THE 2020 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 2020 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE 

FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL 

DISABILITY INSURANCE TRUST FUNDS
.


CONTENTS

(V)

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

A. HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

B. TRUST FUND FINANCIAL OPERATIONS IN 2019 . . . . . . . 7

C. ASSUMPTIONS ABOUT THE FUTURE . . . . . . . . . . . . . . . . 9

D. PROJECTIONS OF FUTURE FINANCIAL STATUS . . . . . . . 10

E. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR . . . . . . . . . . 25

A. OPERATIONS OF THE OLD-AGE AND SURVIVORS 

INSURANCE (OASI) AND DISABILITY INSURANCE (DI) 

TRUST FUNDS, IN CALENDAR YEAR 2019 . . . . . . . . . . . . 25

1. OASI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

2. DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

3. OASI and DI Trust Funds, Combined . . . . . . . . . . . . . . . . . . 32

B. SOCIAL SECURITY AMENDMENTS SINCE THE 

2019 REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

IV. ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

A. SHORT-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . 40

1. Operations of the OASI Trust Fund. . . . . . . . . . . . . . . . . . . . 41

2. Operations of the DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . 45

3. Operations of the Combined OASI and DI Trust Funds . . . . . 48

4. Factors Underlying Changes in 10-Year Trust Fund Ratio 

Estimates From Last Year’s Report . . . . . . . . . . . . . . . . . . . 50

B. LONG-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . 52

1. Annual Income Rates, Cost Rates, and Balances . . . . . . . . . . 53

2. Comparison of Workers to Beneficiaries. . . . . . . . . . . . . . . . 62

3. Trust Fund Ratios and Test of Long-Range 

Close Actuarial Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

4. Summarized Income Rates, Summarized Cost Rates, 

and Actuarial Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

5. Open-Group Unfunded Obligation . . . . . . . . . . . . . . . . . . . . 72

6. Reasons for Change in Actuarial Balance From Last Report . . 74
(VI)

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

A. DEMOGRAPHIC ASSUMPTIONS AND METHODS . . . . . . . 83

1. Fertility Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83

2. Mortality Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

3. Immigration Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 88

4. Total Population Estimates. . . . . . . . . . . . . . . . . . . . . . . . . . 94

5. Life Expectancy Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 96

B. ECONOMIC ASSUMPTIONS AND METHODS . . . . . . . . . . . 100

1. Productivity Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 101

2. Price Inflation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . 101

3. Average Earnings Assumptions . . . . . . . . . . . . . . . . . . . . . . 103

4. Assumed Real-Wage Differential . . . . . . . . . . . . . . . . . . . . . 105

5. Labor Force and Unemployment Projections . . . . . . . . . . . . . 108

6. Gross Domestic Product Projections . . . . . . . . . . . . . . . . . . . 111

7. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS . . . 116

1. Automatically Adjusted Program Parameters. . . . . . . . . . . . . 116

2. Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

3. Insured Population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

4. Old-Age and Survivors Insurance Beneficiaries. . . . . . . . . . . 128

5. Disability Insurance Beneficiaries. . . . . . . . . . . . . . . . . . . . . 134

6. Covered and Taxable Earnings, Taxable Payroll, and 

Payroll Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 145

7. Income From Taxation of Benefits . . . . . . . . . . . . . . . . . . . . 149

8. Average Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

9. Scheduled Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

10. Illustrative Scheduled Benefit Amounts . . . . . . . . . . . . . . . . 151

11. Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 153

12. Railroad Retirement Financial Interchange . . . . . . . . . . . . . . 154

VI. APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS. . 155

B. HISTORY OF ACTUARIAL STATUS ESTIMATES . . . . . . . . 166

C. FISCAL YEAR HISTORICAL AND PROJECTED 

TRUST FUND OPERATIONS THROUGH 2029 . . . . . . . . . . . 173

D. LONG-RANGE SENSITIVITY ANALYSIS . . . . . . . . . . . . . . 180

1. Total Fertility Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

2. Death Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

3. Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

4. Real-Wage Differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

5. Consumer Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

6. Real Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187
(VII)

7. Taxable Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

8. Disability Incidence Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 190

9. Disability Termination Rates . . . . . . . . . . . . . . . . . . . . . . . . 191

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY . . . . . . 193

1. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

2. Stochastic Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . 193

3. Stochastic Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195

4. Comparison of Results: Stochastic to Low-Cost, 

Intermediate, and High-Cost Alternatives . . . . . . . . . . . . . . . 197

F. INFINITE HORIZON PROJECTIONS . . . . . . . . . . . . . . . . . . 203

G. ESTIMATES FOR OASDI AND HI, SEPARATE AND 

COMBINED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207

1. Estimates as a Percentage of Taxable Payroll. . . . . . . . . . . . . 207

2. Estimates as a Percentage of Gross Domestic Product . . . . . . 213

3. Estimates in Dollars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218

H. ANALYSIS OF BENEFIT PAYMENTS FROM THE 

OASI TRUST FUND WITH RESPECT TO DISABLED 

BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 231

I. GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 260

STATEMENT OF ACTUARIAL OPINION . . . . . . . . . . . . . . . 265

THE 2020 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 workers, their families, and survivors of deceased workers receive monthly benefits 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 composed 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 Services; and the Commissioner of Social Security. The President appoints and

the Senate confirms the other two members to serve as public representatives. 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 2020 report is the 80th such report. The

projections and analysis in this report do not reflect the potential effects of

the COVID-19 pandemic on the Social Security and Medicare programs.

Given the uncertainty associated with these impacts, the Trustees believe that

it is not possible to adjust their estimates accurately at this time.
Overview

2

II. OVERVIEW

A. HIGHLIGHTS

This section summarizes the report’s major findings.

In 2019

At the end of 2019, the OASDI program was providing benefit payments1 to

about 64 million people: 48 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

178 million people had earnings covered by Social Security and paid payroll

taxes on those earnings. The total cost of the program in 2019 was

$1,059 billion. Total income was $1,062 billion, which consisted of

$981 billion in non-interest income and $81 billion in interest earnings.

Asset reserves held in special issue U.S. Treasury securities grew from

$2,895 billion at the beginning of the year to $2,897 billion at the end of the

year.

Short-Range Results (2020-29)

Under the Trustees’ intermediate assumptions, Social Security’s total cost is

projected to be less than its total income in 2020 and higher than its total

income in 2021 and all later years. Social Security’s cost has exceeded its

non-interest income since 2010. For 2020, program cost is projected to be

less than total income by about $4 billion and exceed non-interest income by

about $73 billion.

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 combined 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 $2,897 billion at the

beginning of 2020 to $1,819 billion at the end of 2029, 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 261 percent at the beginning of

 1 The definitions of “benefit payments” and other terms appear in the Glossary.
3

Highlights

2020 to 94 percent at the beginning of 2030. Because this ratio falls below

100 percent by the beginning of the 11th 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

260 percent of annual cost at the beginning of 2020 and 97 percent at the

beginning of 2030. 

Long-Range Results (2020-94)

Under the Trustees’ intermediate assumptions, OASDI cost is projected to

exceed total income starting in 2021, and the dollar level of the hypothetical

combined trust fund reserves declines until reserves become depleted

in 2035. Figure II.D2 shows the implications of reserve depletion for the

combined OASI and DI Trust Funds. Considered separately, the OASI Trust

Fund reserves become depleted in 2034 and the DI Trust Fund reserves

become depleted in 2065.1 In last year’s report, the projected reserve depletion years were 2035 for OASDI, 2034 for OASI, and 2052 for DI. 

For the second year in a row, there has been a significant change in the DI

reserve depletion date for two main reasons: (1) a change in the ultimate

assumed disability incidence rate, and (2) continuing favorable experience

for DI applications and benefit awards, which remained at historically low

levels for 2019. 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 and incidence rates are assumed to rise more gradually from the current

low levels to an ultimate age-sex-adjusted disability incidence rate of 5.0 per

thousand exposed by the end of the short-range projection period, compared

to 5.2 per thousand assumed in last year’s report and 5.4 per thousand

assumed in the 2018 report. See page 39 for more details on these changes in

the DI projections.

Projected OASDI cost increases more rapidly than projected non-interest

income through 2042 primarily because the retirement of the baby-boom

generation will increase the number of beneficiaries much faster than the

number of covered workers increases, as subsequent lower-birth-rate generations replace the baby-boom generation at working ages. From 2042 through

2049, the cost rate (the ratio of program cost to taxable payroll) generally

 1 If the OASI Trust Fund reserves were to become depleted in 2034 as is currently projected, the operations

of the hypothetical combined OASI and DI Trust Funds would not reflect the aggregated operation of the

OASI Trust Fund and the DI Trust Fund because part of the OASI benefits could not be paid without a

change in the law. 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.
Overview

4

declines because the aging baby-boom generation is gradually replaced at

retirement ages by subsequent lower-birth-rate generations. Thereafter,

increases in life expectancy cause OASDI cost to increase generally relative

to non-interest income, but more slowly than between 2010 and 2042.

Over the 75-year long-range period 2020-94, the projected OASDI annual

cost rate increases from 13.92 percent of taxable payroll for 2020 to

16.86 percent for 2042 and to 17.94 percent for 2094. The projected cost rate

for 2094 is 4.51 percent of taxable payroll more than the projected income

rate (the ratio of non-interest income to taxable payroll) for 2094. For last

year’s report, the Trustees estimated the OASDI cost for 2094 at

17.52 percent, or 4.16 percent of payroll more than the annual income rate

for that year. Expressed in relation to the projected gross domestic product

(GDP), OASDI cost generally rises from 5.0 percent of GDP for 2020 to

about 5.9 percent by 2038, then declines to 5.8 percent by 2053, and then

generally increases to 5.9 percent by 2094.

For the 75-year projection period, the actuarial deficit is 3.21 percent of taxable payroll, increased from 2.78 percent of taxable payroll in last year’s

report. The closely-related open-group unfunded obligation for OASDI over

the 75-year period is 3.03 percent of taxable payroll, increased from

2.61 percent of payroll in last year’s report. The open-group unfunded obligation for OASDI over the 75-year period is $16.8 trillion in present value

and is $2.9 trillion more than the measured level of $13.9 trillion a year ago. 

If the assumptions, methods, starting values, and the law had all remained

unchanged, the actuarial deficit would have increased to 2.84 percent of taxable payroll, and the unfunded obligation would have risen to about

2.66 percent of taxable payroll and $14.5 trillion in present value due to the

change in the valuation date. These measures increased significantly for this

year’s report due to a change in law (the repeal of the excise tax provision of

the Affordable Care Act), as well as changes in assumptions for fertility,

price inflation, and interest rates, all described in detail in sections III.B and

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
5

Highlights

of 3.14 percentage points1 to 15.54 percent, (2) scheduled benefits would

have to be reduced by an amount equivalent to an immediate and permanent

reduction of about 19 percent applied to all current and future beneficiaries,

or about 23 percent if the reductions were applied only to those who become

initially eligible for benefits in 2020 or later; or (3) some combination of

these approaches would have to be adopted. 

If substantial actions are deferred for several years, the changes necessary to

maintain Social Security solvency would be concentrated on fewer years and

fewer generations. Significantly larger changes would be necessary if action

is deferred until the combined trust fund reserves become depleted in 2035.

For example, maintaining 75-year solvency with changes that begin in 2035

would require: (1) an increase in revenue by an amount equivalent to a permanent 4.13 percentage point payroll tax rate increase to 16.53 percent starting in 2035, (2) a reduction in scheduled benefits by an amount equivalent to

a permanent 25 percent reduction in all benefits starting in 2035, or (3) some

combination of these approaches.

Conclusion

Under the intermediate assumptions, the projected hypothetical combined

OASI and DI Trust Fund asset reserves become depleted and unable to pay

scheduled benefits in full on a timely basis in 2035. At the time of depletion

of these combined reserves, continuing income to the combined trust funds

would be sufficient to pay 79 percent of scheduled benefits. The OASI Trust

Fund reserves are projected to become depleted in 2034, at which time OASI

income would be sufficient to pay 76 percent of OASI scheduled benefits. DI

Trust Fund asset reserves are projected to become depleted in 2065, at which

time continuing income to the DI Trust Fund would be sufficient to pay

92 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

 1 The necessary tax rate increase of 3.14 percent differs from the 3.21 percent actuarial deficit for two reasons. First, the necessary tax rate increase is the increase required to maintain solvency throughout the

period with a zero trust fund reserve at the end of the period, whereas the actuarial deficit also incorporates

an ending trust fund reserve equal to one year’s cost at the end of the projection period. Second, the necessary tax rate increase reflects a behavioral response to tax rate changes, whereas the actuarial deficit does

not. In particular, the calculation of the necessary tax rate increase assumes that an increase in payroll taxes

results in a small shift of wages and salaries to forms of employee compensation that are not subject to the

payroll tax.
Overview

6

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

180 million covered workers and their families during 2020. With informed

discussion, creative thinking, and timely legislative action, Social Security

can continue to protect future generations.
7

Calendar Year 2019 Operations

B. TRUST FUND FINANCIAL OPERATIONS IN 2019

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 2019.

Note: Totals do not necessarily equal the sums of rounded components.

In 2019, net payroll tax contributions accounted for 89.0 percent of total trust

fund income. Net payroll tax contributions consist of taxes paid by employees, employers, and the self-employed on earnings covered by Social Security. These taxes are paid on covered earnings up to a specified maximum

annual amount, which was $132,900 in 2019. Table II.B2 shows the payroll

tax rates for 2019. 

Interest earned on invested trust fund asset reserves accounted for

7.6 percent of OASI and DI combined trust fund income in 2019. Revenue

from subjecting up to 50 percent of Social Security benefits to Federal personal income taxation for beneficiaries with income (including half of beneTable II.B1.—Summary of 2019 Trust Fund Financial Operations

[In billions]

OASI DI OASDI

Asset reserves at the end of 2018. . . . . . . . . . . . . . . . . . . . $2,797.9 $97.1 $2,894.9

Total income in 2019a . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes less than $50 million in reimbursements from the General Fund of the Treasury and gifts. See section III.A for details.

917.9 143.9 1,061.8

Net payroll tax contributions . . . . . . . . . . . . . . . . . . . . . 805.1 139.4 944.5

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77.9 2.9 80.8

Taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.9 1.6 36.5

Total cost in 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911.4 147.9 1,059.3

Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 902.8 145.1 1,047.9

Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 3.7 2.7 6.4

Railroad Retirement financial interchange . . . . . . . . . . 4.9 .1 4.9

Net increase in asset reserves in 2019 . . . . . . . . . . . . . . . . 6.5 -4.0 2.5

Asset reserves at the end of 2019. . . . . . . . . . . . . . . . . . . . 2,804.3 93.1 2,897.4

Table II.B2.—Payroll Tax Contribution Rates for 2019

[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
Overview

8

fits and all non-taxable interest received) exceeding specified levels

accounted for 3.4 percent of OASDI income. 

The Department of the Treasury invests all trust fund income in interestbearing securities issued by the U.S. Government. In 2019, the combined

trust fund reserves (the excess of all past income over all past expenditures)

earned interest at an effective annual rate of 2.8 percent. 

Retirement, survivor, and disability benefits accounted for 98.9 percent of

OASI and DI combined trust fund cost in 2019. The expenses for administering the Social Security program were 0.6 percent of total cost. The net payment 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 $2.5 billion during 2019 because income to the

combined funds, including interest earned on trust fund reserves, exceeded

total cost. In last year’s report, combined reserves were projected to increase

by $1.0 billion in 2019, and then start declining in 2020.1 At the end of

2019, the combined reserves of the OASI and the DI Trust Funds were

$2,897 billion, or 261 percent of estimated cost1 for 2020. In comparison,

the combined reserves at the end of 2018 were 273 percent of actual cost for

2019.

 1 Estimated cost is based on the intermediate set of assumptions.
9

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 receiving 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, employment 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 projections, beginning on page 18, highlights the implications of these alternative

scenarios.

The Trustees reexamine the assumptions each year in light of recent experience and new information. This annual review helps to ensure that the Trustees’ assumptions provide the best estimate of future possibilities.

Table II.C1.—Key Assumptionsa and Summary Measures 

for the Long-Range (75-year) Projection Period

a See chapter V for details, including historical and projected values.

Long-range assumptions Intermediate Low-cost High-cost

Demographic:

Total fertility rate (children per woman), for 2029 and later . . . . 1.95 2.15 1.75

Average annual percentage reduction in total age-sex-adjusted 

death rates from 2019 to 2094. . . . . . . . . . . . . . . . . . . . . . . . . . .76 .40 1.15

Average annual net lawful permanent resident (LPR) immigration 

(in thousands) for 2020 to 2094 . . . . . . . . . . . . . . . . . . . . . . . . 788 1,000 595

Average annual net other-than-LPR immigration (in thousands) for 

2020 to 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 474 598 351

Economic:

Average annual percentage change in:

Productivity (total U.S. economy), for 2029 and later . . . . . . . 1.63 1.93 1.33

Average wage in covered employment from 2029 to 2094 . . . 3.54 4.76 2.32

Consumer Price Index (CPI-W), for 2024 and later. . . . . . . . . 2.40 3.00 1.80

Average annual real-wage differential (percent) for 2030 

to 2094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.14 1.76 .52

Unemployment rate (percent, age-sex-adjusted), for 2028 and later 5.0 4.0 6.0

Annual trust fund real interest rate (percent), for 2030 and later. 2.3 2.8 1.8

Programmatic:

Disability incidence rate (per 1,000 exposed, age-sex-adjusted) in 

2094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.0 4.0 6.0

Disability recovery rate (per 1,000 beneficiaries, age-sex-adjusted) 

in 2094. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 12.5 8.2
Overview

10

D. PROJECTIONS OF FUTURE FINANCIAL STATUS

Short-Range Actuarial Estimates

For the short-range period (2020 through 2029), the Trustees measure financial 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 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 94 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 62 percent at the beginning of

2020. The projected DI trust fund ratio declines to 61 percent at the beginning of 2021, and then increases to 93 percent by the beginning of 2030. On

a combined basis, OASDI also fails the Trustees’ test of short-range financial

adequacy because the OASDI trust fund ratio declines to 94 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.

Projected OASDI cost is less than total income for 2020, so that combined

trust fund reserves increase during the year. In last year’s report, combined

trust fund reserves were projected to start declining in 2020. 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

Future Financial Status

Long-Range Actuarial Estimates

The Trustees use three types of measures to assess the actuarial status of the

program over the long-range period (2020 through 2094): (1) annual cashflow measures, including income rates, cost rates, and balances; (2) trust

fund ratios; and (3) summary measures such as actuarial balances and opengroup unfunded obligations. The Trustees express these measures as percentages 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 longrange close actuarial balance under the intermediate assumptions.

 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]

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Calendar year

Historical Estimated

Minimum level for short-range test of financial adequacy
Overview

12

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) for the full 75-year period (2020 through 2094).

The figure shows all values as percentages of taxable payroll. Under the

intermediate assumptions, demographic factors would by themselves cause

the projected cost rate to rise rapidly for the next two decades before leveling

off in about 2040. However, the economic recession of 2007-09 temporarily

depressed taxable earnings and increased the number of beneficiaries, which

in turn sharply, but temporarily, increased the cost rate starting in 2009. From

a peak in 2013, the cost rate declined through 2017 under the economic

recovery and thereafter returns to a gradually rising trend. 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 2035. After trust fund

reserve depletion, continuing income is sufficient to support expenditures at

a level of 79 percent of program cost for the rest of 2035, declining to

73 percent for 2094. 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 2034 for OASI and in 2065 for DI.
13

Future Financial Status

Figure II.D3 shows the estimated number of covered workers per OASDI

beneficiary. Figures II.D2 and II.D3 illustrate the inverse relationship

between cost rates and the number of workers per beneficiary. In particular,

the projected future increase in the cost rate reflects a projected decline in the

number of covered workers per beneficiary. There were about 2.8 workers

for every OASDI beneficiary in 2019. 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 beneficiaries to decline, as workers of lower-birth-rate generations replace workers of

the baby-boom generation. The decline in the ratio leveled off between 2013

and 2020, as the economy recovered, offsetting the demographic shift during

that period. After 2020, the demographic shift will continue to drive this ratio

down over the next 20 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.

 Figure II.D2.—OASDI Income, Cost, and Expenditures as Percentages of Taxable Payroll

[Under intermediate assumptions]

0%

5%

10%

15%

20%

25%

2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Cost: Scheduled and 

payable benefits

Non-interest Income

Payable benefits as percent

of scheduled benefits:

2020-34: 100%

2035: 79%

2094: 73%

Cost: Scheduled but not 

fully payable benefits

Expenditures: Payable benefits = 

income after trust fund depletion in 2035
Overview

14

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 5.0 percent in 2020 to about 5.9 percent by

2038, then decline to 5.8 percent by 2053, and generally increase thereafter

to 5.9 percent for 2094. Social Security’s non-interest income is projected to

rise from 4.6 percent of GDP in 2020 to 4.7 percent by 2029. Thereafter,

non-interest income as a percent of GDP declines gradually, to about

4.4 percent for 2094, because the Trustees expect the share of employee

compensation provided as noncovered fringe benefits to increase gradually.

 Figure II.D3.—Number of Covered Workers Per OASDI Beneficiary

[Under intermediate assumptions]

0

1

2

3

4

1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Historical Estimated
15

Future Financial Status

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 projected maximum trust fund ratios during the long-range period for the OASI,

DI, and combined OASI and DI funds. The table also shows the year of maximum projected trust fund ratio during the long-range projection period

(2020 through 2094) 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 143 in 2041, then decline until reserve depletion.

 Figure II.D4.—OASDI Cost and Non-interest Income as a Percentage of GDP

[Under intermediate assumptions]

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). . . . . . 291 143 261

Year attained. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 2041 2020

Projected year of trust fund reserve depletion . . . . . . 2034 2065 2035

0%

2%

4%

6%

8%

10%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Non-interest Income

Historical Estimated

Cost
Overview

16

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 measure 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. Actuarial 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 actuarial balance. 

In this report, the actuarial deficit for the combined OASI and DI Trust

Funds under the intermediate assumptions is 3.21 percent of taxable payroll.

The actuarial deficit was 2.78 percent in the 2019 report. If the assumptions,

methods, starting values, and the law had all remained unchanged from last

year, the actuarial deficit would have increased to 2.84 percent of payroll

solely due to advancing the valuation period by 1 year. 

Another way to illustrate the projected financial shortfall of the OASDI program 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 2019

to 2094. 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 2019. The combined trust fund reserves

decline on a present value basis after 2019, but remain positive through

2034. However, after 2034 this cumulative amount becomes negative, which

means that the combined OASI and DI Trust Funds have a net unfunded

obligation through each year after 2034. Through the end of 2094, the combined funds have a present-value unfunded obligation of $16.8 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

$14.5 trillion due to the change in the valuation date.

This unfunded obligation represents 3.03 percent of taxable payroll

(increased from 2.61 percent in last year’s report) and 1.0 percent of GDP

(increased from 0.9 percent in last year’s report) over the 75-year valuation

period. The unfunded obligation as a share of taxable payroll over the period
17

Future Financial Status

(3.03 percent) and the actuarial deficit (3.21 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. Steadily worsening annual balances and 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 prescriptions that do not achieve sustainable solvency.1

Appendix F presents summary measures over the infinite horizon. The

infinite horizon values provide an additional indication of Social Security’s

financial condition for the period beginning with the inception of the program and extending indefinitely into the future, but results are subject to

 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.

 Figure II.D5.—Cumulative Scheduled OASDI Income Less Cost,

From Program Inception Through Years 2019-2094

[Present value as of January 1, 2020, in trillions, under Intermediate Assumptions]

-$17

-$16

-$15

-$14

-$13

-$12

-$11

-$10

-$9

-$8

-$7

-$6

-$5

-$4

-$3

-$2

-$1

$0

$1

$2

$3

2019 2034 2049 2064 2079 2094

Ending year of accumulation

Unfunded 

obligation

(negative)

Trust fund 

reserves

(positive)

2035
Overview

18

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 taxable payroll or 1.4 percent of future GDP.

