporate data from the latest complete economic
cycle, thereby putting more weight on the recent relationships among the
various factors affecting labor force participation. Overall, improvements to
the labor force model decrease the actuarial balance by 0.04 percent of tax-
able payroll.
The third significant set of changes is related to the sample used for the long-
range model for projecting average benefit levels of retired-worker and dis-
abled-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 year’s report was for
worker beneficiaries newly entitled in 2016, while this year’s report uses the
results from worker beneficiaries newly entitled in 2017. This update to the
sample data decreases the actuarial balance by 0.02 percent of payroll. Data
updates and updates to the methodology for projecting average benefit levels
combine to decrease the actuarial balance by an additional 0.07 percent of
payroll. A primary reason for this decrease in actuarial balance is a method
81
Actuarial Estimates
change to improve the assignment of projected earnings by age of initial enti-
tlement, better reflecting the change between historical and projected retired
worker distributions by entitlement age.
Fourth, recent data and estimates provided by the Office of Tax Analysis
(OTA) at the Department of the Treasury indicate lower near-term and ulti-
mate levels of revenue from taxation of OASDI benefits than projected in
last year’s report. The decrease in projected ratios of income tax on benefits
to benefit amounts decreases in the actuarial balance by 0.04 percent of tax-
able payroll.
Fifth, methodology changes to improve projections of retroactive benefits
and effective interest rates combine to decrease the actuarial balance by 0.03
percent of payroll. The projections for retroactive benefits for retired workers
now better capture the different rules for workers who become newly entitled
prior to normal retirement age (NRA) versus those who become entitled at or
after normal retirement age. In addition, the projections for retroactive bene-
fits for all categories of beneficiaries were improved to incorporate addi-
tional years of historical data for determining retroactive amounts.
Projections of effective interest rates were improved to better reflect the
expected detailed operations of the separate trust funds in years after the
short-range period and prior to trust fund depletion, and to more appropri-
ately limit the rates used in years in which one trust fund becomes depleted
and the other does not.
The sixth significant change is updating two sets of benefit adjustment fac-
tors based on new programmatic data: the post-entitlement adjustment fac-
tors and the Windfall Elimination Provision (WEP) reduction factors. Post-
entitlement factors are used to account for changes in benefit levels, primar-
ily due to differential mortality by benefit level and earnings after benefit
entitlement. WEP reduction factors are used to adjust benefits for individuals
who receive a pension based on specified categories of employment not cov-
ered by OASDI. These data updates combine to decrease the actuarial bal-
ance by 0.01 percent of payroll.
In addition to these six 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 decrease the long-range
actuarial balance by 0.03 percent of taxable payroll.
82
Long-Range Estimates
Figure IV.B4.—OASDI Annual Balances: 2020 and 2021 Trustees Reports
[As a percentage of taxable payroll, under intermediate assumptions]
0%
-2%
-4%
2020 Report
2021 Report
-6%
2015 2025 2035 2045 2055 2065 2075 2085 2095
Calendar year
Figure IV.B4 compares the annual balances for this report and the prior
year’s 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 year’s report are lower (more negative) in years
from 2021 through 2090, and then higher for 2091 through 2095. The differ-
ences in annual balances fluctuate somewhat in the early 2020s during the
recovery from the recession, are small in the late 2020s, generally grow until
the late 2050s, and then decline thereafter and change sign in 2090. For this
year’s report, the annual balance improves from 2021 to 2022, due to the
assumed path of recovery from the COVID-19 pandemic and the ensuing
recession, which were not reflected in last year’s report. The trends later in
the projection are mainly due to the changes made this year to fertility meth-
odology and assumptions. In particular, the new cohort-based projection
method extends the transition from current low birth rates to the higher ulti-
mate total fertility rate of 2.00 children per woman, such that projected total
fertility rates are lower in this report through calendar year 2036.
For 2095, the projected annual deficit is 4.34 percent of taxable payroll in
this report, compared to 4.55 percent in last year's report. For the full 75-year
projection period, the annual balances average 0.23 percentage point lower
in this year’s report.
83
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 selected by the middle
of May 2021.
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).
84
Demographic Assumptions and Methods
Readers should interpret with care the estimates based on the three sets of
alternative assumptions. 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/2021/.
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.
85
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 dropped below 1.90 for 2011 and has been at rel-
atively low levels since then. It is estimated to be 1.65 for 2020.
The Trustees assume that the COVID-19 pandemic will affect birth rates in
years 2021 through 2026. Under the intermediate assumptions, the total fer-
tility rate is projected to decrease to a level of 1.54 for 2021 and 1.62 for
2022. The total fertility rate for 2023 is projected to be 1.71 children per
woman, which is the rate that would have been projected in the absence of
the pandemic. The low birth rates for 2021 and 2022 are then projected to be
fully made up with elevated rates in 2024 through 2026, before returning to
the levels that would have been projected in the absence of the pandemic for
2027 and thereafter. In other words, the pandemic is expected to cause a
number of women to defer childbearing from 2021-22 to 2024-26.
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. The low-cost and intermediate assumed ultimate rates are 0.05 higher
than those used in last year’s report and the same as those used in the 2019
report. For the high-cost assumption, the ultimate rate is 0.05 lower than the
assumption used in last year’s report.
The 2021 Trustees Report uses a cohort-based projection approach rather
than the period-based approach used in the 2020 and prior Trustees Reports,
resulting in a much longer transition to ultimate birth rates from the current
low birth rates. The cohort-based approach assumes a more gradual shift to
older ages of childbearing for birth cohorts who have not yet reached fertility
completion at age 49. For the intermediate assumptions, after the assumed
pandemic effects (i.e., after 2026), the projected total fertility rate gradually
86
Demographic Assumptions and Methods
increases through the year the ultimate value is reached (2056). While the
ultimate total fertility rate for alternative II is higher in this year’s report than
in the 2020 report, the total fertility rate is lower for years after the pandemic
through 2036 due to the new cohort-based projection approach. The assumed
low-cost and high-cost total fertility rates trend away from the intermediate
path, reaching their ultimate levels in 2056.
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. For this year’s report, these ultimate rates of reduction were revised
and a new cause of death, dementia, was added. The assumptions were then
used to estimate future central death rates by age group, sex, and cause of
death. Adjustments were made to the death rates in 2020, 2021, 2022, and
2023 to account for the effects of the COVID-19 pandemic. 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 under
age 15 were significantly lower, though not quite to the same degree. Thus,
for ages 15 and over, death rates are assumed to increase above what would
have been projected in the absence of the pandemic by 16.4 percent for 2020,
15 percent for 2021, 4 percent for 2022, and 1 percent for 2023. For ages
under 15, death rates are assumed to decrease by 14 percent for 2020,
10 percent for 2021, and 2 percent for 2022, with no adjustment for 2023.
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 2017 and preliminary data
for 2018 and 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.
87
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 were revised for this
year’s report. For the intermediate assumptions, the resulting total ultimate
rates of improvement are slightly lower in this year’s report than they were in
last year’s report. The changes to the low-cost and high-cost assumptions
widened the range of rates of mortality improvement.
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 2045 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 higher than the rates in last year’s report for the age group
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.
88
Demographic Assumptions and Methods
under 65 and slightly higher than the rates in last year’s report for the age
group 65 and over. These changes primarily result from incorporating more
recent historical data, which continue to show low rates of improvement.
The projected average annual rate of decline for the total age-sex-adjusted
death rate is about 0.46 percent, 0.93 percent, and 1.48 percent between 2020
and 2095 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
0.45 percent, 0.88 percent, and 1.34 percent between 2020 and 2095 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 0.32 percent,
1.32 percent, and 2.74 percent between 2020 and 2095 for alternatives I, II,
and III, respectively. It should be noted that these average annual rates of
decline between 2020 and 2095 are not comparable with the rates of decline
between 2019 and 2094 in last year’s report. As mentioned above, to reflect
the effects of the pandemic in this year’s report, death rates for 2020 were
increased by 16.4 percent for ages 15 and older, and decreased by 14 percent
for ages under 15. For all three alternatives, this short-term change in death
rates for 2020 increases the total (all ages) average annual rate of decline
between 2020 and 2095 by about 0.20 percentage point from what would
have been projected in the absence of COVID-19.
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.
89
Assumptions and Methods
Table V.A1.—Fertility and Mortality Assumptions,a
.
Calendar Years 1940-2095
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 . . . . . . . . . 1.89 820.8 249.2 4,631.3
2012 . . . . . . . . . 1.88 811.8 248.8 4,565.6
2013 . . . . . . . . . 1.85 812.4 249.6 4,564.6
2014 . . . . . . . . . 1.87 805.2 251.8 4,495.1
2015 . . . . . . . . . 1.85 815.4 255.3 4,549.7
2016 . . . . . . . . . 1.82 808.8 261.0 4,461.0
2017 . . . . . . . . . 1.77 812.8 261.6 4,487.7
2018 . . . . . . . . . 1.73 d803.4 258.8 d4,434.6
2019 . . . . . . . . . 1.70 d792.3 d257.6 d4,357.1
2020 . . . . . . . . . e1.65 f923.7 f299.9 f5,083.2
Intermediate:
2025 . . . . . . . . . 1.82 771.1 255.3 4,210.0
2030 . . . . . . . . . 1.87 741.5 245.2 4,050.3
2035 . . . . . . . . . 1.93 711.6 233.9 3,896.7
2040 . . . . . . . . . 1.98 683.0 222.8 3,751.4
2045 . . . . . . . . . 2.00 655.9 212.1 3,614.9
2050 . . . . . . . . . 2.00 630.3 201.9 3,486.7
2055 . . . . . . . . . 2.00 606.3 192.3 3,366.5
2060 . . . . . . . . . 2.00 583.7 183.2 3,253.5
2065 . . . . . . . . . 2.00 562.4 174.7 3,147.3
2070 . . . . . . . . . 2.00 542.3 166.6 3,047.3
2075 . . . . . . . . . 2.00 523.4 159.0 2,953.2
2080 . . . . . . . . . 2.00 505.5 151.8 2,864.4
2085 . . . . . . . . . 2.00 488.7 144.9 2,780.5
2090 . . . . . . . . . 2.00 472.7 138.5 2,701.3
2095 . . . . . . . . . 2.00 457.6 132.4 2,626.4
90
Demographic Assumptions and Methods
Table V.A1.—Fertility and Mortality Assumptions,a
Calendar Years 1940-2095 (Cont.)
Total Age-sex-adjusted death rate c
fertility per 100,000
Calendar year rateb Total Under 65 65 and over
Low-cost:
2025 . . . . . . . . . 1.97 797.3 264.8 4,347.2
2030 . . . . . . . . . 2.07 788.6 262.8 4,294.2
2035 . . . . . . . . . 2.13 778.2 259.2 4,238.4
2040 . . . . . . . . . 2.18 767.4 255.1 4,182.6
2045 . . . . . . . . . 2.20 756.6 251.0 4,127.6
2050 . . . . . . . . . 2.20 745.9 246.8 4,073.6
2055 . . . . . . . . . 2.20 735.4 242.7 4,020.8
2060 . . . . . . . . . 2.20 725.2 238.6 3,969.2
2065 . . . . . . . . . 2.20 715.2 234.7 3,918.6
2070 . . . . . . . . . 2.20 705.4 230.8 3,869.2
2075 . . . . . . . . . 2.20 695.8 227.0 3,820.8
2080 . . . . . . . . . 2.20 686.3 223.3 3,773.5
2085 . . . . . . . . . 2.20 677.1 219.7 3,727.1
2090 . . . . . . . . . 2.20 668.1 216.1 3,681.8
2095 . . . . . . . . . 2.20 659.3 212.6 3,637.4
High-cost:
2025 . . . . . . . . . 1.59 739.2 243.6 4,044.0
2030 . . . . . . . . . 1.59 683.4 223.1 3,752.0
2035 . . . . . . . . . 1.63 631.2 202.9 3,486.7
2040 . . . . . . . . . 1.68 584.2 184.2 3,250.7
2045 . . . . . . . . . 1.70 542.3 167.4 3,041.7
2050 . . . . . . . . . 1.70 505.0 152.3 2,856.2
2055 . . . . . . . . . 1.70 471.8 138.9 2,691.3
2060 . . . . . . . . . 1.70 442.1 126.8 2,544.0
2065 . . . . . . . . . 1.70 415.4 116.0 2,411.9
2070 . . . . . . . . . 1.70 391.5 106.3 2,292.9
2075 . . . . . . . . . 1.70 369.8 97.5 2,185.3
2080 . . . . . . . . . 1.70 350.2 89.6 2,087.6
2085 . . . . . . . . . 1.70 332.4 82.5 1,998.4
2090 . . . . . . . . . 1.70 316.1 76.0 1,916.8
2095 . . . . . . . . . 1.70 301.2 70.1 1,841.8
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 using provisional data through the third quarter and the intermediate assumptions.
f Estimated using the intermediate assumptions for all ages.
3. Immigration Assumptions
Projections of the total Social Security area population reflect assumptions
for annual immigration flows. For this report, four categories of immigration
flows are used:
91
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.
For all three alternatives, the Trustees assume that the COVID-19 pandemic
will affect LPR immigration in years 2020 through 2025. The assumed LPR
immigration levels for 2020 and 2021 are 390,000 lower than would have
been assumed in the absence of the pandemic. 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 through 2025 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.
For the intermediate alternative, the ultimate level of annual LPR immigra-
tion, which includes residents who adjust their status to become LPRs, is
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.
92
Demographic Assumptions and Methods
assumed to be 1,050,000 persons for 2026 and later. For alternative I, ulti-
mate annual LPR immigration is assumed to be 1,250,000 persons for 2026
and later, and for alternative III, ultimate annual LPR immigration is
assumed to be 850,000 persons for 2026 and later. The ultimate levels of
LPR immigration are unchanged from last year’s 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 year’s 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 assumed 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
will affect other-than-LPR immigration in years 2020 through 2025. The
assumed other-than-LPR immigration levels for 2020 are 780,000 lower for
the low-cost and intermediate scenarios, and 720,000 lower for the high-cost
scenario, than would have been assumed in the absence of the pandemic. The
assumed other-than-LPR immigration levels for 2021 are 450,000 lower for
the low-cost scenario, 420,000 lower for the intermediate scenario, and
360,000 lower for the high-cost scenario, than would have been assumed in
the absence of the pandemic. 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 through 2025 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.
The ultimate levels of other-than-LPR immigration are 1,350,000 persons for
alternative II, 1,850,000 persons for alternative I, and 850,000 persons for
alternative III. The ultimate levels are attained in year 2026 for all three
alternatives. In last year’s report, the ultimate levels were 1,650,000 persons
and 1,050,000 persons, for alternatives I and III, respectively. The ultimate
level for alternative II is unchanged from last year.
93
Assumptions and Methods
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 421,000
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 year’s
report. For the low-cost and high-cost scenarios, the total annual number of
other-than-LPR emigrants averages about 577,000 and 264,000, 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 year’s report.
Under the assumptions described above, the projected size of the other-than-
LPR immigrant population grows substantially, from about 15.1 million by
the end of 2021 to about 35.4 million by the end of 2095. 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 2025, 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 488,000 persons. For the
low-cost and high-cost assumptions, projected average annual net other-than-
LPR immigration is about 732,000 persons and 245,000 persons, respec-
tively.
The projected average annual level of total net immigration (LPR and other-
than-LPR, combined) is about 1,280,000 persons per year during the 75-year
94
Demographic Assumptions and Methods
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 844,000 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.
95
Assumptions and Methods
Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2095
[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 . . . . 431 136 112 407 - - 112 203 610
1985 . . . . 458 144 119 432 - - 119 260 692
1990 . . . . 548 166 114 497 - - 114 629 1,125
1995 . . . . 511 192 255 575 - - 255 563 1,137
2000 . . . . 482 224 413 672 1,427 309 413 705 1,376
2005 . . . . 561 290 597 869 1,821 77 597 1,148 2,016
2010 . . . . 622 262 426 786 680 205 426 50 835
2011 . . . . 647 264 408 791 684 345 408 -69 722
2012 . . . . 621 255 401 766 722 450 401 -129 637
2013 . . . . 589 249 409 748 836 335 409 92 840
2014 . . . . 627 256 398 769 1,460 148 398 913 1,682
2015 . . . . 689 271 395 813 1,263 190 395 677 1,491
2016 . . . . 763 292 407 877 1,127 698 407 21 899
2017 . . . . 722 280 398 840 931 280 398 253 1,092
2018 . . . . 678 270 403 810 e901 e234 403 e264 e1,075
2019 . . . . e566 e 258 e 466 e 774 f1,100 e 246 e466 f 389 f1,163
2020 . . . . f 210 f165 f450 f495 f420 f253 f450 f -283 f212
Intermediate:
2025 . . . . 860 328 450 983 1,750 306 450 994 1,977
2030 . . . . 600 263 450 788 1,350 349 450 551 1,339
2035 . . . . 600 263 450 788 1,350 374 450 526 1,314
2040 . . . . 600 263 450 788 1,350 399 450 501 1,288
2045 . . . . 600 263 450 788 1,350 419 450 481 1,269
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 1,229
2075 . . . . 600 263 450 788 1,350 463 450 437 1,225
2080 . . . . 600 263 450 788 1,350 466 450 434 1,222
2085 . . . . 600 263 450 788 1,350 468 450 432 1,220
2090 . . . . 600 263 450 788 1,350 469 450 431 1,218
2095 . . . . 600 263 450 788 1,350 470 450 430 1,217
96
Demographic Assumptions and Methods
Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2095 (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 . . . . 960 302 550 1,208 2,260 355 550 1,355 2,563
2030 . . . . 700 250 550 1,000 1,850 428 550 872 1,872
2035 . . . . 700 250 550 1,000 1,850 480 550 820 1,820
2040 . . . . 700 250 550 1,000 1,850 529 550 771 1,771
2045 . . . . 700 250 550 1,000 1,850 568 550 732 1,732
2050 . . . . 700 250 550 1,000 1,850 596 550 704 1,704
2055 . . . . 700 250 550 1,000 1,850 616 550 684 1,684
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 1,850 659 550 641 1,641
2080 . . . . 700 250 550 1,000 1,850 664 550 636 1,636
2085 . . . . 700 250 550 1,000 1,850 667 550 633 1,633
2090 . . . . 700 250 550 1,000 1,850 669 550 631 1,631
2095 . . . . 700 250 550 1,000 1,850 671 550 629 1,629
High-cost:
2025 . . . . 760 333 350 777 1,210 261 350 599 1,376
2030 . . . . 500 255 350 595 850 271 350 229 824
2035 . . . . 500 255 350 595 850 269 350 231 826
2040 . . . . 500 255 350 595 850 271 350 229 824
2045 . . . . 500 255 350 595 850 270 350 230 825
2050 . . . . 500 255 350 595 850 268 350 232 827
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 . . . . 500 255 350 595 850 262 350 238 833
2075 . . . . 500 255 350 595 850 262 350 238 833
2080 . . . . 500 255 350 595 850 263 350 237 832
2085 . . . . 500 255 350 595 850 263 350 237 832
2090 . . . . 500 255 350 595 850 264 350 236 831
2095 . . . . 500 255 350 595 850 264 350 236 831
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 2019,
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.
97
Assumptions and Methods
4. Total Population Estimates
The starting Social Security area population for December 31, 2018, is
derived from the Census Bureau’s 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 2019 through 2095 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).
98
Demographic Assumptions and Methods
Table V.A3.—Social Security Area Population on July 1 and Dependency Ratios,
Calendar Years 1945-2095
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 15,159 174,499 .158 .818
1960 . . . . . . . . . . . . . . 72,939 99,746 17,295 189,980 .173 .905
1965 . . . . . . . . . . . . . . 80,021 104,832 19,079 203,932 .182 .945
1970 . . . . . . . . . . . . . . 80,995 112,938 20,885 214,817 .185 .902
1975 . . . . . . . . . . . . . . 78,643 122,588 23,316 224,547 .190 .832
1980 . . . . . . . . . . . . . . 74,849 134,028 26,307 235,184 .196 .755
1985 . . . . . . . . . . . . . . 72,896 144,584 29,128 246,608 .201 .706
1990 . . . . . . . . . . . . . . 74,792 152,731 31,926 259,449 .209 .699
1995 . . . . . . . . . . . . . . 79,286 160,737 34,298 274,321 .213 .707
2000 . . . . . . . . . . . . . . 81,981 170,168 35,501 287,649 .209 .690
2005 . . . . . . . . . . . . . . 83,951 181,107 37,135 302,193 .205 .669
2010 . . . . . . . . . . . . . . 85,675 188,246 41,021 314,942 .218 .673
2011 . . . . . . . . . . . . . . 85,304 189,812 41,737 316,853 .220 .669
2012 . . . . . . . . . . . . . . 84,909 190,264 43,417 318,590 .228 .674
2013 . . . . . . . . . . . . . . 84,600 190,957 44,796 320,353 .235 .678
2014 . . . . . . . . . . . . . . 84,520 191,926 46,185 322,631 .241 .681
2015 . . . . . . . . . . . . . . 84,569 193,065 47,590 325,225 .246 .685
2016 . . . . . . . . . . . . . . 84,566 193,719 49,077 327,361 .253 .690
2017 . . . . . . . . . . . . . . 84,456 194,136 50,586 329,178 .261 .696
2018c . . . . . . . . . . . . . 84,264 194,564 52,163 330,990 .268 .701
2019d . . . . . . . . . . . . . 84,011 195,009 53,812 332,832 .276 .707
2020d . . . . . . . . . . . . . 83,548 195,129 55,319 333,997 .284 .712
Intermediate:
2025 . . . . . . . . . . . . . . 82,821 197,423 63,481 343,725 .322 .741
2030 . . . . . . . . . . . . . . 83,162 200,693 71,158 355,013 .355 .769
2035 . . . . . . . . . . . . . . 85,567 204,251 75,635 365,453 .370 .789
2040 . . . . . . . . . . . . . . 89,337 207,696 78,066 375,099 .376 .806
2045 . . . . . . . . . . . . . . 93,604 210,352 79,706 383,662 .379 .824
2050 . . . . . . . . . . . . . . 95,620 213,721 81,987 391,328 .384 .831
2055 . . . . . . . . . . . . . . 96,684 217,161 85,002 398,847 .391 .837
2060 . . . . . . . . . . . . . . 97,740 220,717 88,716 407,174 .402 .845
2065 . . . . . . . . . . . . . . 99,647 224,663 92,207 416,517 .410 .854
2070 . . . . . . . . . . . . . . 102,460 227,952 95,938 426,350 .421 .870
2075 . . . . . . . . . . . . . . 105,559 230,510 99,996 436,065 .434 .892
2080 . . . . . . . . . . . . . . 108,070 234,871 102,453 445,394 .436 .896
2085 . . . . . . . . . . . . . . 109,817 240,838 103,858 454,512 .431 .887
2090 . . . . . . . . . . . . . . 111,335 247,817 104,684 463,835 .422 .872
2095 . . . . . . . . . . . . . . 113,185 253,204 107,255 473,644 .424 .871
99
Assumptions and Methods
Table V.A3.—Social Security Area Population on July 1 and Dependency Ratios,
Calendar Years 1945-2095 (Cont.)
Population (in thousands) Dependency ratio
65 and
Calendar year Under 20 20-64 over Total Aged a Total b
Low-cost:
2025 . . . . . . . . . . . . . . 85,270 199,678 63,364 348,312 0.317 0.744
2030 . . . . . . . . . . . . . . 88,701 204,886 70,670 364,257 .345 .778
2035 . . . . . . . . . . . . . . 94,556 210,320 74,553 379,428 .354 .804
2040 . . . . . . . . . . . . . . 101,833 215,609 76,246 393,688 .354 .826
2045 . . . . . . . . . . . . . . 108,451 221,267 77,117 406,835 .349 .839
2050 . . . . . . . . . . . . . . 112,157 228,535 78,701 419,392 .344 .835
2055 . . . . . . . . . . . . . . 115,166 236,169 81,153 432,488 .344 .831
2060 . . . . . . . . . . . . . . 118,935 243,903 84,434 447,272 .346 .834
2065 . . . . . . . . . . . . . . 124,170 251,981 87,554 463,705 .347 .840
2070 . . . . . . . . . . . . . . 130,403 259,658 90,869 480,929 .350 .852
2075 . . . . . . . . . . . . . . 136,555 267,276 94,411 498,242 .353 .864
2080 . . . . . . . . . . . . . . 141,637 277,540 96,347 515,524 .347 .857
2085 . . . . . . . . . . . . . . 145,863 290,022 97,293 533,177 .335 .838
2090 . . . . . . . . . . . . . . 150,226 302,738 98,785 551,748 .326 .823
2095 . . . . . . . . . . . . . . 155,401 313,309 102,772 571,482 .328 .824
High-cost:
2025 . . . . . . . . . . . . . . 79,938 195,361 63,648 338,948 .326 .735
2030 . . . . . . . . . . . . . . 76,454 196,784 71,828 345,066 .365 .754
2035 . . . . . . . . . . . . . . 74,618 198,573 77,116 350,307 .388 .764
2040 . . . . . . . . . . . . . . 74,071 200,259 80,557 354,887 .402 .772
2045 . . . . . . . . . . . . . . 75,647 199,514 83,251 358,412 .417 .796
2050 . . . . . . . . . . . . . . 75,921 198,293 86,496 360,710 .436 .819
2055 . . . . . . . . . . . . . . 75,054 196,754 90,283 362,091 .459 .840
2060 . . . . . . . . . . . . . . 73,432 195,273 94,557 363,262 .484 .860
2065 . . . . . . . . . . . . . . 72,034 194,200 98,443 364,676 .507 .878
2070 . . . . . . . . . . . . . . 71,449 192,201 102,536 366,187 .533 .905
2075 . . . . . . . . . . . . . . 71,565 188,771 106,988 367,324 .567 .946
2080 . . . . . . . . . . . . . . 71,700 186,237 109,787 367,723 .589 .974
2085 . . . . . . . . . . . . . . 71,328 184,640 111,383 367,351 .603 .990
2090 . . . . . . . . . . . . . . 70,507 185,301 110,675 366,482 .597 .978
2095 . . . . . . . . . . . . . . 69,634 185,259 110,536 365,428 .597 .973
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.