Uncertainty of the Projections

Significant uncertainty surrounds the intermediate assumptions. The Trustees

use several methods to help illustrate that uncertainty.

A first approach uses alternative scenarios reflecting low-cost (alternative I)

and high-cost (alternative III) sets of assumptions. Figure II.D6 shows the

projected trust fund ratios for the combined OASI and DI Trust Funds under

the intermediate, low-cost, and high-cost assumptions. The figure indicates

that the combined trust funds are projected to become depleted in 2035 under

the intermediate alternative and in 2031 under the high-cost alternative.

Under the low-cost alternative, trust fund reserves are projected to become

depleted in 2079, but the trust funds would have sufficient income by the end

of 2088 to permit full payment of scheduled benefits thereafter and also to

pay in arrears the temporary shortfalls between 2079 and 2088. The low-cost

alternative includes a higher ultimate total fertility rate, slower improvement

in mortality, a higher real-wage differential, a higher ultimate real interest

rate, a higher ultimate annual change in the CPI, and a lower unemployment

rate. The high-cost alternative, in contrast, includes a lower ultimate total fertility rate, more rapid improvement in mortality, a lower real-wage differential, 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

Future Financial Status

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 projections 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 corresponding 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 2042 with a 95-percent confidence.

The stochastic results suggest that trust fund ratios as high as the low-cost

alternative are very unlikely. However, the relationship between the stochastic results and the low-cost and high-cost alternatives may change as the

methodology for the stochastic simulations is further developed. As noted in

 Figure II.D6.—Long-Range OASI and DI Combined Trust Fund Ratios Under 

Alternative Scenarios

[Asset reserves as a percentage of annual cost]

0%

100%

200%

300%

400%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Historical Estimated

III II

I
Overview

20

appendix E, future improvements and refinements are expected to be more

likely to expand than to reduce the indicated range of uncertainty.

Changes From Last Year’s Report

The projected long-range OASDI actuarial deficit increased from

2.78 percent of taxable payroll for last year’s report to 3.21 percent of taxable payroll for this year’s report. The change in the 75-year projection

period alone would have increased the actuarial deficit to 2.84 percent.

Changes in law, methods, starting values, and assumptions combined to

increase the actuarial deficit by an additional 0.38 percent of taxable payroll.

For a detailed description of the specific changes identified in table II.D2,

see section IV.B.6.

 Figure II.D7.—Long-Range OASI and DI Combined Trust Fund Ratios 

From Stochastic Modeling

0%

100%

200%

300%

2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

50%

97.5%

2.5%

90%

10%
21

Future Financial Status

Note: Totals do not necessarily equal the sums of rounded components.

Figure II.D8 compares this year’s projections of annual balances (non-interest income minus cost) to those in last year’s report. The annual balances in

this year’s report are lower (more negative) in all years beginning with 2022,

principally due to the repeal of the ACA excise tax on high cost employersponsored group health insurance plans, which results in slower projected

growth in average real covered earnings, and lower fertility rates. For the full

75-year projection period, the annual balances are lower, on average, by 0.37

percentage point.

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.96 1.85 13.81

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.63 1.97 16.60

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.67 -.12 -2.78

Changes in actuarial balance due to changes in:

Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . -.12 .00 -.12

Valuation perioda . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 2094. This change in the valuation period results in a larger long-range actuarial deficit. The actuarial deficit includes the trust fund

reserve at the beginning of the projection period.

-.05 -.01 -.05

Demographic data and assumptions. . . . . . . . . . . . . . -.12 .00 -.13

Economic data and assumptions. . . . . . . . . . . . . . . . . -.16 -.02 -.18

Disability data and assumptions. . . . . . . . . . . . . . . . . -.01 .06 .05

Methods and programmatic data . . . . . . . . . . . . . . . . -.02 .02 .00

Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.47 .05 -.43

Shown in this report:

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 1.85 13.85

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 1.92 17.06
Overview

22

 Figure II.D8.—OASDI Annual Balances: 2019 and 2020 Trustees Reports

[As a percentage of taxable payroll, under the intermediate assumptions]

-6%

-4%

-2%

0%

2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

2019 Report

2020 Report
23

Conclusion

E. CONCLUSION

Under current law, the projected cost of Social Security increases faster than

projected income through 2040 primarily because the ratio of workers paying taxes to beneficiaries receiving benefits will decline as the baby-boom

generation ages and is replaced at working ages with subsequent lower birthrate generations. While the effects of the aging baby boom and subsequent

lower birth rates will have largely stabilized after 2040, annual cost will continue to grow faster than income, but to a lesser degree, reflecting continuing

increases in life expectancy. Based on the Trustees’ intermediate assumptions, Social Security’s cost exceeds total income beginning in 2021, and

throughout the remainder of the 75-year projection period. 

The OASI Trust Fund and the DI Trust Fund are projected to have sufficient

reserves to pay full benefits on time until 2034 and 2065, respectively. Legislative 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 92 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 2035. (Full payment of benefits until depletion of the hypothetical combined reserves in 2035 implicitly assumes that the law will have been

changed to permit the transfer of funds between OASI and DI as needed.) At

that time, projected continuing income to the combined trust funds equals

about 79 percent of the program cost. By 2094, continuing income equals

about 73 percent of the program cost.

The 75-year actuarial deficit for the combined trust funds under the intermediate assumptions is 3.21 percent of taxable payroll, increased from the

2.78 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 permanent payroll tax rate increase of 3.14 percentage points to 15.54 percent;

(2) scheduled benefits would have to be reduced by an amount equivalent to

an immediate and permanent reduction of about 19 percent applied to all current and future beneficiaries, or about 23 percent if the reductions were

applied only to those who become initially eligible for benefits in 2020 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
Overview

24

maintain Social Security solvency become concentrated on fewer years and

fewer generations.

If lawmakers design legislative solutions only to eliminate the overall actuarial 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 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

long-range period and is either stable or rising at the end of the period. Making changes now that achieve sustainable solvency could avoid the need for

later legislative changes.

Lawmakers have a broad continuum of policy options that would close or

reduce Social Security's long-term financing shortfall. Cost estimates for

many such policy options are available at www.ssa.gov/OACT/solvency/

provisions/. Broadly speaking, the approaches that lawmakers can take

include increasing revenue from workers and employers by raising the tax

rate or the maximum level of taxable earnings, or by dedicating revenue

from other sources; lowering benefits for some or all beneficiaries by changing certain program parameters; or a combination of these approaches. There

are countless variations on these options, including those that vary the timing, magnitude, and other specifics of the changes under consideration.

The Trustees recommend that lawmakers address the projected trust fund

shortfalls in a timely way in order to phase in necessary changes gradually

and give workers and beneficiaries time to adjust to them. Implementing

changes sooner rather than later would allow more generations to share in the

needed revenue increases or reductions in scheduled benefits. Social Security

will play a critical role in the lives of 65 million beneficiaries and

180 million covered workers and their families during 2020. 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 following websites:

 • www.ssa.gov/OACT/tr/2020/

 • www.ssa.gov/OACT/solvency/provisions/

 • www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trendsand-Reports/ReportsTrustFunds/

 • https://home.treasury.gov/policy-issues/economic-policy/social-securityand-medicare-trustee-reports
25

Calendar Year 2019 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 2019

This section presents detailed information on the operations of the OASI and

DI Trust Funds1 during calendar year 2019. Chapter IV provides projections

for calendar years 2020 through 2095.

1. OASI Trust Fund

Table III.A1 presents a statement of the income and cost of the Federal OldAge and Survivors Insurance Trust Fund in calendar year 2019, 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 2019 amounted to

$917.9 billion, while cost totaled $911.4 billion, an increase in trust fund

reserves during 2019 of $6.5 billion.

Total income during calendar year 2019 included $808.0 billion in payroll

tax contributions. These contributions include initial appropriations of payroll 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 $2.9 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 $805.1 billion in 2019.

Net reimbursements from the General Fund of the Treasury amounted to

$11 million in 2019. 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 Creation Act of 2010, Public Law 112-78, the Temporary Payroll Tax Cut Continuation Act of 2011, and Public Law 112-96, the Middle Class Tax Relief

and Job Creation Act of 2012. These acts specified General Fund reimbursement for temporary reductions in employee and self-employment payroll

taxes for earnings in 2011 and 2012.

Income to the OASI Trust Fund based on the taxation of OASI benefits

amounted to $34.9 billion in 2019. As first required by the 1983 Social Secu-

 1 See www.ssa.gov/oact/ProgData/fundsQuery.html.
Financial Operations and Legislative Changes

26

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 benefits 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 subsequent adjustments based on the actual amounts shown on annual income tax

records. There were no such adjustments made in 2019. 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 2019, the OASI Trust Fund earned $77.9 billion in net interest, which consisted 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.
27

Calendar Year 2019 Operations

Note: Totals do not necessarily equal the sums of rounded components.

Table III.A1.—Operations of the OASI Trust Fund, Calendar Year 2019

[In millions]

Total asset reserves, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,797,872

Income:

Net payroll tax contributions:

Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes adjustments for prior calendar years.

$807,973

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,882

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 805,091

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 228

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,662

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,890

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77,880

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

1

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 77,881

Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 917,873

Cost:

Benefit payments:

Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

902,833

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -36

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 13

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 902,809

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,880

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,343

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 396

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1

Miscellaneous reimbursements from the General Fund e . . . . . . . . . . . . . . . . . . . .

e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly

related to administering the OASI program.

-5

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,733

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 911,423

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,450

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804,355

Undisbursed balances f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f A negative balance represents a situation where the actual cash payments exceeded the amount of invested

securities of the OASI Trust Fund that were redeemed to make such payments. In this situation, future

redemption of additional invested securities will be required to pay for this shortfall.

-33

Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804,322
Financial Operations and Legislative Changes

28

Of the $911.4 billion in total OASI cost in 2019, $902.8 billion was for net

benefit payments, including recovered overpayments, reimbursements from

the General Fund for unnegotiated checks, and the reimbursable costs of

vocational rehabilitation services.1 Net benefit payments increased by

6.9 percent from calendar year 2018 to calendar year 2019. 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 2019 was due in part to the

automatic cost-of-living benefit increase of 2.8 percent which became effective for December 2018 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 purpose 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

$4.9 billion from the OASI Trust Fund to the Social Security Equivalent

Benefit Account for June 2019.

The remaining $3.7 billion of cost for the OASI Trust Fund was for net

administrative expenses. The Social Security Administration charges administrative 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.

For 2019, the cost incurred by the Social Security Administration to administer the OASI program was 90 percent of OASI net administrative expenses.

The Social Security Administration charged such costs to the trust fund in

 1 Vocational rehabilitation services under the OASI program are furnished to disabled widow(er) beneficiaries 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.
29

Calendar Year 2019 Operations

the amount of $3.3 billion in 2019. In addition, the Department of the Treasury charged the trust fund $0.4 billion in 2019 for services provided in

administering the OASI program. A relatively small offset to administrative

expenses of $1 million in 2019 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 performing certain legislatively mandated activities that are not directly related

to paying OASI benefits. These reimbursements include $4 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 2019. These miscellaneous reimbursements totaled

$5 million in 2019.

The asset reserves shown for the OASI Trust Fund at the end of calendar

year 2019 totaled $2,804.3 billion, consisting of $2,804.4 billion in U.S.

Government obligations and, as an offset, an extension of credit of

$33 million against securities to be redeemed within the first few days of the

following year. The effective annual rate of interest earned by the reserves in

the OASI Trust Fund during calendar year 2019 was 2.8 percent, slightly

lower than the 2.9 percent earned during calendar year 2018. 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 2018 and 2019.

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 shortterm certificates of indebtedness which mature on the next June 30 following

the date of issue. The trust fund normally acquires long-term special-issue

bonds when special issue securities of either type mature on June 30 and

must be reinvested. The amount of long-term bonds acquired on June 30 is

equal to the amount of special issue securities maturing (including accrued

interest earnings), plus tax income for that day, less amounts required to meet

cost on that day.

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
Financial Operations and Legislative Changes

30

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. 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 special-issue

bonds purchased on June 30, 2019, so that the maturity dates of the total

portfolio of special issue securities would be spread evenly to the extent possible over the 15-year period 2020 through 2034. The bonds purchased on

that date have an interest rate of 2.250 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 2019, including the amounts of bonds purchased on June 30, 2019.

2. DI Trust Fund

Table III.A2 presents a statement of the income and cost of the Federal Disability Insurance Trust Fund in calendar year 2019, 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 $143.9 billion in total income, $139.4 billion was net payroll tax contributions. Net payroll tax contributions in 2019 decreased by 18 percent

from the level in 2018, largely due to the expiration of the payroll tax rate

reallocation at the end of 2018. 

Of the $147.9 billion of total cost, $145.1 billion was net benefit payments.

The total level of net benefit payments in 2019 increased by 1.0 percent from

total net benefit payments paid in 2018, largely due to an increase in average

benefit amounts and an offsetting decrease in the average number of beneficiaries. DI total cost exceeded non-interest income and total income in 2019.
31

Calendar Year 2019 Operations

Note: Totals do not necessarily equal the sums of rounded components.

Table III.A2.—Operations of the DI Trust Fund, Calendar Year 2019

[In millions]

Total asset reserves, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $97,057

Income:

Net payroll tax contributions:

Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes adjustments for prior calendar years.

$140,060

Payments from the General Fund of the Treasury for payroll tax contributions 

subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -683

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139,377

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 4

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,579

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,583

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,937

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

3

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 2,940

Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,901

Cost:

Benefit payments:

Monthly benefitsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

145,049

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -20

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 92

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,121

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,607

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Miscellaneous reimbursements from the General Funde . . . . . . . . . . . . . . . . . . . . .

e Reimbursements for costs incurred in performing legislatively mandated activities not directly related to

administering the DI program.

-3

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,689

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,876

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,974

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,138

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f A negative balance represents a situation where the actual cash payments exceeded the amount of invested

securities of the DI Trust Fund that were redeemed to make such payments. In this situation, future redemption of additional invested securities will be required to pay for this shortfall.

-55

Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,083
Financial Operations and Legislative Changes

32

During 2019, the reserves in the DI Trust Fund decreased by $4.0 billion,

from $97.1 billion at the end of 2018 to $93.1 billion at the end of 2019. This

$93.1 billion consisted of $93.1 billion in U.S. Government obligations and,

as an offset, an extension of credit of $55 million against securities to be

redeemed within the first few days of the following year. The effective

annual rate of interest earned by the asset reserves in the DI Trust Fund

during calendar year 2019 was 3.1 percent, which was the same as the

3.1 percent earned during calendar year 2018. 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 2018 and 2019.

Section 201(d) of the Social Security Act provides that the Treasury securities issued for purchase by the OASI and DI Trust Funds shall have maturities 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 specialissue bonds purchased on June 30, 2019, 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 2020-34. The bonds purchased have an

interest rate of 2.250 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 2019.

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.1 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 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.
33

Calendar Year 2019 Operations

Note: Totals do not necessarily equal the sums of rounded components.

Table III.A3.—Operations of the Combined OASI and DI Trust Funds, 

Calendar Year 2019

[In millions]

Total asset reserves, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,894,929

Income:

Net payroll tax contributions:

Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes adjustments for prior calendar years.

$948,033

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,565

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 944,468

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 232

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,241

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,473

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,817

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

4

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 80,821

Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,061,775

Cost:

Benefit payments:

Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

1,047,882

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -56

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 105

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,047,930

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,946

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,950

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Miscellaneous reimbursements from the General Funde . . . . . . . . . . . . . . . . . . . . .

e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly

related to administering the OASI and DI programs.

-8

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,422

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,059,299

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,476

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,897,493

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f A negative balance represents a situation where the actual cash payments exceeded the amount of invested

securities of the OASI and DI Trust Funds that were redeemed to make such payments. In this situation,

future redemption of additional invested securities will be required to pay for this shortfall.

-88

Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,897,405
Financial Operations and Legislative Changes

34

Table III.A4 compares estimates of total income and total cost for calendar

year 2019 from the intermediate projections in the 2015 through 2019 Trustees Reports to the corresponding actual amounts for 2019.

Note: Totals do not necessarily equal the sums of rounded components.

A number of factors contribute to differences between estimates and subsequent actual amounts, including: (1) actual values for key demographic, economic, 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 2019, the OASDI program was providing

monthly benefits to about 64.1 million people. The OASI Trust Fund was

Table III.A4.—Comparison of Actual Calendar Year 2019 Trust Fund Operations

With Estimates Made in Prior Reports, Based on Intermediate Assumptionsa

[Amounts in billions]

a Percentage differences are calculated prior to rounding.

Total income b

b “Actual” income for 2019 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.

Total cost

Amount

Difference

from actual

(percent) Amount

Difference

from actual

(percent)

OASI Trust Fund:

Estimate in 2015 report . . . . . . . . . . . . . . $1,005.4 9.5 $975.1 7.0

Estimate in 2016 report . . . . . . . . . . . . . . 963.4 5.0 935.5 2.6

Estimate in 2017 report . . . . . . . . . . . . . . 961.1 4.7 922.9 1.3

Estimate in 2018 report . . . . . . . . . . . . . . 918.1 c

c Between -0.05 and 0.05 percent.

908.5 -.3

Estimate in 2019 report . . . . . . . . . . . . . . 917.6 c 910.3 -.1

Actual amount . . . . . . . . . . . . . . . . . . . . . 917.9 — 911.4 —

DI Trust Fund:

Estimate in 2015 report . . . . . . . . . . . . . . d

d In the annual report for 2015, the DI Trust Fund was projected to become depleted in calendar year 2016

under the intermediate assumptions. Under those circumstances, scheduled benefits could not be paid in full

on a timely basis, so that certain projected items of income such as income from taxing benefits and interest

on trust fund reserves could not be meaningfully projected. Accordingly, total DI Trust Fund income was not

reported for 2019 in the 2015 report. Following the tax rate reallocation enacted in the Bipartisan Budget Act

of 2015, the DI Trust Fund was not projected to become depleted until after 2019 in the 2016 through 2019

reports, and thus an estimate for total income was reported. Appendix A presents a detailed description of the

components of income and cost, along with complete historical values.

d 173.3 17.2

Estimate in 2016 report . . . . . . . . . . . . . . 149.0 3.5 166.1 12.3

Estimate in 2017 report . . . . . . . . . . . . . . 149.8 4.1 158.7 7.3

Estimate in 2018 report . . . . . . . . . . . . . . 143.2 -.5 153.0 3.5

Estimate in 2019 report . . . . . . . . . . . . . . 143.4 -.4 149.8 1.3

Actual amount . . . . . . . . . . . . . . . . . . . . . 143.9 — 147.9 —

OASI and DI Trust Funds, combined:

Estimate in 2015 report . . . . . . . . . . . . . . 1,150.9 8.4 1,148.3 8.4

Estimate in 2016 report . . . . . . . . . . . . . . 1,112.4 4.8 1,101.6 4.0

Estimate in 2017 report . . . . . . . . . . . . . . 1,110.9 4.6 1,081.6 2.1

Estimate in 2018 report . . . . . . . . . . . . . . 1,061.4 c 1,061.5 .2

Estimate in 2019 report . . . . . . . . . . . . . . 1,061.0 -.1 1,060.0 .1

Actual amount . . . . . . . . . . . . . . . . . . . . . 1,061.8 — 1,059.3 —
35

Calendar Year 2019 Operations

providing benefits to about 54.1 million people and the DI Trust Fund was

providing benefits to about 9.9 million people. The number of people receiving benefits from the OASI Trust Fund grew by 2.6 percent while the number of people receiving DI benefits fell by 2.3 percent during calendar year

2019. These changes are in large part due to the gradual aging of the population, 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 calendar years 2018 and 2019, by type of beneficiary, for each trust fund separately.

Note: Benefits are monthly benefits and lump-sum death payments. Totals do not necessarily equal the sums

of rounded components.

Net administrative expenses of the OASI and DI Trust Funds in calendar

year 2019 totaled $6.4 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.

Table III.A5.—Distribution of Benefit Payments by Type of Beneficiary or Payment, 

Calendar Years 2018 and 2019

[Amounts in millions]

Calendar year 2018 Calendar year 2019

Amount

Percentage

of total Amount

Percentage

of total

Total OASDI benefit payments . . . . . . . . . . $988,580 100.0 $1,047,882 100.0

OASI benefit payments . . . . . . . . . . . . . . 844,924 85.5 902,833 86.2

DI benefit payments . . . . . . . . . . . . . . . . . 143,656 14.5 145,049 13.8

OASI benefit payments, total. . . . . . . . . . . . 844,924 100.0 902,833 100.0

Monthly benefits:

Retired workers and auxiliaries . . . . . . 723,542 85.6 777,258 86.1

Retired workers . . . . . . . . . . . . . . . . 686,099 81.2 737,809 81.7

Spouses . . . . . . . . . . . . . . . . . . . . . . . 31,615 3.7 33,323 3.7

Children . . . . . . . . . . . . . . . . . . . . . . 5,828 .7 6,127 .7

Survivors of deceased workers. . . . . . . 121,175 14.3 125,369 13.9

Aged widows and widowers. . . . . . . 96,623 11.4 100,190 11.1

Disabled widows and widowers . . . . 2,372 .3 2,362 .3

Parents . . . . . . . . . . . . . . . . . . . . . . . 20 a

a Less than 0.05 percent.

20 a

Children . . . . . . . . . . . . . . . . . . . . . . 20,660 2.4 21,310 2.4

Widowed mothers and fathers 

caring for child beneficiaries . . . . 1,500 .2 1,488 .2

Lump-sum death payments . . . . . . . . . . . 207 a 206 a

DI benefit payments, total . . . . . . . . . . . . . . 143,656 100.0 145,049 100.0

Disabled workers . . . . . . . . . . . . . . . . . 134,962 93.9 136,512 94.1

Spouses. . . . . . . . . . . . . . . . . . . . . . . . . 536 .4 532 .4

Children . . . . . . . . . . . . . . . . . . . . . . . . 8,158 5.7 8,004 5.5
Financial Operations and Legislative Changes

36

The acquisition and redemption of securities during calendar year 2019

changed the invested reserves of the OASI and DI Trust Funds. Table III.A7

presents investment transactions for each fund separately and combined.

Note: Investments are shown at par value. Totals do not necessarily equal the sums of rounded components.

Table III.A6.—Administrative Expenses as a Percentage of Total Income and 

of Total Cost, Calendar Years 2015-2019

Calendar year 

OASI Trust Fund DI Trust Fund

OASI and DI

Trust Funds,

combined

Total

income

Total

cost

Total

income

Total

cost

Total

income

Total

cost

2015 . . . . . . . . . . . 0.4 0.4 2.4 1.9 0.7 0.7

2016 . . . . . . . . . . . .4 .4 1.7 1.9 .7 .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

Table III.A7.—Trust Fund Investment Transactions, Calendar Year 2019

[In millions]

OASI

Trust Fund

DI

Trust Fund

OASI and DI

Trust Funds,

combined

Invested asset reserves, 

December 31, 2018a . . . . . . . . . . . . . . . . . .

a Invested asset reserves differ from total asset reserves by the amount of undisbursed balances. See

tables VI.A4 and VI.A5 for details.

$2,797,974 $97,201 $2,895,175

Acquisitions:

Special issue securities:

Certificates of indebtedness . . . . . . . . . . . 879,249 143,004 1,022,253

Bondsb . . . . . . . . . . . . . . . . . . . . . . . . . . .

b Purchased on June 30, 2019. The interest rate on these purchases was 2.250 percent.

190,718 20,940 211,658

Total acquisitions . . . . . . . . . . . . . . . . . . . 1,069,967 163,944 1,233,911

Redemptions:

Special issue securities:

Certificates of indebtedness . . . . . . . . . . . 878,218 153,823 1,032,040

Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185,368 14,184 199,553

Total redemptions . . . . . . . . . . . . . . . . . . . 1,063,586 168,007 1,231,593

Net increase in invested asset reserves . . . . . . 6,381 -4,063 2,318

Invested asset reserves, 

December 31, 2019a . . . . . . . . . . . . . . . . . . 2,804,355 93,138 2,897,493
37

Social Security Amendments Since the 2019 Report

B. SOCIAL SECURITY AMENDMENTS SINCE THE 2019 REPORT

Since the Trustees submitted the 2019 report to Congress, there has been one

change in law that is estimated to have a significant financial effect on the

OASDI program.

On December 20, 2019, Public Law 116-94 repealed a provision in the

Affordable Care Act of 2010 (ACA), which specified an excise tax on

employer-sponsored group health insurance premiums above a specified

level (commonly referred to as the “Cadillac” tax). The excise tax on

employer-sponsored group health insurance premiums, along with anticipated competitive premiums from health benefit exchanges, were expected

to slow the growth in the average cost of insurance, thus increasing the share

of employee compensation provided in wages subject to the Social Security

payroll tax. Although the implementation of this provision was repeatedly

delayed after 2010, each Trustees Report through the 2019 report reflected

the Trustees’ assumption that the excise tax would eventually be applied.

The repeal of this provision of the ACA therefore affects the Social Security

program by decreasing the share of employee compensation that will be paid

in wages covered by Social Security, resulting in slower growth in average

real covered earnings and a significant negative financial effect on the

OASDI program over both the short-range and long-range projection periods.

This report also incorporates the effect of one new regulation that is estimated to have a small positive effect on the OASDI program. On

February 25, 2020, the Social Security Administration published a final rule

in the Federal Register that eliminates the inability to communicate in

English as an educational category in the disability determination and medical review processes. This rule is estimated to reduce the number of disabled

worker beneficiaries in the long-term by 0.25 percent. This regulation has a

small but significant positive effect over the short-range period and a negligible positive effect over the long-range period.

Finally, this report incorporates the effects of one change in policy that is

estimated to have negligible effects over both the short-range and long-range

projection periods. The Deferred Action for Childhood Arrivals, or DACA,

policy was implemented on June 15, 2012, enabling certain other-than-lawful-permanent-resident immigrants who entered the United States as children

to receive employment authorization. DACA was rescinded by the Administration on September 5, 2017, directing a phase out of the program to be carried out over the following two years. As of the time this report was drafted,

the phase out has been held up in the court system. This year’s report accord-
Financial Operations and Legislative Changes

38

ingly assumes the phase out will be completed in 2022, one year later than

assumed in last year’s report. 

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.
39

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 taxable 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 adequacy for the short-range period (2020 through 2029) first, followed by estimates and measures of actuarial status for the long-range period

(2020 through 2094). 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 programmatic 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 estimates 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 additional 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.

In this report, the DI Trust Fund reserve depletion date is again extended, as

it was for the last four reports. The experience for disability beneficiaries and

benefit levels following the economic recession of 2007-09 has not matched

expectations. Initial disability applications to the states’ Disability Determination Services (DDS) declined by 4.3 percent in 2014, by 4.8 percent in

2015, by 7.1 percent in 2016, by 4.1 percent in 2017, and by 4.8 percent in

2018. As a result, substantial revisions were made in each report from 2016
Actuarial Estimates

40

through 2019 to reflect the much lower-than-expected level of applications

that had been realized. 

For 2019, the number of disability applications has remained relatively

unchanged at the historically low level for 2018. The substantial decline in

applications from 2010 to the level for 2018 and 2019, and the resulting

declines in the number of disabled worker beneficiaries since 2013, have

caused the annual cost of the DI program to become much closer to annual

income, making the DI Trust Fund reserve depletion date very sensitive to

small changes in income and cost. 

In addition, the Trustees have changed the assumed ultimate age-sexadjusted incidence rate for this year’s report. The Trustees believe that the

sustained drop in applications and incidence rates since 2010 and the decline

in the number of disabled worker beneficiaries since 2013 are in part due to

structural changes in the nature of employment that will have persistent

effects into the future. Therefore, the Trustees have reduced the assumed

ultimate age-sex-adjusted incidence rate to 5.0 per thousand exposed, down

from the level of 5.2 per thousand for the 2019 report and 5.4 per thousand

for the 2018 report. This change in the ultimate disability incidence rate,

along with the more recent disability experience for 2019, the revised expectations for incidence through the period of transition to the ultimate assumed

rate, and other changes in this year’s report, added another 13 years to the

projected DI Trust Fund reserve depletion date, from 2052 in last year’s

report to 2065 for this report. This continues the extension of the projected

DI reserve depletion date beyond the projected OASI reserve depletion date,

which occurred in last year’s report for the first time since the 1983 Trustees

Report.

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 measure 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

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 benefits in full on a timely basis if annual revenue were less than annual cost.
41

Short-Range Estimates

Unexpected events, such as severe economic recessions, can quickly diminish 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 estimates, based on the assumptions described in

chapter V, of the operations and financial status of the OASI Trust Fund for

the period 2020 through 2029. These estimates assume that there are no further 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 indicate that the asset reserves of the OASI Trust Fund are projected to decrease

in all years after 2020 under the intermediate assumptions, decrease in all

years after 2021 under the low-cost assumptions, and decrease in all years

through 2029 under the high-cost assumptions. Trust fund ratios 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 94

at the beginning of 2030. Consequently, the OASI Trust Fund fails the test of

short-range financial adequacy. See figure IV.A1 for an illustration of these

results.

 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 shortrange 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.
Actuarial Estimates

42

Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2015-2029a

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

Historical data:

2015 . . $801.6 $679.5 $0.3 $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 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

Intermediate:

2020 . . 967.0 853.3 f 38.9 74.8 962.8 953.7 3.9 5.2 4.2 2,808.5 291

2021 . . 995.6 881.4 f 42.2 72.0 1,019.2 1,010.6 3.6 4.9 -23.6 2,784.9 276

2022 . . 1,034.0 919.1 f 45.9 69.0 1,082.3 1,073.4 3.7 5.2 -48.3 2,736.6 257

2023 . . 1,075.9 959.5 f 49.8 66.6 1,149.1 1,139.9 3.9 5.3 -73.2 2,663.4 238

2024 . . 1,121.4 1,001.8 f 54.1 65.5 1,220.3 1,210.9 4.0 5.4 -98.9 2,564.4 218

2025 . . 1,166.9 1,043.4 f 59.0 64.4 1,295.2 1,285.6 4.2 5.4 -128.3 2,436.2 198

2026 . . 1,225.6 1,087.8 f 74.0 63.8 1,374.2 1,364.3 4.3 5.6 -148.6 2,287.5 177

2027 . . 1,276.4 1,133.4 f 80.4 62.6 1,457.9 1,447.8 4.4 5.6 -181.5 2,106.1 157

2028 . . 1,329.2 1,182.6 f 87.2 59.4 1,548.2 1,538.0 4.6 5.7 -219.0 1,887.1 136

2029 . . 1,379.6 1,231.1 f 94.4 54.1 1,641.1 1,630.7 4.7 5.7 -261.5 1,625.6 115

Low-cost:

2020 . . 977.2 862.1 f 38.9 76.2 962.4 953.3 3.9 5.2 14.8 2,819.2 291

2021 . . 1,031.7 913.0 f 42.5 76.1 1,026.9 1,018.4 3.6 4.9 4.8 2,823.9 275

2022 . . 1,092.0 969.3 f 46.4 76.4 1,093.7 1,084.8 3.7 5.2 -1.7 2,822.2 258

2023 . . 1,157.1 1,028.2 f 50.5 78.4 1,166.5 1,157.2 4.0 5.3 -9.3 2,812.9 242

2024 . . 1,227.8 1,090.6 f 55.1 82.0 1,244.3 1,234.7 4.2 5.4 -16.5 2,796.4 226

2025 . . 1,300.3 1,153.8 f 60.5 86.0 1,326.5 1,316.7 4.4 5.5 -26.2 2,770.3 211

2026 . . 1,388.5 1,220.8 f 76.1 91.6 1,413.8 1,403.6 4.6 5.6 -25.3 2,744.9 196

2027 . . 1,470.9 1,290.2 f 83.2 97.6 1,507.0 1,496.6 4.8 5.7 -36.1 2,708.8 182

2028 . . 1,558.5 1,365.1 f 90.6 102.7 1,608.3 1,597.6 5.0 5.7 -49.9 2,659.0 168

2029 . . 1,647.3 1,442.2 f 98.5 106.6 1,713.5 1,702.5 5.2 5.8 -66.3 2,592.7 155
43

Short-Range Estimates

High-cost:

2020 . . $948.7 $836.2 f $38.9 $73.5 $963.2 $954.1 $3.9 $5.2 -$14.5 $2,789.8 291

2021 . . 926.8 817.9 f 41.9 67.0 1,010.5 1,001.9 3.6 4.9 -83.8 2,706.1 276

2022 . . 946.1 840.4 f 45.1 60.6 1,064.1 1,055.1 3.7 5.3 -117.9 2,588.1 254

2023 . . 967.8 863.7 f 48.6 55.5 1,122.3 1,113.1 3.8 5.4 -154.5 2,433.6 231

2024 . . 995.4 891.7 f 52.6 51.1 1,186.5 1,177.2 3.9 5.4 -191.1 2,242.5 205

2025 . . 1,023.5 919.9 f 57.1 46.5 1,253.6 1,244.3 4.0 5.4 -230.1 2,012.4 179

2026 . . 1,064.5 951.0 f 71.3 42.1 1,324.1 1,314.5 4.1 5.5 -259.6 1,752.8 152

2027 . . 1,096.9 982.5 f 77.1 37.3 1,398.1 1,388.5 4.2 5.5 -301.2 1,451.6 125

2028 . . 1,129.3 1,015.7 f 83.2 30.3 1,477.3 1,467.5 4.2 5.5 -348.0 1,103.6 98

2029 . . 1,156.0 1,044.5 f 89.6 21.9 1,557.6 1,547.7 4.3 5.6 -401.6 702.0 71

a Appendix A presents a detailed description of the components of income and cost, along with complete historical

values.

b Amounts for 2015 and 2016 are adjusted to include in 2016 operations those benefit payments regularly scheduled

in the law to be paid on January 3, 2016, which were actually paid on December 31, 2015 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 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) 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 2030 is projected to be 94 percent for the intermediate, 143 percent for the low-cost,

and 43 percent for the high-cost assumptions.

f Between -$50 million and $50 million.

Note: Totals do not necessarily equal the sums of rounded components.

Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2015-2029a (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Actuarial Estimates

44

The estimated income shown in table IV.A1 increases annually 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 every year through 2029

for all three alternatives, with the exception of small decreases in covered

employment in 2020 and 2021 for the high-cost alternative: the number of

covered workers increases under alternatives I, II, and III from 178 million

during calendar year 2019 to about 190 million, 186 million, and

182 million, respectively, in 2029.1 The total annual amount of taxable payroll increases in every year through 2029 for each alternative. Total taxable

payroll increases from $7,643 billion in 2019 to $13,632 billion,

$11,629 billion, and $9,861 billion in 2029, 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 contribution and benefit base under the automatic-adjustment provisions; and

(4) growth in employment and average earnings.

 Figure IV.A1.—Short-Range OASI and DI Trust Fund Ratios

[Asset reserves as a percentage of annual cost]

 1 See table IV.B3.

 2 See table VI.G6.

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029

Calendar year

DI

OASI

Historical Estimated

Minimumlevelfor "short-range financial adequacy" I

II

III

I

II

III
45

Short-Range Estimates

Interest earnings contribute to the overall projected level of trust fund

income during this period. Interest income declines generally at a slow rate

under the intermediate assumptions and much faster under the high-cost

assumptions, and increases generally under the low-cost assumptions, due to

the net effects of changes in reserve levels and the patterns of projected interest rates. Under the intermediate assumptions, interest also declines as a

share of total OASI Trust Fund income reaching 4 percent of total trust fund

income for 2029, as compared to 8 percent for 2019.

Rising OASI cost from 2019 through 2029 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 program costs. Program expenditures require the redemption of trust fund securities, generally prior to maturity, to cover the payments made by the General

Fund of the Treasury on behalf of the trust fund.1

2. Operations of the DI Trust Fund

Table IV.A2 shows the estimated operations and financial status of the DI

Trust Fund during calendar years 2020 through 2029 under the three sets of

assumptions, together with values for actual experience during 2015 through

2019. Non-interest income for DI was much higher in 2016 through 2018

than in 2015, due to the temporary payroll tax rate reallocation from OASI to

DI in these years. For 2019, non-interest income was less than DI cost. Noninterest income increases steadily throughout the short-range projection

period under each alternative, with the exception of a small decrease in 2021

under the high-cost assumptions, due to most of the same factors described

previously for the OASI Trust Fund beginning on page 44. DI cost grows

steadily throughout the period under each alternative. Under the intermediate

and low-cost assumptions, reserves increase through 2029. Under the highcost assumptions, DI reserves decline until depletion in the fourth quarter of

2026. 

 1 For an explanation of the interrelationship between the Medicare and Social Security trust funds and the

overall Federal budget, see appendix F of the 2020 Medicare Trustees Report.
Actuarial Estimates

46

Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2015-2029a

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

Historical data:

2015 . . .$118.6 $115.4 f $1.1 $2.1 $146.6 $143.4 $2.8 $0.4 -$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

Intermediate:

2020 . . . 149.4 144.9 f 1.7 2.8 149.2 146.4 2.7 .1 .2 93.3 62

2021 . . . 154.3 149.7 f 1.8 2.8 151.8 149.2 2.5 .1 2.5 95.8 61

2022 . . . 160.8 156.1 f 1.9 2.8 155.4 152.7 2.6 .1 5.4 101.2 62

2023 . . . 168.0 162.9 f 2.0 3.1 160.2 157.4 2.8 f 7.8 108.9 63

2024 . . . 175.8 170.1 f 2.2 3.5 165.7 162.7 2.9 f 10.1 119.0 66

2025 . . . 183.6 177.2 f 2.3 4.0 172.5 169.3 3.1 f 11.1 130.1 69

2026 . . . 192.3 184.7 f 2.9 4.7 179.7 176.4 3.3 f 12.6 142.7 72

2027 . . . 201.0 192.5 f 3.2 5.4 187.3 183.8 3.4 f 13.7 156.4 76

2028 . . . 210.4 200.8 f 3.4 6.2 193.4 189.8 3.6 f 17.0 173.4 81

2029 . . . 219.9 209.1 f 3.6 7.2 200.1 196.2 3.8 f 19.8 193.3 87

Low-cost:

2020 . . . 151.0 146.4 f 1.7 3.0 148.2 145.4 2.7 .1 2.9 95.9 63

2021 . . . 160.1 155.0 f 1.8 3.3 150.7 148.1 2.5 .1 9.4 105.3 64

2022 . . . 170.3 164.6 f 1.9 3.8 153.1 150.4 2.6 f 17.2 122.5 69

2023 . . . 181.5 174.6 f 2.0 4.9 156.5 153.6 2.8 f 25.0 147.5 78

2024 . . . 193.8 185.2 f 2.1 6.5 160.1 157.1 3.0 f 33.7 181.2 92

2025 . . . 206.8 195.9 f 2.2 8.6 164.8 161.7 3.2 f 42.0 223.1 110

2026 . . . 221.4 207.3 f 2.8 11.4 170.0 166.6 3.4 f 51.4 274.6 131

2027 . . . 236.7 219.1 f 3.0 14.7 175.6 172 3.6 f 61.2 335.7 156

2028 . . . 253.8 231.8 f 3.2 18.8 180.0 176.3 3.8 f 73.8 409.5 186

2029 . . . 271.9 244.9 f 3.4 23.7 185.2 181.2 4.0 f 86.7 496.2 221
47

Short-Range Estimates

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 number

of DI beneficiaries in current-payment status. In 2019, the number of DI beneficiaries in current-payment status continued the declining trend of the prior

five years. Under the intermediate assumptions, that number of DI beneficiaries is projected to drop further through the end of 2022, 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

2022 is much slower than was experienced on average from 1990 to 2010,

when the population with the highest disability prevalence rates was growing

High-cost:

2020 . . . $146.4 $142.0 f $1.7 $2.7 $150.3 $147.5 $2.7 $0.1 -$3.9 $89.2 62

2021 . . . 143.0 138.9 f 1.8 2.3 154.0 151.4 2.5 .1 -11.0 78.2 58

2022 . . . 146.4 142.7 f 1.9 1.8 158.9 156.2 2.6 .1 -12.5 65.7 49

2023 . . . 150.2 146.7 f 2.1 1.4 164.8 162.0 2.8 .1 -14.7 51.0 40

2024 . . . 154.8 151.4 f 2.2 1.1 171.4 168.4 3.0 f -16.6 34.4 30

2025 . . . 159.3 156.2 f 2.4 .7 178.9 175.7 3.1 f -19.6 14.8 19

2026 . . . g 161.5 f 3.0 g 187.0 183.7 3.3 fgg 8

2027 . . . g 166.8 f 3.3 g 195.6 192.2 3.4 f g gg

2028 . . . g 172.5 f 3.6 g 202.8 199.2 3.6 .1 g gg

2029 . . . g 177.4 f 3.8 g 210.2 206.4 3.7 .1 g gg

a The DI Trust Fund reserves become depleted in the fourth quarter of 2026 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 2015 and 2016 are adjusted to include in 2016 operations those benefit payments regularly scheduled in the law to be paid on January 3, 2016, which were actually paid on December 31, 2015 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 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 DI 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.

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 2030 is projected to be 93 percent for the intermediate and 259 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: Totals do not necessarily equal the sums of rounded components.

Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2015-2029a (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Actuarial Estimates

48

rapidly due to the aging of the baby-boom generation. See section V.C.5 for further details.

At the beginning of calendar year 2020, the reserves of the DI Trust Fund represented 62 percent of estimated annual cost. Under the intermediate assumptions,

DI total income exceeds total cost and trust fund reserves increase throughout the

short-range projection period. The trust fund ratio drops to 61 percent of annual

cost at the beginning of 2021, then increases throughout the rest of the shortrange projection period.

Because the reserves of the DI Trust Fund at the beginning of 2020 were less

than the estimated annual cost for 2020, and are projected to remain below

annual cost throughout the short-range period under the intermediate assumptions, the DI Trust Fund fails the Trustees’ test of short-range financial adequacy.

3. Operations of the Combined OASI and DI Trust Funds

Table IV.A3 shows the estimated operations and status of the combined OASI

and DI Trust Funds for calendar years 2020 through 2029 under the three alternatives, together with actual experience in 2015 through 2019. 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 94 percent at the

beginning of 2030. 

Table IV.A3.—Operations of the Combined OASI and DI Trust Funds,

Calendar Years 2015-2029a

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation

of benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

Historical data:

2015 . . $920.2 $794.9 $0.3 $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
49

Short-Range Estimates

Intermediate:

2020 . . $1,116.4 $998.2 f $40.6 $77.6 $1,112.0 $1,100.2 $6.6 $5.3 $4.4 $2,901.8 261

2021 . . 1,149.8 1,031.0 f 44.0 74.8 1,170.9 1,159.8 6.2 5.0 -21.1 2,880.7 248

2022 . . 1,194.8 1,075.2 f 47.8 71.8 1,237.8 1,226.2 6.4 5.2 -42.9 2,837.7 233

2023 . . 1,243.9 1,122.4 f 51.8 69.7 1,309.3 1,297.3 6.7 5.3 -65.5 2,772.3 217

2024 . . 1,297.2 1,171.9 f 56.2 69.0 1,386.0 1,373.6 7.0 5.4 -88.8 2,683.5 200

2025 . . 1,350.4 1,220.6 f 61.4 68.4 1,467.6 1,454.9 7.3 5.5 -117.2 2,566.2 183

2026 . . 1,417.9 1,272.5 f 76.9 68.4 1,553.9 1,540.7 7.6 5.6 -136.0 2,430.2 165

2027 . . 1,477.4 1,325.9 f 83.6 67.9 1,645.1 1,631.6 7.9 5.6 -167.7 2,262.5 148

2028 . . 1,539.7 1,383.4 f 90.6 65.6 1,741.7 1,727.8 8.2 5.7 -202.0 2,060.5 130

2029 . . 1,599.5 1,440.2 f 98.0 61.3 1,841.2 1,826.9 8.5 5.8 -241.7 1,818.8 112

Low-cost:

2020 . . 1,128.2 1,008.5 f 40.6 79.2 1,110.5 1,098.7 6.6 5.3 17.7 2,915.1 261

2021 . . 1,191.7 1,068.1 f 44.3 79.4 1,177.6 1,166.5 6.2 5.0 14.2 2,929.3 248

2022 . . 1,262.3 1,133.8 f 48.2 80.2 1,246.8 1,235.2 6.4 5.2 15.5 2,944.7 235

2023 . . 1,338.6 1,202.8 f 52.5 83.3 1,323.0 1,310.9 6.8 5.3 15.6 2,960.4 223

2024 . . 1,421.6 1,275.8 f 57.2 88.5 1,404.4 1,391.8 7.1 5.4 17.2 2,977.6 211

2025 . . 1,507.1 1,349.8 f 62.7 94.7 1,491.3 1,478.3 7.5 5.5 15.8 2,993.4 200

2026 . . 1,609.9 1,428.0 f 78.9 103.0 1,583.8 1,570.2 7.9 5.6 26.1 3,019.5 189

2027 . . 1,707.7 1,509.3 f 86.1 112.3 1,682.6 1,668.6 8.3 5.7 25.1 3,044.6 179

2028 . . 1,812.3 1,597.0 f 93.8 121.5 1,788.4 1,773.9 8.8 5.7 23.9 3,068.5 170

2029 . . 1,919.2 1,687.0 f 101.9 130.3 1,898.7 1,883.7 9.2 5.8 20.4 3,088.9 162

High-cost:

2020 . . 1,095.1 978.2 f 40.6 76.3 1,113.5 1,101.6 6.6 5.3 -18.4 2,879.0 260

2021 . . 1,069.7 956.8 f 43.7 69.3 1,164.5 1,153.3 6.2 5.0 -94.8 2,784.3 247

2022 . . 1,092.5 983.2 f 47.0 62.4 1,223.0 1,211.3 6.3 5.3 -130.5 2,653.8 228

2023 . . 1,117.9 1,010.3 f 50.7 57.0 1,287.1 1,275.1 6.6 5.4 -169.2 2,484.6 206

2024 . . 1,150.2 1,043.1 f 54.8 52.2 1,357.9 1,345.5 6.8 5.5 -207.7 2,276.9 183

2025 . . 1,182.8 1,076.1 f 59.6 47.1 1,432.5 1,420.0 7.1 5.4 -249.7 2,027.2 159

2026 . . 1,229.1 1,112.5 f 74.3 42.2 1,511.1 1,498.2 7.3 5.5 -282.0 1,745.1 134

2027 . . 1,266.3 1,149.3 f 80.4 36.6 1,593.8 1,580.6 7.6 5.6 -327.4 1,417.7 109

2028 . . 1,303.6 1,188.2 f 86.8 28.6 1,680.0 1,666.6 7.8 5.6 -376.4 1,041.3 84

2029 . . 1,334.5 1,221.9 f 93.4 19.2 1,767.8 1,754.1 8.0 5.7 -433.3 608.0 59

a Appendix A presents a detailed description of the components of income and cost, along with complete historical

values.

b Amounts for 2015 and 2016 are adjusted to include in 2016 operations those benefit payments regularly scheduled in the law to be paid on January 3, 2016, which were actually paid on December 31, 2015 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 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 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 2030 is projected to be 94 percent for the intermediate, 154 percent for the lowcost, and 33 percent for the high-cost assumptions.

f Between -$50 million and $50 million.