100
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-
vidual’s 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 individual’s 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 b . . . 76.1 81.1 18.0 20.6
2019 b . . . 76.2 81.3 18.1 20.7
2020 c . . . 74.5 79.7 17.0 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 . . . . 76.5 81.6 18.4 21.0 76.1 81.2 18.2 20.7 77.1 82.0 18.8 21.3
2030 . . . . 77.0 82.0 18.7 21.3 76.2 81.3 18.3 20.8 78.1 82.9 19.4 21.8
2035 . . . . 77.6 82.5 19.1 21.6 76.4 81.5 18.4 20.9 79.2 83.8 20.0 22.4
2040 . . . . 78.1 82.9 19.4 21.8 76.6 81.6 18.5 21.0 80.2 84.6 20.6 22.9
2045 . . . . 78.7 83.3 19.7 22.1 76.7 81.8 18.6 21.1 81.1 85.4 21.2 23.4
2050 . . . . 79.2 83.8 20.0 22.4 76.9 81.9 18.7 21.2 82.0 86.1 21.7 23.9
2055 . . . . 79.7 84.2 20.3 22.7 77.1 82.1 18.8 21.3 82.8 86.8 22.2 24.4
2060 . . . . 80.2 84.6 20.6 22.9 77.3 82.3 18.9 21.4 83.6 87.4 22.7 24.8
2065 . . . . 80.6 85.0 20.9 23.2 77.5 82.4 19.0 21.5 84.4 88.0 23.1 25.2
2070 . . . . 81.1 85.4 21.1 23.4 77.7 82.6 19.1 21.6 85.1 88.5 23.6 25.6
2075 . . . . 81.6 85.7 21.4 23.6 77.9 82.7 19.2 21.7 85.7 89.1 24.0 25.9
2080 . . . . 82.0 86.1 21.7 23.9 78.0 82.9 19.3 21.8 86.4 89.5 24.4 26.3
2085 . . . . 82.4 86.4 21.9 24.1 78.2 83.0 19.5 21.9 86.9 90.0 24.8 26.6
2090 . . . . 82.8 86.7 22.2 24.3 78.4 83.2 19.6 22.0 87.5 90.4 25.2 26.9
2095 . . . . 83.2 87.1 22.4 24.5 78.6 83.3 19.7 22.1 88.0 90.9 25.5 27.2
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 79.3 13.1 16.7 74.2 80.6 13.1 16.7
1960 . . . . 74.2 80.2 13.2 17.4 73.5 79.5 13.2 17.4 75.1 81.2 13.2 17.4
1965 . . . . 75.1 80.8 13.5 18.0 74.2 79.8 13.5 18.0 76.3 82.0 13.5 18.0
1970 . . . . 76.2 81.6 13.8 18.5 75.1 80.4 13.8 18.5 77.8 83.2 13.8 18.5
1975 . . . . 77.1 82.3 14.2 18.7 75.6 80.9 14.2 18.7 79.0 84.2 14.2 18.7
1980 . . . . 77.8 82.9 14.7 18.8 76.1 81.3 14.7 18.8 80.1 85.0 14.7 18.8
1985 . . . . 78.3 83.4 15.4 19.0 76.3 81.5 15.4 19.0 80.9 85.8 15.4 19.1
1990 . . . . 78.9 83.9 16.0 19.3 76.6 81.8 16.0 19.3 81.8 86.5 16.0 19.3
1995 . . . . 79.5 84.4 16.6 19.6 76.9 82.0 16.6 19.6 82.8 87.3 16.7 19.6
2000 . . . . 80.0 84.8 17.3 20.0 77.1 82.2 17.3 19.9 83.6 87.9 17.4 20.1
2005 . . . . 80.5 85.2 17.8 20.4 77.3 82.4 17.7 20.3 84.3 88.5 18.0 20.6
2010 . . . . 81.0 85.6 18.2 20.8 77.6 82.6 18.0 20.5 85.1 89.1 18.5 21.2
2011 . . . . 81.1 85.7 18.3 20.9 77.6 82.6 18.0 20.6 85.3 89.2 18.7 21.3
2012 . . . . 81.2 85.7 18.4 20.9 77.7 82.7 18.1 20.6 85.4 89.3 18.8 21.4
2013 . . . . 81.3 85.8 18.4 21.0 77.7 82.7 18.1 20.6 85.5 89.4 18.9 21.5
2014 . . . . 81.4 85.9 18.5 21.1 77.7 82.7 18.1 20.7 85.7 89.5 19.0 21.7
2015 . . . . 81.5 86.0 18.5 21.1 77.8 82.8 18.1 20.7 85.8 89.6 19.1 21.8
2016 . . . . 81.6 86.0 18.6 21.2 77.8 82.8 18.1 20.7 86.0 89.7 19.2 21.9
2017 . . . . 81.6 86.1 18.6 21.3 77.9 82.8 18.2 20.8 86.1 89.8 19.3 22.0
2018 . . . . 81.7 86.2 18.7 21.3 77.9 82.9 18.2 20.8 86.2 89.9 19.4 22.1
2019 . . . . 81.8 86.3 18.8 21.4 77.9 82.9 18.2 20.8 86.4 90.0 19.6 22.2
2020 . . . . 82.0 86.4 18.8 21.5 78.0 83.0 18.2 20.8 86.6 90.2 19.7 22.4
2025 . . . . 82.4 86.7 19.3 21.8 78.2 83.1 18.4 21.0 87.2 90.6 20.4 23.0
2030 . . . . 82.8 87.0 19.6 22.1 78.3 83.2 18.5 21.1 87.8 91.1 21.0 23.5
2035 . . . . 83.3 87.4 19.9 22.4 78.5 83.4 18.7 21.2 88.5 91.6 21.6 24.1
2040 . . . . 83.7 87.7 20.2 22.7 78.7 83.5 18.8 21.3 89.0 92.0 22.2 24.5
2045 . . . . 84.1 88.0 20.5 23.0 78.9 83.7 18.9 21.4 89.6 92.4 22.7 25.0
2050 . . . . 84.5 88.3 20.8 23.2 79.1 83.8 19.0 21.5 90.1 92.8 23.2 25.4
2055 . . . . 84.8 88.6 21.1 23.5 79.2 84.0 19.1 21.6 90.6 93.2 23.7 25.8
2060 . . . . 85.2 88.9 21.4 23.7 79.4 84.1 19.2 21.7 91.0 93.5 24.1 26.2
2065 . . . . 85.6 89.2 21.7 24.0 79.6 84.2 19.3 21.8 91.5 93.8 24.6 26.5
2070 . . . . 85.9 89.4 21.9 24.2 79.7 84.4 19.4 21.9 91.9 94.1 25.0 26.9
2075 . . . . 86.2 89.7 22.2 24.4 79.9 84.5 19.5 22.0 92.3 94.4 25.3 27.2
2080 . . . . 86.6 89.9 22.4 24.6 80.1 84.6 19.6 22.1 92.7 94.7 25.7 27.5
2085 . . . . 86.9 90.2 22.7 24.9 80.2 84.8 19.7 22.2 93.1 95.0 26.1 27.8
2090 . . . . 87.2 90.4 22.9 25.1 80.4 84.9 19.8 22.3 93.4 95.3 26.4 28.1
2095 . . . . 87.5 90.6 23.2 25.3 80.6 85.0 19.9 22.3 93.8 95.6 26.7 28.4
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 2017 depends on
actual death rates or on a combination of actual, estimated, and projected death rates. After 2017, these val-
ues depend on estimated and projected death rates.
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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 second “dip” in gross domestic product (GDP) in 2021, pro-
longing the recession that started in 2020, slower economic growth in the
long term, and relatively pessimistic levels for other parameters.
Actual economic data were generally available through the end of 2020 at
the time the assumptions for this report were set. The data indicated that eco-
nomic activity reached a peak in the fourth quarter of 2019. 1 A precipitous
decline in economic activity in March and April of 2020 led to GDP in the
second quarter of 2020 being more than 10 percent below the peak in the
fourth quarter of 2019. GDP recovered substantially by the fourth quarter of
2020, but was still about 2.4 percent below the level in the fourth quarter of
2019.
Under the intermediate assumptions, the economy is projected to reach its
sustainable trend level of output in 2023. Under the low-cost assumptions,
the economy is projected to recover at a faster rate and return to a higher sus-
tainable trend level of output in 2022. Under the high-cost assumptions, the
sustainable trend level is lower. GDP falls to about 5 percent below that
lower sustainable trend level in the fourth quarter of 2021, and then recovers
fully by 2028. Complete economic 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 (2021 through 2030).
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 https://www.nber.org/news/business-cycle-dating-committee-announcement-june-8-2020.
104
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, 2.19, and
1.11 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 1.59 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
2020 report.
The annual change in total-economy productivity for 2020 is estimated to be
2.43 percent under the intermediate assumptions, as employment declined
more than GDP during the recession. For the intermediate assumptions, the
annual rate of change in productivity is 1.46 percent for 2021, averages
0.97 percent for 2022 through 2023, is 1.40 percent for 2024, and reaches
close to its ultimate value of 1.63 percent for 2025 and thereafter. For the
low-cost assumptions, the annual rate of change in productivity is
2.64 percent for 2021, declines to 1.04 percent for 2023, and then reaches
close to its ultimate value of 1.93 percent for 2025 and thereafter. For the
high-cost assumptions, the assumed prolonged recession lowers the annual
rate of change in productivity to 0.65 percent for 2021. The growth rate
remains low, averaging 0.72 percent for 2022 through 2025, averages
1.33 percent for 2026 through 2030, 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-
tor) affect the nominal levels of GDP, wages, self-employment income, aver-
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.
105
Assumptions and Methods
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, 2.49, and 1.63 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 is 1.21 percent for the CPI and 1.16 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 2020 report.
For the intermediate assumptions, the annual rate of change in the CPI is
3.06 percent for 2021, and reaches the ultimate growth rate of 2.40 percent
for 2022 and thereafter. For the low-cost assumptions, the annual rate of
change in the CPI is 3.32 percent for 2021, 3.03 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
2.54 percent for 2021, 1.44 percent for 2022, and reaches its ultimate growth
rate of 1.80 percent for 2024 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
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 is 0.05 percentage point.
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 over the 1978-2020 period had the method cur-
rently used been in effect since 1978. BLS does not revise the CPI values published in earlier years, for
which different methods 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.
106
Economic Assumptions and Methods
The small price differential for 2020 primarily reflects a decline in oil prices.
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
0.66 percentage point for 2021, 0.25 percentage point for 2022, and
0.35 percentage point for 2023 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 2020 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
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. For
107
Assumptions and Methods
2020, the annual change in average hours worked per week is estimated to be
an increase of 0.40 percent, likely due to the changing composition between
full-time and part-time employed workers.
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 2020 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 rates of change in the ratio of wages to employee com-
pensation from 2030 to 2095 are about -0.02, -0.12, and -0.22 percent for the
low-cost, intermediate, and high-cost assumptions, respectively. These
assumed rates are about 0.01 percentage point higher (less negative) than
those assumed for the 2020 report. Under the intermediate assumptions, the
ratio of wages to employee compensation declines from 0.815 for 2020 to
0.752 for 2095.
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 2030 to 2095) is
higher (less negative) than the rate of change in the ratio of wages to
employee compensation.
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Economic Assumptions and Methods
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 0.602 in
2009, increased to 0.612 in 2012, and was 0.611 in 2019. This ratio increased
to 0.628 for 2020 and is assumed to reach 0.631 by 2030. For years after
2030, the relative sizes of different sectors of the economy are assumed to
remain about constant, 1 and therefore the ratio of total labor compensation to
GDP remains at about the 2030 level for each set of assumptions.
The projected average annual growth rate in average nominal U.S. earnings
from 2030 to 2095 is about 3.56 percent for the intermediate assumptions.
This growth rate reflects the average annual growth rate of approximately
-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 produc-
tivity, -0.05 percent for average hours worked, and 2.05 percent for the GDP
deflator. 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
2.73 percent for 2020 under the intermediate assumptions. From 2020 to
2030, the annual rate of change in the average covered wage averages 5.22,
3.94, and 2.75 percent for the low-cost, intermediate, and high-cost assump-
tions, respectively. The projected average annual growth rates in the average
covered wage from 2030 to 2095 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 differential—the 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 1.02, 0.04, 0.44, 1.47, 0.83, and 0.75 percentage
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 2019 level throughout the 75-year projection period.
109
Assumptions and Methods
points over the economic cycles 1969-73, 1973-79, 1979-90, 1990-2001,
2001-07, and 2007-19, respectively.
For the years 2031 through 2095, 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
0.01 percentage point higher than in the 2020 report.
The real wage differential for 2020 is estimated to be 1.52 percentage points
under the intermediate assumptions. For the intermediate assumptions, the
real wage differential is projected to increase to 3.16 percentage points in
2021, and then generally decline to its long-run average of 1.15 percentage
points for 2031 through 2095. For the low-cost assumptions, the real wage
differential is 3.66 percentage points for 2021, 3.87 percentage points in
2022, and reaches its long-run average of 1.77 percentage points for 2031
through 2095. For the high-cost assumptions, the real wage differential is
2.67 percentage points for 2021. Due to the assumed “second dip” of the
“double dip” recession, it declines to -0.39 percent in 2022. It then fluctuates
in years 2023 through 2030, averaging 0.86 percentage point, before reach-
ing its long-run average of 0.53 percentage point for 2031 through 2095.
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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 8.89 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 . . . 2.32 .28 .14 1.67 5.31 2.43 2.88
2000 to 2005 . . . 2.66 -.38 -.79 2.29 2.69 2.49 .20
2005 to 2010 . . . 1.77 -.02 -.48 1.92 2.51 2.30 .22
2010 to 2015 . . . .54 .16 .37 1.72 2.93 1.61 1.31
2015 to 2020 . . . c1.23 .10 .03 1.66 c2.91 1.70 c1.21
Economic cycles:d
1969 to 1973 . . . 2.66 -.34 -.89 5.04 5.93 4.91 1.02
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 . . . 2.19 -.18 -.50 2.49 3.45 2.63 .83
2007 to 2019 . . . 1.11 .05 -.05 1.63 2.49 1.73 .75
Single years:
2010 . . . . . . . . . . 2.60 .21 .54 1.17 2.59 2.07 .52
2011 . . . . . . . . . . .06 .32 .92 2.08 3.14 3.56 -.41
2012 . . . . . . . . . . .46 .47 -.02 1.92 3.32 2.10 1.22
2013 . . . . . . . . . . .60 -.33 .24 1.77 1.22 1.37 -.15
2014 . . . . . . . . . . .63 .27 .28 1.84 3.59 1.50 2.09
2015 . . . . . . . . . . .96 .05 .42 .96 3.40 -.41 3.82
2016 . . . . . . . . . . .40 .10 -.41 1.05 1.23 .98 .25
2017 . . . . . . . . . . 1.00 .13 .09 1.91 3.39 2.13 1.26
2018 . . . . . . . . . . 1.05 -.06 .35 2.39 3.48 2.55 .93
2019 . . . . . . . . . . 1.30 .22 -.28 1.81 3.75 1.66 2.08
2020 . . . . . . . . . . c2.43 .13 .40 1.16 c2.73 1.21 c1.52
Intermediate:
2021 . . . . . . . . . . 1.46 -.16 .20 2.39 6.22 3.06 3.16
2022 . . . . . . . . . . .94 -.02 -.16 2.15 4.24 2.40 1.84
2023 . . . . . . . . . . .99 .05 -.12 2.05 3.68 2.40 1.28
2024 . . . . . . . . . . 1.40 e -.08 2.05 3.41 2.40 1.01
2025 . . . . . . . . . . 1.63 -.03 -.05 2.05 3.63 2.40 1.23
2026 . . . . . . . . . . 1.64 -.03 -.05 2.05 3.64 2.40 1.24
2027 . . . . . . . . . . 1.63 -.05 -.05 2.05 3.65 2.40 1.25
2028 . . . . . . . . . . 1.63 -.05 -.05 2.05 3.67 2.40 1.27
2029 . . . . . . . . . . 1.63 -.05 -.05 2.05 3.66 2.40 1.26
2030 . . . . . . . . . . 1.63 -.09 -.05 2.05 3.61 2.40 1.21
2030 to 2095 . . . 1.63 -.10 -.05 2.05 3.55 2.40 1.15
111
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:
2021 . . . . . . . . . . 2.64 -0.05 0.27 2.58 6.97 3.32 3.66
2022 . . . . . . . . . . 1.51 -.03 -.11 2.79 6.89 3.03 3.87
2023 . . . . . . . . . . 1.04 .07 .02 2.75 4.67 3.00 1.67
2024 . . . . . . . . . . 1.56 .04 .05 2.75 4.45 3.00 1.45
2025 . . . . . . . . . . 1.95 .02 .05 2.75 4.84 3.00 1.84
2026 . . . . . . . . . . 1.94 .02 .05 2.75 4.85 3.00 1.85
2027 . . . . . . . . . . 1.93 .01 .05 2.75 4.88 3.00 1.88
2028 . . . . . . . . . . 1.93 .02 .05 2.75 4.92 3.00 1.92
2029 . . . . . . . . . . 1.93 .03 .05 2.75 4.91 3.00 1.91
2030 . . . . . . . . . . 1.93 e .05 2.75 4.88 3.00 1.88
2030 to 2095 . . . 1.93 -.01 .05 2.75 4.77 3.00 1.77
High-cost:
2021 . . . . . . . . . . .65 -.12 .14 1.99 5.21 2.54 2.67
2022 . . . . . . . . . . .74 -.03 -.30 1.22 1.05 1.44 -.39
2023 . . . . . . . . . . .70 .04 -.23 1.37 3.65 1.82 1.83
2024 . . . . . . . . . . .59 -.02 -.15 1.35 2.12 1.80 .32
2025 . . . . . . . . . . .86 -.07 -.15 1.35 2.35 1.80 .55
2026 . . . . . . . . . . 1.25 -.08 -.15 1.35 2.71 1.80 .91
2027 . . . . . . . . . . 1.37 -.11 -.15 1.35 2.84 1.80 1.04
2028 . . . . . . . . . . 1.43 -.12 -.15 1.35 2.80 1.80 1.00
2029 . . . . . . . . . . 1.27 -.13 -.15 1.35 2.44 1.80 .64
2030 . . . . . . . . . . 1.32 -.17 -.15 1.35 2.35 1.80 .56
2030 to 2095 . . . 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 Estimated values for 2020 vary slightly by alternative and are shown for the intermediate assumptions.
d Economic cycles are shown from peak to peak.
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. The model was
updated for this report to incorporate data from the latest complete economic
112
Economic Assumptions and Methods
cycle, and to reflect changes in the relationships among factors affecting
labor force participation. Projections of the labor force participation rates
reflect changes in disability prevalence, educational 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. The labor force
growth is expected to remain subdued due to a slowing of growth in the
working-age population in the future—a 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 2020 to
2030 and 0.4 percent per year from 2030 to 2095.
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, health, dis-
ability prevalence, the business cycle, incentives for retirement in Social
Security and private pensions, education, and marriage patterns, will influ-
ence future labor force participation rates. The Office of the Chief Actuary
models some of these factors explicitly. 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
113
Assumptions and Methods
in life expectancy. For the intermediate projections, this adjustment increases
the total labor force by 2.9 percent for 2095.
For men age 16 and over, the projected age-adjusted labor force participation
rates 1 for 2095 are 72.6, 72.3, and 71.7 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 2095 are 62.2, 61.9,
and 61.4 percent for the low-cost, intermediate, and high-cost assumptions,
respectively. These age-adjusted labor force participation rates for 2095 are
higher under all three alternatives than the age-adjusted rates for 2019 of
71.3 percent for men and 59.5 percent for women (based on actual age-spe-
cific rates published by the Bureau of Labor Statistics), primarily due to the
Trustees’ projected increases in life expectancy.
Projected labor force participation rates in this report are slightly lower than
in the 2020 report. These lower rates resulted from incorporating into the
model the data and historical relationships among factors affecting labor
force participation from the latest complete economic cycle (2007-19). Labor
force participation rates were lower on average in recent years than in earlier
periods. The updated model is consistent with the Trustees’ belief, expressed
in the 2020 report, that a structural shift has occurred in the components of
employment, such that long-term unemployment rates and labor force partic-
ipation rates will both remain somewhat below long-term past averages, with
relatively little change in the projected ratios of employment to population.
The total civilian unemployment rates are presented in table V.B2. For years
through 2030, the table presents total civilian rates without adjustment for
the changing age-sex distribution of the population. For years after 2030, 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 group’s 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,
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.
114
Economic Assumptions and Methods
respectively. These values are 0.5 percentage point lower than in the
2020 report, consistent with the Trustees’ belief that unemployment rates
will remain below long-term past averages, as mentioned above. The Trust-
ees assume that, as the economy recovers from the recent recession, the
unemployment rate will decrease from 8.1 percent for 2020 to the assumed
4.5 percent for 2024 under the intermediate assumptions. Under the low-cost
assumptions, the ultimate unemployment rate is reached in 2023. Under the
high-cost assumptions, the unemployment rate declines to 6.9 percent in
2021, then rises to a peak of 8.2 percent in 2022, and then gradually
decreases to the ultimate unemployment rate in 2029. 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 for 2020 is 3.5 percent
below its 2019 level.
For the intermediate assumptions, the average annual growth in real GDP is
2.6 percent from 2020 to 2030, combining the average growth rates of
1.46 percent for productivity, 1.14 percent for total employment, and
-0.05 percent for average hours worked. The projected average annual
growth in real GDP of 2.6 percent from 2020 to 2030 is higher than the
underlying sustainable trend rate of 2.1 percent, due to the assumed recovery
from the recession. After 2030, 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
1 The assumed ultimate unemployment rates are age-sex-adjusted rates. For the high-cost assumptions, the
age-sex-adjusted unemployment rate in 2029 is 5.5 percent, while the unadjusted rate is 5.4 percent, 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.
115
Assumptions and Methods
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
3.4 percent from 2020 to 2030 and 2.7 percent from 2030 to 2095. For the
high-cost assumptions, the annual growth in real GDP averages 1.7 percent
from 2020 to 2030 and 1.2 percent from 2030 to 2095.
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
2020 report.
The average annual nominal interest rate was approximately 2.2 percent for
securities newly issuable in 2019, implying an effective annual yield of
2.2 percent for securities held one year. The CPI rose from 2019 to 2020 by
approximately 1.2 percent. The annual real interest rate for 2020 was there-
fore 1.0 percent. From 2020 to 2030, 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 2030.
116
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 .9 3.8 1.8
2010 to 2015. . . . . 7.2 .4 1.3 2.2 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
Single years:
2010 . . . . . . . . . . . 9.6 -.2 -.6 2.6 2.8 .9
2011 . . . . . . . . . . . 8.9 -.2 .6 1.6 2.4 -.7
2012 . . . . . . . . . . . 8.1 .9 1.8 2.2 1.5 .3
2013 . . . . . . . . . . . 7.4 .3 1.0 1.8 1.9 .1
2014 . . . . . . . . . . . 6.2 .3 1.6 2.5 2.3 .4
2015 . . . . . . . . . . . 5.3 .8 1.7 3.1 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 3.0 2.9 -.2
2019 . . . . . . . . . . . 3.7 .9 1.1 2.2 2.2 1.2
2020 . . . . . . . . . . . 8.1 -1.7 -6.2 -3.5 1.0 1.0
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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:
2021 . . . . . . . . . . . 5.8 0.3 2.7 4.4 1.5 -2.0
2022 . . . . . . . . . . . 4.9 2.0 2.9 3.7 1.8 -.8
2023 . . . . . . . . . . . 4.6 1.3 1.7 2.5 2.0 -.6
2024 . . . . . . . . . . . 4.5 .9 .9 2.3 2.4 -.4
2025 . . . . . . . . . . . 4.5 .7 .7 2.3 3.0 h
2026 . . . . . . . . . . . 4.5 .5 .6 2.2 3.7 .6
2027 . . . . . . . . . . . 4.5 .4 .4 2.0 4.4 1.3
2028 . . . . . . . . . . . 4.5 .5 .5 2.1 4.6 2.0
2029 . . . . . . . . . . . 4.4 .5 .5 2.0 4.6 2.2
2030 . . . . . . . . . . . 4.4 .5 .5 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 .4 .4 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 2.0 4.7 2.3
Low-cost:
2021 . . . . . . . . . . . 5.3 .7 3.6 6.7 1.6 -2.3
2022 . . . . . . . . . . . 3.8 1.8 3.5 4.9 2.1 -1.4
2023 . . . . . . . . . . . 3.5 1.6 1.9 3.0 2.6 -.8
2024 . . . . . . . . . . . 3.5 1.5 1.5 3.1 3.3 -.3
2025 . . . . . . . . . . . 3.5 .9 .9 2.9 4.1 .3
2026 . . . . . . . . . . . 3.5 .8 .8 2.8 4.8 1.1
2027 . . . . . . . . . . . 3.5 .6 .7 2.6 5.4 1.8
2028 . . . . . . . . . . . 3.5 .7 .7 2.7 5.7 2.4
2029 . . . . . . . . . . . 3.5 .7 .7 2.6 5.8 2.7
2030 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8
2035 . . . . . . . . . . . 3.5 .5 .5 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 .8 2.8 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
118
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:
2021 . . . . . . . . . . . 6.9 -0.6 0.6 1.4 1.3 -1.5
2022 . . . . . . . . . . . 8.2 .2 -1.0 -.6 1.5 -.1
2023 . . . . . . . . . . . 7.6 1.2 1.9 2.4 1.9 -.3
2024 . . . . . . . . . . . 7.1 1.4 1.9 2.3 2.4 .1
2025 . . . . . . . . . . . 6.7 1.1 1.5 2.2 3.0 .6
2026 . . . . . . . . . . . 6.2 .6 1.1 2.2 3.5 1.2
2027 . . . . . . . . . . . 5.7 .4 .9 2.1 3.6 1.7
2028 . . . . . . . . . . . 5.5 .4 .7 1.9 3.7 1.8
2029 . . . . . . . . . . . 5.4 .3 .4 1.5 3.6 1.9
2030 . . . . . . . . . . . 5.4 .3 .3 1.5 3.6 1.8
2035 . . . . . . . . . . . 5.5 .2 .2 1.4 3.6 1.8
2040 . . . . . . . . . . . 5.5 h .1 1.2 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 1.1 3.6 1.8
2070 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8
2075 . . . . . . . . . . . 5.5 -.1 -.1 1.0 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 1.1 3.6 1.8
2095 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8
a The Office of the Chief Actuary adjusts the civilian unemployment rates for 2031 and later to the age-sex
distribution of the civilian labor force in 2011. For years through 2030, 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.
119
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 more complex models to project the
numbers of future workers covered under OASDI and the levels of their cov-
ered earnings, as well as the numbers of future beneficiaries and the expected
levels 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 2030. 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/.
120
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 worker’s 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.
121
Assumptions and Methods
Table V.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and
Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2030
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
Intermediate:
2020 . . . . . . . . . . . g1.3 55,576.94 2.7 g137,700 g18,240 g 48,600
2021 . . . . . . . . . . . 3.1 59,064.67 6.3 g142,800 g18,960 g 50,520
2022 . . . . . . . . . . . 2.4 61,600.90 4.3 146,700 19,440 51,840
2023 . . . . . . . . . . . 2.4 63,849.67 3.7 156,000 20,760 55,080
2024 . . . . . . . . . . . 2.4 66,000.86 3.4 162,900 21,600 57,480
2025 . . . . . . . . . . . 2.4 68,383.15 3.6 168,600 22,440 59,520
2026 . . . . . . . . . . . 2.4 70,873.78 3.6 174,300 23,160 61,560
2027 . . . . . . . . . . . 2.4 73,475.22 3.7 180,600 24,000 63,840
2028 . . . . . . . . . . . 2.4 76,170.31 3.7 187,200 24,840 66,120
2029 . . . . . . . . . . . 2.4 78,951.37 3.7 194,100 25,800 68,520
2030 . . . . . . . . . . . 2.4 81,801.34 3.6 201,300 26,760 71,040
122
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, 1975-2030 (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
Low-cost:
2020 . . . . . . . . . . . g 1.3 $55,741.04 3.0 g $137,700 g$18,240 g $48,600
2021 . . . . . . . . . . . 3.5 59,648.50 7.0 g142,800 g18,960 g50,520
2022 . . . . . . . . . . . 3.0 63,755.58 6.9 147,300 19,560 51,960
2023 . . . . . . . . . . . 3.0 66,712.89 4.6 157,500 20,880 55,680
2024 . . . . . . . . . . . 3.0 69,647.48 4.4 168,600 22,320 59,520
2025 . . . . . . . . . . . 3.0 72,991.20 4.8 176,400 23,400 62,280
2026 . . . . . . . . . . . 3.0 76,531.70 4.9 183,900 24,360 65,040
2027 . . . . . . . . . . . 3.0 80,275.57 4.9 192,900 25,560 68,040
2028 . . . . . . . . . . . 3.0 84,217.83 4.9 202,200 26,880 71,400
2029 . . . . . . . . . . . 3.0 88,345.11 4.9 212,100 28,200 74,880
2030 . . . . . . . . . . . 3.0 92,646.16 4.9 222,600 29,520 78,600
High-cost:
2020 . . . . . . . . . . . g1.3 55,467.53 2.5 g137,700 g18,240 g48,600
2021 . . . . . . . . . . . 2.4 58,429.26 5.3 g142,800 g18,960 g50,520
2022 . . . . . . . . . . . 1.6 59,127.30 1.2 146,700 19,440 51,720
2023 . . . . . . . . . . . 1.8 61,216.49 3.5 154,500 20,520 54,480
2024 . . . . . . . . . . . 1.8 62,482.94 2.1 156,300 20,760 55,200
2025 . . . . . . . . . . . 1.8 63,944.74 2.3 161,700 21,480 57,120
2026 . . . . . . . . . . . 1.8 65,675.50 2.7 165,000 21,960 58,320
2027 . . . . . . . . . . . 1.8 67,545.75 2.8 168,900 22,440 59,640
2028 . . . . . . . . . . . 1.8 69,439.08 2.8 173,400 23,040 61,320
2029 . . . . . . . . . . . 1.8 71,137.10 2.4 178,500 23,640 63,000
2030 . . . . . . . . . . . 1.8 72,816.93 2.4 183,600 24,360 64,800
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 2021, and also shows
projected values through 2030. 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 worker’s average indexed monthly earnings (AIME).
The formula for the worker’s PIA multiplies a 90, 32, or 15 percent fac-
123
Assumptions and Methods
tor by the portion of the worker’s 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 2021
$3,000
Second
bend point
$2,500
($6,002) 15%
Primary Insurance Amount
$2,000
First
32%
$1,500 bend point
($996)
$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 worker’s PIA.
The formula for the maximum family benefit multiplies a 150, 272, 134,
or 175 percent factor by the portion of the worker’s PIA that falls within
the four respective ranges, and then adds the resulting products together.
124
Program Assumptions and Methods
Figure V.C2.—OASI Maximum-Family-Benefit Formula
for Those Newly Eligible in 2021
$6,000
$5,000
Second 175%
Maximum family benefit
bend point
$4,000 ($1,837) 134%
$3,000
First 272%
bend point
$2,000 ($1,272)
Third
bend point
$1,000 ($2,395)
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 individual’s
insured status—the basic requirement for benefit eligibility under
OASDI.
• The old-law contribution and benefit base—the 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.
125
Assumptions and Methods
Table V.C2.—Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2030
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
Intermediate:
2022 . . . . . . . . . 1,023 6,166 1,307 1,887 2,461 1,510 108,900
2023 . . . . . . . . . 1,087 6,553 1,389 2,005 2,615 1,600 115,800
2024 . . . . . . . . . 1,134 6,834 1,449 2,091 2,727 1,670 120,900
2025 . . . . . . . . . 1,175 7,084 1,502 2,168 2,827 1,730 125,400
2026 . . . . . . . . . 1,215 7,323 1,552 2,241 2,922 1,790 129,600
2027 . . . . . . . . . 1,259 7,587 1,608 2,322 3,028 1,850 134,100
2028 . . . . . . . . . 1,304 7,863 1,667 2,406 3,138 1,920 139,200
2029 . . . . . . . . . 1,352 8,152 1,728 2,494 3,253 1,990 144,300
2030 . . . . . . . . . 1,402 8,451 1,791 2,586 3,373 2,060 149,400
126
Program Assumptions and Methods
Table V.C2.—Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2030 (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:
2022 . . . . . . . . . $1,026 $6,184 $1,311 $1,892 $2,468 $1,510 $109,500
2023 . . . . . . . . . 1,098 6,618 1,403 2,025 2,641 1,620 117,000
2024 . . . . . . . . . 1,173 7,073 1,499 2,164 2,823 1,730 125,100
2025 . . . . . . . . . 1,228 7,402 1,569 2,265 2,954 1,810 130,800
2026 . . . . . . . . . 1,282 7,727 1,638 2,364 3,084 1,890 136,800
2027 . . . . . . . . . 1,343 8,098 1,717 2,478 3,232 1,980 143,100
2028 . . . . . . . . . 1,409 8,491 1,800 2,598 3,389 2,070 150,300
2029 . . . . . . . . . 1,478 8,906 1,888 2,725 3,554 2,180 157,500
2030 . . . . . . . . . 1,550 9,344 1,981 2,859 3,729 2,280 165,300
High-cost:
2022 . . . . . . . . . 1,021 6,154 1,305 1,883 2,456 1,500 108,900
2023 . . . . . . . . . 1,075 6,483 1,374 1,984 2,587 1,580 114,600
2024 . . . . . . . . . 1,088 6,560 1,391 2,007 2,618 1,600 116,100
2025 . . . . . . . . . 1,127 6,792 1,440 2,078 2,710 1,660 120,000
2026 . . . . . . . . . 1,150 6,932 1,470 2,121 2,767 1,690 122,700
2027 . . . . . . . . . 1,177 7,094 1,504 2,171 2,831 1,730 125,400
2028 . . . . . . . . . 1,209 7,287 1,545 2,230 2,908 1,780 129,000
2029 . . . . . . . . . 1,243 7,494 1,589 2,293 2,991 1,830 132,600
2030 . . . . . . . . . 1,278 7,704 1,633 2,357 3,075 1,880 136,200
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.
127
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 group’s
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 2030, 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.
128
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 2095 are 68.8, 68.8, and 68.6 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
2095 are 66.5, 65.9, and 65.1 percent for the low-cost, intermediate, and
high-cost assumptions, respectively. For men, the intermediate projected rate
for 2095 is lower than the 2019 age-adjusted rate of 70.8 percent primarily
due to the projected increase in the portion of the Social Security area popu-
lation that consists of other-than-LPR immigrants. For women, the interme-
diate projected rate for 2095 is higher than the 2019 age-adjusted rate of
65.4 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 2021 is $1,470.
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
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
1 Age-adjusted covered-worker rates are adjusted to the 2011 age distribution of the Social Security area
population.
129
Assumptions and Methods
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
immigrant population. 1 For the other-than-LPR immigrant population, the
1 Those granted legal work authorization through the 2012 Deferred Action for Childhood Arrivals program
are included in the simulations.
130
Program Assumptions and Methods
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 88.1 for December 31, 2018, to 86.0, 88.0, and 90.5 for
December 31, 2095, 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
decreases from 94.1 to 87.1, and the percentage for women increases from
83.1 to 88.9.
131
Assumptions and Methods
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-
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
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.
132
Program Assumptions and Methods
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
eligibility—that is, the probabilities that: (1) the earner is 62 or over, (2) the
earner is insured, (3) the earner is either receiving benefits or has suspended
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 bene-
fits, 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 pro-
jected prevalence rate to the resulting number of spouses. Due to the Biparti-
san Budget Act of 2015, aged spouses are no longer eligible to receive an
aged-spouse benefit if the earner suspends their benefit after April 29, 2016.
Additionally, for those turning 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.
133
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-
134
Program Assumptions and Methods
tional factors representing the probability that the person’s 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
135
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 1945-2095
[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
Intermediate:
2021 . . . . . . . . . . 47,428 2,182 720 3,776 113 1,971 1 56,190
2025 . . . . . . . . . . 52,878 1,794 772 3,714 108 2,048 1 61,314
2030 . . . . . . . . . . 59,512 1,705 853 3,635 104 2,115 1 67,925
2035 . . . . . . . . . . 63,708 1,642 928 3,364 117 2,136 1 71,896
2040 . . . . . . . . . . 65,944 1,509 1,010 3,128 131 2,194 1 73,916
136
Program Assumptions and Methods
Table V.C4.—OASI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1945-2095 (Cont.)
[In thousands]
Retired workers and auxiliaries Survivors
Widow- Mother-
Calendar year Workera Spouse Child widower father Child Parent Total
Intermediate (Cont.):
2045 . . . . . . . . . . 66,932 1,417 1,030 2,982 129 2,206 1 74,695
2050 . . . . . . . . . . 68,549 1,377 1,075 2,861 126 2,193 1 76,182
2055 . . . . . . . . . . 70,885 1,382 1,123 2,771 121 2,150 1 78,432
2060 . . . . . . . . . . 74,109 1,405 1,172 2,697 116 2,080 1 81,579
2065 . . . . . . . . . . 77,173 1,435 1,182 2,665 112 2,023 1 84,591
2070 . . . . . . . . . . 80,247 1,476 1,195 2,658 111 2,003 1 87,691
2075 . . . . . . . . . . 83,347 1,508 1,227 2,648 111 2,007 1 90,848
2080 . . . . . . . . . . 85,369 1,518 1,249 2,615 109 2,006 1 92,868
2085 . . . . . . . . . . 86,279 1,514 1,257 2,558 107 1,987 1 93,703
2090 . . . . . . . . . . 86,606 1,538 1,257 2,524 104 1,958 1 93,987
2095 . . . . . . . . . . 88,350 1,574 1,299 2,502 102 1,931 1 95,758
Low-cost:
2021 . . . . . . . . . . 47,414 2,182 721 3,775 113 1,974 1 56,180
2025 . . . . . . . . . . 52,756 1,797 779 3,710 109 2,075 1 61,226
2030 . . . . . . . . . . 59,049 1,719 876 3,622 109 2,207 1 67,584
2035 . . . . . . . . . . 62,431 1,638 965 3,407 117 2,366 1 70,925
2040 . . . . . . . . . . 63,854 1,491 1,070 3,193 133 2,549 1 72,290
2045 . . . . . . . . . . 64,055 1,381 1,101 3,066 133 2,654 1 72,390
2050 . . . . . . . . . . 64,932 1,326 1,162 2,957 133 2,712 1 73,223
2055 . . . . . . . . . . 66,639 1,307 1,228 2,871 132 2,731 1 74,909
2060 . . . . . . . . . . 69,293 1,299 1,299 2,795 132 2,728 1 77,547
2065 . . . . . . . . . . 71,793 1,292 1,327 2,756 135 2,761 1 80,065
2070 . . . . . . . . . . 74,220 1,295 1,361 2,743 140 2,855 1 82,615
2075 . . . . . . . . . . 76,566 1,292 1,420 2,727 146 2,979 1 85,131
2080 . . . . . . . . . . 77,848 1,280 1,460 2,694 151 3,082 1 86,516
2085 . . . . . . . . . . 78,192 1,259 1,483 2,658 154 3,149 1 86,896
2090 . . . . . . . . . . 78,726 1,289 1,500 2,678 157 3,204 1 87,555
2095 . . . . . . . . . . 81,544 1,338 1,590 2,731 160 3,269 1 90,632
High-cost:
2021 . . . . . . . . . . 47,445 2,182 719 3,777 113 1,968 1 56,206
2025 . . . . . . . . . . 53,040 1,792 768 3,722 106 2,023 1 61,451
2030 . . . . . . . . . . 60,129 1,695 832 3,659 97 2,016 1 68,429
2035 . . . . . . . . . . 65,338 1,677 883 3,299 111 1,872 1 73,179
2040 . . . . . . . . . . 68,705 1,558 931 3,026 119 1,789 1 76,129
2045 . . . . . . . . . . 70,855 1,492 939 2,847 113 1,719 1 77,966
2050 . . . . . . . . . . 73,509 1,487 967 2,703 105 1,651 1 80,422
2055 . . . . . . . . . . 76,684 1,533 990 2,596 96 1,565 1 83,465
2060 . . . . . . . . . . 80,631 1,589 1,003 2,509 86 1,460 1 87,279
2065 . . . . . . . . . . 84,370 1,645 987 2,472 77 1,358 1 90,910
2070 . . . . . . . . . . 88,186 1,691 974 2,451 71 1,281 1 94,654
2075 . . . . . . . . . . 92,049 1,734 971 2,434 66 1,226 1 98,480
2080 . . . . . . . . . . 94,770 1,762 969 2,391 61 1,182 1 101,135
2085 . . . . . . . . . . 96,143 1,747 959 2,298 57 1,134 1 102,337
2090 . . . . . . . . . . 95,714 1,750 938 2,209 52 1,083 1 101,746
2095 . . . . . . . . . . 95,340 1,767 933 2,111 47 1,033 1 101,233
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.
137
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 2020. 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.
138
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 2030), incidence rates
reflect several factors including: (1) aspects of program administration, such
as efforts to reduce the disability determination backlogs and recent changes
in procedures for adjudicating claims; (2) assumed future unemployment
rates; and (3) recent trends in incidence. 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
last few years, incidence rates have subsided as the economy has recovered,
and have persisted at levels well below those expected over the long-term.
Some 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 are likely due to many individuals applying for disability
benefits earlier than they would have otherwise. For 2020, the actual inci-
dence rate (3.5 per thousand) was below the level projected in last year’s
report (4.3 per thousand). In this year’s report, incidence rates under the
intermediate alternative are projected to rise quickly from the level in 2020
to a temporary peak in 2022, decline from that peak in 2023, and then gradu-
ally rise through the rest of the short-range period toward the ultimate
assumed levels. This projected pattern of incidence over the next several
years is based on a variety of factors, including that disability applications
are expected to increase to pre-pandemic levels as the COVID-19 pandemic
139
Assumptions and Methods
recedes, the economy will continue to recover, and there will be a temporary
increase in applications partially offsetting reduced levels experienced
during the pandemic. In 2030, at the end of the short-range period, age-sex-
specific incidence rates are assumed to reach the ultimate rates assumed for
the long-range projections. These ultimate age-sex-specific disability inci-
dence 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 repre-
sent 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 5.0 awards per thousand exposed, which is the same as
in last year’s report. Figure V.C3 illustrates that the assumed ultimate age-
sex-adjusted incidence rate of 5.0 is slightly lower than the average rate for
the historical period 1970 through 2020 (5.1 per thousand). However, a simi-
lar comparison using gross incidence rates gives a very different result. The
projected ultimate gross incidence rate is substantially greater than the aver-
age gross rate over the historical period due to the large changes in the age-
sex distribution of the disability-exposed population between 1970 and 2010.
The Trustees assume that the ultimate age-sex-adjusted incidence rates for
the low-cost and high-cost alternatives will be 4.0 and 6.0 awards per thou-
sand exposed, or about 1.0 awards per thousand lower and 1.0 awards per
thousand higher, respectively, than the ultimate incidence rate for the inter-
mediate alternative. These ultimate age-sex-adjusted incidence rates are sim-
ilar to those in last year’s report.
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.
140
Program Assumptions and Methods
Figure V.C3.—DI Disability Incidence Rates, 1970-2095
[Awards per thousand disability-exposed]
9
8 III
7
II III
6
5 II
I
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
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-2030).
In the short-range period (through 2030), 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 28.2 deaths per thousand beneficiaries for 2020 to about 24.0 per
thousand for 2030. These rates are assumed to remain elevated through 2023
141
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 14.0 per thousand beneficiaries for 2020 to 10.3 per thousand beneficia-
ries for 2030. 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-
15 percent higher or lower, respectively, than under the intermediate assump-
tions.
For the long-range period (post-2030), 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 28.2 per thousand beneficiaries in 2020 to 22.2, 12.8, and
6.2 per thousand disabled-worker beneficiaries for 2095 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 2095.
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.
142
Program Assumptions and Methods
Figure V.C4.—DI Disability Termination Rates, 1970-2095
[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
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-
143
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, 1970-2095
[Awards per thousand disability-exposed;
terminations and conversions per thousand disabled-worker beneficiaries]
8 160
Historical Projected
7 140
Gross incidence rates
6 120
Age-sex-adjusted incidence rates
Termination 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 Gross termination rates
20
0 0
1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090
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 8.2 million at the end of 2020, to 10.9 million, 12.6 million, and
12.8 million at the end of 2095, under the low-cost, intermediate, and high-
cost assumptions, respectively. Of course, much of this growth results from
144
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 1960-2095
[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
Intermediate:
2021. . . . . . . . . . . . 8,067 106 1,336 9,509 52 38
2025. . . . . . . . . . . . 8,348 111 1,334 9,793 52 38
2030. . . . . . . . . . . . 8,395 109 1,399 9,903 52 39
2035. . . . . . . . . . . . 8,738 110 1,539 10,387 53 40
2040. . . . . . . . . . . . 9,174 112 1,760 11,046 55 41
2045. . . . . . . . . . . . 9,853 123 1,918 11,894 58 42
2050. . . . . . . . . . . . 10,316 127 2,035 12,478 60 43
2055. . . . . . . . . . . . 10,683 132 2,100 12,915 61 43
2060. . . . . . . . . . . . 10,778 129 2,114 13,021 61 44
2065. . . . . . . . . . . . 10,956 132 2,119 13,208 61 44
2070. . . . . . . . . . . . 11,120 137 2,161 13,418 61 44
2075. . . . . . . . . . . . 11,085 137 2,242 13,464 60 44
2080. . . . . . . . . . . . 11,187 137 2,336 13,660 59 44
2085. . . . . . . . . . . . 11,460 138 2,414 14,011 59 45
2090. . . . . . . . . . . . 12,157 150 2,475 14,782 61 45
2095. . . . . . . . . . . . 12,635 153 2,521 15,308 62 45
145
Assumptions and Methods
Table V.C5.—DI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1960-2095 (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:
2021. . . . . . . . . . . . 8,048 106 1,336 9,489 51 37
2025. . . . . . . . . . . . 7,884 110 1,255 9,249 49 35
2030. . . . . . . . . . . . 7,320 108 1,243 8,671 45 33
2035. . . . . . . . . . . . 7,212 89 1,335 8,636 43 33
2040. . . . . . . . . . . . 7,340 85 1,528 8,953 43 33
2045. . . . . . . . . . . . 7,752 90 1,660 9,501 44 33
2050. . . . . . . . . . . . 8,046 91 1,753 9,890 45 33
2055. . . . . . . . . . . . 8,308 92 1,806 10,206 45 33
2060. . . . . . . . . . . . 8,390 89 1,830 10,309 44 33
2065. . . . . . . . . . . . 8,560 89 1,866 10,515 43 33
2070. . . . . . . . . . . . 8,747 93 1,951 10,791 43 33
2075. . . . . . . . . . . . 8,837 93 2,073 11,003 42 33
2080. . . . . . . . . . . . 9,099 94 2,198 11,390 41 34
2085. . . . . . . . . . . . 9,590 97 2,301 11,987 42 34
2090. . . . . . . . . . . . 10,389 109 2,389 12,886 43 34
2095. . . . . . . . . . . . 10,928 111 2,473 13,513 43 34
High-cost:
2021. . . . . . . . . . . . 8,076 105 1,334 9,516 52 38
2025. . . . . . . . . . . . 8,835 113 1,413 10,361 56 40
2030. . . . . . . . . . . . 9,522 110 1,527 11,159 60 45
2035. . . . . . . . . . . . 10,393 135 1,689 12,216 64 48
2040. . . . . . . . . . . . 11,171 145 1,871 13,187 68 51
2045. . . . . . . . . . . . 12,122 165 2,013 14,300 74 52
2050. . . . . . . . . . . . 12,742 174 2,126 15,042 78 54
2055. . . . . . . . . . . . 13,191 184 2,183 15,558 81 55
2060. . . . . . . . . . . . 13,243 179 2,167 15,589 82 55
2065. . . . . . . . . . . . 13,351 178 2,111 15,640 83 55
2070. . . . . . . . . . . . 13,367 181 2,065 15,613 84 55
2075. . . . . . . . . . . . 13,027 178 2,055 15,260 84 56
2080. . . . . . . . . . . . 12,707 176 2,076 14,959 83 56
2085. . . . . . . . . . . . 12,376 167 2,095 14,638 82 56
2090. . . . . . . . . . . . 12,598 177 2,100 14,875 83 56
2095. . . . . . . . . . . . 12,791 179 2,082 15,052 84 57
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-
nation rates, which are helpful for understanding the trend in prevalence
146
Program Assumptions and Methods
rates. Annual incidence and termination rates are not directly comparable or
combinable because their denominators differ.
Figure V.C6.—DI Disability Prevalence Rates, 1970-2095
[Rate per thousand persons insured for disability benefits]
100
Historical Projected
90
80
III
70
60 III
II
50
II
I
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
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
(4) DI program age and insured requirements. As these factors gradually sta-
147
Assumptions and Methods
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 38.6 per thousand disability insured workers
at the end of 2020 to 44.9 per thousand at the end of 2095. The projected
age-sex-adjusted disability prevalence rate at the end of 2095 is 33.9 per
thousand under the low-cost assumptions and 56.6 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
(2021 through 2030), the Office of the Chief Actuary projects incidence and
termination rates for each category of auxiliary beneficiary. After 2030, 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.
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
148
Program Assumptions and Methods
component sectors of the economy (i.e., private, State and local, Federal
civilian, and military) based on the projected overall growth of sectoral 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-cov-
ered undocumented immigrants and to the mandatory coverage of new hires
in the Federal civilian sector. The office projects covered self-employment
net earnings based on the growth in net proprietors’ income in the U.S. econ-
omy.
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
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-
149
Assumptions and Methods
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 higher
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 was 83.0 percent for 2019.
For this report, the Trustees assume a level for the taxable ratio at the end of
the short-range period (2030) of 82.5 percent for the intermediate assump-
tions, 84.0 percent for the low-cost assumptions, and 81.0 percent for the
high-cost assumptions. 1 These are the same assumptions that the Trustees
made for the end of the short-range period (2029) for the 2020 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-
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 employer’s 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. 2 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.
1 The taxable ratio drifts down slightly after 2030, to 82.3, 84.0, and 80.6 percent for 2095 for the intermedi-
ate, low-cost, and high-cost assumptions, respectively, as self-employment income becomes an increasing
share of total earnings.
2 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.
150
Program Assumptions and Methods
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. 1 It also shows the contribution and benefit base for each
year through 2021.
1 Table VI.G1 shows the payroll tax contribution rates for the Hospital Insurance (HI) program.
151
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
152
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 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
threshold amounts. The threshold amounts are $25,000 for single filers,
$32,000 for joint filers, and $0 for those married individuals filing separately.
153
Assumptions and Methods
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 taxpayer’s 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 Actuary’s 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-
tial entitlement depend on automatic benefit increases, recomputations to
reflect additional covered earnings, and differences in mortality by level of
154
Program Assumptions and Methods
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 2017 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 2021 and subsequent
years. The illustrative benefit amounts in table V.C7 are presented in CPI-
indexed 2021 dollars—that is, adjusted to 2021 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 2021 and subsequent years
in CPI-indexed 2021 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
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
155
Assumptions and Methods
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 1998 through 2017. 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 $59,065 for 2021). 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 $14,766, $26,579, and
$94,503, respectively, for 2021). The steady maximum earner has earnings at
or above the contribution and benefit base ($142,800 for 2021) 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 2021-2095
National
Scaled very Scaled Steady Average Wage
Year attain Age at low Scaled low medium Scaled high maximum Index in 2021
age 65a retirement earningsb earningsc earningsd earningse earningsf dollarsg
Benefits in 2021 dollarsh with retirement at normal retirement age
2021 . . . . 66:4 $10,826 $14,181 $23,393 $30,958 $37,881 $59,065
2025 . . . . 67:0 11,358 14,893 24,583 32,488 40,007 62,196
2030 . . . . 67:0 12,403 16,238 26,789 35,450 43,668 66,081
2035 . . . . 67:0 13,180 17,253 28,467 37,664 46,435 70,190
2040 . . . . 67:0 14,001 18,327 30,231 40,001 49,296 74,464
2045 . . . . 67:0 14,850 19,438 32,062 42,427 52,299 78,601
2050 . . . . 67:0 15,674 20,516 33,838 44,784 55,149 82,896
2055 . . . . 67:0 16,527 21,642 35,696 47,236 58,080 87,571
1 Actuarial Note 2021.3 has more details on scaled-earnings patterns.
See www.ssa.gov/OACT/NOTES/ran3/.
156
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 2021-2095 (Cont.)
National
Scaled very Scaled Steady Average Wage
Year attain Age at low Scaled low medium Scaled high maximum Index in 2021
age 65a retirement earningsb earningsc earningsd earningse earningsf dollarsg
2060 . . . . 67:0 $17,467 $22,864 $37,712 $49,903 $61,312 $92,595
2065 . . . . 67:0 18,470 24,177 39,876 52,768 64,808 97,976
2070 . . . . 67:0 19,540 25,584 42,194 55,836 68,574 103,646
2075 . . . . 67:0 20,672 27,063 44,635 59,065 72,548 109,599
2080 . . . . 67:0 21,858 28,616 47,197 62,455 76,715 115,828
2085 . . . . 67:0 23,103 30,244 49,879 66,005 81,078 122,345
2090 . . . . 67:0 24,404 31,945 52,688 69,721 85,638 129,305
2095 . . . . 67:0 25,791 33,764 55,687 73,688 90,504 136,764
Benefits in 2021 dollarsh with retirement at age 65
2021 . . . . 65:0 9,794 12,825 21,162 28,009 34,180 59,065
2025 . . . . 65:0 9,842 12,883 21,270 28,128 34,384 62,196
2030 . . . . 65:0 10,743 14,065 23,195 30,704 37,590 66,081
2035 . . . . 65:0 11,414 14,942 24,647 32,627 39,978 70,190
2040 . . . . 65:0 12,130 15,876 26,182 34,657 42,442 74,464
2045 . . . . 65:0 12,863 16,837 27,767 36,757 45,052 78,601
2050 . . . . 65:0 13,576 17,771 29,310 38,800 47,504 82,896
2055 . . . . 65:0 14,318 18,747 30,912 40,920 50,030 87,571
2060 . . . . 65:0 15,130 19,807 32,658 43,230 52,809 92,595
2065 . . . . 65:0 16,000 20,943 34,533 45,714 55,819 97,976
2070 . . . . 65:0 16,931 22,159 36,543 48,370 59,064 103,646
2075 . . . . 65:0 17,907 23,440 38,657 51,169 62,488 109,599
2080 . . . . 65:0 18,937 24,789 40,878 54,106 66,082 115,828
2085 . . . . 65:0 20,014 26,197 43,199 57,183 69,838 122,345
2090 . . . . 65:0 21,142 27,673 45,632 60,402 73,766 129,305
2095 . . . . 65:0 22,345 29,246 48,228 63,837 77,958 136,764
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 2021 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 2021 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.