Note: Totals do not necessarily equal the sums of rounded components.

Table IV.A3.—Operations of the Combined OASI and DI Trust Funds,

Calendar Years 2015-2029a (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation

of benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Actuarial Estimates

50

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 2019 report under the intermediate assumptions, the trust fund ratio for

OASI reached 138 percent at the beginning of 2028—the tenth projection

year for that report. The change in the short-range valuation period alone,

from 2019 through 2028 to 2020 through 2029, lowered the estimated trust

fund ratio for the tenth year by 19 percentage points, to 119 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 4 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 23 percentage points to 115 percent.

The repeal in P.L. 116-94 of the excise tax provision of the Affordable Care

Act discussed in III.B, which affects the Social Security program by decreasing the share of employee compensation that will be paid in wages covered

by Social Security, reduced the tenth year OASI trust fund ratio by 1 percentage point. Changes in demographic assumptions over the short-range period

increased the projected tenth year trust fund ratio for OASI by 3 percentage

points. Several changes in economic data and assumptions combined to

cause a net reduction in the OASI trust fund ratio of 7 percentage points by

the beginning of 2029. Incorporating recent programmatic data resulted in an

increase of 1 percentage point in the tenth year OASI trust fund ratio.

Finally, the tenth year trust fund ratio was not affected significantly by

changes in the short-range methodology for this report.

Table IV.A4 also shows corresponding estimates of the factors underlying

the changes in the financial projections for the DI Trust Fund and for the

combined OASI and DI Trust Funds. 

The 19-percentage-point increase in the DI trust fund ratio from the beginning of 2028 in last year’s report to the beginning of 2029 in this year’s

report is the net effect of increases and decreases from the factors described

above for the OASI Trust Fund, combined with other changes that are significant for DI but not OASI. First, the large increase of 26 points due to programmatic data and assumptions reflects lower estimated disabled-worker

incidence rates throughout the short-range projection period, incorporating

both more favorable recent experience and the lower ultimate disabledworker incidence rate assumption in this report. The second is an improve-
51

Short-Range Estimates

ment in the method for projecting average monthly benefit amounts awarded

to disabled workers, which decreased the DI trust fund ratio for 2029 by

2 percentage points. Finally, a regulation change eliminating the inability to

communicate in English as an educational category in the disability determination and medical review processes,1 partially offset by the effect of

P.L. 116-94 described in the OASI section, increased the tenth year DI Trust

Fund ratio by 1 percentage point.

Note: Totals do not necessarily equal the sums of rounded components.

 1 See III.B for more details on this change in regulation.

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]

Item

OASI

Trust Fund

DI

Trust Fund

OASI and DI

Trust Funds,

combined

Trust fund ratio shown in last year’s report for calendar year 2028 . 138 68 130

Change in trust fund ratio due to changes in: 

Legislation and regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1 1 a

Valuation period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19 4 -16

Demographic data and assumptions. . . . . . . . . . . . . . . . . . . . . . . 3 a

a Between -0.5 and 0.5 percent.

2

Economic data and assumptions . . . . . . . . . . . . . . . . . . . . . . . . . -7 -10 -8

Programmatic data and assumptions . . . . . . . . . . . . . . . . . . . . . . 1 26 4

Projection methods and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . a -2 a

Total change in trust fund ratio -23 19 -18

Trust fund ratio shown in this report for calendar year 2029. . . . . . . 115 87 112
Actuarial Estimates

52

B. LONG-RANGE ESTIMATES

The Trustees use three types of financial measures to assess the actuarial status 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 program.

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 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.

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 opengroup 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

Long-Range Estimates

1. Annual Income Rates, Cost Rates, and Balances

The concepts of income rate and cost rate, expressed as percentages of taxable 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-interest 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 payroll for the year. The cost includes scheduled benefits, administrative

expenses, net interchange with the Railroad Retirement program, and payments 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 components of the annual income rates.

Under the intermediate assumptions, the Trustees project that the OASI

income rate will increase from 10.99 percent of payroll for 2019 to

11.17 percent of payroll for 2020. The income rate increases in 2020 because

of an adjustment made to previous years’ estimates of payroll tax contributions. After declining in 2021, the OASI income rate then generally rises at a

very gradual rate to 11.58 percent of taxable payroll for 2094. Income from

taxation of benefits causes a 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 150.

From 2020 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 2040 to 2051, 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 rises from 14.81 percent in

2051 to 16.20 percent in 2078, then generally declines to 15.89 percent in

2094.

 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 multipleemployer “excess wages.” Lower rates also applied to net earnings from self-employment before 1984 and

to income from tips before 1988.
Actuarial Estimates

54

Projections of income rates under the low-cost and high-cost sets of assumptions 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 lowcost assumptions, the OASI cost rate rises from 11.84 percent in 2020 until it

peaks in 2034 at 12.84 percent of payroll. The cost rate then declines to

11.98 percent for 2055, rises to 12.27 percent for 2074, and mostly declines

to 11.53 percent in 2094, at which point the income rate reaches

11.30 percent. For the high-cost assumptions, the OASI cost rate rises

throughout the 75-year period. It rises relatively rapidly through about 2040

because of the aging of the baby-boom generation. Thereafter, the cost rate

continues to rise and reaches 22.63 percent of payroll for 2094, at which

point the income rate reaches 12.00 percent.

The pattern of the projected OASI annual balance is important in the analysis

of the financial condition of the program. Under the intermediate assumptions, the annual balance is negative throughout the projection period. The

annual deficit rises relatively rapidly from 0.88 percent for 2020 to

3.54 percent for 2040. It then declines to 3.32 percent of payroll for 2051,

rises to 4.61 percent for 2078, and generally declines thereafter, reaching

4.31 percent of taxable payroll for 2094.

Under the low-cost assumptions, the OASI annual deficit decreases from

0.93 percent of payroll in 2019 to 0.76 percent in 2020, and then generally

rises to 1.50 percent of payroll for 2034. After 2034, the annual deficit

declines to 0.66 percent of payroll for 2055, rises to 0.93 percent in 2074,

and then mostly declines until reaching 0.23 percent of payroll in 2094.

Under the high-cost assumptions, the OASI balance worsens throughout the

projection period. Annual deficits rise to 3.18 percent for 2025, 6.64 percent

for 2050, and 10.63 percent of payroll for 2094.
55

Long-Range Estimates

Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095

[As a percentage of taxable payroll]

Calendar 

year

OASI DI OASDI

Income

ratea Costrateb Balanceb Incomeratea Costrateb Balanceb Incomeratea Costrateb 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 11.54 -.57 1.81 2.44 -.63 12.77 13.97 -1.20

2014. . . . . 10.95 11.60 -.64 1.81 2.36 -.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 13.89 -.80

2017. . . . . 10.64 11.56 -.92 2.42 2.09 .33 13.06 13.65 -.59

2018. . . . . 10.26 11.67 -1.41 2.32 2.01 .31 12.58 13.68 -1.10

2019. . . . . 10.99 11.93 -.93 1.84 1.93 -.09 12.84 13.86 -1.03

Intermediate:

2020. . . . . 11.17 12.05 -.88 1.83 1.87 -.03 13.00 13.92 -.92

2021. . . . . 11.08 12.23 -1.15 1.82 1.82 c 12.90 14.05 -1.15

2022. . . . . 11.11 12.46 -1.35 1.82 1.79 .03 12.93 14.25 -1.32

2023. . . . . 11.13 12.67 -1.54 1.82 1.77 .05 12.94 14.43 -1.49

2024. . . . . 11.16 12.89 -1.74 1.82 1.75 .07 12.98 14.64 -1.67

2025. . . . . 11.18 13.13 -1.95 1.82 1.75 .07 13.00 14.88 -1.88

2026. . . . . 11.30 13.37 -2.07 1.82 1.75 .08 13.12 15.11 -1.99

2027. . . . . 11.32 13.60 -2.28 1.82 1.75 .08 13.15 15.35 -2.20

2028. . . . . 11.36 13.85 -2.49 1.83 1.73 .10 13.19 15.58 -2.39

2029. . . . . 11.40 14.11 -2.71 1.83 1.72 .11 13.23 15.83 -2.61

2030. . . . . 11.41 14.31 -2.89 1.83 1.72 .11 13.24 16.02 -2.78

2035. . . . . 11.46 14.88 -3.42 1.83 1.75 .08 13.29 16.63 -3.33

2040. . . . . 11.48 15.03 -3.54 1.83 1.82 .01 13.32 16.85 -3.53

2045. . . . . 11.48 14.89 -3.41 1.84 1.93 -.09 13.32 16.82 -3.50

2050. . . . . 11.49 14.81 -3.33 1.84 1.98 -.14 13.32 16.79 -3.46

2055. . . . . 11.50 14.89 -3.40 1.84 2.00 -.16 13.33 16.89 -3.56

2060. . . . . 11.52 15.16 -3.64 1.84 1.98 -.14 13.36 17.14 -3.79

2065. . . . . 11.54 15.47 -3.93 1.84 1.98 -.15 13.38 17.46 -4.08

2070. . . . . 11.57 15.81 -4.25 1.84 1.99 -.15 13.41 17.80 -4.40

2075. . . . . 11.59 16.12 -4.53 1.84 1.96 -.13 13.43 18.08 -4.65

2080. . . . . 11.60 16.19 -4.59 1.84 1.95 -.11 13.43 18.14 -4.70

2085. . . . . 11.59 16.03 -4.44 1.84 1.97 -.13 13.43 18.00 -4.57

2090. . . . . 11.58 15.84 -4.26 1.84 2.03 -.19 13.42 17.87 -4.45

2095. . . . . 11.58 15.93 -4.35 1.84 2.04 -.20 13.42 17.97 -4.55

First year balance becomes

negative and remains negative

throughout the 75-year

projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2041 . . . . . . . . . . . . . . . . 2010
Actuarial Estimates

56

Low-cost:

2020. . . . . 11.09 11.84 -0.76 1.82 1.82 c 12.91 13.67 -0.76

2021. . . . . 11.06 11.89 -.83 1.82 1.74 .07 12.88 13.63 -.75

2022. . . . . 11.08 11.93 -.85 1.82 1.67 .15 12.90 13.60 -.71

2023. . . . . 11.09 11.99 -.90 1.82 1.61 .21 12.91 13.60 -.70

2024. . . . . 11.11 12.07 -.96 1.82 1.55 .26 12.93 13.62 -.69

2025. . . . . 11.12 12.15 -1.03 1.82 1.51 .31 12.94 13.66 -.72

2026. . . . . 11.23 12.24 -1.01 1.82 1.47 .35 13.05 13.72 -.67

2027. . . . . 11.25 12.34 -1.09 1.82 1.44 .38 13.07 13.78 -.71

2028. . . . . 11.28 12.46 -1.18 1.82 1.39 .43 13.10 13.85 -.76

2029. . . . . 11.30 12.57 -1.27 1.82 1.36 .46 13.12 13.93 -.81

2030. . . . . 11.31 12.67 -1.35 1.82 1.33 .49 13.13 14.00 -.86

2035. . . . . 11.34 12.84 -1.50 1.82 1.29 .53 13.16 14.13 -.97

2040. . . . . 11.34 12.71 -1.36 1.82 1.31 .51 13.17 14.02 -.85

2045. . . . . 11.33 12.34 -1.01 1.82 1.36 .46 13.15 13.70 -.55

2050. . . . . 11.32 12.07 -.75 1.82 1.37 .45 13.14 13.44 -.30

2055. . . . . 11.32 11.98 -.66 1.82 1.37 .45 13.14 13.36 -.21

2060. . . . . 11.33 12.07 -.74 1.82 1.35 .48 13.15 13.42 -.26

2065. . . . . 11.34 12.16 -.83 1.82 1.34 .48 13.16 13.51 -.34

2070. . . . . 11.34 12.25 -.91 1.82 1.34 .48 13.17 13.59 -.42

2075. . . . . 11.35 12.27 -.92 1.82 1.32 .50 13.17 13.59 -.42

2080. . . . . 11.34 12.08 -.74 1.82 1.31 .51 13.16 13.39 -.23

2085. . . . . 11.32 11.73 -.41 1.82 1.33 .49 13.14 13.06 .08

2090. . . . . 11.30 11.47 -.17 1.83 1.38 .44 13.13 12.86 .27

2095. . . . . 11.31 11.58 -.27 1.83 1.40 .43 13.13 12.97 .16

First year balance becomes

negative and remains negative

throughout the 75-year 

projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . d . . . . . . . . . . . . . . . . d

High-cost:

2020. . . . . 11.27 12.40 -1.13 1.85 1.93 -.08 13.11 14.33 -1.22

2021. . . . . 11.13 13.08 -1.95 1.82 1.99 -.17 12.95 15.07 -2.12

2022. . . . . 11.16 13.41 -2.25 1.82 2.00 -.18 12.98 15.41 -2.43

2023. . . . . 11.19 13.76 -2.58 1.82 2.02 -.20 13.01 15.78 -2.77

2024. . . . . 11.22 14.09 -2.88 1.82 2.04 -.21 13.04 16.13 -3.09

2025. . . . . 11.24 14.42 -3.18 1.82 2.06 -.23 13.06 16.48 -3.42

2026. . . . . 11.38 14.74 -3.36 1.83 2.08 -.25 13.21 16.82 -3.61

2027. . . . . 11.41 15.05 -3.64 1.83 2.11 -.27 13.24 17.16 -3.92

2028. . . . . 11.45 15.40 -3.94 1.83 2.11 -.28 13.29 17.51 -4.22

2029. . . . . 11.50 15.80 -4.29 1.84 2.13 -.29 13.34 17.93 -4.59

Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 (Cont.)

[As a percentage of taxable payroll]

Calendar 

year

OASI DI OASDI

Income

ratea Costrateb Balanceb Incomeratea Costrateb Balanceb Incomeratea Costrateb Balanceb
57

Long-Range Estimates

Notes:

1. The income rate excludes interest income.

2. Revisions of taxable payroll may change some historical values.

3. Totals do not necessarily equal the sums of rounded components.

Under the intermediate assumptions, the projected DI cost rate declines from

1.93 percent for 2019 to 1.72 percent for 2031. After 2031, the DI cost rate

increases gradually to 2.00 percent for 2055. Thereafter, the cost rate remains

relatively stable, decreasing slowly to 1.95 percent for 2080, then increasing

to 2.04 percent for 2094. The projected DI income rate is relatively stable

throughout the projection period, reaching 1.84 percent for 2094. The annual

balance is negative through 2021 before becoming positive in 2022, reaching

a peak of 0.11 percent of payroll for 2031. The annual balance then declines

and becomes negative in 2041. After 2041, the DI annual deficit increases to

0.16 percent in 2055, generally decreases to 0.11 percent in 2080, and then

increases to 0.20 percent of payroll for 2094.

Under the low-cost assumptions, the projected DI cost rate declines from

1.82 percent of payroll for 2020 to 1.29 percent for 2035, and generally

increases to 1.37 percent for 2052. The cost rate remains relatively stable

thereafter, reaching 1.40 percent for 2094. The annual balance is negative for

High-cost (Cont.):

2030. . . . . 11.52 16.10 -4.58 1.84 2.15 -0.32 13.36 18.26 -4.90

2035. . . . . 11.60 17.19 -5.60 1.84 2.29 -.45 13.44 19.49 -6.05

2040. . . . . 11.64 17.77 -6.12 1.84 2.43 -.59 13.49 20.20 -6.71

2045. . . . . 11.67 18.04 -6.37 1.85 2.62 -.77 13.52 20.66 -7.15

2050. . . . . 11.69 18.33 -6.64 1.85 2.73 -.88 13.55 21.07 -7.52

2055. . . . . 11.73 18.75 -7.03 1.85 2.81 -.95 13.58 21.56 -7.98

2060. . . . . 11.77 19.36 -7.59 1.85 2.80 -.95 13.62 22.17 -8.54

2065. . . . . 11.82 20.04 -8.23 1.86 2.83 -.97 13.67 22.87 -9.20

2070. . . . . 11.87 20.82 -8.95 1.86 2.85 -1.00 13.73 23.67 -9.94

2075. . . . . 11.92 21.63 -9.71 1.86 2.82 -.96 13.78 24.45 -10.67

2080. . . . . 11.96 22.22 -10.25 1.86 2.79 -.93 13.82 25.00 -11.18

2085. . . . . 11.98 22.48 -10.50 1.86 2.78 -.92 13.84 25.26 -11.42

2090. . . . . 11.99 22.52 -10.53 1.86 2.83 -.98 13.85 25.36 -11.51

2095. . . . . 12.00 22.66 -10.66 1.86 2.85 -.99 13.86 25.51 -11.65

First year balance becomes

negative and remains negative

throughout the 75-year

projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . 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 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 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.

Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 (Cont.)

[As a percentage of taxable payroll]

Calendar 

year

OASI DI OASDI

Income

ratea Costrateb Balanceb Incomeratea Costrateb Balanceb Incomeratea Costrateb Balanceb
Actuarial Estimates

58

2020 and positive throughout the remainder of the long-range period. Under

the high-cost assumptions, the DI cost rate rises from 1.93 percent of payroll

in 2020 to 2.81 percent in 2056 and remains relatively stable thereafter,

reaching 2.85 percent for 2094. The annual deficit is negative throughout the

projection period, reaching 0.23 percent for 2025, 0.88 percent for 2050, and

1.00 percent for 2094.

Figure IV.B1 shows the patterns of the historical and projected OASI and DI

annual cost rates. Annual DI cost rates rose substantially between 1990 and

2010 in large part due to: (1) aging of the working population as the babyboom 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 disability 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 have caused age-sexadjusted incidence rates and cost rates to decline after 2010. The patterns in

projected OASI and DI cost rates are described earlier in this chapter.

Figure IV.B1 shows only the income rates for alternative II because the variation in income rates by alternative is very small. Income rates generally

increase slowly for each of the alternatives over the long-range period. Taxation of benefits, which is a relatively small portion of income, is the main

source of both 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 pattern of the annual balances is important to the analysis of the financial condition 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 appropriate 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 pattern of annual cost rates after 1990 because the payroll tax rate does not

change for the OASDI program, with only small variations in the allocation

between DI and OASI except for changes due to the 1994 and the

2016 through 2018 payroll tax rate reallocations. 

In the future, the costs of OASI, DI, and the combined OASDI programs as a

percentage of taxable payroll are unlikely to fall outside the range encompassed by alternatives I and III because alternatives I and III define a wide

range of demographic and economic conditions.
59

Long-Range Estimates

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 produced during the year in the United States. Under alternative II, the Trustees

project OASDI cost to increase from about 5.0 percent of GDP for 2020 to

about 5.9 percent for 2038. After 2038, OASDI cost as a percentage of GDP

declines to a low of about 5.8 percent for 2053, increases to a peak of

6.0 percent for 2077, and thereafter generally decreases slowly, reaching

about 5.9 percent by 2094. Appendix 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 scheduled benefits, and the rates of income from General Fund reimbursements.

Projected income from taxation of benefits increases over time for reasons

discussed on page 150. 

 Figure IV.B1.—Long-Range OASI and DI Annual Income Rates and Cost Rates

[As a percentage of taxable payroll]

0%

5%

10%

15%

20%

25%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Alternative II Income rates

OASI cost rates

DI cost rates

Historical Estimated

OASI

DI III

II

I

II

I

III
Actuarial Estimates

60

Table IV.B2.—Components of Annual Income Rates, Calendar Years 1990-2095

[As a percentage of taxable payroll]

Calendar

year

OASI DI OASDI

Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb 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 12.63

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 . . 9.79 .47 d 10.26 2.31 .01 d 2.32 12.10 .48 d 12.58

2019 . . 10.53 .46 d 10.99 1.82 .02 d 1.84 12.36 .48 d 12.84

Intermediate:

2020 . . 10.68 .49 d 11.17 1.81 .02 d 1.83 12.50 .51 d 13.00

2021 . . 10.58 .51 d 11.08 1.80 .02 d 1.82 12.37 .53 d 12.90

2022 . . 10.58 .53 d 11.11 1.80 .02 d 1.82 12.38 .55 d 12.93

2023 . . 10.58 .55 d 11.13 1.80 .02 d 1.82 12.37 .57 d 12.94

2024 . . 10.59 .57 d 11.16 1.80 .02 d 1.82 12.38 .59 d 12.98

2025 . . 10.58 .60 d 11.18 1.80 .02 d 1.82 12.37 .62 d 13.00

2026 . . 10.58 .72 d 11.30 1.80 .03 d 1.82 12.38 .75 d 13.12

2027 . . 10.57 .75 d 11.32 1.80 .03 d 1.82 12.37 .78 d 13.15

2028 . . 10.58 .78 d 11.36 1.80 .03 d 1.83 12.38 .81 d 13.19

2029 . . 10.59 .81 d 11.40 1.80 .03 d 1.83 12.38 .84 d 13.23

2030 . . 10.59 .83 d 11.41 1.80 .03 d 1.83 12.38 .86 d 13.24

2035 . . 10.59 .88 d 11.46 1.80 .03 d 1.83 12.38 .91 d 13.29

2040 . . 10.59 .90 d 11.48 1.80 .03 d 1.83 12.39 .93 d 13.32

2045 . . 10.59 .90 d 11.48 1.80 .04 d 1.84 12.38 .93 d 13.32

2050 . . 10.59 .90 d 11.49 1.80 .04 d 1.84 12.38 .94 d 13.32

2055 . . 10.59 .91 d 11.50 1.80 .04 d 1.84 12.38 .95 d 13.33

2060 . . 10.59 .93 d 11.52 1.80 .04 d 1.84 12.38 .97 d 13.36

2065 . . 10.59 .96 d 11.54 1.80 .04 d 1.84 12.38 1.00 d 13.38

2070 . . 10.59 .98 d 11.57 1.80 .04 d 1.84 12.38 1.02 d 13.41

2075 . . 10.59 1.00 d 11.59 1.80 .04 d 1.84 12.38 1.04 d 13.43

2080 . . 10.59 1.01 d 11.60 1.80 .04 d 1.84 12.38 1.05 d 13.43

2085 . . 10.59 1.00 d 11.59 1.80 .04 d 1.84 12.38 1.04 d 13.43

2090 . . 10.59 .99 d 11.58 1.80 .04 d 1.84 12.38 1.03 d 13.42

2095 . . 10.59 1.00 d 11.58 1.80 .04 d 1.84 12.38 1.04 d 13.42

Low-cost:

2020 . . 10.61 .48 d 11.09 1.80 .02 d 1.82 12.41 .50 d 12.91

2021 . . 10.57 .49 d 11.06 1.79 .02 d 1.82 12.36 .51 d 12.88

2022 . . 10.57 .51 d 11.08 1.80 .02 d 1.82 12.37 .53 d 12.90

2023 . . 10.57 .52 d 11.09 1.79 .02 d 1.82 12.37 .54 d 12.91

2024 . . 10.58 .53 d 11.11 1.80 .02 d 1.82 12.37 .55 d 12.93

2025 . . 10.57 .55 d 11.12 1.80 .02 d 1.82 12.37 .57 d 12.94

2026 . . 10.57 .66 d 11.23 1.80 .02 d 1.82 12.37 .68 d 13.05

2027 . . 10.57 .68 d 11.25 1.79 .02 d 1.82 12.36 .71 d 13.07

2028 . . 10.58 .70 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10

2029 . . 10.58 .72 d 11.30 1.80 .02 d 1.82 12.38 .75 d 13.12
61

Long-Range Estimates

Note: Totals do not necessarily equal the sums of rounded components.