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-
157
Assumptions and Methods
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.
Calculation of the financial interchange with the Railroad Retirement 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-$6 billion and the long-range summarized net cost for the OASI and DI
Trust Funds is 0.05 percent of taxable payroll.
158
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.
159
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 individual’s
or couple’s 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 bond’s 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.
160
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 program’s 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.
161
Appendices
Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2020
[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 butions mentsb benefits interest c Totala mentsa d costs change year of year ratio e
1937f . . $0.8 $0.8 — — g g g — — $0.8 $0.8 —
1938f . . .4 .4 — — g g g — — .4 1.1 7,660
1939f . . .6 .6 — — g g g — — .6 1.7 8,086
1940 . . .4 .3 — — g $0.1 g g — .3 2.0 2,781
1941 . . .8 .8 — — $0.1 .1 $0.1 g — .7 2.8 1,782
1942 . . 1.1 1.0 — — .1 .2 .1 g — .9 3.7 1,737
1943 . . 1.3 1.2 — — .1 .2 .2 g — 1.1 4.8 1,891
1944 . . 1.4 1.3 — — .1 .2 .2 g — 1.2 6.0 2,025
1945 . . 1.4 1.3 — — .1 .3 .3 g — 1.1 7.1 1,975
1946 . . 1.4 1.3 — — .2 .4 .4 g — 1.0 8.1 1,704
1947 . . 1.7 1.6 g — .2 .5 .5 g — 1.2 9.4 1,592
1948 . . 2.0 1.7 g — .3 .6 .6 $0.1 — 1.4 10.7 1,542
1949 . . 1.8 1.7 g — .1 .7 .7 .1 — 1.1 11.8 1,487
1950 . . 2.9 2.7 g — .3 1.0 1.0 .1 — 1.9 13.7 1,156
1951 . . 3.8 3.4 g — .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 g 1.9 20.6 500
1955 . . 6.2 5.7 — — .5 5.1 5.0 .1 g 1.1 21.7 405
1956 . . 6.7 6.2 — — .5 5.8 5.7 .1 g .9 22.5 371
1957 . . 7.4 6.8 — — .6 7.5 7.3 .2 g -.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 h .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 i20
1985 . . 184.2 175.1 4.0 3.2 1.9 171.2 167.2 1.6 2.3 h 8.7 35.8 i24
1986 . . 197.4 189.1 1.8 3.4 3.1 181.0 176.8 1.6 2.6 h 3.2 39.1 i28
1987 . . 210.7 201.1 1.7 3.3 4.7 187.7 183.6 1.5 2.6 23.1 62.1 i30
1988 . . 240.8 227.7 2.1 3.4 7.6 200.0 195.5 1.8 2.8 40.7 102.9 i41
1989 . . 264.7 248.1 2.1 2.4 12.0 212.5 208.0 1.7 2.8 52.2 155.1 i59
1990 . . 286.7 266.1 -.7 4.8 16.4 227.5 223.0 1.6 3.0 59.1 214.2 i78
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 g 5.3 27.0 273.1 267.8 2.0 3.4 50.2 369.3 117
1994 . . 328.3 293.3 g 5.0 29.9 284.1 279.1 1.6 3.4 44.1 413.5 130
162
History of Trust Fund Operations
Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2020 (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 butions mentsb benefits interest c Totala mentsa d costs change year of year ratio e
1995 . . $342.8 $304.7 -$0.2 $5.5 $32.8 $297.8 $291.6 $2.1 $4.1 $45.0 $458.5 139
1996 . . 363.7 321.6 g 6.5 35.7 308.2 302.9 1.8 3.6 55.5 514.0 149
1997 . . 397.2 349.9 g 7.4 39.8 322.1 316.3 2.1 3.7 75.1 589.1 160
1998 . . 424.8 371.2 g 9.1 44.5 332.3 326.8 1.9 3.7 92.5 681.6 177
1999 . . 457.0 396.4 g 10.9 49.8 339.9 334.4 1.8 3.7 117.2 798.8 201
2000 . . 490.5 421.4 g 11.6 57.5 358.3 352.7 2.1 3.5 132.2 931.0 223
2001 . . 518.1 441.5 g 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 g 12.5 75.2 406.0 399.8 2.6 3.6 137.8 1,355.3 300
2004 . . 566.3 472.8 g 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 g 15.6 91.8 461.0 454.5 3.0 3.5 181.3 1,844.3 361
2007 . . 675.0 560.9 g 17.2 97.0 495.7 489.1 3.1 3.6 179.3 2,023.6 372
2008 . . 695.5 574.6 g 15.6 105.3 516.2 509.3 3.2 3.6 179.3 2,202.9 392
2009 . . 698.2 570.4 g 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 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
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 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.
c 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 October 1973, figures include rel-
atively 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.
d 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 sched-
uled under law at that time for all historical years.
e 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.
f 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.
g Between -$50 million and $50 million.
h 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).
i Reserves used for the trust fund ratio calculation include January advance tax transfers.
Note: Components may not sum to totals because of rounding. 163
Appendices
Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2020
[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 butions ments b benefits interest c Totalaments a d costs change year of year ratio e
1957 . . $0.7 $0.7 — — f $0.1 $0.1 f — $0.6 $0.6 —
1958 . . 1.0 1.0 — — f .3 .2 f — .7 1.4 249
1959 . . .9 .9 — — f .5 .5 f f .4 1.8 284
1960 . . 1.1 1.0 — — $0.1 .6 .6 f f .5 2.3 304
1961 . . 1.1 1.0 — — .1 1.0 .9 $0.1 f .1 2.4 239
1962 . . 1.1 1.0 — — .1 1.2 1.1 .1 f -.1 2.4 206
1963 . . 1.2 1.1 — — .1 1.3 1.2 .1 f -.1 2.2 183
1964 . . 1.2 1.2 — — .1 1.4 1.3 .1 f -.2 2.0 159
1965 . . 1.2 1.2 — — .1 1.7 1.6 .1 f -.4 1.6 121
1966 . . 2.1 2.0 f — .1 1.9 1.8 .1 f .1 1.7 82
1967 . . 2.4 2.3 f — .1 2.1 1.9 .1 f .3 2.0 83
1968 . . 3.5 3.3 f — .1 2.5 2.3 .1 f 1.0 3.0 83
1969 . . 3.8 3.6 f — .2 2.7 2.6 .1 f 1.1 4.1 111
1970 . . 4.8 4.5 f — .3 3.3 3.1 .2 f 1.5 5.6 126
1971 . . 5.0 4.6 $0.1 — .4 4.0 3.8 .2 f 1.0 6.6 140
1972 . . 5.6 5.1 .1 — .4 4.8 4.5 .2 f .8 7.5 140
1973 . . 6.4 5.9 .1 — .5 6.0 5.8 .2 f .5 7.9 125
1974 . . 7.4 6.8 .1 — .5 7.2 7.0 .2 f .2 8.1 110
1975 . . 8.0 7.4 .1 — .5 8.8 8.5 .3 f -.8 7.4 92
1976 . . 8.8 8.2 .1 — .4 10.4 10.1 .3 f -1.6 5.7 71
1977 . . 9.6 9.1 .1 — .3 11.9 11.5 .4 f -2.4 3.4 48
1978 . . 13.8 13.4 .1 — .3 13.0 12.6 .3 f .9 4.2 26
1979 . . 15.6 15.1 .1 — .4 14.2 13.8 .4 f 1.4 5.6 30
1980 . . 13.9 13.3 .1 — .5 15.9 15.5 .4 f -2.0 3.6 35
1981 . . 17.1 16.7 .2 — .2 17.7 17.2 .4 f -.6 3.0 21
1982 . . 22.7 22.0 .2 — .5 18.0 17.4 .6 f g -.4 2.7 17
1983 . . 20.7 18.0 1.1 — 1.6 18.2 17.5 .6 f 2.5 5.2 15
1984 . . 17.3 15.5 .4 $0.2 1.2 18.5 17.9 .6 f -1.2 4.0 h35
1985 . . 19.3 17.0 1.2 .2 .9 19.5 18.8 .6 f g 2.4 6.3 h27
1986 . . 19.4 18.2 .2 .2 .8 20.5 19.9 .6 $0.1 g 1.5 7.8 h38
1987 . . 20.3 19.5 .2 f .6 21.4 20.5 .8 .1 -1.1 6.7 h44
1988 . . 22.7 21.8 .2 .1 .6 22.5 21.7 .7 .1 .2 6.9 h38
1989 . . 24.8 23.8 .2 .1 .7 23.8 22.9 .8 .1 1.0 7.9 h38
1990 . . 28.8 28.4 -.6 .1 .9 25.6 24.8 .7 .1 3.2 11.1 h40
1991 . . 30.4 29.1 f .2 1.1 28.6 27.7 .8 .1 1.8 12.9 39
1992 . . 31.4 30.1 f .2 1.1 32.0 31.1 .8 .1 -.6 12.3 40
1993 . . 32.3 31.2 f .3 .8 35.7 34.6 1.0 .1 -3.4 9.0 35
1994 . . 52.8 51.4 f .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 f .4 3.0 45.4 44.2 1.2 f 15.4 52.9 83
1997 . . 60.5 56.0 f .5 4.0 47.0 45.7 1.3 .1 13.5 66.4 113
1998 . . 64.4 59.0 f .6 4.8 49.9 48.2 1.6 .2 14.4 80.8 133
1999 . . 69.5 63.2 f .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 f .8 8.2 61.4 59.6 1.7 f 22.5 141.0 193
2002 . . 87.4 77.3 f .9 9.2 67.9 65.7 2.0 .2 19.5 160.5 208
2003 . . 88.1 77.4 f .9 9.7 73.1 70.9 2.0 .2 15.0 175.4 219
2004 . . 91.4 80.3 f 1.1 10.0 80.6 78.2 2.2 .2 10.8 186.2 218
2005 . . 97.4 86.1 f 1.1 10.3 88.0 85.4 2.3 .3 9.4 195.6 212
2006 . . 102.6 90.8 f 1.2 10.6 94.5 91.7 2.3 .4 8.2 203.8 207
2007 . . 109.9 95.2 f 1.4 13.2 98.8 95.9 2.5 .4 11.1 214.9 206
2008 . . 109.8 97.6 f 1.3 11.0 109.0 106.0 2.5 .4 .9 215.8 197
2009 . . 109.3 96.9 f 2.0 10.5 121.5 118.3 2.7 .4 -12.2 203.5 178
164
History of Trust Fund Operations
Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2020 (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 butions ments b benefits interest c Totalaments a d costs change year of year ratio e
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 f 1.1 2.1 146.6 143.4 2.8 .4 -28.0 32.3 41
2016. . . 160.0 157.4 f 1.2 1.4 145.9 142.8 2.8 .4 14.1 46.3 22
2017. . . 171.0 167.1 f 2.0 1.9 145.8 142.8 2.8 .2 25.1 71.5 32
2018. . . 172.3 169.2 f .5 2.6 146.8 143.7 2.9 .2 25.6 97.1 49
2019. . . 143.9 139.4 f 1.6 2.9 147.9 145.1 2.7 .1 -4.0 93.1 66
2020. . . 149.7 145.3 f 1.7 2.8 146.3 143.6 2.6 .1 3.5 96.6 64
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 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.
c 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 rela-
tively 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.
d 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 sched-
uled under law at that time for all historical years.
e 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.
f Between -$50 million and $50 million.
g 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).
h Reserves used for the trust fund ratio calculation include January advance tax transfers.
Note: Components may not sum to totals because of rounding.
165
Appendices
Table VI.A3.— Operations of the Combined OASI and DI Trust Funds,
Calendar Years 1957-2020
[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 butions mentsb benefits interestc Totala mentsad costs change year of year ratio e
1957 . . $8.1 $7.5 — — $0.6 $7.6 $7.4 $0.2 f $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 f 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 g .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 h21
1985 . . 203.5 192.1 5.2 3.4 2.7 190.6 186.1 2.2 2.4 g 11.1 42.2 h24
1986 . . 216.8 207.4 1.9 3.7 3.9 201.5 196.7 2.2 2.7 g 4.7 46.9 h29
1987 . . 231.0 220.6 1.9 3.2 5.3 209.1 204.1 2.4 2.6 21.9 68.8 h31
1988 . . 263.5 249.5 2.3 3.4 8.2 222.5 217.1 2.5 2.9 41.0 109.8 h41
1989 . . 289.4 271.9 2.3 2.5 12.7 236.2 230.9 2.4 2.9 53.2 163.0 h57
1990 . . 315.4 294.5 -1.3 5.0 17.2 253.1 247.8 2.3 3.0 62.3 225.3 h75
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 f 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 f 6.8 38.7 353.6 347.0 3.0 3.6 70.9 567.0 140
1997 . . 457.7 406.0 f 7.9 43.8 369.1 362.0 3.4 3.7 88.6 655.5 154
1998 . . 489.2 430.2 f 9.7 49.3 382.3 375.0 3.5 3.8 106.9 762.5 171
1999 . . 526.6 459.6 f 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 f 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 f 13.4 84.9 479.1 470.8 4.6 3.7 152.8 1,530.8 288
2004 . . 657.7 553.0 f 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 f 16.9 102.4 555.4 546.2 5.3 3.8 189.5 2,048.1 335
2007 . . 784.9 656.1 f 18.6 110.2 594.5 584.9 5.5 4.0 190.4 2,238.5 345
2008 . . 805.3 672.1 f 16.9 116.3 625.1 615.3 5.7 4.0 180.2 2,418.7 358
2009 . . 807.5 667.3 f 21.9 118.3 685.8 675.5 6.2 4.1 121.7 2,540.3 353
166
History of Trust Fund Operations
Table VI.A3.— Operations of the Combined OASI and DI Trust Funds,
Calendar Years 1957-2020 (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 butions mentsb benefits interestc Totala mentsad costs change year of year ratio e
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 f 37.9 85.1 952.5 941.5 6.5 4.5 44.1 2,891.8 299
2018 . . 1,003.4 885.1 f 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 f 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 f 40.7 76.1 1,107.2 1,095.9 6.3 5.0 10.9 2,908.3 262
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 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.
c 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
accounting for administrative expenses for years prior to 1967. Beginning in October 1973, figures include rela-
tively 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.
d 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.
e The “Trust fund ratio” column represents asset reserves at the beginning of a year as a percentage of cost during
the year.
f Between -$50 million and $50 million.
g 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).
h 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 2019
and 2020. The tables show the invested asset reserves by interest rate and
year of maturity. Bonds issued to the trust funds in 2020 had an interest rate
of 0.750 percent, compared with an interest rate of 2.250 percent for bonds
issued in 2019.
167
Appendices
Table VI.A4.—OASI Trust Fund Asset Reserves, End of
Calendar Years 2019 and 2020
[In thousands]
December 31, 2019 December 31, 2020
Obligations sold only to the trust funds (special issue securi-
ties):
Certificates of indebtedness:
0.875 percent, 2021 — $31,409,192
1.875 percent, 2020 $53,898,934 —
Bonds:
0.750 percent, 2022-25 — 59,725,632
0.750 percent, 2026-33 — 119,451,256
1.375 percent, 2021 6,693,020 —
1.375 percent, 2022-25 26,772,080 26,772,080
1.375 percent, 2026 6,693,019 6,693,019
1.375 percent, 2027 173,240,401 173,240,401
1.750 percent, 2021 4,908,185 —
1.750 percent, 2022-25 19,632,740 19,632,740
1.750 percent, 2026-27 9,816,372 9,816,372
1.750 percent, 2028 178,148,587 178,148,587
1.875 percent, 2021 2,320,956 —
1.875 percent, 2022-27 13,925,736 13,925,736
1.875 percent, 2028-30 6,962,865 6,962,865
1.875 percent, 2031 188,111,583 188,111,583
2.000 percent, 2021 3,655,628 —
2.000 percent, 2022-25 14,622,512 14,622,512
2.000 percent, 2026-29 14,622,516 14,622,516
2.000 percent, 2030 185,790,628 185,790,628
2.250 percent, 2021 5,582,927 —
2.250 percent, 2022-25 22,331,708 22,331,708
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, 2021 5,971,787 —
2.500 percent, 2022-25 23,887,148 23,887,148
2.500 percent, 2026 166,547,382 166,547,382
2.875 percent, 2021 7,264,432 —
2.875 percent, 2022-24 21,793,296 21,793,296
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, 2021 10,628,270 —
3.250 percent, 2022-23 21,256,540 21,256,540
3.250 percent, 2024 153,311,163 153,311,163
4.000 percent, 2021 12,075,192 —
4.000 percent, 2022 12,075,192 12,075,192
4.000 percent, 2023 142,682,893 142,682,893
4.125 percent, 2020 82,329,713 —
5.000 percent, 2020 12,454,232 —
5.000 percent, 2021 12,454,232 10,010,036
5.000 percent, 2022 130,607,701 130,607,701
5.125 percent, 2020 11,567,769 —
5.125 percent, 2021 118,153,469 118,153,469
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804,355,261 2,793,146,100
Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -33,356 18,569,550
Total asset reserves 2,804,321,905 2,811,715,650
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.
168
History of Trust Fund Operations
Table VI.A5.—DI Trust Fund Asset Reserves, End of Calendar Years 2019 and 2020
[In thousands]
December 31, 2019 December 31, 2020
Obligations sold only to the trust funds (special issue securi-
ties):
Certificates of indebtedness:
0.875 percent, 2021 — $110,721
1.875 percent, 2020 $6,293,202 —
Bonds:
0.750 percent, 2024-26 — 1,438,419
0.750 percent, 2027-29 — 1,438,422
0.750 percent, 2030-34 — 2,397,365
0.750 percent, 2035 — 5,348,270
1.875 percent, 2022 3,011,390 595,277
2.250 percent, 2021 4,458,053 —
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 11,142,596
Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,137,565 90,703,394
Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -54,812 5,866,965
Total asset reserves 93,082,753 96,570,359
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.
169
Appendices
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
170
History of Actuarial Status
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 program’s 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.
171
Appendices
Table VI.B1.—Long-Range OASDI Actuarial Balances and Trust Fund Reserve
Depletion Dates as Shown in the Trustees Reports for 1982-2021
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
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 2021.8 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.
172
History of Actuarial Status
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.
173
Appendices
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
assumptions—both decreases in the actuarial balance—were 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
174
History of Actuarial Status
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
175
Appendices
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 inci-
dence 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 fol-
lowing factors. First, the repeal of the Affordable Care Act’s excise tax on
employer-sponsored 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 fertility rate, the ultimate rate of price inflation, and the ulti-
mate real interest rate, as compared to the rates assumed for the 2019 report,
decreased the actuarial balance.
Section IV.B.6 describes changes affecting the actuarial balance shown for
the 2021 report.
176
Fiscal Year Operations and Projections
C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND
OPERATIONS THROUGH 2030
Tables VI.C1, VI.C2, and VI.C3 contain details of the fiscal year 2020 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 2020 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.
177
Appendices
Table VI.C1.—Operations of the OASI Trust Fund, Fiscal Year 2020
[In millions]
Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,804,312
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $841,664
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841,664
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . 7
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Net General Fund reimbursementsa 7
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 236
All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,674
Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,910
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,988
Interest adjustments c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 75,990
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 955,571
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . 940,224
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -38
Payment for costs of vocational rehabilitation services for disabled beneficiaries 14
Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940,200
Financial interchange with the Railroad Retirement “Social Security Equivalent
Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,844
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,151
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2
Miscellaneous reimbursements from the General Fund e . . . . . . . . . . . . . . . . . . . . -3
Net administrative expenses 3,658
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 948,702
Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,869
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,213
Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -32
Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,181
a Includes adjustments for prior years
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 negative balance represents a situation where the actual program 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.
178
Fiscal Year Operations and Projections
Table VI.C2.—Operations of the DI Trust Fund, Fiscal Year 2020
[In millions]
Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $96,409
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $142,898
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,898
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . 1
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 4
All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,667
Total income from taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,671
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,813
Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 2,817
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,387
Cost:
Benefit payments:
Monthly benefitsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,001
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -21
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 104
Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,084
Financial interchange with the Railroad Retirement “Social Security Equivalent
Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Miscellaneous reimbursements from the General Fund e . . . . . . . . . . . . . . . . . . . . . -2
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,505
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,733
Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,209
Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -146
Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,063
a Includes adjustments for prior years.
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 negative balance represents a situation where the actual program cash payments exceeded the amount of
invested securities of the DI 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.
179
Appendices
Table VI.C3.—Operations of the Combined OASI and DI Trust Funds, Fiscal Year 2020
[In millions]
Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,900,721
Income:
Net payroll tax contributions:
Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $984,562
Payments from the General Fund of the Treasury for payroll tax contributions sub-
ject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 984,562
Reimbursements from the General Fund:
Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96 . a 8
Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Net General Fund reimbursements a 8
Income based on taxation of benefit payments:
Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 240
All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,341
Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,581
Investment income and interest adjustments:
Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,800
Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 78,807
Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b
Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,102,958
Cost:
Benefit payments:
Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . 1,084,224
Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -59
Payment for costs of vocational rehabilitation services for disabled beneficiaries . 118
Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,084,284
Financial interchange with the Railroad Retirement “Social Security Equivalent
Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,988
Administrative expenses:
Costs incurred by:
Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,551
Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605
Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2
Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
e
Miscellaneous reimbursements from the General Fund . . . . . . . . . . . . . . . . . . . . . -4
Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,163
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,095,435
Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,524
Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,908,423
Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -178
Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,908,245
a Includes adjustments for prior years.
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 negative net balance represents a situation where the actual combined program cash payments exceeded
the amount of invested securities of the OASI and DI Trust Funds that were redeemed to make such pay-
ments. In this situation, future net redemption of additional invested securities will be required to pay for this
shortfall.
Note: Components may not sum to totals because of rounding.
180
Fiscal Year Operations and Projections
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 2016 through 2030.
Table VI.C4.—Operations of the OASI Trust Fund, Fiscal Years 2016-2030
[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 butions mentsa fitsb interest Total benefits costs change year of year ratio c
Historical data:
2016 . . $799.9 $679.6 $0.1 $31.1 $89.1 $769.8 $762.1 $3.4 $4.3 $30.1 $2,796.6 359
2017 . . 822.4 702.1 d 35.4 84.9 799.0 791.1 3.6 4.3 23.5 2,820.1 350
2018 . . 822.4 706.1 d 34.7 81.6 841.5 833.0 3.7 4.8 -19.0 2,801.1 335
2019 . . 900.1 785.6 d 34.9 79.6 896.8 888.1 3.9 4.9 3.2 2,804.3 312
2020 . . 955.6 841.7 d 37.9 76.0 948.7 940.2 3.7 4.8 6.9 2,811.2 296
Intermediate:
2021 . . 932.0 827.7 d 33.7 70.6 994.4 985.2 4.0 5.1 -62.4 2,748.8 283
2022 . . 1,010.8 903.9 d 42.6 64.3 1,055.2 1,045.6 4.0 5.6 -44.4 2,704.4 260
2023 . . 1,045.7 940.2 d 46.2 59.3 1,122.5 1,112.9 4.1 5.5 -76.9 2,627.5 241
2024 . . 1,091.4 986.1 d 50.1 55.1 1,193.9 1,184.1 4.2 5.6 -102.5 2,525.0 220
2025 . . 1,135.0 1,028.1 d 54.5 52.3 1,268.5 1,258.5 4.3 5.6 -133.6 2,391.4 199
2026 . . 1,190.4 1,074.0 d 66.0 50.4 1,347.1 1,336.9 4.5 5.8 -156.7 2,234.8 178
2027 . . 1,240.2 1,114.7 d 74.0 51.6 1,429.0 1,418.6 4.6 5.8 -188.8 2,045.9 156
2028 . . 1,299.3 1,167.9 d 80.1 51.3 1,517.9 1,507.3 4.7 5.8 -218.6 1,827.4 135
2029 . . 1,346.6 1,212.0 d 86.4 48.2 1,610.0 1,599.2 4.8 5.9 -263.4 1,564.0 114
2030 . . 1,396.9 1,260.7 d 93.2 43.0 1,704.8 1,693.9 5.0 6.0 -308.0 1,256.0 92
Low-cost:
2021 . . 938.3 834.0 d 33.7 70.6 994.1 985.0 4.0 5.1 -55.8 2,755.4 283
2022 . . 1,058.9 951.4 d 42.7 64.8 1,057.4 1,047.9 4.0 5.5 1.5 2,756.9 261
2023 . . 1,098.3 990.8 d 46.5 61.0 1,129.9 1,120.4 4.1 5.4 -31.6 2,725.3 244
2024 . . 1,167.9 1,057.5 d 50.7 59.7 1,207.6 1,197.8 4.3 5.5 -39.8 2,685.6 226
2025 . . 1,236.1 1,121.2 d 55.4 59.5 1,289.3 1,279.2 4.5 5.6 -53.3 2,632.3 208
2026 . . 1,318.1 1,189.0 d 67.4 61.8 1,375.8 1,365.3 4.7 5.8 -57.6 2,574.7 191
2027 . . 1,395.5 1,252.7 d 75.9 66.9 1,466.7 1,456.0 4.9 5.8 -71.2 2,503.5 176
2028 . . 1,486.9 1,332.9 d 82.6 71.4 1,565.9 1,554.9 5.1 5.9 -78.9 2,424.5 160
2029 . . 1,568.4 1,404.8 d 89.6 74.0 1,669.9 1,658.7 5.3 5.9 -101.5 2,323.1 145
2030 . . 1,656.7 1,483.8 d 97.2 75.7 1,778.4 1,766.9 5.5 6.0 -121.8 2,201.3 131
High-cost:
2021 . . 928.4 824.1 d 33.7 70.6 994.6 985.5 4.0 5.1 -66.2 2,744.9 283
2022 . . 949.3 843.5 d 42.5 63.4 1,050.9 1,041.3 4.0 5.6 -101.6 2,643.4 261
2023 . . 966.0 863.6 d 45.7 56.7 1,110.7 1,101.0 4.1 5.5 -144.7 2,498.7 238
2024 . . 996.5 895.9 d 49.3 51.2 1,175.3 1,165.5 4.1 5.6 -178.8 2,319.9 213
2025 . . 1,026.0 925.8 d 53.4 46.8 1,243.2 1,233.3 4.2 5.7 -217.2 2,102.7 187
2026 . . 1,066.3 960.0 d 64.4 41.9 1,314.5 1,304.5 4.3 5.7 -248.2 1,854.6 160
2027 . . 1,099.7 989.1 d 71.8 38.8 1,388.3 1,378.2 4.3 5.7 -288.6 1,565.9 134
2028 . . 1,137.4 1,026.9 d 77.4 33.0 1,468.0 1,457.9 4.4 5.7 -330.6 1,235.3 107
2029 . . 1,160.1 1,051.9 d 83.2 25.0 1,549.8 1,539.6 4.5 5.8 -389.7 845.7 80
2030 . . 1,185.1 1,078.4 d 89.3 17.4 1,633.1 1,622.8 4.5 5.8 -448.0 397.7 52
a 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.
b Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the
law.
c 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.
d Between -$50 million and $50 million.
Note: Components may not sum to totals because of rounding.
181
Appendices
Table VI.C5.—Operations of the DI Trust Fund, Fiscal Years 2016-2030a
[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 butions ments b c
fits interest Total benefits costs change year of year ratio d
Historical data:
2016 . . $150.3 $147.6 e $1.2 $1.5 $146.2 $143.1 $2.8 $0.4 $4.1 $45.7 28
2017 . . 169.5 165.9 e 2.0 1.6 145.8 142.9 2.7 .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 .7 97.1 66
Intermediate:
2021 . . 143.7 140.6 e .4 2.7 145.2 142.3 2.7 .2 -1.4 95.7 67
2022 . . 157.5 153.5 e 1.5 2.5 151.3 148.3 2.9 .1 6.2 101.9 63
2023 . . 163.6 159.7 e 1.6 2.3 158.3 155.4 2.8 .1 5.3 107.1 64
2024 . . 171.5 167.5 e 1.7 2.3 164.3 161.3 2.9 .1 7.1 114.3 65
2025 . . 178.9 174.6 e 1.9 2.5 170.5 167.4 3.1 .1 8.4 122.7 67
2026 . . 187.4 182.4 e 2.2 2.8 177.7 174.4 3.3 .1 9.7 132.4 69
2027 . . 195.1 189.3 e 2.5 3.3 185.5 182.0 3.4 .1 9.6 142.0 71
2028 . . 204.9 198.3 e 2.6 4.0 192.1 188.5 3.6 .1 12.8 154.8 74
2029 . . 213.3 205.8 e 2.8 4.8 198.8 194.9 3.8 .1 14.5 169.3 78
2030 . . 222.7 214.1 e 2.9 5.7 205.9 201.8 3.9 .1 16.8 186.0 82
Low-cost:
2021 . . 144.8 141.7 e .4 2.7 144.6 141.7 2.7 .2 .2 97.3 67
2022 . . 165.7 161.6 e 1.5 2.6 149.3 146.3 2.9 .1 16.4 113.7 65
2023 . . 172.6 168.2 e 1.6 2.8 154.5 151.7 2.8 .1 18.1 131.8 74
2024 . . 184.5 179.6 e 1.7 3.2 159.0 156.0 2.9 e 25.5 157.3 83
2025 . . 196.5 190.4 e 1.8 4.3 163.5 160.3 3.1 e 33.0 190.3 96
2026 . . 210.0 201.9 e 2.1 6.0 168.6 165.3 3.3 e 41.4 231.7 113
2027 . . 223.5 212.7 e 2.3 8.5 174.4 170.8 3.5 .1 49.2 280.9 133
2028 . . 240.6 226.3 e 2.4 11.9 179.0 175.2 3.7 .1 61.6 342.5 157
2029 . . 257.0 238.6 e 2.5 15.9 183.9 179.9 3.9 .1 73.1 415.6 186
2030 . . 275.4 252.0 e 2.7 20.7 189.5 185.3 4.1 .1 85.9 501.5 219
High-cost:
2021 . . 143.1 140.0 e .4 2.7 145.6 142.7 2.7 .2 -2.4 94.6 67
2022 . . 147.1 143.2 e 1.5 2.4 152.9 149.9 2.9 .1 -5.8 88.9 62
2023 . . 150.2 146.6 e 1.7 1.8 161.6 158.7 2.8 .1 -11.5 77.4 55
2024 . . 155.5 152.1 e 1.8 1.5 169.6 166.6 2.9 .1 -14.1 63.3 46
2025 . . 160.4 157.2 e 1.9 1.3 177.4 174.3 3.0 .1 -17.0 46.3 36
2026 . . 166.2 163.0 e 2.3 .9 186.3 183.0 3.2 .1 -20.1 26.3 25
2027 . . 170.9 168.0 e 2.6 .3 196.0 192.6 3.3 .1 -25.1 1.2 13
2028 . . f 174.4 e 2.8 f 204.2 200.6 3.5 .1 f f 1
2029 . . f 178.6 e 3.0 f 212.2 208.5 3.6 .1 f f f
2030 . . f 183.1 e 3.1 f 220.4 216.5 3.8 .1 f f f
a The DI Trust Fund becomes depleted in fiscal year 2028 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.
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 the
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.
f While the fund is depleted, values under current law would reflect permissible expenditures only, which are
inconsistent with the cost of scheduled benefits shown in this table.
Note: Components may not sum to totals because of rounding.
182
Fiscal Year Operations and Projections
Table VI.C6.—Operations of the Combined OASI and DI Trust Funds,
Fiscal Years 2016-2030
[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 butions ments a b
fits interest Total benefits costs change year of year ratio c
Historical data:
2016 . . $950.2 $827.1 $0.2 $32.3 $90.6 $916.0 $905.2 $6.2 $4.7 $34.1 $2,842.4 307
2017 . . 991.9 868.0 d 37.4 86.5 944.7 934.0 6.2 4.5 47.2 2,889.5 301
2018 . . 992.7 873.2 d 35.7 83.8 988.0 976.7 6.4 4.9 4.7 2,894.2 292
2019 . . 1,051.1 932.4 d 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 d 39.6 78.8 1,095.4 1,084.3 6.2 5.0 7.5 2,908.2 265
Intermediate:
2021 . . 1,075.7 968.3 d 34.2 73.3 1,139.5 1,127.5 6.8 5.2 -63.8 2,844.5 255
2022 . . 1,168.3 1,057.3 d 44.1 66.8 1,206.5 1,193.9 6.9 5.7 -38.2 2,806.3 236
2023 . . 1,209.2 1,099.8 d 47.8 61.6 1,280.8 1,268.4 6.9 5.5 -71.6 2,734.7 219
2024 . . 1,262.8 1,153.6 d 51.8 57.4 1,358.2 1,345.4 7.1 5.6 -95.4 2,639.3 201
2025 . . 1,313.9 1,202.7 d 56.4 54.8 1,439.0 1,425.9 7.4 5.7 -125.2 2,514.1 183
2026 . . 1,377.8 1,256.4 d 68.2 53.2 1,524.7 1,511.2 7.7 5.8 -146.9 2,367.2 165
2027 . . 1,435.2 1,303.9 d 76.4 54.9 1,614.5 1,600.7 8.0 5.8 -179.3 2,187.9 147
2028 . . 1,504.2 1,366.2 d 82.7 55.3 1,710.0 1,695.8 8.3 5.9 -205.8 1,982.1 128
2029 . . 1,559.9 1,417.8 d 89.2 52.9 1,808.8 1,794.2 8.6 6.0 -248.9 1,733.3 110
2030 . . 1,619.6 1,474.8 d 96.1 48.6 1,910.8 1,895.8 8.9 6.1 -291.2 1,442.1 91
Low-cost:
2021 . . 1,083.1 975.7 d 34.2 73.3 1,138.7 1,126.7 6.8 5.2 -55.5 2,852.7 255
2022 . . 1,224.6 1,113.0 d 44.2 67.4 1,206.7 1,194.1 6.9 5.7 17.9 2,870.6 236
2023 . . 1,270.9 1,159.0 d 48.1 63.8 1,284.4 1,272.1 6.9 5.5 -13.5 2,857.1 223
2024 . . 1,352.4 1,237.1 d 52.4 62.9 1,366.6 1,353.8 7.2 5.6 -14.2 2,842.9 209
2025 . . 1,432.6 1,311.6 d 57.2 63.8 1,452.8 1,439.5 7.6 5.7 -20.2 2,822.6 196
2026 . . 1,528.2 1,390.9 d 69.5 67.8 1,544.4 1,530.6 8.0 5.8 -16.2 2,806.4 183
2027 . . 1,619.0 1,465.4 d 78.2 75.4 1,641.0 1,626.8 8.4 5.8 -22.0 2,784.4 171
2028 . . 1,727.6 1,559.3 d 85.0 83.3 1,744.9 1,730.2 8.8 5.9 -17.3 2,767.1 160
2029 . . 1,825.4 1,643.3 d 92.2 89.9 1,853.8 1,838.6 9.2 6.0 -28.4 2,738.7 149
2030 . . 1,932.0 1,735.7 d 99.9 96.4 1,967.9 1,952.2 9.6 6.1 -35.9 2,702.8 139
High-cost:
2021 . . 1,071.5 964.1 d 34.2 73.3 1,140.2 1,128.2 6.8 5.2 -68.7 2,839.6 255
2022 . . 1,096.4 986.7 d 44.0 65.8 1,203.7 1,191.1 6.9 5.7 -107.3 2,732.3 236
2023 . . 1,116.2 1,010.2 d 47.4 58.6 1,272.3 1,259.8 6.9 5.6 -156.1 2,576.1 215
2024 . . 1,152.0 1,048.1 d 51.1 52.8 1,344.9 1,332.1 7.0 5.7 -192.9 2,383.2 192
2025 . . 1,186.4 1,083.0 d 55.3 48.0 1,420.5 1,407.6 7.2 5.7 -234.2 2,149.1 168
2026 . . 1,232.5 1,123.0 d 66.7 42.8 1,500.7 1,487.5 7.4 5.8 -268.2 1,880.8 143
2027 . . 1,270.5 1,157.0 d 74.4 39.1 1,584.3 1,570.8 7.7 5.8 -313.7 1,567.1 119
2028 . . 1,314.1 1,201.3 d 80.2 32.6 1,672.2 1,658.5 7.9 5.8 -358.1 1,209.0 94
2029 . . 1,340.3 1,230.5 d 86.1 23.6 1,762.0 1,748.0 8.1 5.9 -421.7 787.3 69
2030 . . 1,368.8 1,261.6 d 92.4 14.8 1,853.5 1,839.3 8.3 5.9 -484.7 302.6 42
a 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.
b Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the
law.
c 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.
d Between -$50 million and $50 million.
183
Appendices
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 2031 through 2095 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.
184
Long-Range Sensitivity Analysis
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: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.92 13.90
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.85 13.78 13.73
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.79 16.80 16.81
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 17.07 16.84
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.10 17.31 16.80
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.36 -2.37 -2.38
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.44 -3.14 -2.94
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.26 -3.54 -3.07
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.69 -4.34 -3.06
Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
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
2031 through 2095. 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 2031 through 2095 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 18.10 to 16.80 percent, as the
average total fertility rate for the period 2031 through 2095 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 -4.26 to
-3.07 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.
185
Appendices
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 2030 to 2095. 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: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.92 13.94
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.75 13.78 13.81
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 16.80 17.00
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 17.07 17.58
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 17.31 18.09
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.21 -2.37 -2.58
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.73 -3.14 -3.65
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.89 -3.54 -4.28
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -2.94 -4.34 -5.81
Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 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 2030 to 2095. The overall age-sex-adjusted death rate decreases from
2030 to 2095 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 2030 to 2095 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 16.64 percent (for an average
annual death-rate reduction of 0.28 percent from 2030 to 2095) to
17.00 percent (for an average annual death-rate reduction of 1.25 percent
from 2030 to 2095). The 75-year cost rate increases from 16.64 to
18.09 percent. The actuarial balance decreases from -2.21 to -2.58 percent
for the 25-year period, and from -2.89 to -4.28 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-
186
Long-Range Sensitivity Analysis
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 for people at age 50 to retirement eligibility 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 men-
tioned above and the disability benefits paid to additional beneficiaries at
these pre-retirement ages, which are ages of high disability incidence. 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 rela-
tive amount for all ages, the cost increases faster than the rate of growth in
payroll, which results in higher cost rates and lower actuarial balances. Each
additional 0.1-percentage-point increase in the average annual rate of decline
in the death rate decreases the long-range actuarial balance by about
0.14 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 830,000 persons,
1,248,000 persons, and 1,688,000 persons for the period 2031 through 2095
under alternatives III, II, and I, respectively.
187
Appendices
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 830,000 1,248,000 1,688,000
Summarized income rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.46 14.43 14.39
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.96 13.92 13.88
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.83 13.78 13.73
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 16.80 16.56
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.43 17.07 16.71
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.77 17.31 16.87
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.58 -2.37 -2.17
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -3.14 -2.83
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.95 -3.54 -3.14
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -5.16 -4.34 -3.65
Year of combined trust fund reserve depletion . . . . . . . . 2033 2034 2034
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 2031 through 2095.
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 2031 through 2095 is 830,000 from the
alternative III assumptions, 1,248,000 from the alternative II assumptions, and 1,688,000 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 17.04 percent
of taxable payroll (for average annual total net immigration of 830,000 per-
sons for 2031 through 2095) to 16.56 percent (for an average annual total net
immigration of 1,688,000 persons for 2031 through 2095). For the 50-year
period, it decreases from 17.43 percent to 16.71 percent, and for the 75-year
period, it decreases from 17.77 percent to 16.87 percent. The actuarial bal-
ance increases from -2.58 to -2.17 percent for the 25-year period, from -3.46
to -2.83 percent for the 50-year period, and from -3.95 to -3.14 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
188
Long-Range Sensitivity Analysis
wage differential for the period 2031 through 2095 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 for 2031
through 2095 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 17.66 percent (for a real
wage differential of 0.53 percentage point) to 15.98 percent (for a differential
of 1.77 percentage points). For the 50-year period, it decreases from 18.31 to
15.88 percent, and for the 75-year period it decreases from 18.71 to
15.98 percent. The actuarial balance increases from -3.11 to -1.67 percent for
the 25-year period, from -4.23 to -2.11 percent for the 50-year period, and
from -4.76 to -2.36 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: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.56 14.43 14.31
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.08 13.92 13.77
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.78 13.61
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.66 16.80 15.98
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.31 17.07 15.88
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.71 17.31 15.98
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.11 -2.37 -1.67
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.23 -3.14 -2.11
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.76 -3.54 -2.36
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.40 -4.34 -2.58
Year of combined trust fund reserve depletion . . . . . . . . 2033 2034 2035
a The first value in each pair is the average annual percentage increase in the average wage in covered
employment for 2031 through 2095. 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
2031 through 2095.
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 2031 through 2095 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
189
Appendices
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. 1 These ultimate
rates of increase are reached by 2024 under all three alternatives. In each
case, the average annual real wage differential for 2031 through 2095 is
1.15 percentage points (consistent with alternative II), yielding average
annual percentage increases in the average wage in covered employment for
2031 through 2095 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: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.41 14.43 14.45
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.92 13.94
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.76 13.78 13.79
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 16.80 16.91
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.93 17.07 17.21
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.17 17.31 17.47
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.29 -2.37 -2.46
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.03 -3.14 -3.27
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.40 -3.54 -3.68
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.18 -4.34 -4.52
Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
a The first value in each pair is the average annual percentage increase in the average wage in covered
employment for 2031 through 2095. 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
2031 through 2095.
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 2024 under all three alternatives. All other assumptions used for this analysis are
from alternative II.
1 Prior to the 2014 report, alternative I included a lower ultimate annual change in the CPI and alternative III
included a higher ultimate annual change in the CPI than was included for alternative II.
190
Long-Range Sensitivity Analysis
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 16.70 (for a CPI increase of 3.00 percent) to 16.91 percent (for a CPI
increase of 1.80 percent). For the 50-year period, it increases from 16.93 to
17.21 percent, and for the 75-year period, it increases from 17.17 to
17.47 percent. The actuarial balance decreases from -2.29 to -2.46 percent
for the 25-year period, from -3.03 to -3.27 percent for the 50-year period,
and from -3.40 to -3.68 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
2031 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.
191
Appendices
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: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.38 14.43 14.48
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.87 13.92 13.98
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.72 13.78 13.84
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.87 16.80 16.74
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.16 17.07 16.97
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.44 17.31 17.19
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.49 -2.37 -2.26
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.30 -3.14 -2.99
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.72 -3.54 -3.35
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.34 -4.34 -4.34
Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
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 2031 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 16.87 percent (for an ultimate real interest rate of 1.8 percent) to
16.74 percent (for an ultimate real interest rate of 2.8 percent). For the
50-year period, it decreases from 17.16 to 16.97 percent and, for the 75-year
period, it decreases from 17.44 to 17.19 percent. The actuarial balance
increases from -2.49 to -2.26 percent for the 25-year period, from -3.30 to
-2.99 percent for the 50-year period, and from -3.72 to -3.35 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
192
Long-Range Sensitivity Analysis
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 ($142,800 for 2021). Under the Trustees’ assumptions, the tax-
able ratio at the end of the short-range period (2030) 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 2030 a b
Valuation period 81.0 percent 82.5 percent 84.0 percent
Summarized income rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.46 14.43 14.40
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.92 13.90
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 13.78 13.76
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 16.80 16.57
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.29 17.07 16.85
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.51 17.31 17.12
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.58 -2.37 -2.17
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.34 -3.14 -2.95
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.71 -3.54 -3.36
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.46 -4.34 -4.23
Year of combined trust fund reserve depletion . . . . . . . . 2033 2034 2034
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 (2030) 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 17.04 percent (for a taxable ratio in 2030 of 81.0 percent) to
16.57 percent (for a taxable ratio in 2030 of 84.0 percent). For the 50-year
period, it decreases from 17.29 to 16.85 percent and, for the 75-year period,
it decreases from 17.51 to 17.12 percent. The actuarial balance increases
from -2.58 to -2.17 percent for the 25-year period, from -3.34 to
-2.95 percent for the 50-year period, and from -3.71 to -3.36 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.
Each 1.0 percentage-point increase in the taxable ratio in 2030 increases
193
Appendices
(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 average
annual age-sex-adjusted 1 incidence rate for the period 2031 through 2095 is
4.0, 5.0, and 6.0 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 4.0 5.0 6.0
Summarized income rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.92 13.92 13.92
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.77 13.78 13.78
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.59 16.80 17.03
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.81 17.07 17.32
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.06 17.31 17.57
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.16 -2.37 -2.60
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.89 -3.14 -3.39
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.28 -3.54 -3.79
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.08 -4.34 -4.60
Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2033
a The disability incidence rates used for this analysis are consistent with those assumed for the three alterna-
tive scenarios; the average annual age-sex-adjusted incidence rate for 2031 through 2095 is 4.0 awards per
thousand exposed for the alternative I assumptions, 5.0 awards per thousand exposed for the alternative II
assumptions, and 6.0 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 16.59 percent (for the relatively low rates assumed for
alternative I) to 17.03 percent (for the relatively high rates assumed for alter-
native III). For the 50-year period, it increases from 16.81 to 17.32 percent,
and for the 75-year period, it increases from 17.06 to 17.57 percent. The
actuarial balance decreases from -2.16 to -2.60 percent for the 25-year
1 Age-sex-adjusted to the disability-exposed population as of the year 2000.
194
Long-Range Sensitivity Analysis
period, from -2.89 to -3.39 percent for the 50-year period, and from -3.28 to
-3.79 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 28.2 deaths per thousand disabled-worker
beneficiaries in 2020 declines to 22.2, 12.8, and 6.2 deaths per thousand in
2095 for alternatives I, II, and III, respectively. These levels are about
21 percent, 55 percent, and 78 percent lower, respectively, than the level in
2020.
The average annual age-sex-adjusted1 recovery rate for the period 2031
through 2095 used for this analysis 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 alter-
native III assumptions.
1 Age-sex-adjusted to the disabled-worker population as of the year 2000.
195
Appendices
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 22.2; 12.5 12.8; 10.4 6.2; 8.3
Summarized income rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.92 13.92 13.92
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.78 13.78 13.77
Summarized cost rate:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.78 16.80 16.84
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 17.07 17.09
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.29 17.31 17.32
Actuarial balance:
25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.35 -2.37 -2.41
50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.11 -3.14 -3.17
75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.51 -3.54 -3.55
Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.35 -4.34 -4.29
Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
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 2095 is 22.2 deaths per thousand disabled-worker bene-
ficiaries for the alternative I assumptions, 12.8 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 average annual age-sex-adjusted recovery rate for 2031 through 2095 is 12.5 recoveries per
thousand disabled-worker beneficiaries for the alternative I assumptions, 10.4 recoveries per thousand dis-
abled-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 16.78 percent (for the relatively high termination rates
assumed for alternative I) to 16.84 percent (for the relatively low termination
rates assumed for alternative III). For the 50-year period, it increases from
17.04 to 17.09 percent, and for the 75-year period, it increases from 17.29 to
17.32 percent. The actuarial balance decreases from -2.35 to -2.41 percent
for the 25-year period, from -3.11 to -3.17 percent for the 50-year period, and
from -3.51 to -3.55 percent for the 75-year period.
196
Stochastic Projections
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 has been enhanced for this year’s 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,
including: levels of fertility, rates of change in mortality, lawful permanent
resident (LPR) and other-than-LPR immigration levels, legal emigration lev-
els, other-than-LPR emigration rates, changes in the Consumer Price Index,
changes in average real wages, unemployment rates, trust fund real yield
rates, and disability incidence and recovery rates. In general, the Trustees
assume that each of these variables will reach an ultimate value at a specific
point during the long-range period, and will maintain that value throughout
the remainder of the period. The three alternative scenarios 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 the above key variables to vary
throughout the long-range period. The fluctuation of each variable over time
197
Appendices
is simulated using historical data and standard time-series techniques. Gener-
ally, each variable is modeled using an equation that: (1) captures a relation-
ship 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 histori-
cal 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 model’s 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.
198
Stochastic Projections
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.
199
Appendices
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%
2021 2031 2041 2051 2061 2071 2081 2091
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 2041, 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 year is the
same as the Trustees project for the intermediate scenario. The figure also
shows confidence intervals for the trust fund ratio in each year. For example,
the 95-percent confidence interval for the trust fund ratio at the beginning of
2030 ranges from 39 to 138 percent of annual cost.
200
Stochastic Projections
Figure VI.E2.—Long-Range OASDI Trust Fund Ratios From Stochastic Modeling
300%
200%
97.5%
90%
100% 50%
10%
2.5%
0%
2021 2031 2041 2051 2061 2071 2081 2091
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
201
Appendices
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 this report, the range
of the 95-percent confidence interval is generally expanded from the range in
last year’s report. Nevertheless, the range defined by the 2.5th and 97.5th
percentiles for annual rates for the stochastic distribution is contained within
the range for the low-cost and high-cost alternative scenarios after the first
10 years of the projection period. Note that the range for the alternative sce-
narios was also expanded for this year’s report, due primarily to changes
made to the low-cost and high-cost demographic assumptions.
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.
202
Stochastic Projections
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%
2021 2031 2041 2051 2061 2071 2081 2091
Calendar year
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 model’s 95-percent confi-
dence intervals for any summary measure of trust fund finances would tend
203
Appendices
to be narrower than the range produced for the low-cost and high-cost alter-
native scenarios, even if the stochastic model’s 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.
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%
2021 2031 2041 2051 2061 2071 2081 2091
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.
204
Stochastic Projections
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
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
205
Appendices
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 -3.50 percent of taxable payroll, about
0.04 percentage point higher (less negative) than projected in the intermedi-
ate scenario. The median estimate for the open-group unfunded obligation is
$19.5 trillion, about $0.3 trillion smaller than the $19.8 trillion estimate in
the intermediate scenario. The median first projected year for which cost
exceeds non-interest income (as it did in 2010 through 2020), and remains in
excess of non-interest income throughout the remainder of the long-range
period, is 2021. This is the same year as projected in the intermediate sce-
nario. The median projected year in which trust fund reserves first become
depleted is 2034, also the same as projected in the intermediate scenario. The
median estimates of the annual cost rate for the 75th year of the projection
period are 18.11 percent of taxable payroll and 6.02 percent of gross domes-
tic product (GDP). The comparable estimates in the intermediate scenario are
17.70 percent of payroll and 5.89 percent of GDP.
For four measures in table VI.E1 (the actuarial balance, the first projected
year cost exceeds non-interest income and remains in excess through 2095,
the first year trust fund reserves become depleted, and the annual cost in the
75th year as a percent of taxable payroll), the 95-percent stochastic confi-
dence interval falls within the range defined by the low-cost and high-cost
scenarios. For the remaining two measures (the open-group unfunded obliga-
tion, 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 outside the
range defined by the low-cost and high-cost scenarios.
206
Stochastic Projections
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 . . . . . . -3.54 -0.12 -8.25 -3.50 -5.51 -1.96 -6.85 -1.12
Open-group unfunded
obligation
(in trillions) . . . . . . . . . $19.8 -$.3 $36.3 $19.5 $8.8 $37.6 $4.9 $51.4
First projected year cost
exceeds non-interest
income and remains
in excess
through 2095. . . . . . . . 2021 a 2021 2021 2021 2021 2021 a
First year trust fund
reserves become
depleted b . . . . . . . . . . 2034 2061 2031 2034 2032 2038 2031 2041
Annual cost in 75th year
(percent of taxable
payroll) . . . . . . . . . . . . 17.70 12.32 27.54 18.11 14.27 23.60 12.51 27.46
Annual cost in 75th year
(percent of GDP). . . . . 5.89 4.46 8.56 6.02 4.77 7.77 4.20 9.01
a Cost less non-interest income is projected to be negative for a temporary period, returning to positive levels
before 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.
207
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 $59.8 trillion in present value, which is $40.0 trillion
larger than for the 75-year period. The $40.0 trillion increment reflects a sig-
nificant financing gap projected for OASDI for years after 2095 into perpetu-
ity. Of course, the degree of uncertainty associated with estimates increases
substantially for years further in the future.
The $59.8 trillion infinite horizon open-group unfunded obligation is equiva-
lent to 4.6 percent of taxable payroll or 1.4 percent of GDP. 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 17.0 percent, 1 or with cost reductions equivalent to an immediate and
permanent reduction in benefits for all current and future beneficiaries by
about 27 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.