Low-cost (Cont.):

2030 . . 10.58 0.73 d 11.31 1.80 0.02 d 1.82 12.38 0.76 d 13.13

2035 . . 10.58 .76 d 11.34 1.80 .02 d 1.82 12.38 .78 d 13.16

2040 . . 10.58 .76 d 11.34 1.80 .03 d 1.82 12.38 .79 d 13.17

2045 . . 10.58 .75 d 11.33 1.80 .03 d 1.82 12.38 .78 d 13.15

2050 . . 10.58 .74 d 11.32 1.80 .03 d 1.82 12.38 .77 d 13.14

2055 . . 10.58 .74 d 11.32 1.80 .03 d 1.82 12.38 .77 d 13.14

2060 . . 10.58 .75 d 11.33 1.80 .03 d 1.82 12.38 .78 d 13.15

2065 . . 10.58 .76 d 11.34 1.80 .03 d 1.82 12.38 .78 d 13.16

2070 . . 10.58 .76 d 11.34 1.80 .03 d 1.82 12.38 .79 d 13.17

2075 . . 10.58 .77 d 11.35 1.80 .03 d 1.82 12.38 .79 d 13.17

2080 . . 10.58 .76 d 11.34 1.80 .03 d 1.82 12.38 .78 d 13.16

2085 . . 10.58 .74 d 11.32 1.80 .03 d 1.82 12.38 .76 d 13.14

2090 . . 10.58 .72 d 11.30 1.80 .03 d 1.83 12.38 .75 d 13.13

2095 . . 10.58 .73 d 11.31 1.80 .03 d 1.83 12.38 .76 d 13.13

High-cost:

2020 . . 10.76 .50 d 11.27 1.83 .02 d 1.85 12.59 .52 d 13.11

2021 . . 10.59 .54 d 11.13 1.80 .02 d 1.82 12.38 .57 d 12.95

2022 . . 10.59 .57 d 11.16 1.80 .02 d 1.82 12.39 .59 d 12.98

2023 . . 10.59 .60 d 11.19 1.80 .03 d 1.82 12.39 .62 d 13.01

2024 . . 10.59 .62 d 11.22 1.80 .03 d 1.82 12.39 .65 d 13.04

2025 . . 10.58 .66 d 11.24 1.80 .03 d 1.82 12.38 .69 d 13.06

2026 . . 10.58 .79 d 11.38 1.80 .03 d 1.83 12.38 .83 d 13.21

2027 . . 10.58 .83 d 11.41 1.80 .04 d 1.83 12.37 .87 d 13.24

2028 . . 10.59 .87 d 11.45 1.80 .04 d 1.83 12.38 .90 d 13.29

2029 . . 10.59 .91 d 11.50 1.80 .04 d 1.84 12.39 .95 d 13.34

2030 . . 10.59 .93 d 11.52 1.80 .04 d 1.84 12.39 .97 d 13.36

2035 . . 10.59 1.01 d 11.60 1.80 .04 d 1.84 12.39 1.05 d 13.44

2040 . . 10.59 1.05 d 11.64 1.80 .05 d 1.84 12.39 1.10 d 13.49

2045 . . 10.59 1.07 d 11.67 1.80 .05 d 1.85 12.39 1.13 d 13.52

2050 . . 10.59 1.10 d 11.69 1.80 .05 d 1.85 12.39 1.15 d 13.55

2055 . . 10.59 1.13 d 11.73 1.80 .05 d 1.85 12.39 1.19 d 13.58

2060 . . 10.59 1.18 d 11.77 1.80 .06 d 1.85 12.39 1.23 d 13.62

2065 . . 10.59 1.22 d 11.82 1.80 .06 d 1.86 12.39 1.28 d 13.67

2070 . . 10.59 1.28 d 11.87 1.80 .06 d 1.86 12.39 1.33 d 13.73

2075 . . 10.59 1.33 d 11.92 1.80 .06 d 1.86 12.39 1.39 d 13.78

2080 . . 10.59 1.37 d 11.96 1.80 .06 d 1.86 12.39 1.43 d 13.82

2085 . . 10.59 1.39 d 11.98 1.80 .06 d 1.86 12.39 1.45 d 13.84

2090 . . 10.59 1.40 d 11.99 1.80 .06 d 1.86 12.39 1.45 d 13.85

2095 . . 10.59 1.41 d 12.00 1.80 .06 d 1.86 12.39 1.47 d 13.86

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.

Table IV.B2.—Components of Annual Income Rates, Calendar Years 1990-2095 (Cont.)

[As a percentage of taxable payroll]

Calendar

year

OASI DI OASDI

Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc
Actuarial Estimates

62

2. Comparison of Workers to Beneficiaries

Under the intermediate assumptions, the Trustees project that the OASDI

cost rate will rise rapidly between 2020 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 beneficiaries to workers is dominated by the OASI program because all workers eventually 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 parents, 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 babyboom generation has retired. Due to increasing longevity, the ratio of beneficiaries 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

Calendar year

Covered

workersa

(in thousands)

Beneficiariesb (in thousands) Covered

workers per

OASDI

beneficiary

OASDI

beneficiaries

per 100

covered

OASI DI OASDI workers c

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 . . . . . . . . . 120,440 32,763 3,874 36,636 3.3 30

1990 . . . . . . . . . 133,007 35,255 4,204 39,459 3.4 30

1995 . . . . . . . . . 140,802 37,364 5,731 43,096 3.3 31

2000 . . . . . . . . . 154,706 38,556 6,606 45,162 3.4 29

2005 . . . . . . . . . 159,034 39,961 8,172 48,133 3.3 30

2010 . . . . . . . . . 157,059 43,440 9,958 53,398 2.9 34

2011 . . . . . . . . . 158,595 44,388 10,428 54,816 2.9 35

2012 . . . . . . . . . 160,712 45,377 10,799 56,176 2.9 35

2013 . . . . . . . . . 163,014 46,517 10,954 57,471 2.8 35

2014 . . . . . . . . . 165,435 47,603 10,971 58,574 2.8 35

2015 . . . . . . . . . 168,186 48,663 10,881 59,543 2.8 35

2016 . . . . . . . . . 170,853 49,811 10,728 60,539 2.8 35

2017 . . . . . . . . . 173,021 50,962 10,517 61,480 2.8 36

2018 . . . . . . . . . 175,579 52,168 10,296 62,464 2.8 36

2019 . . . . . . . . . 177,864 53,508 10,063 63,570 2.8 36

Intermediate:

2020 . . . . . . . . . 179,548 54,892 9,867 64,759 2.8 36

2025 . . . . . . . . . 182,760 61,346 9,788 71,134 2.6 39

2030 . . . . . . . . . 186,135 67,948 9,944 77,893 2.4 42

2035 . . . . . . . . . 188,513 72,519 10,321 82,840 2.3 44

2040 . . . . . . . . . 190,474 74,728 10,946 85,674 2.2 45

2045 . . . . . . . . . 193,973 75,503 11,819 87,322 2.2 45
63

Long-Range Estimates

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. Totals do not necessarily equal the sums of rounded components.

The effect of the demographic shift under the three alternatives on the

OASDI cost rates is clear when one considers the projected number of

Intermediate (Cont.):

2050 . . . . . . . . . 198,300 76,773 12,398 89,170 2.2 45

2055 . . . . . . . . . 202,559 78,891 12,861 91,752 2.2 45

2060 . . . . . . . . . 206,369 81,873 13,047 94,920 2.2 46

2065 . . . . . . . . . 209,694 84,923 13,322 98,246 2.1 47

2070 . . . . . . . . . 213,017 88,233 13,606 101,839 2.1 48

2075 . . . . . . . . . 216,806 91,565 13,727 105,291 2.1 49

2080 . . . . . . . . . 221,279 93,822 13,943 107,765 2.1 49

2085 . . . . . . . . . 226,190 94,909 14,358 109,267 2.1 48

2090 . . . . . . . . . 231,159 95,976 15,060 111,036 2.1 48

2095 . . . . . . . . . 235,814 98,569 15,488 114,057 2.1 48

Low-cost:

2020 . . . . . . . . . 180,465 54,886 9,856 64,741 2.8 36

2025 . . . . . . . . . 186,292 61,226 9,231 70,457 2.6 38

2030 . . . . . . . . . 190,341 67,541 8,728 76,269 2.5 40

2035 . . . . . . . . . 193,572 71,647 8,605 80,252 2.4 41

2040 . . . . . . . . . 196,740 73,385 8,906 82,290 2.4 42

2045 . . . . . . . . . 202,410 73,712 9,493 83,205 2.4 41

2050 . . . . . . . . . 209,563 74,541 9,881 84,422 2.5 40

2055 . . . . . . . . . 216,760 76,349 10,225 86,574 2.5 40

2060 . . . . . . . . . 223,492 79,067 10,396 89,462 2.5 40

2065 . . . . . . . . . 229,882 81,889 10,675 92,564 2.5 40

2070 . . . . . . . . . 236,726 84,925 11,006 95,932 2.5 41

2075 . . . . . . . . . 244,722 87,896 11,266 99,162 2.5 41

2080 . . . . . . . . . 254,019 89,746 11,655 101,401 2.5 40

2085 . . . . . . . . . 264,038 90,557 12,272 102,830 2.6 39

2090 . . . . . . . . . 274,019 92,034 13,130 105,164 2.6 38

2095 . . . . . . . . . 283,490 95,923 13,712 109,634 2.6 39

High-cost:

2020 . . . . . . . . . 177,378 54,899 9,875 64,774 2.7 37

2025 . . . . . . . . . 177,643 61,490 10,447 71,937 2.5 40

2030 . . . . . . . . . 182,300 68,333 11,212 79,545 2.3 44

2035 . . . . . . . . . 183,901 73,554 12,065 85,618 2.1 47

2040 . . . . . . . . . 184,884 76,400 13,008 89,408 2.1 48

2045 . . . . . . . . . 186,413 77,753 14,164 91,917 2.0 49

2050 . . . . . . . . . 188,101 79,571 14,935 94,506 2.0 50

2055 . . . . . . . . . 189,611 82,084 15,511 97,595 1.9 51

2060 . . . . . . . . . 190,637 85,377 15,682 101,060 1.9 53

2065 . . . . . . . . . 191,125 88,705 15,905 104,610 1.8 55

2070 . . . . . . . . . 191,275 92,326 16,063 108,389 1.8 57

2075 . . . . . . . . . 191,359 96,059 15,937 111,996 1.7 59

2080 . . . . . . . . . 191,619 98,730 15,837 114,567 1.7 60

2085 . . . . . . . . . 192,123 100,066 15,850 115,917 1.7 60

2090 . . . . . . . . . 192,757 100,671 16,190 116,860 1.6 61

2095 . . . . . . . . . 193,316 101,784 16,337 118,120 1.6 61

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.

Table IV.B3.—Covered Workers and Beneficiaries, Calendar Years 1945-2095 (Cont.)

Calendar year

Covered

workersa

(in thousands)

Beneficiariesb (in thousands) Covered

workers per

OASDI

beneficiary

OASDI

beneficiaries

per 100

covered

OASI DI OASDI workers c
Actuarial Estimates

64

OASDI beneficiaries per 100 covered workers. Compared to the 2019 level

of 36 beneficiaries per 100 covered workers, the Trustees project that this

ratio rises to 45 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 assumptions, reaching 48 under the intermediate assumptions and 61 under the highcost assumptions. Under the low-cost assumptions, this ratio rises to 42 by

2038 and then generally declines, reaching 39 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 corresponding 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 population. 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.

Table IV.B3 also shows the number of covered workers per OASDI beneficiary, which was about 2.8 for 2019. Under the intermediate assumptions,

this ratio declines generally throughout the long-range period, reaching 2.2

 Figure IV.B2.—Number of OASDI Beneficiaries Per 100 Covered Workers

0

10

20

30

40

50

60

70

80

90

100

1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Historical Estimated

III

II

I
65

Long-Range Estimates

for 2038 and 2.1 by 2095. Under the low-cost assumptions, this ratio

declines to 2.4 for 2038, then generally rises to 2.6 by 2095. Under the highcost assumptions, this ratio decreases steadily to 1.6 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 continue for subsequent reports. Under these conditions, the program has

achieved sustainable solvency.

Table IV.B4 shows the Trustees’ projections of trust fund ratios by alternative, 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 291 percent at the beginning of 2020 until the trust fund

reserves become depleted in 2034 (the same year as in last year’s report), at

which time 76 percent of scheduled benefits would be payable. The DI trust

fund ratio decreases from 62 percent at the beginning of 2020 to 61 percent

in 2021. After 2021, 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 143 percent by 2041. The ratio then declines until the trust fund reserves

become depleted in 2065 (13 years later than projected in last year’s report).

At that time, 92 percent of scheduled benefits would be payable. The difference in depletion year from last year’s report is largely due to a lower

assumed ultimate disability incidence rate. See page 39 for additional details.

Under the intermediate assumptions, the trust fund ratio for the combined

OASI and DI Trust Funds declines from 261 percent at the beginning of
Actuarial Estimates

66

2020 until the combined fund reserves become depleted early in 2035 (the

same year as projected in last year’s report), at which time 79 percent of

scheduled benefits would be payable.

Under the low-cost assumptions, the trust fund ratio for the DI program

increases throughout the projection period, from 63 percent at the beginning

of 2020 to the extremely high level of 2,846 percent for 2095. For the OASI

program, the trust fund ratio declines steadily, from 291 percent for 2020

until the reserves become depleted in 2043, at which time 90 percent of

scheduled benefits would be payable. For the combined OASDI program, the

trust fund ratio declines from 261 percent for 2020 until the combined fund

reserves become depleted in 2079. However, the trust funds would have sufficient income by the end of 2088 to permit full payment of scheduled benefits thereafter and also to pay in arrears the temporary shortfalls between

2079 and 2088. By 2089, trust fund reserves become positive and the trust

fund ratio increases thereafter, to a ratio of 13 percent in 2095. 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

291 percent for 2020 until reserves become depleted in 2031, at which time

69 percent of scheduled benefits would still be payable. The DI trust fund

ratio declines from 62 percent for 2020 until the reserves become depleted in

2026. At that time, 88 percent of scheduled benefits would still be payable.

The combined OASI and DI trust fund ratio declines from 260 percent for

2020 until reserves become depleted in 2031, at which time 71 percent of

scheduled benefits would still be payable.

The Trustees project trust fund reserve depletion within the 75-year projection 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.

Even under the high-cost assumptions, however, the combined OASI and DI

Trust Fund reserves on hand plus their estimated future income are sufficient

to fully cover their combined cost until 2031. Under the intermediate

assumptions, the combined starting fund reserves plus estimated future

income are sufficient to fully cover cost until 2035. In the 2019 report, the

Trustees projected that the combined trust fund reserves would become

depleted in 2030 and 2035 under the high-cost and intermediate assumptions,

respectively, and would achieve sustainable solvency under the low-cost

assumptions.
67

Long-Range Estimates

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:

(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, allowing 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

Table IV.B4.—Trust Fund Ratios, Calendar Years 2020-2095a

[In percent]

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 Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund ratios reflect the 12 months of benefits scheduled for payment each year.

Calendar

year

Intermediate Low-cost High-cost

OASI DI OASDI OASI DI OASDI OASI DI OASDI

2020 . . . . . . . . . . . . . 291 62 261 291 63 261 291 62 260

2021 . . . . . . . . . . . . . 276 61 248 275 64 248 276 58 247

2022 . . . . . . . . . . . . . 257 62 233 258 69 235 254 49 228

2023 . . . . . . . . . . . . . 238 63 217 242 78 223 231 40 206

2024 . . . . . . . . . . . . . 218 66 200 226 92 211 205 30 183

2025 . . . . . . . . . . . . . 198 69 183 211 110 200 179 19 159

2026 . . . . . . . . . . . . . 177 72 165 196 131 189 152 8 134

2027 . . . . . . . . . . . . . 157 76 148 182 156 179 125 b 109

2028 . . . . . . . . . . . . . 136 81 130 168 186 170 98 b 84

2029 . . . . . . . . . . . . . 115 87 112 155 221 162 71 b

b Trust fund reserves would be depleted at the beginning of this year.

59

2030 . . . . . . . . . . . . . 94 93 94 143 259 154 43 b 33

2035 . . . . . . . . . . . . . b 125 1 86 473 121 bbb

2040 . . . . . . . . . . . . . b 142 b 33 684 94 bbb

2045 . . . . . . . . . . . . . b 133 b b 856 73 bbb

2050 . . . . . . . . . . . . . b 106 b b 1,031 61 bbb

2055 . . . . . . . . . . . . . b 71 b b 1,212 54 bbb

2060 . . . . . . . . . . . . . b 35 b b 1,430 47 bbb

2065 . . . . . . . . . . . . . b 1 b b 1,648 38 bbb

2070 . . . . . . . . . . . . . bbb b 1,869 26 bbb

2075 . . . . . . . . . . . . . bbb b 2,122 11 bbb

2080 . . . . . . . . . . . . . bbb b 2,362 b bbb

2085 . . . . . . . . . . . . . bbb b 2,548 b bbb

2090 . . . . . . . . . . . . . bbb b 2,666 3 bbb

2095 . . . . . . . . . . . . . bbb b 2,846 13 bbb

Trust fund reserves 

permanently 

become 

depleted in . . . . . . 2034 2065 2035 2043 c

c Trust fund reserves would not be depleted within the projection period.

d

d Trust fund reserves would be depleted for a temporary period, and return to positive levels before the end

of the period.

2031 2026 2031

Payable benefits as 

percent of scheduled benefits:

At the time of 

permanent 

reserve

depletion . . . . . 76 92 79 90 c d 69 88 71

For 2094 . . . . . 71 90 73 98 c d 50 64 52
Actuarial Estimates

68

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 adequacy because the trust fund ratios drop below 100 percent by the end of the

10-year period. Under the intermediate assumptions, the OASI Trust Fund

reserves become depleted in 2034, DI Trust Fund reserves become depleted

in 2065, and the combined OASI and DI Trust Fund reserves become

depleted in 2035. 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.

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

 Figure IV.B3.—Long-Range OASI and DI Trust Fund Ratios

[Asset reserves as a percentage of annual cost]

0%

200%

400%

600%

800%

1,000%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

OASI

DI

Historical Estimated

III

II I

I

II

III
69

Long-Range Estimates

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. Summarized 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 General 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 taxation 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 150.

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 rehabilitation 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 actuarial 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 positive, meaning that the reserves at the end of the period are at least equal to

annual cost. Note that solvency is possible with a small negative actuarial

balance where reserves are still positive.1

 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.
Actuarial Estimates

70

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 scenario or as bad as the high-cost scenario are unlikely to occur.

For the 25-year valuation period, the OASDI program has an actuarial balance of -0.15 percent of taxable payroll under the low-cost assumptions,

-2.02 percent under the intermediate assumptions, and -4.17 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 -0.19 percent under the low-cost assumptions, -2.75 percent under the

intermediate assumptions, and -5.90 percent under the high-cost assumptions. These actuarial balances mean that the OASDI program is not adequately 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 -0.13 percent of taxable payroll under the low-cost

assumptions, -3.21 percent under the intermediate assumptions, and

-7.10 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 demographic and economic trends, solvency for the program over the next

75 years could be restored using a variety of approaches. For example, revenue could be increased in a manner equivalent to an immediate and permanent increase in the combined Social Security payroll tax rate from

12.40 percent to 15.54 percent (a relative increase of 25.3 percent), cost

could be reduced in a manner equivalent to an immediate and permanent

reduction in scheduled benefits of about 19 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
71

Long-Range Estimates

15.73 percent (a relative increase of 26.9 percent),1 reducing cost in a manner equivalent to an immediate reduction in scheduled benefits of about

20 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 are increasing and reach

4.51 percent of payroll for 2094 (see table IV.B1). These large deficits indicate that annual cost continues to exceed non-interest income after 2094, so

continued adequate 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 intermediate assumptions.

 1 The indicated increase in the payroll tax rate of 3.33 percent is somewhat larger than the 3.21 percent

75-year actuarial deficit because the indicated increase reflects a behavioral response to tax rate changes. In

particular, the calculation assumes that an increase in payroll taxes results in a small shift of wages and salaries to forms of employee compensation that are not subject to the payroll tax.

Table IV.B5.—Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2020-2094

[As a percentage of taxable payroll]

Valuation period

Summarized income rate Summarized cost rate

Actuarial

balance

Non-interest

income

Beginning

asset

reservesa Total Costa

Ending

target

funda Total

OASI:

Intermediate:

2020-44. . . . . 11.38 1.30 12.68 14.14 0.58 14.72 -2.04

2020-69. . . . . 11.45 .70 12.15 14.58 .27 14.85 -2.71

2020-94. . . . . 11.49 .51 12.00 14.97 .16 15.14 -3.14

Low-cost:

2020-44. . . . . 11.29 1.17 12.45 12.51 .50 13.01 -.56

2020-69. . . . . 11.31 .60 11.92 12.31 .23 12.54 -.63

2020-94. . . . . 11.32 .42 11.74 12.19 .14 12.33 -.59

High-cost:

2020-44. . . . . 11.49 1.49 12.98 16.05 .67 16.71 -3.73

2020-69. . . . . 11.61 .83 12.44 17.37 .32 17.69 -5.26

2020-94. . . . . 11.70 .63 12.32 18.52 .19 18.71 -6.39

DI:

Intermediate:

2020-44. . . . . 1.83 0.04 1.87 1.78 0.07 1.85 0.02

2020-69. . . . . 1.83 .02 1.86 1.87 .03 1.91 -.05

2020-94. . . . . 1.84 .02 1.85 1.90 .02 1.92 -.07

Low-cost:

2020-44. . . . . 1.82 .04 1.86 1.40 .06 1.45 .41

2020-69. . . . . 1.82 .02 1.84 1.38 .03 1.41 .44

2020-94. . . . . 1.82 .01 1.84 1.37 .02 1.39 .45

High-cost:

2020-44. . . . . 1.84 .05 1.89 2.23 .10 2.32 -.44

2020-69. . . . . 1.85 .03 1.87 2.47 .04 2.51 -.64

2020-94. . . . . 1.85 .02 1.87 2.55 .02 2.58 -.71
Actuarial Estimates

72

Note: Totals do not necessarily equal the sums of rounded components.

5. Open-Group Unfunded Obligation

Consistent with practice since 1965, this report focuses on a 75-year opengroup valuation to evaluate the long-run financial status of the OASDI program. The open-group valuation includes non-interest income and cost for

past, current, and future participants through the year 2094. 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, payroll taxes and scheduled benefits for all participants are included through

2094.

The open-group unfunded obligation increased from $13.9 trillion shown in

last year's report to $16.8 trillion in this report. If there had been no changes

in starting values, assumptions, laws, or methods for this report, then the

open-group unfunded obligation would have increased to $14.5 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, 2020, rather than to January 1, 2019, which tends to

increase the unfunded obligation by the annual nominal interest rate; and

(2) the unfunded obligation now includes an additional year (2094). However, changes in the law, assumptions, methods, and starting values resulted

in a net $2.3 trillion increase in the unfunded obligation. 

OASDI:

Intermediate:

2020-44. . . . . 13.21 1.34 14.55 15.92 0.65 16.57 -2.02

2020-69. . . . . 13.28 .72 14.00 16.45 .30 16.76 -2.75

2020-94. . . . . 13.33 .52 13.85 16.88 .18 17.06 -3.21

Low-cost:

2020-44. . . . . 13.11 1.20 14.31 13.91 .55 14.46 -.15

2020-69. . . . . 13.14 .62 13.76 13.69 .25 13.95 -.19

2020-94. . . . . 13.15 .43 13.58 13.56 .15 13.71 -.13

High-cost:

2020-44. . . . . 13.33 1.54 14.86 18.27 .76 19.03 -4.17

2020-69. . . . . 13.45 .86 14.31 19.84 .36 20.21 -5.90

2020-94. . . . . 13.55 .65 14.19 21.08 .22 21.29 -7.10

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 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.