208
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, 2021; 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 . . . . . . . . . . . . $59.8 4.6 1.4
Unfunded obligation through 2095 b . . . . . . . . . . . . . . . . . . . . . . . 19.8 3.4 1.2
a Present value of future cost less future non-interest income, reduced by the amount of trust fund asset
reserves at the beginning of 2021. Expressed as a percentage of payroll and GDP for the period 2021 through
the infinite horizon.
b Present value of future cost less future non-interest income through 2095, reduced by the amount of trust
fund reserves at the beginning of 2021. Expressed as a percentage of payroll and GDP for the period 2021
through 2095.
Notes:
1. The present values of future taxable payroll for 2021-95 and for 2021 through the infinite horizon are
$591.5 trillion and $1,296.7 trillion, respectively.
2. The present values of GDP for 2021-95 and for 2021 through the infinite horizon are $1,698.0 trillion and
$4,237.0 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 program’s trust fund holdings.
Last year, the Trustees projected that the infinite horizon unfunded obligation
was $53.0 trillion in present value. If the assumptions, methods, and starting
values had not changed, moving the valuation date forward by 1 year would
have increased the unfunded obligation by about $1.4 trillion, to
$54.4 trillion. The net effects of changes in assumptions, methods, law, and
starting values increased the infinite horizon unfunded obligation by
$5.4 trillion. Significant reasons for the increase in the infinite horizon
unfunded obligation include reductions in near-term interest rates and
updates to methods and programmatic data. See section IV.B.6 for details
regarding changes in law, data, methods, and assumptions.
Although the unrounded 75-year unfunded obligation expressed as a share of
taxable payroll and of GDP increased by 0.3 percentage point and
0.1 percentage point respectively, compared to last year’s report, the infinite
horizon unfunded obligation expressed as a share of these measures is higher
than in last year’s report by less than 0.05 percentage point. The relatively
small increase over the infinite horizon, expressed as a share of taxable pay-
roll and GDP, is largely due to the extended long-term effects of the increase
in the total ultimate fertility rate from 1.95 to 2.0 births per woman, which
includes all years beyond the 75-year long-range projection period.
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
209
Appendices
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 2021. 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
$44.0 trillion. Table VI.F2 also shows an unfunded obligation of
$43.4 trillion for past and current participants, including past and future Gen-
eral Fund reimbursements. Future participants are scheduled to pay dedi-
cated taxes of $16.4 trillion less into the system than the cost of their
scheduled benefits ($134.2 trillion of dedicated tax income as compared to
$150.6 trillion of cost). The unfunded obligation for all participants through
the infinite horizon thus equals $59.8 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 $59.8 trillion in present value, 4.6 percent of future
taxable payroll, or 1.4 percent of future GDP.
210
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, 2021; dollar amounts in trillions]
Expressed as a
percentage of future
payroll and GDP
Present Taxable
value payroll GDP
Present value of past cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70.5 5.4 1.7
Less present value of past dedicated tax income . . . . . . . . . . . . . . . . . . 72.7 5.6 1.7
Plus present value of future cost for current participants . . . . . . . . . . . 85.5 6.6 2.0
Less present value of future dedicated tax income for current
participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.3 3.0 .9
Equals unfunded obligation for past and current participants
excluding General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 44.0 3.4 1.0
Less present value of past General Fund reimbursementsa . . . . . . . . . . .7 .1 b
Less present value of future General Fund reimbursements through
the infinite horizon a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . c d b
Equals unfunded obligation for past and current participants
including General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 43.3 3.3 1.0
Plus present value of cost for future participants through the infinite
horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.7 11.6 3.6
Less present value of dedicated tax income for future participants
through the infinite horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.2 10.3 3.2
Equals unfunded obligation for all participants through the infinite
horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8 4.6 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 GDP.
c Less than $50 billion.
d Less than 0.05 percent of taxable payroll.
Notes:
1. The present value of future taxable payroll for 2021 through the infinite horizon is $1,296.7 trillion.
2. The present value of GDP for 2021 through the infinite horizon is $4,237.0 trillion.
3. Components may not sum to totals because of rounding.
211
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 2021 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 about 25 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.
212
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 $142,800 for 2021.
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
213
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 2021 to about 2038 under the inter-
mediate assumptions for OASDI and HI, from 2021 to 2046 under the high-
cost assumptions for OASDI, and from 2021 to 2078 under the high-cost
assumptions for HI. Under the intermediate assumptions, the OASDI cost
rate increases by 25 percent from its current level by 2095, while under the
high-cost assumptions, the cost rate increases by 92 percent by 2095. For HI,
cost rates increase by 32 percent and 173 percent from 2021 to 2095 under
the intermediate and high-cost assumptions, respectively. Under the low-cost
assumptions, the OASDI and HI cost rates decrease from 2021 to 2095 by
11 percent and 37 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 thereafter, increasing to 0.76 percent
of payroll for 2093, and then decreasing to 0.74 percent through 2095. HI
annual balances as a percent of payroll are negative for 2021 and 2022, and
are positive and mostly increasing from 2023 through the remainder of the
projection period under the low-cost assumptions.
214
OASDI and HI: Percent of Payroll
Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,
Calendar Years 2021-2095
[As a percentage of taxable payroll a]
OASDI HI
Income Cost Income Cost
Calendar year rate rateb Balanceb rate rate Balance
Intermediate:
2021 . . . . . . . . . . 12.31 14.11 -1.81 3.38 3.64 -0.26
2022 . . . . . . . . . . 12.93 14.30 -1.38 3.40 3.67 -.27
2023 . . . . . . . . . . 12.91 14.43 -1.52 3.42 3.68 -.27
2024 . . . . . . . . . . 12.94 14.64 -1.69 3.43 3.73 -.30
2025 . . . . . . . . . . 12.96 14.86 -1.90 3.45 3.81 -.35
2026 . . . . . . . . . . 13.08 15.10 -2.03 3.53 3.89 -.36
2027 . . . . . . . . . . 13.10 15.36 -2.26 3.56 3.97 -.42
2028 . . . . . . . . . . 13.14 15.62 -2.49 3.58 4.06 -.48
2029 . . . . . . . . . . 13.17 15.87 -2.70 3.60 4.14 -.54
2030 . . . . . . . . . . 13.19 16.11 -2.92 3.63 4.20 -.57
2035 . . . . . . . . . . 13.24 16.74 -3.49 3.72 4.61 -.88
2040 . . . . . . . . . . 13.27 16.98 -3.71 3.80 4.81 -1.01
2045 . . . . . . . . . . 13.28 17.05 -3.77 3.86 4.92 -1.06
2050 . . . . . . . . . . 13.29 17.14 -3.85 3.92 4.92 -1.01
2055 . . . . . . . . . . 13.31 17.29 -3.99 3.98 4.90 -.91
2060 . . . . . . . . . . 13.33 17.55 -4.22 4.05 4.89 -.84
2065 . . . . . . . . . . 13.35 17.80 -4.45 4.13 4.92 -.80
2070 . . . . . . . . . . 13.37 18.07 -4.70 4.19 4.97 -.78
2075 . . . . . . . . . . 13.39 18.32 -4.93 4.26 5.00 -.75
2080 . . . . . . . . . . 13.40 18.35 -4.96 4.31 5.00 -.70
2085 . . . . . . . . . . 13.38 18.14 -4.75 4.34 4.97 -.62
2090 . . . . . . . . . . 13.36 17.81 -4.45 4.37 4.90 -.53
2095 . . . . . . . . . . 13.36 17.70 -4.34 4.40 4.81 -.42
Low-cost:
2021 . . . . . . . . . . 12.22 13.77 -1.55 3.38 3.50 -.13
2022 . . . . . . . . . . 13.00 13.69 -.69 3.39 3.44 -.05
2023 . . . . . . . . . . 12.88 13.70 -.81 3.40 3.35 .05
2024 . . . . . . . . . . 12.89 13.66 -.77 3.41 3.32 .09
2025 . . . . . . . . . . 12.91 13.71 -.80 3.43 3.33 .10
2026 . . . . . . . . . . 13.01 13.78 -.77 3.50 3.33 .17
2027 . . . . . . . . . . 13.02 13.85 -.83 3.52 3.34 .18
2028 . . . . . . . . . . 13.05 13.93 -.87 3.54 3.35 .19
2029 . . . . . . . . . . 13.07 13.99 -.92 3.56 3.35 .21
2030 . . . . . . . . . . 13.09 14.06 -.97 3.58 3.32 .26
2035 . . . . . . . . . . 13.12 14.15 -1.04 3.68 3.31 .37
2040 . . . . . . . . . . 13.12 14.00 -.88 3.75 3.13 .63
2045 . . . . . . . . . . 13.11 13.71 -.60 3.82 2.90 .92
2050 . . . . . . . . . . 13.10 13.49 -.38 3.89 2.65 1.24
2055 . . . . . . . . . . 13.10 13.39 -.28 3.96 2.45 1.51
2060 . . . . . . . . . . 13.11 13.41 -.30 4.03 2.33 1.70
2065 . . . . . . . . . . 13.12 13.42 -.31 4.10 2.27 1.82
2070 . . . . . . . . . . 13.12 13.42 -.30 4.15 2.27 1.88
2075 . . . . . . . . . . 13.12 13.37 -.25 4.20 2.29 1.91
2080 . . . . . . . . . . 13.11 13.13 -.03 4.23 2.29 1.94
2085 . . . . . . . . . . 13.08 12.73 .35 4.25 2.27 1.98
2090 . . . . . . . . . . 13.06 12.36 .70 4.27 2.24 2.03
2095 . . . . . . . . . . 13.06 12.32 .74 4.31 2.20 2.10
215
Appendices
Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,
Calendar Years 2021-2095 (Cont.)
[As a percentage of taxable payroll a]
OASDI HI
Income Cost Income Cost
Calendar year rate rateb Balanceb rate rate Balance
High-cost:
2021 . . . . . . . . . . 12.28 14.36 -2.07 3.39 3.77 -0.38
2022 . . . . . . . . . . 13.01 15.38 -2.37 3.42 3.98 -.56
2023 . . . . . . . . . . 12.96 15.64 -2.68 3.44 4.03 -.59
2024 . . . . . . . . . . 13.00 16.00 -3.00 3.46 4.15 -.69
2025 . . . . . . . . . . 13.01 16.29 -3.28 3.48 4.32 -.83
2026 . . . . . . . . . . 13.15 16.66 -3.50 3.57 4.49 -.92
2027 . . . . . . . . . . 13.18 17.02 -3.84 3.60 4.68 -1.08
2028 . . . . . . . . . . 13.23 17.42 -4.19 3.62 4.87 -1.24
2029 . . . . . . . . . . 13.27 17.86 -4.59 3.66 5.07 -1.41
2030 . . . . . . . . . . 13.30 18.32 -5.01 3.69 5.23 -1.55
2035 . . . . . . . . . . 13.39 19.67 -6.28 3.79 6.33 -2.53
2040 . . . . . . . . . . 13.44 20.56 -7.12 3.87 7.27 -3.39
2045 . . . . . . . . . . 13.49 21.38 -7.88 3.95 8.20 -4.25
2050 . . . . . . . . . . 13.54 22.17 -8.63 4.02 8.99 -4.97
2055 . . . . . . . . . . 13.59 22.96 -9.37 4.09 9.59 -5.50
2060 . . . . . . . . . . 13.65 23.78 -10.13 4.17 10.07 -5.90
2065 . . . . . . . . . . 13.70 24.61 -10.90 4.25 10.44 -6.19
2070 . . . . . . . . . . 13.76 25.51 -11.75 4.32 10.63 -6.31
2075 . . . . . . . . . . 13.83 26.48 -12.65 4.41 10.71 -6.30
2080 . . . . . . . . . . 13.88 27.25 -13.37 4.48 10.71 -6.23
2085 . . . . . . . . . . 13.91 27.66 -13.74 4.54 10.63 -6.09
2090 . . . . . . . . . . 13.91 27.64 -13.73 4.57 10.48 -5.90
2095 . . . . . . . . . . 13.91 27.54 -13.63 4.61 10.30 -5.69
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.
216
OASDI and HI: Percent of Payroll
Table VI.G3.—Summarized OASDI and HI Income Rates and Cost Rates for Valuation
Periods,a Calendar Years 2021-2095
[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:
2021-45 . . . . . . 14.43 16.80 -2.37 3.73 4.54 -0.81
50-year:
2021-70 . . . . . . 13.92 17.07 -3.14 3.86 4.70 -.83
75-year:
2021-95 . . . . . . 13.78 17.31 -3.54 3.99 4.76 -.77
Low-cost:
25-year:
2021-45 . . . . . . 14.15 14.52 -.37 3.69 3.37 .32
50-year:
2021-70 . . . . . . 13.65 13.96 -.31 3.84 2.91 .93
75-year:
2021-95 . . . . . . 13.48 13.60 -.12 3.96 2.70 1.26
High-cost:
25-year:
2021-45 . . . . . . 14.76 19.42 -4.66 3.79 6.13 -2.34
50-year:
2021-70 . . . . . . 14.27 21.07 -6.79 3.94 7.65 -3.71
75-year:
2021-95 . . . . . . 14.18 22.43 -8.25 4.07 8.32 -4.25
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.
217
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 2021 to 2022, fluctuates 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 increase
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.
218
OASDI and HI: Percent of GDP
to a peak in 2033 and then decrease through 2056. After 2056, the annual
deficits slightly increase through 2063 and then decrease through 2080
before becoming positive for 2081 and later. Under the intermediate assump-
tions, the annual deficits decrease from 2021 to 2022, primarily because of a
negative adjustment made in 2021 to payroll tax contributions, reflecting
excess amounts credited in 2020. Annual deficits then mostly increase
through 2078, and decrease thereafter. Under the high-cost assumptions,
annual deficits mostly increase through 2085, 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 negative in 2021 and 2022, and then positive and mostly increasing
throughout the rest of 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 generally increase through 2045, and then
decline thereafter. Under the high-cost assumptions, annual deficits reach a
peak in 2068 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 2041, and then positive and rising
thereafter. Under the intermediate assumptions, the combined OASDI and HI
annual deficits decrease from 2021 to 2022, increase from 2022 through
2043, slightly decrease through 2054, increase through 2077, and then
decline thereafter, reaching 1.62 percent of GDP by 2095. Under the high-
cost assumptions, combined annual deficits rise to a peak of 6.86 percent in
2082 and decrease thereafter.
By 2095, the combined OASDI and HI annual balances as percentages of
GDP range from a positive annual balance of 1.21 percent for the low-cost
assumptions to an annual deficit of 6.50 percent for the high-cost assump-
tions. Annual balances differ by a much smaller amount for the tenth projec-
tion year, 2030, ranging from an annual deficit of 0.24 percent for the low-
cost assumptions to an annual deficit of 2.51 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
0.52 percent under the low-cost assumptions to an actuarial deficit of
4.66 percent under the high-cost assumptions. The 25-year summarized actu-
arial balance varies by a smaller amount, from a positive actuarial balance of
less than 0.005 percent of GDP to an actuarial deficit of 2.74 percent. Sum-
219
Appendices
marized rates are calculated on a present-value basis. They include the trust
fund reserve balances on January 1, 2021 and the cost of reaching a target
trust fund level equal to 100 percent of the following year’s annual cost at
the end of the period. (See section IV.B.4 for further explanation.)
Table VI.G4.—OASDI and HI Annual and Summarized Income, Cost, and Balance
as a Percentage of GDP, Calendar Years 2021-2095
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:
2021 . . . . . 4.48 5.14 -0.66 1.56 1.68 -0.12 6.04 6.82 -0.78 $22,382
2022 . . . . . 4.67 5.17 -.50 1.56 1.68 -.12 6.23 6.85 -.62 23,714
2023 . . . . . 4.69 5.24 -.55 1.57 1.69 -.12 6.25 6.93 -.67 24,815
2024 . . . . . 4.71 5.32 -.62 1.57 1.71 -.14 6.28 7.03 -.75 25,895
2025 . . . . . 4.71 5.40 -.69 1.58 1.74 -.16 6.29 7.14 -.85 27,041
2026 . . . . . 4.75 5.49 -.74 1.61 1.77 -.16 6.36 7.26 -.90 28,190
2027 . . . . . 4.76 5.58 -.82 1.62 1.81 -.19 6.38 7.39 -1.01 29,353
2028 . . . . . 4.77 5.67 -.90 1.63 1.85 -.22 6.40 7.52 -1.12 30,571
2029 . . . . . 4.78 5.76 -.98 1.64 1.88 -.25 6.42 7.64 -1.23 31,836
2030 . . . . . 4.78 5.84 -1.06 1.65 1.91 -.26 6.43 7.75 -1.32 33,151
2035 . . . . . 4.76 6.01 -1.25 1.68 2.07 -.40 6.43 8.09 -1.65 40,505
2040 . . . . . 4.72 6.04 -1.32 1.69 2.14 -.45 6.41 8.18 -1.77 49,247
2045 . . . . . 4.68 6.00 -1.33 1.70 2.17 -.47 6.38 8.17 -1.80 59,903
2050 . . . . . 4.64 5.99 -1.34 1.71 2.15 -.44 6.36 8.14 -1.78 73,006
2055 . . . . . 4.61 6.00 -1.38 1.73 2.13 -.40 6.35 8.13 -1.78 89,182
2060 . . . . . 4.59 6.05 -1.45 1.75 2.11 -.36 6.35 8.16 -1.82 108,977
2065 . . . . . 4.58 6.10 -1.53 1.77 2.11 -.34 6.35 8.21 -1.87 132,996
2070 . . . . . 4.56 6.16 -1.60 1.79 2.12 -.33 6.35 8.28 -1.93 162,027
2075 . . . . . 4.54 6.21 -1.67 1.81 2.13 -.32 6.35 8.34 -1.99 197,375
2080 . . . . . 4.52 6.19 -1.67 1.82 2.12 -.29 6.34 8.30 -1.97 241,032
2085 . . . . . 4.49 6.08 -1.59 1.83 2.09 -.26 6.32 8.17 -1.86 295,310
2090 . . . . . 4.46 5.95 -1.49 1.83 2.05 -.22 6.29 8.00 -1.71 362,422
2095 . . . . . 4.44 5.89 -1.44 1.83 2.01 -.17 6.28 7.90 -1.62 444,359
Summarized rates: c
25-year:
2021-45 . . 5.19 6.04 -.85 1.67 2.05 -.38 6.86 8.09 -1.23
50-year:
2021-70 . . 4.92 6.03 -1.11 1.71 2.08 -.37 6.62 8.11 -1.48
75-year:
2021-95 . . 4.80 6.03 -1.23 1.74 2.08 -.34 6.54 8.11 -1.57
Low-cost:
2021 . . . . . 4.45 5.02 -.57 1.56 1.62 -.06 6.01 6.64 -.62 22,906
2022 . . . . . 4.71 4.96 -.25 1.56 1.59 -.02 6.28 6.55 -.27 24,706
2023 . . . . . 4.69 4.99 -.30 1.56 1.54 .02 6.26 6.53 -.27 26,140
2024 . . . . . 4.73 5.01 -.28 1.57 1.52 .04 6.29 6.54 -.24 27,688
2025 . . . . . 4.74 5.04 -.29 1.57 1.52 .05 6.31 6.56 -.25 29,286
2026 . . . . . 4.79 5.07 -.28 1.60 1.52 .08 6.39 6.59 -.20 30,925
2027 . . . . . 4.80 5.11 -.30 1.61 1.53 .08 6.41 6.64 -.22 32,616
2028 . . . . . 4.83 5.15 -.32 1.62 1.53 .09 6.44 6.68 -.23 34,406
2029 . . . . . 4.84 5.18 -.34 1.63 1.53 .10 6.47 6.71 -.24 36,289
2030 . . . . . 4.86 5.22 -.36 1.63 1.52 .12 6.49 6.74 -.24 38,262
2035 . . . . . 4.84 5.22 -.38 1.67 1.50 .17 6.50 6.72 -.22 49,759
2040 . . . . . 4.80 5.13 -.32 1.69 1.41 .28 6.49 6.54 -.04 64,426
2045 . . . . . 4.77 4.99 -.22 1.71 1.30 .41 6.48 6.28 .20 83,756
2050 . . . . . 4.75 4.89 -.14 1.73 1.18 .55 6.48 6.06 .41 109,341
2055 . . . . . 4.73 4.84 -.10 1.76 1.09 .67 6.49 5.92 .57 143,081
2060 . . . . . 4.73 4.84 -.11 1.79 1.03 .76 6.52 5.87 .65 187,087
2065 . . . . . 4.73 4.84 -.11 1.81 1.01 .81 6.54 5.85 .70 244,148
2070 . . . . . 4.73 4.84 -.11 1.84 1.01 .83 6.57 5.84 .73 318,198
2075 . . . . . 4.73 4.82 -.09 1.86 1.01 .85 6.59 5.84 .76 415,164
2080 . . . . . 4.73 4.74 -.01 1.88 1.01 .86 6.61 5.75 .85 543,683
2085 . . . . . 4.72 4.60 .13 1.89 1.01 .88 6.61 5.60 1.01 714,686
2090 . . . . . 4.72 4.47 .25 1.90 .99 .90 6.62 5.46 1.16 939,774
2095 . . . . . 4.73 4.46 .27 1.92 .98 .94 6.65 5.44 1.21 1,231,982
220
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 2021-2095 (Cont.)
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)
Low-cost (Cont.):
Summarized rates: c
25-year:
2021-45 . . 5.20 5.34 -0.14 1.67 1.53 0.14 6.87 6.86 d
50-year:
2021-70 . . 4.97 5.09 -.11 1.72 1.30 .41 6.69 6.39 .30
75-year:
2021-95 . . 4.90 4.94 -.04 1.77 1.21 .56 6.67 6.15 .52
High-cost:
2021 . . . . . 4.56 5.32 -.77 1.59 1.76 -.18 6.14 7.09 -.95 $21,635
2022 . . . . . 4.75 5.61 -.86 1.57 1.83 -.26 6.32 7.44 -1.12 21,774
2023 . . . . . 4.73 5.71 -.98 1.58 1.85 -.27 6.31 7.55 -1.25 22,598
2024 . . . . . 4.73 5.82 -1.09 1.59 1.91 -.32 6.32 7.73 -1.41 23,431
2025 . . . . . 4.74 5.93 -1.19 1.60 1.98 -.38 6.34 7.92 -1.58 24,278
2026 . . . . . 4.77 6.05 -1.27 1.64 2.07 -.43 6.42 8.11 -1.70 25,155
2027 . . . . . 4.78 6.17 -1.39 1.66 2.15 -.50 6.43 8.32 -1.89 26,041
2028 . . . . . 4.78 6.30 -1.52 1.67 2.24 -.57 6.45 8.54 -2.09 26,905
2029 . . . . . 4.79 6.45 -1.66 1.68 2.33 -.65 6.47 8.78 -2.31 27,688
2030 . . . . . 4.79 6.59 -1.80 1.69 2.40 -.71 6.48 8.99 -2.51 28,478
2035 . . . . . 4.76 6.99 -2.23 1.72 2.87 -1.15 6.48 9.86 -3.38 32,698
2040 . . . . . 4.72 7.22 -2.50 1.73 3.25 -1.52 6.45 10.47 -4.02 37,313
2045 . . . . . 4.68 7.41 -2.73 1.75 3.62 -1.88 6.42 11.03 -4.61 42,342
2050 . . . . . 4.64 7.59 -2.96 1.76 3.93 -2.17 6.39 11.52 -5.13 47,945
2055 . . . . . 4.60 7.77 -3.17 1.77 4.15 -2.38 6.37 11.92 -5.55 54,348
2060 . . . . . 4.57 7.97 -3.40 1.78 4.31 -2.53 6.36 12.28 -5.92 61,654
2065 . . . . . 4.54 8.16 -3.61 1.80 4.42 -2.62 6.34 12.58 -6.24 69,839
2070 . . . . . 4.51 8.37 -3.85 1.81 4.46 -2.65 6.33 12.83 -6.50 78,889
2075 . . . . . 4.49 8.59 -4.10 1.83 4.44 -2.62 6.31 13.03 -6.72 88,890
2080 . . . . . 4.45 8.74 -4.29 1.84 4.39 -2.56 6.29 13.14 -6.85 100,171
2085 . . . . . 4.41 8.77 -4.36 1.84 4.31 -2.47 6.25 13.08 -6.83 113,114
2090 . . . . . 4.37 8.67 -4.31 1.84 4.21 -2.37 6.20 12.88 -6.68 128,029
2095 . . . . . 4.32 8.56 -4.24 1.83 4.10 -2.27 6.16 12.66 -6.50 145,093
Summarized rates: c
25-year:
2021-45 . . 5.27 6.94 -1.67 1.71 2.79 -1.07 6.99 9.72 -2.74
50-year:
2021-70 . . 4.97 7.34 -2.37 1.74 3.40 -1.65 6.71 10.73 -4.02
75-year:
2021-95 . . 4.83 7.65 -2.81 1.76 3.62 -1.85 6.60 11.26 -4.66
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, 2021 and the cost of reaching a target trust fund level equal to 100 percent of annual cost at the end
of the period.
d Between 0 and 0.005 percent of GDP.
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.
221
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 about 25 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 2021-2095
Calendar year Intermediate Low-cost High-cost
2021 . . . . . . . . . . . . . . . . . . . . . . . . . 0.364 0.365 0.371
2022 . . . . . . . . . . . . . . . . . . . . . . . . . .361 .363 .365
2023 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .364 .365
2024 . . . . . . . . . . . . . . . . . . . . . . . . . .364 .367 .364
2025 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .367 .364
2026 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .368 .363
2027 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .369 .362
2028 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .370 .362
2029 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .371 .361
2030 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .371 .360
2035 . . . . . . . . . . . . . . . . . . . . . . . . . .359 .369 .356
2040 . . . . . . . . . . . . . . . . . . . . . . . . . .356 .366 .351
2045 . . . . . . . . . . . . . . . . . . . . . . . . . .352 .364 .347
2050 . . . . . . . . . . . . . . . . . . . . . . . . . .349 .362 .342
2055 . . . . . . . . . . . . . . . . . . . . . . . . . .347 .361 .339
2060 . . . . . . . . . . . . . . . . . . . . . . . . . .345 .361 .335
2065 . . . . . . . . . . . . . . . . . . . . . . . . . .343 .361 .332
2070 . . . . . . . . . . . . . . . . . . . . . . . . . .341 .360 .328
2075 . . . . . . . . . . . . . . . . . . . . . . . . . .339 .361 .324
2080 . . . . . . . . . . . . . . . . . . . . . . . . . .337 .361 .321
2085 . . . . . . . . . . . . . . . . . . . . . . . . . .335 .361 .317
2090 . . . . . . . . . . . . . . . . . . . . . . . . . .334 .361 .314
2095 . . . . . . . . . . . . . . . . . . . . . . . . . .333 .362 .311
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
2095, the ratio of wages and salaries to employee compensation is projected
to decline at an average annual rate of 0.12, 0.02, and 0.22 percent for the
intermediate, low-cost, and high-cost assumptions, respectively.
222
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 2.4, 3.0, and 1.8 percent for the
intermediate, low-cost, 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 3.6, 4.8, and 2.3 percent under the
intermediate, low-cost, and high-cost assumptions, respectively, between
2030 and 2095. 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
223
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.
224
OASDI and HI: Estimates in Dollars
Table VI.G6.—Selected Economic Variables, Calendar Years 2020-2095
[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:
2020 . . . . . . . . 97.03 $55,576.94 $7,705 $20,937 0.9902 0.9870
2021 . . . . . . . . 100.00 59,064.67 8,155 22,382 1.0000 1.0123
2022 . . . . . . . . 102.40 61,600.90 8,572 23,714 1.0154 1.0363
2023 . . . . . . . . 104.85 63,849.67 9,005 24,815 1.0340 1.0594
2024 . . . . . . . . 107.37 66,000.86 9,415 25,895 1.0550 1.0821
2025 . . . . . . . . 109.95 68,383.15 9,826 27,041 1.0804 1.1049
2026 . . . . . . . . 112.59 70,873.78 10,239 28,190 1.1132 1.1291
2027 . . . . . . . . 115.29 73,475.22 10,660 29,353 1.1551 1.1559
2028 . . . . . . . . 118.06 76,170.31 11,100 30,571 1.2060 1.1857
2029 . . . . . . . . 120.89 78,951.37 11,554 31,836 1.2619 1.2186
2030 . . . . . . . . 123.79 81,801.34 12,021 33,151 1.3210 1.2547
2035 . . . . . . . . 139.38 97,827.83 14,555 40,505 1.6663 1.5109
2040 . . . . . . . . 156.92 116,851.62 17,515 49,247 2.1020 1.9025
2045 . . . . . . . . 176.68 138,872.19 21,098 59,903 2.6517 2.3997
2050 . . . . . . . . 198.92 164,898.71 25,500 73,006 3.3450 3.0272
2055 . . . . . . . . 223.97 196,130.90 30,932 89,182 4.2196 3.8188
2060 . . . . . . . . 252.17 233,491.30 37,570 108,977 5.3230 4.8173
2065 . . . . . . . . 283.91 278,165.31 45,583 132,996 6.7148 6.0768
2070 . . . . . . . . 319.66 331,313.42 55,224 162,027 8.4705 7.6658
2075 . . . . . . . . 359.90 394,448.33 66,921 197,375 10.6853 9.6701
2080 . . . . . . . . 405.21 469,352.35 81,281 241,032 13.4792 12.1986
2085 . . . . . . . . 456.23 558,173.45 99,039 295,310 17.0037 15.3882
2090 . . . . . . . . 513.67 664,200.32 120,985 362,422 21.4497 19.4118
2095 . . . . . . . . 578.34 790,959.99 147,837 444,359 27.0582 24.4875
Low-cost:
2020 . . . . . . . . 96.79 55,741.04 7,726 20,937 .9902 .9870
2021 . . . . . . . . 100.00 59,648.50 8,351 22,906 1.0000 1.0123
2022 . . . . . . . . 103.03 63,755.58 8,956 24,706 1.0159 1.0363
2023 . . . . . . . . 106.12 66,712.89 9,523 26,140 1.0377 1.0597
2024 . . . . . . . . 109.30 69,647.48 10,155 27,688 1.0652 1.0832
2025 . . . . . . . . 112.58 72,991.20 10,758 29,286 1.1005 1.1078
2026 . . . . . . . . 115.96 76,531.70 11,377 30,925 1.1456 1.1349
2027 . . . . . . . . 119.44 80,275.57 12,030 32,616 1.2012 1.1656
2028 . . . . . . . . 123.02 84,217.83 12,719 34,406 1.2675 1.2005
2029 . . . . . . . . 126.71 88,345.11 13,445 36,289 1.3404 1.2399
2030 . . . . . . . . 130.51 92,646.16 14,205 38,262 1.4185 1.2842
2035 . . . . . . . . 151.30 117,663.23 18,356 49,759 1.8880 1.5927
2040 . . . . . . . . 175.39 149,057.24 23,588 64,426 2.5128 2.0976
2045 . . . . . . . . 203.33 187,654.61 30,473 83,756 3.3443 2.7900
2050 . . . . . . . . 235.72 236,256.49 39,609 109,341 4.4510 3.7133
2055 . . . . . . . . 273.26 298,123.58 51,697 143,081 5.9239 4.9421
2060 . . . . . . . . 316.78 376,654.98 67,510 187,087 7.8843 6.5775
2065 . . . . . . . . 367.24 476,105.30 88,026 244,148 10.4933 8.7541
2070 . . . . . . . . 425.73 601,499.91 114,696 318,198 13.9658 11.6510
2075 . . . . . . . . 493.54 759,356.70 149,714 415,164 18.5873 15.5065
2080 . . . . . . . . 572.14 957,970.84 196,153 543,683 24.7382 20.6379
2085 . . . . . . . . 663.27 1,207,986.36 257,982 714,686 32.9245 27.4674
2090 . . . . . . . . 768.91 1,523,912.53 339,674 939,774 43.8199 36.5569
2095 . . . . . . . . 891.38 1,924,287.31 446,347 1,231,982 58.3207 48.6543
225
Appendices
Table VI.G6.—Selected Economic Variables, Calendar Years 2020-2095 (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:
2020 . . . . . . . . 97.52 $55,467.53 $7,691 $20,937 0.9902 0.9870
2021 . . . . . . . . 100.00 58,429.26 8,025 21,635 1.0000 1.0123
2022 . . . . . . . . 101.44 59,127.30 7,947 21,774 1.0130 1.0362
2023 . . . . . . . . 103.29 61,216.49 8,246 22,598 1.0282 1.0590
2024 . . . . . . . . 105.15 62,482.94 8,524 23,431 1.0480 1.0813
2025 . . . . . . . . 107.04 63,944.74 8,836 24,278 1.0728 1.1036
2026 . . . . . . . . 108.97 65,675.50 9,134 25,155 1.1053 1.1266
2027 . . . . . . . . 110.93 67,545.75 9,436 26,041 1.1447 1.1509
2028 . . . . . . . . 112.92 69,439.08 9,728 26,905 1.1866 1.1763
2029 . . . . . . . . 114.96 71,137.10 9,991 27,688 1.2307 1.2021
2030 . . . . . . . . 117.03 72,816.93 10,245 28,478 1.2757 1.2285
2035 . . . . . . . . 127.94 81,983.28 11,627 32,698 1.5249 1.4571
2040 . . . . . . . . 139.88 92,331.59 13,098 37,313 1.8227 1.7417
2045 . . . . . . . . 152.93 103,623.41 14,674 42,342 2.1787 2.0818
2050 . . . . . . . . 167.20 116,040.38 16,418 47,945 2.6042 2.4884
2055 . . . . . . . . 182.80 130,050.96 18,404 54,348 3.1128 2.9744
2060 . . . . . . . . 199.85 145,802.66 20,660 61,654 3.7207 3.5553
2065 . . . . . . . . 218.50 163,590.46 23,155 69,839 4.4473 4.2497
2070 . . . . . . . . 238.89 183,549.49 25,876 78,889 5.3159 5.0796
2075 . . . . . . . . 261.17 205,926.68 28,844 88,890 6.3541 6.0717
2080 . . . . . . . . 285.54 230,969.71 32,140 100,171 7.5951 7.2575
2085 . . . . . . . . 312.18 258,923.64 35,874 113,114 9.0784 8.6749
2090 . . . . . . . . 341.31 290,592.58 40,169 128,029 10.8515 10.3691
2095 . . . . . . . . 373.15 326,282.25 45,094 145,093 12.9708 12.3942
a CPI-W indexed to calendar year 2021.
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-year’s 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 2021 dollars—that 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.
226
OASDI and HI: Estimates in Dollars
Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,
in CPI-indexed 2021 Dollars,a Calendar Years 2021-2095
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costb end of yearb
Intermediate:
2021 . . . . . . . . . . . . . $1,003.7 $70.1 $1,073.8 $1,151.0 $2,831.0
2022 . . . . . . . . . . . . . 1,082.1 62.6 1,144.7 1,197.4 2,712.0
2023 . . . . . . . . . . . . . 1,109.0 56.6 1,165.5 1,239.3 2,574.7
2024 . . . . . . . . . . . . . 1,134.8 52.0 1,186.8 1,283.4 2,417.7
2025 . . . . . . . . . . . . . 1,158.1 48.8 1,206.9 1,327.7 2,240.3
2026 . . . . . . . . . . . . . 1,189.4 48.0 1,237.4 1,373.7 2,051.5
2027 . . . . . . . . . . . . . 1,211.3 47.8 1,259.1 1,420.6 1,842.0
2028 . . . . . . . . . . . . . 1,235.2 45.9 1,281.1 1,468.9 1,611.0
2029 . . . . . . . . . . . . . 1,258.7 42.2 1,300.9 1,516.9 1,357.3
2030 c . . . . . . . . . . . . 1,281.0 37.4 1,318.4 1,564.3 1,079.6
Low-cost:
2021 . . . . . . . . . . . . . 1,020.2 70.2 1,090.4 1,149.9 2,848.9
2022 . . . . . . . . . . . . . 1,130.3 63.6 1,193.9 1,190.4 2,768.7
2023 . . . . . . . . . . . . . 1,156.2 59.1 1,215.4 1,229.0 2,674.4
2024 . . . . . . . . . . . . . 1,197.8 57.3 1,255.1 1,269.5 2,582.1
2025 . . . . . . . . . . . . . 1,233.6 58.2 1,291.8 1,310.0 2,488.7
2026 . . . . . . . . . . . . . 1,276.8 61.5 1,338.3 1,352.0 2,402.5
2027 . . . . . . . . . . . . . 1,311.9 66.2 1,378.1 1,395.0 2,315.6
2028 . . . . . . . . . . . . . 1,349.5 70.3 1,419.8 1,439.9 2,228.1
2029 . . . . . . . . . . . . . 1,387.3 73.5 1,460.9 1,484.9 2,139.1
2030 . . . . . . . . . . . . . 1,424.3 76.4 1,500.8 1,530.1 2,047.5
2035 . . . . . . . . . . . . . 1,591.2 81.7 1,672.9 1,717.0 1,573.5
2040 . . . . . . . . . . . . . 1,764.6 68.6 1,833.1 1,883.4 1,136.1
2045 . . . . . . . . . . . . . 1,964.8 47.3 2,012.2 2,054.1 756.4
2050 . . . . . . . . . . . . . 2,201.9 31.9 2,233.8 2,266.5 484.6
2055 . . . . . . . . . . . . . 2,479.0 19.9 2,498.9 2,532.7 267.4
2060 . . . . . . . . . . . . . 2,794.0 6.4 2,800.4 2,857.8 10.7
2065 . . . . . . . . . . . . . d d d d d
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 . . . . . . . . . . . . . d d d d d
2095 . . . . . . . . . . . . . 6,538.1 83.3 6,621.4 6,166.8 1,520.0
227
Appendices
Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,
in CPI-indexed 2021 Dollars,a Calendar Years 2021-2095 (Cont.)
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costb end of yearb
High-cost:
2021 . . . . . . . . . . . . . $985.8 $69.8 $1,055.6 $1,152.0 $2,811.9
2022 . . . . . . . . . . . . . 1,019.6 61.3 1,081.0 1,205.0 2,647.9
2023 . . . . . . . . . . . . . 1,034.3 53.8 1,088.1 1,248.4 2,440.4
2024 . . . . . . . . . . . . . 1,053.8 47.7 1,101.5 1,296.9 2,201.8
2025 . . . . . . . . . . . . . 1,074.4 42.2 1,116.6 1,345.2 1,934.3
2026 . . . . . . . . . . . . . 1,102.3 37.7 1,140.0 1,396.1 1,644.0
2027 . . . . . . . . . . . . . 1,121.1 32.5 1,153.6 1,447.7 1,320.8
2028 . . . . . . . . . . . . . 1,139.3 25.3 1,164.6 1,500.5 961.7
2029 . . . . . . . . . . . . . 1,153.2 16.9 1,170.1 1,552.4 562.3
2030 c . . . . . . . . . . . . 1,164.5 8.1 1,172.6 1,603.5 121.5
a CPI-indexed 2021 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 2034 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 2061 under the low-cost assumptions, but
combined asset reserves become positive again by the beginning of 2093 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 2021 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 2021 until trust fund reserves are depleted in 2034.
Estimates after reserve depletion are not shown. For 2021 through 2033 (the
year preceding the year of trust fund reserve depletion), annual cost is cov-
ered by drawing down combined trust fund reserves.
228
OASDI and HI: Estimates in Dollars
Figure VI.G1.—Estimated OASDI Income and Cost in CPI-indexed 2021 Dollars,
Based on Intermediate Assumptions
[In billions]
$1,800
$1,600
Cost
$1,400 Total income
$1,200 Non-interest income
$1,000
$800
$600
2025 2030
Calendar year
Table VI.G8 presents the operations of the combined OASI and DI Trust
Funds in current, or nominal, dollars—that 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.
229
Appendices
Table VI.G8.—Operations of the Combined OASI and DI Trust Funds,
in Current Dollars, Calendar Years 2021-2095
[In billions]
Asset
Non-interest Interest Total reserves at
Calendar year income income income Costa end of year a
Intermediate:
2021 . . . . . . . . . . . . . $1,003.7 $70.1 $1,073.8 $1,151.0 $2,831.0
2022 . . . . . . . . . . . . . 1,108.0 64.1 1,172.1 1,226.1 2,777.1
2023 . . . . . . . . . . . . . 1,162.8 59.3 1,222.1 1,299.5 2,699.7
2024 . . . . . . . . . . . . . 1,218.5 55.8 1,274.2 1,378.0 2,595.9
2025 . . . . . . . . . . . . . 1,273.4 53.6 1,327.0 1,459.7 2,463.2
2026 . . . . . . . . . . . . . 1,339.1 54.0 1,393.1 1,546.6 2,309.8
2027 . . . . . . . . . . . . . 1,396.5 55.1 1,451.6 1,637.8 2,123.6
2028 . . . . . . . . . . . . . 1,458.2 54.2 1,512.5 1,734.2 1,901.9
2029 . . . . . . . . . . . . . 1,521.6 51.1 1,572.7 1,833.8 1,640.8
2030 b . . . . . . . . . . . . 1,585.8 46.3 1,632.1 1,936.5 1,336.4
Low-cost:
2021 . . . . . . . . . . . . . 1,020.2 70.2 1,090.4 1,149.9 2,848.9
2022 . . . . . . . . . . . . . 1,164.5 65.6 1,230.1 1,226.4 2,852.5
2023 . . . . . . . . . . . . . 1,227.0 62.8 1,289.7 1,304.2 2,838.0
2024 . . . . . . . . . . . . . 1,309.2 62.6 1,371.9 1,387.6 2,822.3
2025 . . . . . . . . . . . . . 1,388.7 65.5 1,454.3 1,474.8 2,801.7
2026 . . . . . . . . . . . . . 1,480.5 71.3 1,551.9 1,567.7 2,785.8
2027 . . . . . . . . . . . . . 1,566.9 79.0 1,645.9 1,666.2 2,765.6
2028 . . . . . . . . . . . . . 1,660.2 86.4 1,746.6 1,771.3 2,740.9
2029 . . . . . . . . . . . . . 1,757.9 93.2 1,851.1 1,881.5 2,710.4
2030 . . . . . . . . . . . . . 1,858.9 99.8 1,958.7 1,996.9 2,672.2
2035 . . . . . . . . . . . . . 2,407.5 123.6 2,531.1 2,597.7 2,380.6
2040 . . . . . . . . . . . . . 3,095.0 120.3 3,215.2 3,303.3 1,992.7
2045 . . . . . . . . . . . . . 3,995.1 96.2 4,091.3 4,176.5 1,538.0
2050 . . . . . . . . . . . . . 5,190.3 75.1 5,265.4 5,342.4 1,142.3
2055 . . . . . . . . . . . . . 6,774.1 54.3 6,828.4 6,920.8 730.6
2060 . . . . . . . . . . . . . 8,851.0 20.2 8,871.2 9,053.1 34.0
2065 . . . . . . . . . . . . . c c c c c
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 . . . . . . . . . . . . . c c c c c
2095 . . . . . . . . . . . . . 58,279.2 742.7 59,021.9 54,969.4 13,549.1
High-cost:
2021 . . . . . . . . . . . . . 985.8 69.8 1,055.6 1,152.0 2,811.9
2022 . . . . . . . . . . . . . 1,034.3 62.2 1,096.5 1,222.3 2,686.1
2023 . . . . . . . . . . . . . 1,068.3 55.5 1,123.9 1,289.4 2,520.6
2024 . . . . . . . . . . . . . 1,108.0 50.1 1,158.1 1,363.6 2,315.1
2025 . . . . . . . . . . . . . 1,150.0 45.2 1,195.2 1,439.8 2,070.4
2026 . . . . . . . . . . . . . 1,201.1 41.0 1,242.2 1,521.2 1,791.4
2027 . . . . . . . . . . . . . 1,243.6 36.1 1,279.6 1,605.8 1,465.2
2028 . . . . . . . . . . . . . 1,286.6 28.6 1,315.2 1,694.4 1,085.9
2029 . . . . . . . . . . . . . 1,325.7 19.4 1,345.1 1,784.6 646.4
2030 b . . . . . . . . . . . . 1,362.8 9.5 1,372.3 1,876.5 142.2
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 2034 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 2061 under the low-cost assumptions, but
combined asset reserves become positive again by the beginning of 2093 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.
230
OASDI and HI: Estimates in Dollars
Table VI.G9 presents values in CPI-indexed 2021 dollars—that 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
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.
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.
231
Appendices
Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2021 Dollars,a Calendar Years 2021-2095
[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:
2021 . . . . . $1,004 $1,151 -$147 $349 $375 -$27 $1,352 $1,526 -$174
2022 . . . . . 1,082 1,197 -115 361 390 -29 1,443 1,587 -144
2023 . . . . . 1,109 1,239 -130 370 400 -29 1,479 1,639 -159
2024 . . . . . 1,135 1,283 -149 379 412 -33 1,514 1,695 -181
2025 . . . . . 1,158 1,328 -170 388 428 -40 1,546 1,755 -209
2026 . . . . . 1,189 1,374 -184 403 444 -41 1,593 1,818 -225
2027 . . . . . 1,211 1,421 -209 413 461 -48 1,624 1,882 -258
2028 . . . . . 1,235 1,469 -234 422 479 -57 1,657 1,948 -290
2029 . . . . . 1,259 1,517 -258 432 496 -65 1,690 2,013 -323
2030 . . . . . 1,281 1,564 -283 441 510 -69 1,722 2,075 -352
2035 . . . . . 1,383 1,748 -365 487 602 -116 1,870 2,350 -480
2040 . . . . . 1,481 1,895 -414 531 672 -142 2,012 2,567 -556
2045 . . . . . 1,586 2,036 -450 577 736 -159 2,162 2,771 -609
2050 . . . . . 1,704 2,197 -493 629 791 -162 2,333 2,987 -655
2055 . . . . . 1,838 2,388 -551 689 847 -158 2,527 3,235 -709
2060 . . . . . 1,986 2,614 -629 757 913 -156 2,743 3,527 -785
2065 . . . . . 2,143 2,858 -715 830 990 -160 2,973 3,848 -875
2070 . . . . . 2,310 3,121 -812 908 1,076 -168 3,218 4,197 -980
2075 . . . . . 2,490 3,406 -916 992 1,167 -174 3,482 4,572 -1,090
2080 . . . . . 2,687 3,681 -994 1,083 1,258 -175 3,770 4,940 -1,169
2085 . . . . . 2,906 3,938 -1,032 1,182 1,352 -170 4,088 5,290 -1,202
2090 . . . . . 3,148 4,196 -1,048 1,290 1,446 -156 4,438 5,642 -1,204
2095 . . . . . 3,415 4,525 -1,110 1,410 1,543 -133 4,824 6,068 -1,243
Low-cost:
2021 . . . . . 1,020 1,150 -130 357 370 -13 1,377 1,520 -143
2022 . . . . . 1,130 1,190 -60 375 380 -6 1,505 1,571 -66
2023 . . . . . 1,156 1,229 -73 385 379 6 1,541 1,608 -67
2024 . . . . . 1,198 1,269 -72 397 386 11 1,595 1,656 -61
2025 . . . . . 1,234 1,310 -76 409 396 12 1,643 1,707 -64
2026 . . . . . 1,277 1,352 -75 427 407 21 1,704 1,759 -55
2027 . . . . . 1,312 1,395 -83 440 417 23 1,752 1,812 -60
2028 . . . . . 1,350 1,440 -90 452 428 25 1,802 1,868 -66
2029 . . . . . 1,387 1,485 -98 466 438 28 1,853 1,923 -70
2030 . . . . . 1,424 1,530 -106 479 445 34 1,903 1,975 -71
2035 . . . . . 1,591 1,717 -126 548 493 55 2,139 2,210 -71
2040 . . . . . 1,765 1,883 -119 621 517 103 2,385 2,400 -15
2045 . . . . . 1,965 2,054 -89 704 534 170 2,668 2,588 80
2050 . . . . . 2,202 2,266 -65 803 546 257 3,005 2,813 192
2055 . . . . . 2,479 2,533 -54 921 570 351 3,400 3,102 297
2060 . . . . . 2,794 2,858 -64 1,056 610 446 3,850 3,467 383
2065 . . . . . 3,144 3,217 -73 1,207 669 537 4,350 3,886 464
2070 . . . . . 3,534 3,614 -80 1,375 753 622 4,909 4,367 542
2075 . . . . . 3,979 4,055 -75 1,566 854 712 5,545 4,908 637
2080 . . . . . 4,493 4,503 -10 1,784 964 819 6,277 5,467 810
2085 . . . . . 5,088 4,952 137 2,034 1,086 948 7,122 6,038 1,084
2090 . . . . . 5,769 5,460 309 2,320 1,216 1,104 8,089 6,676 1,413
2095 . . . . . 6,538 6,167 371 2,649 1,354 1,294 9,187 7,521 1,666
232
OASDI and HI: Estimates in Dollars
Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2021 Dollars,a Calendar Years 2021-2095 (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:
2021 . . . . . $986 $1,152 -$166 $343 $382 -$39 $1,329 $1,534 -$205
2022 . . . . . 1,020 1,205 -185 337 392 -55 1,357 1,597 -240
2023 . . . . . 1,034 1,248 -214 346 404 -59 1,380 1,653 -273
2024 . . . . . 1,054 1,297 -243 354 425 -71 1,408 1,722 -314
2025 . . . . . 1,074 1,345 -271 363 450 -87 1,438 1,795 -358
2026 . . . . . 1,102 1,396 -294 379 477 -98 1,481 1,873 -392
2027 . . . . . 1,121 1,448 -327 389 505 -117 1,510 1,953 -443
2028 . . . . . 1,139 1,500 -361 398 534 -137 1,537 2,035 -498
2029 . . . . . 1,153 1,552 -399 405 561 -156 1,558 2,114 -556
2030 . . . . . 1,165 1,604 -439 412 584 -173 1,576 2,188 -612
2035 . . . . . 1,216 1,788 -571 439 733 -294 1,656 2,521 -865
2040 . . . . . 1,259 1,925 -666 463 868 -405 1,722 2,793 -1,072
2045 . . . . . 1,295 2,051 -756 484 1,003 -520 1,778 3,054 -1,276
2050 . . . . . 1,330 2,177 -847 504 1,126 -622 1,834 3,303 -1,470
2055 . . . . . 1,368 2,312 -943 526 1,233 -707 1,894 3,544 -1,650
2060 . . . . . 1,411 2,458 -1,047 550 1,329 -779 1,961 3,788 -1,826
2065 . . . . . 1,452 2,608 -1,155 575 1,413 -838 2,027 4,020 -1,993
2070 . . . . . 1,491 2,763 -1,273 599 1,472 -874 2,089 4,235 -2,146
2075 . . . . . 1,527 2,924 -1,397 622 1,512 -890 2,149 4,436 -2,287
2080 . . . . . 1,562 3,067 -1,505 645 1,541 -897 2,207 4,609 -2,401
2085 . . . . . 1,599 3,178 -1,579 667 1,563 -896 2,266 4,741 -2,475
2090 . . . . . 1,637 3,253 -1,616 689 1,578 -889 2,326 4,832 -2,505
2095 . . . . . 1,681 3,328 -1,647 713 1,593 -881 2,393 4,921 -2,528
a CPI-indexed 2021 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, dollars—that 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.