Table IV.B5.—Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2020-2094

[As a percentage of taxable payroll]

Valuation period

Summarized income rate Summarized cost rate

Actuarial

balance

Non-interest

income

Beginning

asset reservesa Total Costa

Ending

target

funda Total
73

Long-Range Estimates

The 75-year unfunded obligation is equivalent to 3.03 percent of OASDI taxable payroll and 1.0 percent of GDP for 2020-94.1 These percentages were

2.61 and 0.9, respectively, for last year’s report. The 75-year unfunded obligation 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 2.78 percent of payroll in last year’s report, and was

expected to increase to a deficit of 2.84 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 0.38 percentage

point increase (worsening) in the actuarial deficit to 3.21 percent of payroll.

As mentioned above, the open-group unfunded obligation expressed in dollars, 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 as explained in the next section, including a

law change, a reduction in the ultimate total fertility rate, and reductions in

near-term and ultimate interest rates.

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 $16.8 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,

plus starting trust fund reserves, minus the present value of the ending target

trust fund, is -$17.8 trillion for the OASDI program. 

 1 The present value of taxable payroll for 2020-94 is $554.6 trillion. The present value of GDP for 2020-94

is $1,614.2 trillion. In last year’s report, the present value of taxable payroll for 2019-93 was $531.2 trillion

and the present value of GDP for 2019-93 was $1,497.0 trillion.
Actuarial Estimates

74

Note: Totals do not necessarily equal the sums of rounded components.

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 solvency. 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 52.)

Another measure of trust fund finances, discussed in appendix F, is the

infinite horizon unfunded obligation, which takes account of all annual balances, 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 4.1 and 1.4,

respectively, for last year’s report. Of course, the degree of uncertainty associated 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.

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, 2020 (in billions):

A. Payroll tax revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $58,761 $9,978 $68,739

B. Reimbursements from general revenue. . . . . . . . . . . . . . . . . . . a

a Less than $0.5 billion.

a a

C. Taxation of benefits revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,957 202 5,159

D. Non-interest income (A + B + C) . . . . . . . . . . . . . . . . . . . . . . . 63,718 10,180 73,898

E. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,044 10,551 93,595

F. Cost minus non-interest income (E - D) . . . . . . . . . . . . . . . . . . 19,326 371 19,696

G. Trust fund asset reserves at start of period . . . . . . . . . . . . . . . . 2,804 93 2,897

H. Open-group unfunded obligation (F - G) . . . . . . . . . . . . . . . . . 16,521 278 16,799

I. Ending target trust fundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

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.

899 115 1,014

J. Income minus cost, plus reserves at start of period, minus

ending target trust fund (D - E + G - I = - H - I) . . . . . . . . . . . . -17,420 -393 -17,813

K. Taxable payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 554,563 554,563 554,563

Percent of taxable payroll:

Actuarial balance (100 × J ÷ K) . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21
75

Long-Range Estimates

Note: Totals do not necessarily equal the sums of rounded components.

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 0.05 percent of taxable payroll

solely due to the change in the valuation period. However, as described

below, projections in this report also reflect new data and changes in law,

assumptions, and methods. These changes, including the change in the valuation period, combine to decrease (worsen) the long-range OASDI actuarial

balance by 0.43 percentage point, from -2.78 percent of taxable payroll in

last year’s report to -3.21 percent in this report.

Legislation/Regulation

Changes in law, regulations, and policy combine to decrease the long-range

OASDI actuarial balance by 0.12 percent of payroll.

Since the last report, there has been one change in law that is expected to

have a significant financial effect on the long-range actuarial balance. The

Affordable Care Act (ACA), which was enacted in 2010, specified an excise

tax on employer-sponsored group health insurance premiums above a given

level (commonly referred to as the “Cadillac” tax). On December 20, 2019,

the ACA’s excise tax provision was repealed. The repeal of the excise tax is

expected to result in an increase in the rate of growth in the average cost of

employer-sponsored group health insurance. Faster growth in these premiTable 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.96 1.85 13.81

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.63 1.97 16.60

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.67 -.12 -2.78

Changes in actuarial balance due to changes in:

Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . -.12 .00 -.12

Valuation perioda . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 2094. This change in the valuation period results in a larger long-range actuarial deficit. The actuarial deficit includes the trust fund

reserve at the beginning of the projection period.

-.05 -.01 -.05

Demographic data and assumptions. . . . . . . . . . . . . . -.12 .00 -.13

Economic data and assumptions. . . . . . . . . . . . . . . . . -.16 -.02 -.18

Disability data and assumptions. . . . . . . . . . . . . . . . . -.01 .06 .05

Methods and programmatic data . . . . . . . . . . . . . . . . -.02 .02 .00

Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.47 .05 -.43

Shown in this report:

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 1.85 13.85

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 1.92 17.06
Actuarial Estimates

76

ums, which are not subject to the payroll tax, is assumed to reduce the share

of employee compensation that is provided in the form of wages, which are

subject to the payroll tax. As a result, the rate of growth in average real covered earnings will be reduced. This change in law is estimated to decrease

the long-range actuarial balance by 0.13 percent of taxable payroll.

This report also incorporates the effects of one notable new regulation. On

February 25, 2020, the Social Security Administration published a final rule

in the Federal Register that eliminates the inability to communicate in

English as an educational category in the disability determination and medical review processes. This rule is estimated to reduce the number of disabled

worker beneficiaries in the long-term by 0.25 percent. This regulation has a

negligible (less than 0.005 percent of taxable payroll) positive effect on the

actuarial balance.

Valuation Period

As mentioned above, changing the 75-year valuation period from 2019

through 2093 for last year’s report to 2020 through 2094 for this report

decreases the projected long-range OASDI actuarial balance by 0.05 percent

of taxable payroll. This decrease is mainly the result of including the relatively large negative annual balance for 2094 in this year’s 75-year projection period. Note that the actuarial balance calculation includes trust fund

reserves at the beginning of the projection period. These reserves reflect the

program’s net financial flows for all past years, including 2019, up to the

start of the valuation period.

Demographic Data and Assumptions

New demographic data and changes in demographic assumptions combine to

decrease the long-range OASDI actuarial balance by 0.13 percent of taxable

payroll. 

One ultimate demographic assumption was changed for this year’s report.

Since 2007, the total fertility rate has declined, reaching historically low levels of 1.73 for 2018 and an estimated 1.68 for 2019. It is not clear whether

these recent low levels will persist, or whether they are the temporary effect

of younger women delaying childbirth until they are older and then their

expectation of future births will be realized. Based on consideration of these

factors, the Trustees reduced the ultimate total fertility rate for this report

from 2.00 to 1.95 children per woman. This change in the ultimate fertility

assumption decreases the actuarial balance by 0.11 percent of taxable payroll. 
77

Long-Range Estimates

Three demographic data updates also resulted in significant changes in the

long-range actuarial balance. First, birth data for 2018 and the first quarter of

2019 indicate somewhat lower fertility rates than were assumed in last year’s

report for 2018 and 2019. 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, in addition to the effect due to the

reduced ultimate total fertility rate that is accounted for above. Second,

incorporating new mortality data (final 2017 data for ages under 65 from

NCHS; final 2016, preliminary 2017, and preliminary 2018 data for ages 65

and older from Medicare experience) results in higher death rates for all

future years than were projected in last year’s report. These higher death

rates increase the actuarial balance by 0.04 percent of taxable payroll. Third,

updates to lawful permanent resident (LPR) immigration data, other-thanLPR immigration data, and other minor data updates combine to decrease the

actuarial balance by 0.02 percent of taxable payroll.

Economic Data and Assumptions

New economic data and changes in economic assumptions combine to

decrease the long-range OASDI actuarial balance by 0.18 percent of payroll. 

Four ultimate economic assumptions were changed for this year’s report.

First, the ultimate rate of price inflation (CPI-W) was lowered by

0.2 percentage point, from 2.6 percent for last year’s report to 2.4 percent for

this year’s report. Inflation has been very low in recent years, reflecting

many factors that have been highly favorable for low price inflation. While

inflation will likely increase from recent low levels, the Trustees believe that

a return to historical long-term averages is unlikely. This change in the

CPI-W assumption decreases the long-range actuarial balance by

0.05 percent of payroll. 

Second, the average real-wage differential over the last 65 years of the projection period for this year’s report is 1.14 percentage points per year, lower

than the 1.21 value in last year’s report. Most of this decrease in the longterm real-wage differential is due to the repeal of the ACA excise tax, as

accounted for above. However, a small portion is due to faster assumed

growth in employer-sponsored group health insurance premiums apart from

the effect of the repeal of the excise tax, based on updated projections by the

Centers for Medicare and Medicaid Services (CMS). This additional incremental change to the real-wage differential assumption, separate from the

change due to the repeal of the excise tax, decreases the long-range actuarial

balance by 0.01 percent of taxable payroll. 

Third, the ultimate age-sex-adjusted unemployment rate is reduced from

5.5 percent for last year’s report to 5.0 percent for this year’s report. At the
Actuarial Estimates

78

same time, long-term labor force participation rates have been reduced by

age and sex for this report such that projected employment rates are essentially unchanged. The Trustees believe that a structural shift has occurred in

the unemployment rate, and thus future long-term unemployment rates and

labor force participation rates will both remain somewhat below long-term

past averages. This change to unemployment rates and labor force participation rates has a negligible effect on the actuarial balance. 

Fourth, the ultimate real interest rate was lowered by 0.2 percentage point,

from 2.5 percent for last year’s report to 2.3 percent for this year’s report.

Real interest rates have been low since 2000, and particularly low since the

start of the economic recession of 2007-09. An ongoing and much-debated

question among experts is how much of this change is a temporary response

to extraordinary events, versus a fundamental permanent change. The Trustees believe that lowering the long-term ultimate real interest rate somewhat

is appropriate at this time. This change in the ultimate real interest rate

assumption decreases the actuarial balance by 0.07 percent of payroll. 

Other changes to data and near-term economic assumptions, including a

0.7 percent decrease in the estimated level of potential GDP for the fourth

quarter of 2019 and thereafter, combine for a net decrease in the actuarial

balance of 0.04 percent of taxable payroll.

Disability Data and Assumptions

New disability data and changes in disability assumptions combine to

increase the long-range OASDI actuarial balance by 0.05 percent of payroll.

Disabled-worker applications have declined substantially since 2010 and

have reached levels well below expectations and far below average rates in

the past. Based on this experience, the Trustees reduced the ultimate disability incidence rate for this report from 5.2 to 5.0 per thousand exposed. This

change in the ultimate disability incidence rate increases the actuarial balance by 0.04 percent of payroll. In addition, recent disability data and

changes in near-term assumptions increase the long-range actuarial balance

by 0.01 percent of taxable payroll. These new disability data and changes in

assumptions are almost entirely responsible for the change in the DI Trust

Fund reserve depletion date from 2052 in last year’s report to 2065 in this

year’s report. The short-range effects are noted in section IV.A.4.

Methods and Programmatic Data

The projections in this report also reflect several methodological improvements and updates based on new program-specific data. These methodological changes, programmatic data updates, and interactions combine for a net

negligible effect on the long-range OASDI actuarial balance. Descriptions of
79

Long-Range Estimates

eight significant methodological changes and programmatic data updates follow. 

The first significant update is the use of this year’s lower disability incidence

assumptions, and resulting lower disability prevalence projections, for the

labor force participation model. Incorporating these lower disability prevalence projections in the labor force model increases the actuarial balance by

0.02 percent of payroll. 

Second, improvements were made to the long-range model used for projecting the percentage of the population that has fully-insured status. The longrange fully insured model constructs 30,000 simulated work histories for

each sex and birth cohort using past coverage rates, earnings distributions,

and amounts required for crediting quarters of coverage. The model develops

the work histories in a manner that replicates the kind of individual variation

seen in historical experience. The changes made for this year’s report

improve the alignment of simulated fully insured rates with historical fully

insured rates. These improvements to the fully insured model decrease the

actuarial balance by 0.03 percent of taxable payroll.

Third, the method used to project retired worker prevalence rates for ages 63

to 69 was updated to better reflect recent patterns in benefit claiming at those

ages. Recent data indicate that retired workers are choosing to start their benefits at later ages on average, and this trend is expected to continue. Increases

in the ages at which retirees start benefits results in higher lifetime benefits,

on average. This change results in a decrease in the actuarial balance of

0.02 percent of payroll.

The fourth significant change is in the sample used for the long-range model

for projecting average benefit levels of retired-worker and disabled-worker

beneficiaries who are 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 2015. This year’s report uses the results from worker

beneficiaries newly entitled in 2016. This update to the sample data increases

the actuarial balance by 0.03 percent of payroll.

Fifth, recent data and estimates provided by the Office of Tax Analysis

(OTA) at the Department of the Treasury indicate higher near-term and ultimate levels of revenue from taxation of OASDI benefits than projected in

last year’s report. The increase in projected ratios of income tax on benefits

to benefit amounts results in an increase in the actuarial balance of 0.02 percent of taxable payroll.

The sixth significant change improves estimates of average benefit levels for

retired workers and disabled workers receiving benefits. The new method
Actuarial Estimates

80

refines the adjustment factors that are applied to awarded benefit levels

based on the duration from initial entitlement to the date the benefit award is

made. This refinement better uses available data for several historical years.

This change results in a decrease in the actuarial balance of 0.01 percent of

payroll.

Seventh, this year’s report better reflects projected changes in the distribution of benefit awards by disability adjudication level. The average monthly

benefit level for disability claims awarded at the initial state Disability Determination Services (DDS) level tends to be higher than for claims awarded at

the Administrative Law Judge (ALJ) hearings level. Because the cases in the

2016 new entitlement sample include relatively more DDS cases and relatively fewer ALJ cases than usual, alignment to the expected average distribution of cases by adjudicative level reduced the projected future average

benefit level. This change increased the actuarial balance by 0.02 percent of

payroll.

The eighth significant change is updating post-entitlement adjustment factors

based on new programmatic data. Post-entitlement factors are used to

account for changes in benefit levels, primarily due to differential mortality

by benefit level and earnings after benefit entitlement. This data update

decreases the actuarial balance by 0.01 percent of payroll.

In addition to these eight significant methodological changes and programmatic data updates, changes in starting levels and projected levels of OASI

and DI beneficiaries and benefit amounts over the first 10 years of the projection period, updating other programmatic data, other small methodological improvements, and interactions among the various method changes and

updates to programmatic experience combine to decrease the long-range

actuarial balance by 0.02 percent of taxable payroll.
81

Long-Range Estimates

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 all

years beginning with 2022, principally due to the repeal of the ACA excise

tax, which results in slower projected growth in average real covered earnings, and lower fertility rates. For the full 75-year projection period, the

annual balances are lower, on average, by 0.37 percentage point. The differences in annual balances are small in the 2020s, generally grow until 2080,

and then decline thereafter. For 2093, the projected annual deficit is

4.48 percent of taxable payroll in this report, compared to 4.11 percent in last

year's report.

 Figure IV.B4.—OASDI Annual Balances: 2019 and 2020 Trustees Reports

[As a percentage of taxable payroll, under intermediate assumptions]

-6%

-4%

-2%

0%

2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

2019 Report

2020 Report
Assumptions and Methods

82

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. Similarly, program cost will depend on how these factors affect the size and composition 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 conditions. These factors include fertility, mortality, immigration, marriage,

divorce, productivity, inflation, average earnings, unemployment, real interest 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 appropriate revisions. The assumptions for this report were selected by the middle

of January 2020.

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 significant 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. Outcomes 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 probability distribution of possible future outcomes, with most of the key factors

being varied around the intermediate alternative (see appendix E).
83

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 reasonable 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 extrapolations 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.

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 historical data and the assumptions used for the projections.

1. Fertility Assumptions

Birth rates by single year of age, for 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

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

 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. To obtain copies of such studies or of this

report, please submit a request at www.ssa.gov/OACT/request.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/2020/.

 2 Birth rates at age 14 include births to women 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.
Assumptions and Methods

84

remained through 2009, but dropped below 1.90 for 2011 through 2018 and

is estimated in this report to be 1.68 for 2019. 

These variations in the 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 total fertility rate for future years to remain relatively close to

the average level since the end of the baby-boom era. The assumed ultimate

total fertility rates are 2.15, 1.95, and 1.75 children per woman for the lowcost, intermediate, and high-cost assumptions, respectively. These ultimate

rates are reduced from the ultimate rates of 2.20, 2.00, and 1.80 children per

woman used in last year’s report.

For the intermediate assumptions, the projected total fertility rate gradually

increases from 2019 through the year the ultimate value is reached (2029)

with somewhat more rapid increases in the middle of the 2019-2029 period.

The assumed low-cost and high-cost total fertility rates trend away from the

intermediate path and reach the ultimate values in 2029 and 2026, respectively.

2. Mortality Assumptions

For the projections in this year’s report, ultimate average annual percentage

reductions in future mortality rates were assumed by age group and cause of

death. These assumptions were then used to estimate future central death

rates by age group, sex, and cause of death. From these estimated central

death rates, probabilities of death by single year of age and sex were calculated.

Historical death rates were calculated for years 1900 through 2017 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 2016 and preliminary data

for 2017 and 2018 were used.2 Death rates by cause of death were produced

for all ages for years 1979-2017 using data from the NCHS.

 1 These rates reflect NCHS data on deaths and Census estimates of population.

 2 These rates reflect Medicare data on deaths and enrollments.
85

Demographic Assumptions and Methods

The total age-sex-adjusted death rate1 declined at an average annual rate of

1.02 percent between 1900 and 2017. Between 1979 and 2017, 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 0.83 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 periods. 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 2017, the agesex-adjusted death rate declined at an average rate of 0.77 percent per year

for ages 65 and over, and 2.99 percent per year for ages under 15.

Mortality assumptions differ for the low-cost, intermediate, and high-cost

scenarios. Throughout the projection, the low-cost scenario contains annual

percentage reductions that are smaller than those in the intermediate scenario, while those in the high-cost scenario are larger. The ultimate annual

percentage reductions for each of the three alternatives are the same as those

in last year’s report.

The trends in the annual reductions in central death rates were calculated for

the period from 2007 to 2017 for NCHS data, and 2008 to 2018 for 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

2044 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 population 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, in general, slightly higher than the death rates in last year’s

report for both the age group under 65 and the age group 65 and over. These

 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.
Assumptions and Methods

86

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 0.40 percent, 0.76 percent, and 1.15 percent between 2019

and 2094 for alternatives I, II, and III, respectively. In keeping with the patterns 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

0.37 percent, 0.68 percent, and 1.02 percent between 2019 and 2094 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 0.79 percent,

1.56 percent, and 2.54 percent between 2019 and 2094 for alternatives I, II,

and III, respectively.

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 historical 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 mortality. 
87

Demographic Assumptions and Methods

.

Table V.A1.—Fertility and Mortality Assumptions,a

Calendar Years 1940-2095

Calendar year

Total

fertility

rateb

Age-sex-adjusted death ratec

per 100,000

Total Under 65 65 and over

Historical data:

1940 . . . . . . . . . 2.23 1,919.8 750.1 9,718.8

1945 . . . . . . . . . 2.42 1,716.6 674.8 8,662.9

1950 . . . . . . . . . 3.03 1,561.9 570.2 8,173.7

1955 . . . . . . . . . 3.50 1,453.8 508.2 7,758.4

1960 . . . . . . . . . 3.61 1,454.3 503.2 7,795.6

1965 . . . . . . . . . 2.88 1,428.8 495.2 7,653.9

1970 . . . . . . . . . 2.43 1,340.0 485.7 7,036.3

1975 . . . . . . . . . 1.77 1,204.8 426.6 6,393.6

1980 . . . . . . . . . 1.82 1,136.9 384.3 6,154.3

1985 . . . . . . . . . 1.83 1,081.0 353.3 5,932.9

1990 . . . . . . . . . 2.07 1,022.9 333.6 5,618.9

1995 . . . . . . . . . 1.98 1,002.7 317.9 5,568.6

2000 . . . . . . . . . 2.05 961.5 281.0 5,498.9

2005 . . . . . . . . . 2.06 901.9 270.7 5,110.3

2010 . . . . . . . . . 1.93 820.8 248.5 4,636.1

2011 . . . . . . . . . 1.89 820.7 249.2 4,631.3

2012 . . . . . . . . . 1.87 811.8 248.8 4,565.6

2013 . . . . . . . . . 1.85 812.3 249.6 4,564.6

2014 . . . . . . . . . 1.86 805.1 251.7 4,495.1

2015 . . . . . . . . . 1.85 815.3 255.2 4,549.7

2016 . . . . . . . . . 1.82 808.7 260.8 4,461.0

2017 . . . . . . . . . 1.77 d812.5 261.5 d4,486.3

2018 . . . . . . . . . 1.73 e800.5 e255.8 e4,431.9

2019 . . . . . . . . . f1.68 g795.5 g255.3 g4,397.1

Intermediate: 

2020 . . . . . . . . . 1.69 790.4 254.3 4,364.9

2025 . . . . . . . . . 1.87 760.9 245.0 4,200.3

2030 . . . . . . . . . 1.95 729.4 233.1 4,038.3

2035 . . . . . . . . . 1.95 698.6 220.8 3,884.3

2040 . . . . . . . . . 1.95 669.5 209.1 3,739.6

2045 . . . . . . . . . 1.95 642.2 198.0 3,603.8

2050 . . . . . . . . . 1.95 616.6 187.6 3,476.5

2055 . . . . . . . . . 1.95 592.6 177.9 3,357.0

2060 . . . . . . . . . 1.95 570.1 168.9 3,244.8

2065 . . . . . . . . . 1.95 548.9 160.4 3,139.3

2070 . . . . . . . . . 1.95 529.1 152.5 3,039.8

2075 . . . . . . . . . 1.95 510.4 145.1 2,946.0

2080 . . . . . . . . . 1.95 492.8 138.1 2,857.4

2085 . . . . . . . . . 1.95 476.2 131.6 2,773.6

2090 . . . . . . . . . 1.95 460.5 125.4 2,694.2

2095 . . . . . . . . . 1.95 445.6 119.7 2,619.0
Assumptions and Methods

88

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:

Low-cost: 

2020 . . . . . . . . . 1.73 798.3 257.0 4,407.4

2025 . . . . . . . . . 1.99 786.9 254.6 4,335.6

2030 . . . . . . . . . 2.15 771.3 249.0 4,253.6

2035 . . . . . . . . . 2.15 754.8 242.6 4,170.1

2040 . . . . . . . . . 2.15 738.4 236.0 4,088.1

2045 . . . . . . . . . 2.15 722.3 229.5 4,008.3

2050 . . . . . . . . . 2.15 706.8 223.2 3,931.1

2055 . . . . . . . . . 2.15 691.7 217.1 3,856.4

2060 . . . . . . . . . 2.15 677.2 211.2 3,784.2

2065 . . . . . . . . . 2.15 663.2 205.5 3,714.4

2070 . . . . . . . . . 2.15 649.6 200.0 3,646.8

2075 . . . . . . . . . 2.15 636.4 194.7 3,581.3

2080 . . . . . . . . . 2.15 623.7 189.6 3,518.0

2085 . . . . . . . . . 2.15 611.4 184.7 3,456.6

2090 . . . . . . . . . 2.15 599.5 179.9 3,397.1

2095 . . . . . . . . . 2.15 588.0 175.3 3,339.4

High-cost:

2020 . . . . . . . . . 1.65 781.9 251.3 4,319.3

2025 . . . . . . . . . 1.74 731.7 234.1 4,049.1

2030 . . . . . . . . . 1.75 682.0 214.8 3,797.3

2035 . . . . . . . . . 1.75 636.3 196.4 3,568.8

2040 . . . . . . . . . 1.75 594.9 179.7 3,363.0

2045 . . . . . . . . . 1.75 557.6 164.7 3,177.5

2050 . . . . . . . . . 1.75 524.0 151.2 3,009.9

2055 . . . . . . . . . 1.75 493.7 139.1 2,857.8

2060 . . . . . . . . . 1.75 466.2 128.2 2,719.5

2065 . . . . . . . . . 1.75 441.2 118.4 2,593.1

2070 . . . . . . . . . 1.75 418.4 109.6 2,477.2

2075 . . . . . . . . . 1.75 397.5 101.6 2,370.5

2080 . . . . . . . . . 1.75 378.3 94.3 2,272.1

2085 . . . . . . . . . 1.75 360.7 87.7 2,181.0

2090 . . . . . . . . . 1.75 344.4 81.6 2,096.3

2095 . . . . . . . . . 1.75 329.3 76.1 2,017.5

a This table contains basic assumptions along with key summary values that are derived from basic assumptions.