233
Appendices
Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and
Balance in Current Dollars, Calendar Years 2021-2095
[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:
2021 . . . . . $1,004 $1,151 -$147 $349 $375 -$27 $1,352 $1,526 -$174
2022 . . . . . 1,108 1,226 -118 370 399 -29 1,478 1,625 -148
2023 . . . . . 1,163 1,299 -137 388 419 -31 1,551 1,718 -167
2024 . . . . . 1,218 1,378 -160 407 442 -35 1,625 1,820 -195
2025 . . . . . 1,273 1,460 -186 427 470 -43 1,700 1,930 -230
2026 . . . . . 1,339 1,547 -207 454 500 -46 1,793 2,047 -253
2027 . . . . . 1,397 1,638 -241 476 532 -56 1,872 2,169 -297
2028 . . . . . 1,458 1,734 -276 498 565 -67 1,957 2,299 -343
2029 . . . . . 1,522 1,834 -312 522 600 -78 2,043 2,434 -390
2030 . . . . . 1,586 1,936 -351 546 632 -85 2,132 2,568 -436
2035 . . . . . 1,928 2,436 -508 679 840 -161 2,606 3,276 -669
2040 . . . . . 2,324 2,974 -649 833 1,055 -223 3,157 4,029 -872
2045 . . . . . 2,802 3,597 -795 1,019 1,300 -281 3,820 4,896 -1,076
2050 . . . . . 3,389 4,370 -981 1,251 1,573 -321 4,640 5,943 -1,302
2055 . . . . . 4,116 5,349 -1,233 1,543 1,898 -354 5,659 7,246 -1,587
2060 . . . . . 5,007 6,592 -1,585 1,909 2,303 -394 6,916 8,895 -1,979
2065 . . . . . 6,085 8,115 -2,030 2,357 2,811 -454 8,442 10,926 -2,484
2070 . . . . . 7,383 9,978 -2,595 2,903 3,440 -537 10,286 13,417 -3,131
2075 . . . . . 8,960 12,257 -3,297 3,572 4,199 -627 12,532 16,455 -3,924
2080 . . . . . 10,888 14,917 -4,030 4,390 5,099 -709 15,278 20,016 -4,739
2085 . . . . . 13,256 17,965 -4,709 5,393 6,168 -775 18,649 24,133 -5,484
2090 . . . . . 16,169 21,552 -5,383 6,626 7,429 -803 22,795 28,981 -6,187
2095 . . . . . 19,748 26,169 -6,420 8,152 8,924 -771 27,901 35,092 -7,192
Low-cost:
2021 . . . . . 1,020 1,150 -130 357 370 -13 1,377 1,520 -143
2022 . . . . . 1,164 1,226 -62 386 392 -6 1,550 1,618 -68
2023 . . . . . 1,227 1,304 -77 409 403 6 1,636 1,707 -71
2024 . . . . . 1,309 1,388 -78 434 422 12 1,743 1,810 -67
2025 . . . . . 1,389 1,475 -86 460 446 14 1,849 1,921 -72
2026 . . . . . 1,481 1,568 -87 495 471 24 1,976 2,039 -63
2027 . . . . . 1,567 1,666 -99 525 498 27 2,092 2,164 -72
2028 . . . . . 1,660 1,771 -111 557 526 30 2,217 2,297 -81
2029 . . . . . 1,758 1,882 -124 590 555 35 2,348 2,436 -88
2030 . . . . . 1,859 1,997 -138 625 580 45 2,484 2,577 -93
2035 . . . . . 2,407 2,598 -190 829 746 83 3,237 3,344 -107
2040 . . . . . 3,095 3,303 -208 1,088 907 181 4,183 4,210 -27
2045 . . . . . 3,995 4,177 -181 1,431 1,086 345 5,426 5,262 163
2050 . . . . . 5,190 5,342 -152 1,893 1,288 605 7,083 6,630 453
2055 . . . . . 6,774 6,921 -147 2,516 1,556 959 9,290 8,477 813
2060 . . . . . 8,851 9,053 -202 3,345 1,931 1,414 12,196 10,984 1,212
2065 . . . . . 11,545 11,815 -270 4,431 2,457 1,973 15,976 14,272 1,704
2070 . . . . . 15,047 15,388 -341 5,853 3,205 2,648 20,899 18,592 2,307
2075 . . . . . 19,640 20,012 -372 7,728 4,213 3,515 27,368 24,225 3,143
2080 . . . . . 25,708 25,764 -56 10,206 5,517 4,688 35,914 31,281 4,633
2085 . . . . . 33,750 32,845 906 13,489 7,203 6,286 47,240 40,047 7,192
2090 . . . . . 44,358 41,986 2,373 17,837 9,349 8,488 62,195 51,334 10,861
2095 . . . . . 58,279 54,969 3,310 23,610 12,073 11,537 81,890 67,043 14,847
234
OASDI and HI: Estimates in Dollars
Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and
Balance in Current Dollars, Calendar Years 2021-2095 (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:
2021 . . . . . $986 $1,152 -$166 $343 $382 -$39 $1,329 $1,534 -$205
2022 . . . . . 1,034 1,222 -188 342 398 -56 1,377 1,620 -244
2023 . . . . . 1,068 1,289 -221 357 418 -61 1,425 1,707 -282
2024 . . . . . 1,108 1,364 -256 373 447 -74 1,481 1,811 -330
2025 . . . . . 1,150 1,440 -290 389 482 -93 1,539 1,922 -383
2026 . . . . . 1,201 1,521 -320 413 520 -107 1,614 2,041 -427
2027 . . . . . 1,244 1,606 -362 431 561 -129 1,675 2,166 -492
2028 . . . . . 1,287 1,694 -408 449 603 -154 1,736 2,297 -562
2029 . . . . . 1,326 1,785 -459 465 645 -180 1,791 2,430 -639
2030 . . . . . 1,363 1,877 -514 482 684 -202 1,844 2,560 -716
2035 . . . . . 1,556 2,287 -731 562 938 -376 2,118 3,225 -1,106
2040 . . . . . 1,761 2,693 -932 647 1,215 -567 2,408 3,907 -1,499
2045 . . . . . 1,980 3,137 -1,157 740 1,534 -795 2,719 4,671 -1,952
2050 . . . . . 2,223 3,640 -1,417 843 1,883 -1,040 3,066 5,523 -2,457
2055 . . . . . 2,501 4,225 -1,724 962 2,253 -1,292 3,463 6,479 -3,016
2060 . . . . . 2,820 4,913 -2,093 1,100 2,657 -1,557 3,920 7,570 -3,650
2065 . . . . . 3,173 5,697 -2,525 1,256 3,087 -1,831 4,429 8,785 -4,356
2070 . . . . . 3,561 6,601 -3,040 1,430 3,517 -2,087 4,991 10,118 -5,127
2075 . . . . . 3,988 7,637 -3,649 1,625 3,949 -2,325 5,613 11,587 -5,974
2080 . . . . . 4,461 8,758 -4,297 1,841 4,401 -2,560 6,302 13,159 -6,857
2085 . . . . . 4,991 9,921 -4,931 2,082 4,878 -2,796 7,073 14,799 -7,726
2090 . . . . . 5,589 11,104 -5,516 2,352 5,387 -3,035 7,940 16,491 -8,551
2095 . . . . . 6,272 12,418 -6,146 2,659 5,946 -3,287 8,931 18,364 -9,433
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.
235
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 2020, the OASI Trust Fund was providing monthly benefit pay-
ments to about 1,147,000 people because of their disabilities or the disabili-
ties of children. This total includes approximately 23,000 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 2020, the OASI Trust Fund paid
a total of $12,351 million to the people described above. Table VI.H1 shows
OASI scheduled benefits for disability for selected calendar years during
1960 through 2020 and estimates for 2021 through 2030 based on the inter-
mediate set of assumptions.
236
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
Estimates under the intermediate assumptions:
2021 . . . . . . . . . 1,160 1,067 94 12,769 11,828 926
2022 . . . . . . . . . 1,174 1,081 92 13,429 12,464 946
2023 . . . . . . . . . 1,184 1,096 88 13,986 13,041 931
2024 . . . . . . . . . 1,197 1,111 87 14,606 13,649 943
2025 . . . . . . . . . 1,208 1,126 82 15,249 14,306 928
2026 . . . . . . . . . 1,222 1,141 81 15,954 15,000 939
2027 . . . . . . . . . 1,235 1,156 79 16,702 15,733 954
2028 . . . . . . . . . 1,249 1,170 79 17,475 16,478 982
2029 . . . . . . . . . 1,263 1,184 79 18,294 17,262 1,016
2030 . . . . . . . . . 1,276 1,198 78 19,124 18,072 1,036
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 widow’s and widower’s 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.
237
Appendices
Under the intermediate assumptions, estimated total scheduled benefits paid
from the OASI Trust Fund with respect to disabled beneficiaries will
increase from $12,769 million in calendar year 2021 to $19,124 million in
calendar year 2030.
In calendar year 2020, 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
$155,933 million. Of this amount, $12,351 million, or 7.9 percent, repre-
sented payments from the OASI Trust Fund. Table VI.H2 contains these and
similar figures for selected calendar years during 1960 through 2020 and
estimates for calendar years 2021 through 2030.
238
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
Estimates under the intermediate assumptions:
2021 . . . . . . . . . 155,569 142,800 12,769 8.2
2022 . . . . . . . . . 164,038 150,610 13,429 8.2
2023 . . . . . . . . . 171,018 157,032 13,986 8.2
2024 . . . . . . . . . 177,632 163,026 14,606 8.2
2025 . . . . . . . . . 184,026 168,777 15,249 8.3
2026 . . . . . . . . . 192,130 176,176 15,954 8.3
2027 . . . . . . . . . 200,555 183,853 16,702 8.3
2028 . . . . . . . . . 207,530 190,055 17,475 8.4
2029 . . . . . . . . . 214,938 196,644 18,294 8.5
2030 . . . . . . . . . 222,749 203,625 19,124 8.6
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.
239
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 assumptions—it 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 assumptions—it 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
240
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 earnings—AIME. 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 worker’s
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 index—AWI. 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 individual’s 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 another’s earnings record. The benefits may be either in current-
payment status or withheld.
Benefit award. See “Award.”
Benefit conversion. See “Disability conversion.”
241
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 Index—CPI. 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.
242
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
worker’s earnings record. Such earnings determine eligibility for benefits
and the amount of benefits on that worker’s 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 month’s 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
243
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 activity—SGA”) 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-
244
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.
Federal Insurance Contributions Act—FICA. 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.
File and suspend. The ability to apply for a retired-worker benefit at or after
normal retirement age, then voluntarily suspend it, allowing the worker to
earn delayed retirement credits and a spouse or child to receive benefits on
the worker’s record. Voluntary suspensions requested after April 29, 2016 no
longer allow spouses (other than divorced spouses) and children to receive
benefits while the worker’s benefit is suspended.
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 2021 began October 1, 2020, and will end September
30, 2021.
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-
245
Appendices
tion over a fixed period of any financial obligation that is incurred at the
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 product—GDP. 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.”
246
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 worker’s 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 fund’s 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.
247
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 worker’s
children.
Maximum family benefit. The maximum monthly amount that can be paid
on a worker’s earnings record. Whenever the total of the individual monthly
benefits payable to all the beneficiaries entitled on one earnings record
exceeds the maximum, each dependent’s or survivor’s 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 funds—Hospital Insurance (HI,
Part A) and Supplementary Medical Insurance (SMI). The SMI Trust Fund is
composed of two separate accounts—the 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
248
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 index—AWI. See “Average wage index—AWI.”
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 age—NRA. 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.
249
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 amount—PIA. 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
worker’s average monthly wage or average indexed monthly earnings, is also
used as a base for computing all types of benefits payable on an individual’s
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.
250
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 worker’s 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 Act–SECA. 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
251
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 activity—SGA. 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 person’s disability. The Social Secu-
rity Act specifies a higher SGA amount for statutorily blind individuals;
252
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 year’s
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 Income—SSI. 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-
253
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 individual’s or a couple’s 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;
254
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
255
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 year’s
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 fund’s 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
256
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.
257
List of Tables
LIST OF TABLE
II. OVERVIEW
II.B1 Summary of 2020 Trust Fund Financial Operations . . . . . . . . 7
II.B2 Payroll Tax Contribution Rates for 2020 . . . . . . . . . . . . . . . . 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 . . . . . . . . . . . . . . . . . . . 22
III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND
LEGISLATIVE CHANGES IN THE LAST YEAR
III.A1 Operations of the OASI Trust Fund, Calendar Year 2020 . . . . 29
III.A2 Operations of the DI Trust Fund, Calendar Year 2020 . . . . . . . 33
III.A3 Operations of the Combined OASI and DI Trust Funds,
Calendar Year 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
III.A4 Comparison of Actual Calendar Year 2020 Trust Fund
Operations With Estimates Made in Prior Reports, Based on
Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 36
III.A5 Distribution of Benefit Payments by Type of Beneficiary or
Payment, Calendar Years 2019 and 2020 . . . . . . . . . . . . . . . . 37
III.A6 Administrative Expenses as a Percentage of Total Income and
of Total Cost, Calendar Years 2016-2020 . . . . . . . . . . . . . . . . 38
III.A7 Trust Fund Investment Transactions, Calendar Year 2020 . . . . 38
IV. ACTUARIAL ESTIMATES
IV.A1 Operations of the OASI Trust Fund,
Calendar Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 43
IV.A2 Operations of the DI Trust Fund,
Calendar Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 47
IV.A3 Operations of the Combined OASI and DI Trust Funds,
Calendar Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 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 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 57
IV.B2 Components of Annual Income Rates,
Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 62
258
List of Tables
IV.B3 Covered Workers and Beneficiaries,
Calendar Years 1945-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 64
IV.B4 Trust Fund Ratios, Calendar Years 2021-2095 . . . . . . . . . . . . 69
IV.B5 Components of Summarized Income Rates and Cost Rates,
Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 73
IV.B6 Components of 75-Year Actuarial Balance and
Unfunded Obligation Under Intermediate Assumptions . . . . . 76
IV.B7 Reasons for Change in the 75-Year Actuarial Balance,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 77
V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES
V.A1 Fertility and Mortality Assumptions,
Calendar Years 1940-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 90
V.A2 Immigration Assumptions, Calendar Years 1940-2095 . . . . . . 96
V.A3 Social Security Area Population on July 1 and
Dependency Ratios, Calendar Years 1945-2095 . . . . . . . . . . . 99
V.A4 Period Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
V.A5 Cohort Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
V.B1 Principal Economic Assumptions . . . . . . . . . . . . . . . . . . . . . 111
V.B2 Additional Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . 117
V.C1 Cost-of-Living Benefit Increases, Average Wage Index,
Contribution and Benefit Bases, and Retirement Earnings Test
Exempt Amounts, 1975-2030 . . . . . . . . . . . . . . . . . . . . . . . . 122
V.C2 Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 126
V.C3 Legislated Changes in Normal Retirement Age and Delayed
Retirement Credits for Persons Attaining Age 62 in Each Year
1986 and Later . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
V.C4 OASI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1945-2095 . . . . . . . . . . . . . . . . 136
V.C5 DI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1960-2095 . . . . . . . . . . . . . . . . 145
V.C6 Contribution and Benefit Base and
Payroll Tax Contribution Rates . . . . . . . . . . . . . . . . . . . . . . 152
V.C7 Annual Scheduled Benefit Amounts for Retired Workers
With Various Pre-Retirement Earnings Patterns
Based on Intermediate Assumptions,
Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 156
259
List of Tables
VI. APPENDICES
A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS
VI.A1 Operations of the OASI Trust Fund,
Calendar Years 1937-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . 162
VI.A2 Operations of the DI Trust Fund,
Calendar Years 1957-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . 164
VI.A3 Operations of the Combined OASI and DI Trust Funds,
Calendar Years 1957-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . 166
VI.A4 OASI Trust Fund Asset Reserves, End of
Calendar Years 2019 and 2020 . . . . . . . . . . . . . . . . . . . . . . . 168
VI.A5 DI Trust Fund Asset Reserves, End of
Calendar Years 2019 and 2020 . . . . . . . . . . . . . . . . . . . . . . . 169
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 1982-2021 under Intermediate Assumptions . . . . . . . . . . . 172
C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND OP-
ERATIONS THROUGH 2030
VI.C1 Operations of the OASI Trust Fund, Fiscal Year 2020 . . . . . . . 178
VI.C2 Operations of the DI Trust Fund, Fiscal Year 2020 . . . . . . . . . 179
VI.C3 Operations of the Combined OASI and DI Trust Funds,
Fiscal Year 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180
VI.C4 Operations of the OASI Trust Fund, Fiscal Years 2016-2030 . . 181
VI.C5 Operations of the DI Trust Fund, Fiscal Years 2016-2030 . . . . 182
VI.C6 Operations of the Combined OASI and DI Trust Funds,
Fiscal Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183
D. LONG-RANGE SENSITIVITY ANALYSIS
VI.D1 Sensitivity of OASDI Measures to Fertility Assumptions . . . . 185
VI.D2 Sensitivity of OASDI Measures to Death-Rate Assumptions . . 186
VI.D3 Sensitivity of OASDI Measures to
Total Net Immigration Assumptions . . . . . . . . . . . . . . . . . . . 188
VI.D4 Sensitivity of OASDI Measures to Real Wage Assumptions . . 189
VI.D5 Sensitivity of OASDI Measures to
CPI-Increase Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 190
VI.D6 Sensitivity of OASDI Measures to
Real Interest Rate Assumptions . . . . . . . . . . . . . . . . . . . . . . . 192
VI.D7 Sensitivity of OASDI Measures to
Taxable Ratio Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 193
260
List of Tables
VI.D8 Sensitivity of OASDI Measures to
Disability Incidence Assumptions . . . . . . . . . . . . . . . . . . . . . 194
VI.D9 Sensitivity of OASDI Measures to
Disability Termination Assumptions . . . . . . . . . . . . . . . . . . . 196
E. STOCHASTIC PROJECTIONS AND UNCERTAINTY
VI.E1 Long-Range Estimates Relating to the Actuarial Status of
the Combined OASDI Program . . . . . . . . . . . . . . . . . . . . . . . 207
F. INFINITE HORIZON PROJECTIONS
VI.F1 Unfunded OASDI Obligations Through the Infinite Horizon
and the 75-Year Projection Period,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 209
VI.F2 Present Values Through the Infinite Horizon
for Various Categories of Program Participants,
Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 211
G. ESTIMATES FOR OASDI AND HI, SEPARATE AND COMBINED
VI.G1 Payroll Tax Contribution Rates for
the OASDI and HI Programs . . . . . . . . . . . . . . . . . . . . . . . . 213
VI.G2 OASDI and HI Annual Income Rates, Cost Rates, and Balances,
Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 215
VI.G3 Summarized OASDI and HI Income Rates and Cost Rates for
Valuation Periods, Calendar Years 2021-2095 . . . . . . . . . . . . 217
VI.G4 OASDI and HI Annual and Summarized Income, Cost, and
Balance as a Percentage of GDP,
Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 220
VI.G5 Ratio of OASDI Taxable Payroll to GDP,
Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 222
VI.G6 Selected Economic Variables, Calendar Years 2020-2095 . . . . 225
VI.G7 Operations of the Combined OASI and DI Trust Funds,
in CPI-indexed 2021 Dollars, Calendar Years 2021-2095 . . . . 227
VI.G8 Operations of the Combined OASI and DI Trust Funds,
in Current Dollars, Calendar Years 2021-2095 . . . . . . . . . . . . 230
VI.G9 OASDI and HI Annual Non-interest Income, Cost, and
Balance in CPI-Indexed 2021 Dollars,
Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 232
VI.G10 OASDI and HI Annual Non-interest Income, Cost, and
Balance in Current Dollars, Calendar Years 2021-2095 . . . . . . 234
261
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 . . . . . . . . . . . . . . . . . 237
VI.H2 Scheduled Benefit Payments Under the OASDI Program
With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 239
262
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 2020-2095 . . . . . . . . 18
II.D6 Long-Range OASI and DI Combined Trust Fund Ratios
Under Alternative Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . 20
II.D7 Long-Range OASI and DI Combined Trust Fund Ratios
From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 21
II.D8 OASDI Annual Balances: 2020 and 2021 Trustees Reports . . . 23
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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
IV.B2 Number of OASDI Beneficiaries Per 100 Covered Workers . . 66
IV.B3 Long-Range OASI and DI Trust Fund Ratios . . . . . . . . . . . . . 70
IV.B4 OASDI Annual Balances: 2020 and 2021 Trustees Reports . . . 83
V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES
V.C1 Primary-Insurance-Amount Formula
for Those Newly Eligible in 2021 . . . . . . . . . . . . . . . . . . . . . 124
V.C2 OASI Maximum-Family-Benefit Formula
for Those Newly Eligible in 2021 . . . . . . . . . . . . . . . . . . . . . 125
V.C3 DI Disability Incidence Rates, 1970-2095 . . . . . . . . . . . . . . . 141
V.C4 DI Disability Termination Rates, 1970-2095 . . . . . . . . . . . . . 143
V.C5 Comparison of DI Disability Incidence Rates,
Termination Rates and Conversion Ratios
Under Intermediate Assumptions, 1970-2095 . . . . . . . . . . . . . 144
V.C6 DI Disability Prevalence Rates, 1970-2095 . . . . . . . . . . . . . . 147
263
List of Figures
VI. APPENDICES
VI.E1 Long-Range OASDI Cost Rates From Stochastic Modeling . . 200
VI.E2 Long-Range OASDI Trust Fund Ratios
From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 201
VI.E3 OASDI Cost Rates: Comparison of Stochastic to Low-Cost,
Intermediate, and High-Cost Alternative Scenarios . . . . . . . . . 203
VI.E4 OASDI Trust Fund (Unfunded Obligation) Ratios:
Comparison of Stochastic to Low-Cost, Intermediate,
and High-Cost Alternative Scenarios . . . . . . . . . . . . . . . . . . . 204
VI.G1 Estimated OASDI Income and Cost in CPI-indexed
2021 Dollars, Based on Intermediate Assumptions . . . . . . . . . 229
264
Index
INDEX
A
Actuarial balance 12, 17, 53, 170, 184
Actuarial deficit 5, 17, 25, 73, 217
Actuarial estimates, LR 53
Actuarial estimates, SR 41
Adjusted program amounts 120
Administrative expenses 7, 37, 54, 157, 161, 178, 218, 226
Advance tax transfers 41, 67, 163
Amendments 39
Annual balance 22, 53, 77
Asset reserves 2, 7, 11, 31, 178, 192, 212
Assumptions 84, 104, 120, 170, 184, 213, 218, 223, 236
Automatic cost-of-living benefit increase 46, 105, 120
Auxiliary benefits 130
Average benefits 154
Average earnings assumptions 107
Average indexed monthly earnings (AIME) 123
Average wage index 120, 223
Award 132
B
Baby-boom generation 24, 55, 64, 113, 139
Bend points 123
Beneficiaries, DI 138
Beneficiary 14, 46, 64, 84, 121, 173, 185, 218, 226, 236
Beneficiary, OASI 132
Benefit payments 7, 54, 155, 161, 178
Benefit termination 9
Best estimate 9, 41, 84
Board of Trustees 41, 104, 159
C
Constant dollars 228
Consumer Price Index 105, 190, 223, 241
Contribution and benefit base 45, 107, 121, 241
Contributions 7, 159, 178, 212, 218, 226, 240
Cost 3, 7, 32, 49
Cost rate 4, 54, 212
Cost-of-living adjustment 120
Covered earnings 7, 120, 222
Covered employment 10, 45, 107, 128, 159, 189
Covered worker 66, 187
Creditable earnings 243
Current dollars 223
265
Index
Current-payment status 48, 143, 144, 145, 241
D
Deemed wage credit 54
Delayed retirement credit 127
Demographic assumptions 9, 22, 41, 85, 113, 120, 170, 224, 240
Deterministic model 197
DI beneficiaries 138
Disability 159, 187, 236
Disability conversion ratio 143
Disability incidence rate 84, 138, 141, 187, 194, 240
Disability Insurance Trust Fund 242
Disability prevalence rate 145, 147
Disability termination rate 195
Disabled-worker benefit 141, 244
Disbursements 41
E
Earnings 2, 7, 54, 107, 121, 159, 171, 212, 222, 223, 240
Earnings test 107, 121, 241
Economic assumptions 9, 22, 41, 51, 104, 113, 120, 170, 224, 240
Excess wages 54, 223
Expenditures 41, 245
F
Federal Insurance Contributions Act 212, 250
Fertility assumptions 85
Financial interchange 7, 158, 161
Fiscal year 163, 177
Full advance funding 245
G
General Fund of the Treasury 44, 46, 48, 50, 163, 165, 167, 181, 182, 183,
240
General fund reimbursement 246
Gross domestic product 4, 12, 61, 84, 105, 115, 218
Gross domestic product projections 115
H
High-cost assumptions 10, 19, 41, 55, 84, 104, 142, 184, 205, 213, 223, 240
Hospital Insurance program 151, 212, 248
Hospital Insurance Trust Fund 218
I
Immigration 9, 84, 91, 187, 197, 240, 247
Immigration assumptions 91
266
Index
Income rate 4, 13, 54, 212
Infinite horizon 12
Inflation 9, 84, 105, 223, 240
Inflation assumptions 105
Insured population 9, 129
Insured status 125
Interest 116, 160, 170, 178, 214, 240
Interest rate 84, 170, 191, 240
Interest rate projections 116
Interest rates 9
Interfund borrowing 163, 247
Intermediate assumptions 10, 41, 46, 55, 84, 142, 184, 214, 219, 223, 228,
230, 236, 240
L
Labor force projections 112
Lawful Permanent Resident (LPR) immigration 92
Legal immigration 247, 248
Life expectancy 84, 101, 113, 248
Life expectancy estimates 100
Long range 12, 53, 85, 132, 170, 212, 218
Low-cost assumptions 10, 19, 41, 55, 84, 104, 142, 184, 205, 213, 223, 240
Lump-sum death payment 155
M
Medicare 87, 248
Military service 54, 159, 163, 165, 167
N
National average wage index 223
Normal retirement age 121, 138, 155, 243
O
OASI beneficiaries 132
Old-Age and Survivors Insurance Trust Fund 159, 242
Old-law base 125
Other immigration 249
Other-than-LPR immigration 92
P
Par value 160
Partial advance funding 250
Pay-as-you-go financing 170
Payroll taxes 2, 120, 148, 173, 208, 212, 226
Population estimates 98
Population in the Social Security area 45, 66, 98, 128, 188
267
Index
Present value 170
Primary insurance amount (PIA) 123
Productivity assumptions 105
Q
Quarters of coverage 129
R
Railroad Retirement 54, 71, 125, 158, 161, 178, 179, 180, 212, 218, 226,
242
Reallocation of tax rates 251
Real-wage differential 109, 188
Retired-worker benefit 132, 187, 236
Retirement age 121, 155, 243
Retirement earnings test 107, 121
Retirement eligibility age 187
S
Scenario-based model 251
Scheduled benefits 191, 218, 226, 238, 251
Self-employment 54, 105, 213, 250
Self-Employment Contributions Act 250, 251
Sensitivity analysis 184
Short range 11, 41, 132
Social Security Act 120, 160, 223, 236, 242
Social Security amendments 39
Solvency 252
Special public-debt obligation 119, 160, 191
Stochastic projections 197
Substantial gainful activity 138, 244
Summarized balance 219
Summarized income and cost rates 71, 170, 184, 216, 240
Supplemental Security Income 178
Supplementary Medical Insurance program 212, 248
Survivor benefit 2, 8, 135, 241
Sustainable solvency 67, 68
T
Taxable earnings 45, 66, 121, 171, 241
Taxable payroll 5, 25, 54, 106, 129, 170, 185, 212, 218, 223, 242
Taxable ratio 192
Taxable self-employment income 253
Taxable wages 153, 213, 254
Taxation of benefits 7, 153, 218, 226, 247
Taxes 7, 120, 213
268
Index
Termination 84
Termination rate 9, 132, 195, 240
Test of long-range close actuarial balance 53, 67, 69
Test of short-range financial adequacy 11, 12, 42, 43, 70, 254
Total fertility rate 86, 184
Trust fund financial operations 7, 27, 42, 159
Trust fund ratio 11, 41, 53, 67, 163, 181, 256
Trust fund reserves 41
U
Unemployment projections 112
Unfunded obligation 5, 12, 17, 19, 53, 74, 75, 209, 210, 249, 256, 257
Unnegotiated check 178
V
Valuation period 17, 51, 53, 170, 184, 216, 240
Vocational rehabilitation 54, 161, 179, 218, 226, 238, 242
Y
Year of depletion 13, 16, 53, 69
269
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 the
actuarial opinion contained herein.
Stephen C. Goss
Associate, Society of Actuaries
Member, American Academy of Actuaries
Chief Actuary, Social Security Administration
270
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