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 the intermediate assumptions for ages below 65 and preliminary data for ages 65 and

older.

f Estimated using provisional first quarter data.

g Estimated using the intermediate assumptions for all ages.

Table V.A1.—Fertility and Mortality Assumptions,a

Calendar Years 1940-2095 (Cont.)

Calendar year

Total

fertility

rateb

Age-sex-adjusted death ratec

per 100,000

Total Under 65 65 and over
89

Demographic 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 otherthan-LPR immigration and other-than-LPR emigration. Total net immigration refers to the sum of net LPR immigration and net other-than-LPR immigration.

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 various factors and legislative changes, including the Immigration Act of 1965

and the Immigration Act of 1990.

For the intermediate alternative, the ultimate level of annual LPR immigration, which includes residents who adjust their status to become LPRs, is

assumed to be 1,050,000 persons for 2020 and later. For alternative I, ultimate annual LPR immigration is assumed to be 1,250,000 persons for 2020

and later, and for alternative III, ultimate annual LPR immigration is

assumed to be 850,000 persons for 2020 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

 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.
Assumptions and Methods

90

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 scenarios, 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 have been

affected significantly by the economic recession of 2007-09. Although net

other-than-LPR immigration was greatly reduced during the economic

downturn, it has begun to rise since then. Under the intermediate alternative,

annual other-than-LPR immigration is assumed to increase until 2019 and

remain level thereafter, reflecting a recovery from levels experienced during

the recession. The ultimate levels of other-than-LPR immigration are

unchanged from last year’s report: 1,350,000 persons for alternative II,

1,650,000 persons for alternative I, and 1,050,000 persons for alternative III.

The ultimate levels are attained in years 2019, 2021, and 2019 for alternatives II, I, and III, respectively.

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-thanLPR immigrants who leave the Social Security area averages about 426,000

through the 75-year projection period. In addition, 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. For the low-cost

and high-cost scenarios, the total annual number of other-than-LPR emigrants averages about 502,000 and 349,000, 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. The ultimate annual

number of people adjusting status to become LPRs is one-third as large as

the assumed ultimate annual number of the other-than-LPR immigrants

entering the Social Security area, and is unchanged from last year’s report for

all three sets of assumptions.
91

Demographic Assumptions and Methods

Under the assumptions described above, the projected size of the other-thanLPR immigrant population grows substantially, from about 16.6 million by

the end of 2020 to about 35.5 million by the end of 2094. 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 immigration gradually decreases over time. Because the projected number of otherthan-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 2019, 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 immigration over the 75-year projection period is about 474,000 persons. For the

low-cost and high-cost assumptions, projected average annual net other-thanLPR immigration is about 598,000 persons and 351,000 persons, respectively.

The projected average annual level of total net immigration (LPR and otherthan-LPR, combined) is about 1,261,000 persons per year during the 75-year

projection period under the intermediate assumptions. For the low-cost and

high-cost assumptions, projected average annual total net immigration is

about 1,598,000 persons and 946,000 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. 
Assumptions and Methods

92

Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2095

[in thousands]

Calendar 

year

LPR immigration Other-than-LPR immigrationb

Total net

immigration

LPR

in

Legal

out

Adjustments

of statusc d NetLPR

OtherthanLPR

in

OtherthanLPR

out

Adjustments

of statusc d

Net

otherthanLPR

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 - - 119 261 693

1990 . . . . 548 166 114 497 - - 114 623 1,120

1995 . . . . 511 192 255 575 - - 255 560 1,135

2000 . . . . 482 224 413 672 1,408 294 413 701 1,372

2005 . . . . 561 290 597 869 1,778 35 597 1,146 2,015

2010 . . . . 622 262 426 786 679 204 426 50 835

2011 . . . . 647 264 408 791 591 252 408 -69 722

2012 . . . . 621 255 401 766 710 437 401 -128 638

2013 . . . . 589 249 409 748 832 331 409 92 840

2014 . . . . 627 256 398 769 1,443 133 398 912 1,681

2015 . . . . 689 271 395 813 1,237 165 395 677 1,490

2016 . . . . 763 292 407 877 1,150 721 407 22 900

2017 . . . . 722 280 398 840 e1,250 e235 398 e617 e1,457

2018 . . . . e715 e274 e382 e823 f1,300 e243 e382 f675 f1,497

2019 . . . . f650 f275 f450 f825 f1,350 f258 f450 f642 f1,467

Intermediate: 

2020 . . . . 600 263 450 788 1,350 269 450 631 1,418

2025 . . . . 600 263 450 788 1,350 333 450 567 1,355

2030 . . . . 600 263 450 788 1,350 361 450 539 1,326

2035 . . . . 600 263 450 788 1,350 386 450 514 1,301

2040 . . . . 600 263 450 788 1,350 410 450 490 1,277

2045 . . . . 600 263 450 788 1,350 427 450 473 1,261

2050 . . . . 600 263 450 788 1,350 438 450 462 1,249

2055 . . . . 600 263 450 788 1,350 446 450 454 1,242

2060 . . . . 600 263 450 788 1,350 452 450 448 1,236

2065 . . . . 600 263 450 788 1,350 457 450 443 1,231

2070 . . . . 600 263 450 788 1,350 461 450 439 1,227

2075 . . . . 600 263 450 788 1,350 464 450 436 1,223

2080 . . . . 600 263 450 788 1,350 466 450 434 1,221

2085 . . . . 600 263 450 788 1,350 468 450 432 1,219

2090 . . . . 600 263 450 788 1,350 469 450 431 1,218

2095 . . . . 600 263 450 788 1,350 470 450 430 1,217
93

Demographic Assumptions and Methods

Low-cost: 

2020 . . . . 700 250 550 1,000 1,600 274 550 776 1,776

2025 . . . . 700 250 550 1,000 1,650 358 550 742 1,742

2030 . . . . 700 250 550 1,000 1,650 401 550 699 1,699

2035 . . . . 700 250 550 1,000 1,650 438 550 662 1,662

2040 . . . . 700 250 550 1,000 1,650 473 550 627 1,627

2045 . . . . 700 250 550 1,000 1,650 499 550 601 1,601

2050 . . . . 700 250 550 1,000 1,650 518 550 582 1,582

2055 . . . . 700 250 550 1,000 1,650 531 550 569 1,569

2060 . . . . 700 250 550 1,000 1,650 541 550 559 1,559

2065 . . . . 700 250 550 1,000 1,650 550 550 550 1,550

2070 . . . . 700 250 550 1,000 1,650 556 550 544 1,544

2075 . . . . 700 250 550 1,000 1,650 561 550 539 1,539

2080 . . . . 700 250 550 1,000 1,650 564 550 536 1,536

2085 . . . . 700 250 550 1,000 1,650 567 550 533 1,533

2090 . . . . 700 250 550 1,000 1,650 568 550 532 1,532

2095 . . . . 700 250 550 1,000 1,650 569 550 531 1,531

High-cost:

2020 . . . . 500 255 350 595 1,050 260 350 440 1,035

2025 . . . . 500 255 350 595 1,050 304 350 396 991

2030 . . . . 500 255 350 595 1,050 319 350 381 976

2035 . . . . 500 255 350 595 1,050 331 350 369 964

2040 . . . . 500 255 350 595 1,050 344 350 356 951

2045 . . . . 500 255 350 595 1,050 352 350 348 943

2050 . . . . 500 255 350 595 1,050 357 350 343 938

2055 . . . . 500 255 350 595 1,050 359 350 341 936

2060 . . . . 500 255 350 595 1,050 360 350 340 935

2065 . . . . 500 255 350 595 1,050 362 350 338 933

2070 . . . . 500 255 350 595 1,050 364 350 336 931

2075 . . . . 500 255 350 595 1,050 365 350 335 930

2080 . . . . 500 255 350 595 1,050 367 350 333 928

2085 . . . . 500 255 350 595 1,050 368 350 332 927

2090 . . . . 500 255 350 595 1,050 369 350 331 926

2095 . . . . 500 255 350 595 1,050 369 350 331 926

a This table contains basic assumptions along with key summary values that are derived from basic assumptions.

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 2017,

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 immigration.

e Estimated.

f Estimated, intermediate alternative.

Note: Totals do not necessarily equal the sums of rounded components.

Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2095 (Cont.)

[in thousands]

Calendar 

year

LPR immigration Other-than-LPR immigrationb

Total net

immigration

LPR

in

Legal

out

Adjustments

of statusc d NetLPR

OtherthanLPR

in

OtherthanLPR

out

Adjustments

of statusc d

Net

otherthanLPR
Assumptions and Methods

94

4. Total Population Estimates

The starting Social Security area population for December 31, 2017, 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 census, inclusion of U.S. citizens living abroad (including residents of U.S. territories), 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 2018 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 marriage 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).
95

Demographic Assumptions and Methods

Table V.A3.—Social Security Area Population on July 1 and Dependency Ratios,

Calendar Years 1945-2095

Calendar year

Population (in thousands) Dependency ratio

Under 20 20-64

65 and

over Total Ageda Totalb

Historical data:

1945 . . . . . . . . . . . . . . 49,121 88,109 10,899 148,129 0.124 0.681

1950 . . . . . . . . . . . . . . 53,903 92,387 12,769 159,059 .138 .722

1955 . . . . . . . . . . . . . . 63,292 96,208 15,075 174,574 .157 .815

1960 . . . . . . . . . . . . . . 73,075 99,800 17,278 190,152 .173 .905

1965 . . . . . . . . . . . . . . 80,019 104,883 19,071 203,974 .182 .945

1970 . . . . . . . . . . . . . . 81,020 112,989 20,895 214,903 .185 .902

1975 . . . . . . . . . . . . . . 78,629 122,640 23,307 224,576 .190 .831

1980 . . . . . . . . . . . . . . 74,833 134,107 26,306 235,247 .196 .754

1985 . . . . . . . . . . . . . . 72,945 144,579 29,132 246,656 .201 .706

1990 . . . . . . . . . . . . . . 74,797 152,770 31,924 259,490 .209 .699

1995 . . . . . . . . . . . . . . 79,278 160,733 34,313 274,324 .213 .707

2000 . . . . . . . . . . . . . . 82,003 170,181 35,505 287,689 .209 .690

2005 . . . . . . . . . . . . . . 83,984 181,061 37,171 302,216 .205 .669

2010 . . . . . . . . . . . . . . 85,681 188,293 41,046 315,020 .218 .673

2011 . . . . . . . . . . . . . . 85,314 189,658 42,024 316,996 .222 .671

2012 . . . . . . . . . . . . . . 84,966 190,432 43,415 318,814 .228 .674

2013 . . . . . . . . . . . . . . 84,678 191,084 44,882 320,644 .235 .678

2014 . . . . . . . . . . . . . . 84,590 192,115 46,281 322,987 .241 .681

2015 . . . . . . . . . . . . . . 84,631 193,294 47,715 325,640 .247 .685

2016 . . . . . . . . . . . . . . 84,637 194,014 49,187 327,838 .254 .690

2017c . . . . . . . . . . . . . 84,565 194,436 50,732 329,733 .261 .696

2018d . . . . . . . . . . . . . 84,477 195,076 52,314 331,867 .268 .701

2019d . . . . . . . . . . . . . 84,374 195,827 53,952 334,152 .276 .706

Intermediate:

2020 . . . . . . . . . . . . . . 84,202 196,499 55,645 336,345 .283 .712

2025 . . . . . . . . . . . . . . 84,239 198,986 64,332 347,557 .323 .747

2030 . . . . . . . . . . . . . . 85,679 202,121 71,903 359,703 .356 .780

2035 . . . . . . . . . . . . . . 88,708 205,658 76,452 370,818 .372 .803

2040 . . . . . . . . . . . . . . 92,424 209,168 78,886 380,478 .377 .819

2045 . . . . . . . . . . . . . . 95,274 212,823 80,612 388,708 .379 .826

2050 . . . . . . . . . . . . . . 95,786 217,406 82,970 396,162 .382 .822

2055 . . . . . . . . . . . . . . 96,291 221,476 86,079 403,846 .389 .823

2060 . . . . . . . . . . . . . . 97,625 224,946 89,903 412,474 .400 .834

2065 . . . . . . . . . . . . . . 99,916 228,448 93,512 421,877 .409 .847

2070 . . . . . . . . . . . . . . 102,544 231,387 97,374 431,304 .421 .864

2075 . . . . . . . . . . . . . . 104,760 233,999 101,508 440,267 .434 .881

2080 . . . . . . . . . . . . . . 106,220 238,551 103,986 448,756 .436 .881

2085 . . . . . . . . . . . . . . 107,313 244,470 105,372 457,155 .431 .870

2090 . . . . . . . . . . . . . . 108,688 250,017 107,105 465,810 .428 .863

2095 . . . . . . . . . . . . . . 110,565 253,483 110,718 474,766 .437 .873
Assumptions and Methods

96

Notes:

1. Historical data are subject to revision.

2. Totals do not necessarily equal the sums of rounded components.

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 assumptions. This report includes life expectancy in two different forms (period and

cohort), which are useful for two separate purposes.

Low-cost:

2020 . . . . . . . . . . . . . . 84,440 196,783 55,634 336,857 0.283 0.712

2025 . . . . . . . . . . . . . . 86,064 200,563 64,163 350,790 .320 .749

2030 . . . . . . . . . . . . . . 90,184 205,014 71,374 366,572 .348 .788

2035 . . . . . . . . . . . . . . 96,305 209,852 75,402 381,559 .359 .818

2040 . . . . . . . . . . . . . . 103,074 214,710 77,229 395,013 .360 .840

2045 . . . . . . . . . . . . . . 108,179 220,555 78,354 407,088 .355 .846

2050 . . . . . . . . . . . . . . 110,141 228,429 80,194 418,764 .351 .833

2055 . . . . . . . . . . . . . . 112,339 236,146 82,908 431,394 .351 .827

2060 . . . . . . . . . . . . . . 116,141 243,216 86,442 445,800 .355 .833

2065 . . . . . . . . . . . . . . 121,441 250,312 89,808 461,561 .359 .844

2070 . . . . . . . . . . . . . . 127,066 257,144 93,402 477,613 .363 .857

2075 . . . . . . . . . . . . . . 131,859 264,332 97,207 493,398 .368 .867

2080 . . . . . . . . . . . . . . 135,491 274,239 99,375 509,106 .362 .856

2085 . . . . . . . . . . . . . . 138,759 286,018 100,550 525,328 .352 .837

2090 . . . . . . . . . . . . . . 142,712 296,916 102,862 542,489 .346 .827

2095 . . . . . . . . . . . . . . 147,571 304,984 107,981 560,536 .354 .838

High-cost:

2020 . . . . . . . . . . . . . . 83,874 196,053 55,654 335,582 .284 .712

2025 . . . . . . . . . . . . . . 82,370 197,304 64,529 344,202 .327 .745

2030 . . . . . . . . . . . . . . 81,133 199,211 72,532 352,876 .364 .771

2035 . . . . . . . . . . . . . . 81,199 201,544 77,709 360,451 .386 .788

2040 . . . . . . . . . . . . . . 82,014 203,796 80,876 366,687 .397 .799

2045 . . . . . . . . . . . . . . 82,796 205,350 83,327 371,474 .406 .809

2050 . . . . . . . . . . . . . . 82,183 206,680 86,306 375,170 .418 .815

2055 . . . . . . . . . . . . . . 81,339 207,256 89,877 378,473 .434 .826

2060 . . . . . . . . . . . . . . 80,698 207,280 94,009 381,987 .454 .843

2065 . . . . . . . . . . . . . . 80,579 207,358 97,835 385,771 .472 .860

2070 . . . . . . . . . . . . . . 80,823 206,641 101,908 389,373 .493 .884

2075 . . . . . . . . . . . . . . 81,045 205,041 106,296 392,381 .518 .914

2080 . . . . . . . . . . . . . . 80,924 204,734 108,996 394,654 .532 .928

2085 . . . . . . . . . . . . . . 80,531 205,396 110,472 396,400 .538 .930

2090 . . . . . . . . . . . . . . 80,174 206,304 111,422 397,900 .540 .929

2095 . . . . . . . . . . . . . . 80,038 206,072 113,163 399,273 .549 .938

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.

Table V.A3.—Social Security Area Population on July 1 and Dependency Ratios,

Calendar Years 1945-2095 (Cont.)

Calendar year

Population (in thousands) Dependency ratio

Under 20 20-64

65 and

over Total Ageda Totalb
97

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 statistic for illustrating the overall level of the death rates experienced in a

single year. Period life expectancy for a particular year provides an individual’s expected average remaining lifetime at a selected age, assuming 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. 
Assumptions and Methods

98

Table V.A4.—Period Life Expectancya

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.

Historical data

Calendar

year

At birth At age 65

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

2017b . . .

b Estimated using final data for ages below 65 and preliminary data for ages 65 and older.

76.0 81.0 17.9 20.5

2018c . . .

c Estimated using the intermediate assumptions for ages below 65 and preliminary data for ages 65 and older.

76.3 81.1 18.0 20.6

2019d . . .

d Estimated using the intermediate assumptions for all ages.

76.3 81.2 18.1 20.6

Intermediate Low-cost High-cost

Calendar

year

At birth At age 65 At birth At age 65 At birth At age 65

Male Female Male Female Male Female Male Female Male Female Male Female

2020 . . . . 76.4 81.3 18.1 20.7 76.3 81.2 18.0 20.6 76.6 81.4 18.2 20.7

2025 . . . . 76.9 81.7 18.5 21.0 76.5 81.3 18.2 20.7 77.5 82.1 18.8 21.2

2030 . . . . 77.5 82.2 18.8 21.3 76.7 81.5 18.4 20.9 78.4 82.9 19.3 21.7

2035 . . . . 78.1 82.6 19.1 21.6 77.0 81.8 18.5 21.0 79.3 83.6 19.9 22.2

2040 . . . . 78.6 83.1 19.5 21.9 77.3 82.0 18.7 21.2 80.2 84.3 20.4 22.6

2045 . . . . 79.2 83.5 19.8 22.1 77.6 82.3 18.9 21.3 81.0 85.0 20.9 23.1

2050 . . . . 79.7 84.0 20.1 22.4 77.9 82.5 19.0 21.5 81.8 85.6 21.3 23.5

2055 . . . . 80.2 84.4 20.4 22.7 78.2 82.8 19.2 21.6 82.5 86.2 21.7 23.9

2060 . . . . 80.7 84.8 20.7 22.9 78.5 83.0 19.4 21.8 83.2 86.8 22.2 24.2

2065 . . . . 81.2 85.2 21.0 23.2 78.8 83.2 19.5 21.9 83.8 87.3 22.6 24.6

2070 . . . . 81.6 85.6 21.2 23.4 79.0 83.4 19.7 22.0 84.4 87.8 22.9 25.0

2075 . . . . 82.1 85.9 21.5 23.7 79.3 83.7 19.8 22.2 85.0 88.3 23.3 25.3

2080 . . . . 82.5 86.3 21.7 23.9 79.6 83.9 20.0 22.3 85.6 88.7 23.7 25.6

2085 . . . . 82.9 86.6 22.0 24.1 79.8 84.1 20.1 22.5 86.1 89.2 24.0 25.9

2090 . . . . 83.3 86.9 22.2 24.3 80.1 84.3 20.3 22.6 86.6 89.6 24.3 26.2

2095 . . . . 83.7 87.2 22.5 24.5 80.3 84.5 20.4 22.7 87.1 90.0 24.6 26.5
99

Demographic Assumptions and Methods

Table V.A5.—Cohort Life Expectancya

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.

Calendar

year

Intermediate Low-cost High-cost

At birth b At age 65 c At birth b

b Cohort life expectancy at birth for those born in the calendar year is based on a combination of actual, estimated, and projected death rates for birth years 1940 through 2017. For birth years after 2017, these values

depend on estimated and projected death rates.

At age 65 c

c Age 65 cohort life expectancy for those attaining age 65 in calendar years 1940 though 2016 depends on

actual death rates or on a combination of actual, estimated, and projected death rates. After 2016, these values depend on estimated and projected death rates.

At birth b At age 65 c

Male Female Male Female Male Female Male Female Male Female Male Female

1940 . . . . 70.3 76.5 12.7 14.7 70.2 76.4 12.7 14.7 70.4 76.6 12.7 14.7

1945 . . . . 72.0 78.1 13.0 15.4 71.9 77.9 13.0 15.4 72.2 78.4 13.0 15.4

1950 . . . . 73.2 79.4 13.1 16.2 72.9 79.1 13.1 16.2 73.5 79.8 13.1 16.2

1955 . . . . 73.7 79.9 13.1 16.7 73.3 79.5 13.1 16.7 74.2 80.5 13.1 16.7

1960 . . . . 74.3 80.3 13.2 17.4 73.8 79.7 13.2 17.4 75.0 81.0 13.2 17.4

1965 . . . . 75.2 80.8 13.5 18.0 74.5 80.1 13.5 18.0 76.2 81.8 13.5 18.0

1970 . . . . 76.4 81.7 13.8 18.5 75.5 80.7 13.8 18.5 77.6 82.8 13.8 18.5

1975 . . . . 77.3 82.4 14.2 18.7 76.1 81.3 14.2 18.7 78.7 83.7 14.2 18.7

1980 . . . . 78.1 83.0 14.7 18.8 76.7 81.7 14.7 18.8 79.8 84.6 14.7 18.8

1985 . . . . 78.7 83.5 15.4 19.1 77.1 82.1 15.4 19.1 80.6 85.3 15.4 19.1

1990 . . . . 79.3 84.0 16.0 19.4 77.5 82.4 16.0 19.4 81.5 86.0 16.0 19.4

1995 . . . . 80.0 84.6 16.7 19.7 78.0 82.7 16.7 19.7 82.4 86.7 16.7 19.7

2000 . . . . 80.5 85.0 17.4 20.1 78.3 83.0 17.4 20.0 83.1 87.2 17.5 20.2

2005 . . . . 81.0 85.4 17.9 20.5 78.6 83.2 17.8 20.4 83.8 87.8 18.0 20.7

2010 . . . . 81.5 85.8 18.3 20.9 78.9 83.5 18.1 20.6 84.5 88.3 18.6 21.2

2011 . . . . 81.6 85.9 18.4 20.9 79.0 83.6 18.2 20.7 84.6 88.4 18.7 21.3

2012 . . . . 81.7 85.9 18.5 21.0 79.0 83.6 18.2 20.7 84.7 88.5 18.8 21.4

2013 . . . . 81.8 86.0 18.5 21.1 79.1 83.6 18.2 20.8 84.8 88.6 18.9 21.5

2014 . . . . 81.9 86.1 18.6 21.1 79.1 83.7 18.2 20.8 85.0 88.7 19.0 21.6

2015 . . . . 82.0 86.2 18.6 21.2 79.2 83.7 18.3 20.8 85.1 88.8 19.1 21.7

2016 . . . . 82.1 86.2 18.7 21.3 79.2 83.8 18.3 20.9 85.2 88.9 19.2 21.8

2017 . . . . 82.2 86.3 18.8 21.3 79.3 83.8 18.3 20.9 85.3 89.0 19.3 21.9

2018 . . . . 82.3 86.4 18.8 21.4 79.4 83.9 18.4 20.9 85.5 89.1 19.4 22.0

2019 . . . . 82.4 86.5 18.9 21.5 79.4 83.9 18.4 21.0 85.6 89.2 19.5 22.1

2020 . . . . 82.5 86.5 19.0 21.5 79.5 84.0 18.4 21.0 85.7 89.3 19.6 22.2

2025 . . . . 82.9 86.9 19.3 21.8 79.7 84.2 18.6 21.1 86.3 89.8 20.2 22.7

2030 . . . . 83.4 87.3 19.6 22.1 80.0 84.4 18.8 21.3 86.9 90.3 20.7 23.1

2035 . . . . 83.8 87.6 20.0 22.4 80.3 84.6 18.9 21.5 87.5 90.7 21.2 23.6

2040 . . . . 84.2 87.9 20.3 22.7 80.5 84.8 19.1 21.6 88.0 91.2 21.7 24.0

2045 . . . . 84.6 88.2 20.6 23.0 80.8 85.0 19.3 21.8 88.5 91.6 22.1 24.4

2050 . . . . 84.9 88.5 20.9 23.2 81.0 85.2 19.4 21.9 89.0 92.0 22.6 24.8

2055 . . . . 85.3 88.8 21.2 23.5 81.3 85.4 19.6 22.0 89.4 92.3 23.0 25.1

2060 . . . . 85.7 89.1 21.4 23.7 81.5 85.6 19.8 22.2 89.9 92.7 23.4 25.5

2065 . . . . 86.0 89.4 21.7 24.0 81.7 85.8 19.9 22.3 90.3 93.0 23.8 25.8

2070 . . . . 86.3 89.7 22.0 24.2 82.0 86.0 20.1 22.5 90.7 93.4 24.1 26.2

2075 . . . . 86.7 89.9 22.2 24.4 82.2 86.2 20.2 22.6 91.1 93.7 24.5 26.5

2080 . . . . 87.0 90.2 22.5 24.6 82.4 86.4 20.4 22.7 91.5 94.0 24.8 26.8

2085 . . . . 87.3 90.4 22.7 24.9 82.6 86.5 20.5 22.9 91.8 94.3 25.1 27.1

2090 . . . . 87.6 90.7 23.0 25.1 82.8 86.7 20.7 23.0 92.2 94.6 25.5 27.4

2095 . . . . 87.9 90.9 23.2 25.3 83.0 86.9 20.8 23.1 92.5 94.9 25.8 27.6
Assumptions and Methods

100

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 moderate economic growth after completion of the recovery from the last recession

and their best estimate for other economic parameters. The low-cost assumptions represent a more optimistic outlook with 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 weaker economic growth interrupted by a

recession in the near term, slower economic growth in the long term, and relatively pessimistic levels for other parameters.

Actual economic data were available through the third quarter of 2019 at the

time the assumptions for this report were set. The data indicated that economic activity peaked in the fourth quarter of 2007.1 A severe recession followed, with a low point in the economic cycle reached in the second quarter

of 2009 with gross domestic product (GDP) about 7 percent below the estimated sustainable trend level. The annual growth rate in real GDP has been

positive in all years since then, but not as rapid as in most past recoveries. 

Under the intermediate assumptions, the economy is estimated to have

reached its sustainable trend level of output in 2019, two years earlier than in

last year’s report, mainly because employment in 2019 exceeded projections

from last year’s report and reached the estimated full-employment level.

Under the low-cost assumptions, the economy is estimated to be still recovering and is projected to return to a higher sustainable trend level of output

by 2022, one year later than in last year’s report. Under the high-cost

assumptions, the estimated sustainable trend level of output is lower, and

actual output has already exceeded that level. However, due to the assumed

recession, GDP is projected to drop to 3.5 percent below the sustainable

trend level in the first half of 2021, and the subsequent recovery is assumed

to return GDP to the sustainable trend level in 2029. Complete economic

cycles have little effect on the long-range estimates of financial status, so the

assumptions do not include cycles beyond the short-range period

(2020 through 2029).

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 See www.nber.org/cycles/cyclesmain.html.
101

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 five

complete economic cycles (1969-73, 1973-79, 1979-90, 1990-2001, and

2001-07, measured peak to peak), the annual increases in total-economy productivity averaged 2.66, 1.07, 1.41, 1.85, and 2.19 percent, respectively. For

the period from 1969 to 2007, covering those last five complete economic

cycles, the annual increase in total-economy productivity averaged

1.74 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

2019 report. 

The average annual rate of change in total-economy productivity from 2007

(the end of the last complete economic cycle) to 2019 is estimated to be

1.07 percent. For the intermediate assumptions, the annual change in productivity is 1.26 percent for 2020, 1.99 percent for 2021, and reaches its ultimate

value of 1.63 percent for 2025 and thereafter. For the low-cost assumptions,

the annual change in productivity is 1.61 percent for 2020, then increases to

2.64 percent for 2021, and then approaches its ultimate value of 1.93 percent

for 2026. For the high-cost assumptions, the assumed recession slows the

annual change in productivity to 0.55 percent for 2020 and 1.15 percent for

2021. The growth rate rebounds to 1.84 percent for 2022, averages

1.41 percent for 2023 through 2028, and stabilizes at its ultimate value of

1.33 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 deflator) affect the nominal levels of GDP, wages, self-employment income, average earnings, and taxable payroll. For a given real rate of growth in average

 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 are consistent with ultimate annual increases in private nonfarm business productivity

of 2.36, 2.00, and 1.63 percent. Compared to total-economy productivity, private nonfarm business productivity is a more widely known concept that excludes the farm, government, nonprofit institution, and private

household sectors.
Assumptions and Methods

102

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, and

2.63 percent over the economic cycles 1969-73, 1973-79, 1979-90,

1990-2001, and 2001-07, respectively. The annual increases in the GDP

deflator averaged 5.04, 7.54, 4.61, 2.08, and 2.49 percent for the respective

economic cycles. For the period from 1969 to 2007, covering the last five

complete economic cycles, the annual increases in the CPI and GDP deflator

averaged 4.59 and 4.03 percent, respectively. The estimated average annual

change from 2007 (the end of the last complete economic cycle) to 2019 is

1.73 percent for the CPI and 1.64 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.1 These assumptions are 0.2 percentage point lower than in the

2019 report, reflecting the Trustees’ expectation that the Federal Reserve

Board’s inflation targets will remain unchanged. 

For the intermediate assumptions, the annual change in the CPI is

2.27 percent for 2020, 2.43 percent for 2021, and reaches the ultimate

growth rate of 2.40 percent for 2022 and later. For the low-cost assumptions,

the annual change in the CPI is 2.96 percent for 2020, decreases to

2.85 percent for 2021, and reaches its ultimate growth rate of 3.00 percent

for 2022 and later. For the high-cost assumptions, the annual rate of change

in the CPI is 1.49 percent for 2020, decreases to 1.26 percent for 2021, and

gradually rises to its ultimate growth rate of 1.80 percent for 2024 and later. 

The annual increase in the GDP deflator differs from the annual increase in

the CPI because the two indices are constructed using different computational methods and coverage. 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 2007, covering

the last five complete economic cycles, the average annual price differential

was 0.57 percentage point. From 2007 (the end of the last complete eco-

 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 1978-2019 period had the method currently 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.
103

Economic Assumptions and Methods

nomic cycle) to 2019, the average annual price differential is estimated to be

0.10 percentage point.

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 recognizes the historical variation in this measure. Accordingly, the assumed ultimate 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, intermediate, and high-cost alternatives, respectively. The ultimate price differentials

for the three alternatives are unchanged from the 2019 report.

The price differential was 0.15 percentage point in 2018, is estimated to be

-0.16 in 2019, and is assumed to be 0.13 for 2020. The negative price differential estimated for 2019 primarily reflects a temporary 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. For 2020 and later, oil prices are assumed to grow at a relatively

stable rate. For the intermediate assumptions, the price differential is

0.30 percentage point for 2021 and 0.35 for 2022 and later.

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 coverage, and in certain circumstances, the automatic cost-of-living benefit

increases.

Projected growth rates in average covered earnings are derived from projections of the most inclusive measure, 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.
Assumptions and Methods

104

The average annual change in average hours worked was -0.26 percent over

the last five complete economic cycles covering the period from 1969 to

2007. The annual change in average hours worked averaged -0.89, -0.55,

-0.11, 0.10, and -0.50 percent over the economic cycles 1969-73, 1973-79,

1979-90, 1990-2001, and 2001-07, respectively. From 2007 (the end of the

last complete economic cycle) to 2019, the average annual change in average

hours worked is estimated to be -0.01 percent.

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 2019 report.

The average annual change in the ratio of earnings to total labor compensation was -0.20 percent from 1969 to 2007. Most of this decrease was due to

the relative increase in the cost of employer-sponsored group health insurance (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. Projections of future ratios of earnings to total labor compensation follow this principle. 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 assume

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 compensation from 2029 to 2094 are about -0.03, -0.13, and -0.23 percent for the

low-cost, intermediate, and high-cost assumptions, respectively. These

assumed rates are about 0.07 percentage point lower (more negative) than

those assumed for the 2019 report. Under the intermediate assumptions, the

ratio of wages to employee compensation declines from 0.814 for 2019 to

0.740 for 2094.

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

decline in the ratio of earnings to total labor compensation (which, under the
105

Economic Assumptions and Methods

intermediate assumptions, averages 0.11 percent from 2029 to 2094) is less

than the rate of decline in the ratio of wages to employee compensation.

The ratio of total labor compensation (i.e., employee compensation and net

proprietors’ income) to GDP varies over the economic cycle and with

changes in the relative sizes of different sectors of the economy. Over the last

five economic cycles from 1969 to 2007, this ratio has averaged 0.627. The

ratio declined from 0.649 for 2001 to 0.602 in 2009, increased to 0.612 in

2012, and is 0.608 in 2018. This ratio is assumed to rise to 0.631 for 2029.

For years after 2029, 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 2029 level for each set of

assumptions.

The projected average annual growth rate in average nominal U.S. earnings

from 2029 to 2094 is about 3.55 percent for the intermediate assumptions.

This growth rate reflects the average annual growth rate of approximately

-0.11 percent for the ratio of earnings to total labor compensation, and also

reflects the assumed ultimate annual growth rates of 1.63 percent for productivity, -0.05 percent for average hours worked, and 2.05 percent for the GDP

deflator. Similarly, the projected average annual growth rates in average

nominal U.S. earnings are 4.76 percent for the low-cost assumptions and

2.35 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

3.10 percent for 2019. From 2019 to 2029, the annual rate of change in the

average covered wage averages 5.12, 3.88, and 2.57 percent for the low-cost,

intermediate, and high-cost assumptions, respectively. The projected average

annual growth rates in the average covered wage from 2029 to 2094 are 4.76,

3.54, and 2.32 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

 1 However, employment in the uniformed military sector has declined in size over the last 40 years, and is

assumed to remain at its 2018 level throughout the 75-year projection period.
Assumptions and Methods

106

the CPI. For the period from 1969 to 2007, covering the last five complete

economic cycles, the real-wage differential averaged 0.80 percentage point,

the result of averages of 1.02, 0.05, 0.44, 1.47, and 0.83 percentage points

over the economic cycles 1969-73, 1973-79, 1979-90, 1990-2001, and

2001-07, respectively.

For the years 2030 through 2094, the projected average annual real-wage differentials for OASDI covered employment are 1.76, 1.14, and

0.52 percentage points for the low-cost, intermediate, and high-cost assumptions, respectively. The rounded average annual real-wage differentials are

0.08, 0.07, and 0.08 percentage point lower than in the 2019 report. 

The estimated real-wage differential averaged 0.71 percentage point for 2008

through 2019 (the years since the peak of the last complete economic cycle).

The real-wage differential was 1.08 percentage points in 2018 and is estimated to be 1.44 percentage points in 2019. For the intermediate assumptions, the real-wage differential is projected to rise from 1.23 percentage

points in 2020 to 2.01 percentage points in 2021 before reaching its long-run

average of 1.14 percentage points for 2030 through 2094. For the low-cost

assumptions, the real-wage differential is 1.72 percentage points for 2020,

increases to 2.94 percentage points in 2021, and reaches its long-run average

of 1.76 percentage points for 2030 through 2094. For the high-cost assumptions, the real-wage differential is 0.06 percentage point for 2020 and

-1.11 percentage points in 2021, due to the assumed recession. It then rises to

1.62 percentage points in 2022 before gradually declining to its long-run

average of 0.52 percentage point for 2030 through 2094.
107

Economic Assumptions and Methods

Table V.B1.—Principal Economic Assumptions

Calendar year

Annual percentage changea in—

Realwage

differentialb

Productivity

(Total U.S.

economy)

Earnings as

a percent of

total labor

compensation

Average

hours

worked

GDP

price

index

Average

annual wage

in covered

employment

Consumer

Price

Index

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 -.49 1.92 2.51 2.30 .22

2010 to 2015 . . . .51 .15 .37 1.72 2.92 1.61 1.31

Economic cycles:c

1969 to 1973 . . . 2.66 -.34 -.89 5.04 5.93 4.91 1.02

1973 to 1979 . . . 1.07 -.43 -.55 7.54 8.59 8.54 .05

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 . . . 1.07 .04 -.01 1.64 2.44 1.73 .71

Single years:

2009 . . . . . . . . . . 3.14 -.57 -1.87 .78 -1.56 -.67 -.89

2010 . . . . . . . . . . 2.61 .21 .53 1.17 2.59 2.07 .52

2011 . . . . . . . . . . .06 .32 .92 2.08 3.14 3.56 -.41

2012 . . . . . . . . . . .46 .47 -.02 1.92 3.36 2.10 1.26

2013 . . . . . . . . . . .60 -.33 .25 1.77 1.21 1.37 -.16

2014 . . . . . . . . . . .63 .27 .28 1.84 3.57 1.50 2.06

2015 . . . . . . . . . . .79 .03 .42 1.00 3.37 -.41 3.78

2016 . . . . . . . . . . .35 .09 -.43 1.03 1.17 .98 .20

2017 . . . . . . . . . . 1.02 .17 .10 1.91 3.38 2.13 1.25

2018 . . . . . . . . . . .87 .05 .46 2.40 3.63 2.55 1.08

2019d . . . . . . . . . 1.19 .05 .02 1.82 3.10 1.66 1.44

Intermediate: 

2020 . . . . . . . . . . 1.26 -.03 -.13 2.14 3.50 2.27 1.23

2021 . . . . . . . . . . 1.99 -.01 e 2.13 4.44 2.43 2.01

2022 . . . . . . . . . . 1.86 -.08 e 2.05 4.09 2.40 1.69

2023 . . . . . . . . . . 1.67 -.11 -.01 2.05 3.83 2.40 1.43

2024 . . . . . . . . . . 1.62 -.11 -.04 2.05 3.78 2.40 1.38

2025 . . . . . . . . . . 1.63 -.11 -.05 2.05 3.81 2.40 1.41

2026 . . . . . . . . . . 1.63 -.09 -.05 2.05 3.84 2.40 1.44

2027 . . . . . . . . . . 1.63 -.07 -.05 2.05 3.89 2.40 1.49

2028 . . . . . . . . . . 1.63 -.07 -.05 2.05 3.89 2.40 1.49

2029 . . . . . . . . . . 1.63 -.08 -.05 2.05 3.72 2.40 1.32

2029 to 2094 . . . 1.63 -.11 -.05 2.05 3.54 2.40 1.14
Assumptions and Methods

108

5. Labor Force and Unemployment Projections

The model used by the Office of the Chief Actuary projects the civilian labor

force by age, sex, marital status, and presence of children. Projections of the

labor force participation rates reflect changes in disability prevalence, educational attainment, the average level of Social Security retirement benefits, the

state of the economy, and the change in life expectancy. The projections also

include a “cohort effect,” which reflects an upward trend in female participation rates across cohorts born through 1948.

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,

Low-cost: 

2020 . . . . . . . . . . 1.61 -0.02 0.10 2.61 4.68 2.96 1.72

2021 . . . . . . . . . . 2.64 .01 e 2.64 5.79 2.85 2.94

2022 . . . . . . . . . . 2.40 -.06 .03 2.75 5.57 3.00 2.57

2023 . . . . . . . . . . 1.96 -.07 .05 2.75 4.98 3.00 1.98

2024 . . . . . . . . . . 1.98 -.07 .05 2.75 4.99 3.00 1.99

2025 . . . . . . . . . . 1.96 -.05 .05 2.75 5.00 3.00 2.00

2026 . . . . . . . . . . 1.93 -.03 .05 2.75 5.02 3.00 2.02

2027 . . . . . . . . . . 1.93 e .05 2.75 5.08 3.00 2.08

2028 . . . . . . . . . . 1.93 e .05 2.75 5.10 3.00 2.10

2029 . . . . . . . . . . 1.93 .01 .05 2.75 4.96 3.00 1.96

2029 to 2094 . . . 1.93 -.03 .05 2.75 4.76 3.00 1.76

High-cost: 

2020 . . . . . . . . . . .55 -.04 -.24 1.58 1.55 1.49 .06

2021 . . . . . . . . . . 1.15 -.01 -.50 1.00 .15 1.26 -1.11

2022 . . . . . . . . . . 1.84 -.11 -.08 1.11 3.18 1.56 1.62

2023 . . . . . . . . . . 1.43 -.14 -.07 1.34 3.17 1.79 1.37

2024 . . . . . . . . . . 1.39 -.16 -.07 1.35 3.17 1.80 1.37

2025 . . . . . . . . . . 1.41 -.16 -.10 1.35 3.04 1.80 1.24

2026 . . . . . . . . . . 1.44 -.16 -.10 1.35 3.02 1.80 1.22

2027 . . . . . . . . . . 1.41 -.15 -.10 1.35 3.02 1.80 1.22

2028 . . . . . . . . . . 1.34 -.16 -.11 1.35 2.89 1.80 1.09

2029 . . . . . . . . . . 1.33 -.16 -.13 1.35 2.59 1.80 .79

2029 to 2094 . . . 1.33 -.19 -.15 1.35 2.32 1.80 .52

a For rows with a single year listed, the value is the annual percentage change from the prior year. For rows

with a range of years listed, the value is the compound average annual percentage change.

b For rows with a single year listed, the value is the annual percentage change in the average annual wage in

covered employment less the annual percentage change in the Consumer Price Index. For rows with a range

of years listed, the value is the average of annual values of the real wage differential, beginning with the year

following the first year of the range. Values are rounded after all computations.

c Economic cycles are shown from peak to peak, except for the last cycle, which is not yet complete.

d Historical data are not available for the full year. Estimated values vary slightly by alternative and are

shown for the intermediate assumptions.

e Greater than -0.005 and less than 0.005.

Table V.B1.—Principal Economic Assumptions (Cont.)

Calendar year

Annual percentage changea in—

Realwage

differentialb

Productivity

(Total U.S.

economy)

Earnings as

a percent of

total labor

compensation

Average

hours

worked

GDP

price

index

Average

annual wage

in covered

employment

Consumer

Price

Index
109

Economic Assumptions and Methods

1.2 percent during the 1990-2001 cycle, and 1.1 percent during the

2001-07 cycle. Further slowing of labor force growth is expected to follow

from a substantial 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 0.7 percent per year from 2019 to 2029 and 0.4 percent per year

over the remainder of the 75-year projection period.

Labor force participation rates are projected with a model that uses demographic and economic assumptions specific to each alternative. More optimistic 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 consistent with lower labor force participation rates. These economic and demographic 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 participation rates at ages 50 and over declined for males but were fairly stable for

females. 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 males and increased for females. Since the mid-1990s,

however, participation rates for both sexes at ages 50 and over have generally risen.

Many economic and demographic factors, including longevity, health, disability prevalence, the business cycle, incentives for retirement in Social

Security and private pensions, education, and marriage patterns, will influence future labor force participation rates. The Office of the Chief Actuary

models some of these factors explicitly. To model the effects of other factors

related to increases in life expectancy, projected participation rates are

adjusted upward for mid-career and older ages to reflect projected increases

in life expectancy. For the intermediate projections, this adjustment increases

the total labor force by 2.9 percent for 2094.

For men age 16 and over, the projected age-adjusted labor force participation

rates1 for 2094 are 73.0, 73.1, and 73.1 percent for the low-cost, intermedi-

 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.
Assumptions and Methods

110

ate, and high-cost assumptions, respectively. The low-cost assumptions result

in a larger working-age population and a larger labor force when compared

to the intermediate assumptions, but a slightly lower labor force participation

rate for men. This occurs because the low-cost assumptions include shorter

life expectancies and relatively higher numbers of never-married individuals

in the population. Shorter life expectancies tend to reduce work at older ages,

while labor force participation rates tend to be lower for never-married men

and higher for never-married women compared to their married counterparts.

For women age 16 and over, the projected age-adjusted labor force participation rates for 2094 are 62.1, 61.5, and 60.7 percent for the low-cost, intermediate, and high-cost assumptions, respectively. These age-adjusted labor

force participation rates for 2094 are higher under all three alternatives than

the age-adjusted rates for 2018 of 71.0 percent for men and 58.8 percent for

women (based on actual age-specific 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 2019 report. The Trustees believe that a structural shift has occurred in

the unemployment rate, such that long-term unemployment rates and labor

force participation rates will both remain somewhat below long-term past

averages. Lowering both unemployment rates and labor force participation

rates from levels in the 2019 report does not imply lower levels of employment; the projected ratio of employment to population for this report is similar to that in the 2019 report. 

The total civilian unemployment rates are presented in table V.B2. For years

through 2029, the table presents total civilian rates without adjustment for

the changing age-sex distribution of the population. For years after 2029, 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 unemployment for various age-sex groups of the population. Each group’s unemployment rate gradually approaches an assumed stable value within the first

ten years of the projection period for all alternatives, and thus the total agesex-adjusted civilian unemployment rate reaches its ultimate assumed value

within the first ten years of the projection.

The assumed ultimate age-sex-adjusted unemployment rates are 4.0, 5.0, and

6.0 percent for the low-cost, intermediate, and high-cost assumptions,

respectively. These values are 0.5 percentage point lower than in the
111

Economic Assumptions and Methods

2019 report, consistent with the Trustees’ belief that unemployment rates and

labor force participation rates will both remain below long-term past averages, as mentioned above. The Trustees assume the current favorable labor

market conditions will draw more nonparticipants back into the labor force

and the unemployment rate will increase from an estimated 3.7 percent for

2019 to the assumed 5.0 percent for 2023 under the intermediate assumptions. Under the low-cost assumptions, the ultimate unemployment rate is

reached in 2022. Under the high-cost assumptions, the ultimate unemployment rate is reached in 2028.1

6. Gross Domestic Product Projections

The value of real GDP equals the product of three components: (1) average

weekly total employment,2 (2) productivity, and (3) average hours worked

per week. Consequently, the growth rate in real GDP is approximately equal

to the sum of the growth rates for total employment, productivity, and average hours worked. For the period from 1969 to 2007, which covers the last

five complete economic cycles, the average growth rate in real GDP was

3.1 percent. This average growth rate approximately equals the sum of the

average growth rates of 1.6 percent for total employment, 1.7 percent for

productivity, and -0.3 percent for average hours worked. The real GDP for

2018 was 19.3 percent above the 2007 level. The estimated real GDP growth

from 2018 to 2019 is 2.3 percent.

For the intermediate assumptions, the average annual growth in real GDP is

2.1 percent from 2019 to 2029, the approximate sum of component growth

rates of 0.5 percent for total employment, 1.66 percent for productivity, and

-0.04 percent for average hours worked. The projected average annual

growth in real GDP of 2.1 percent for this period is equal to the underlying

sustainable trend rate because the Trustees assume that the recovery from the

last recession was complete in 2019. After 2029, the annual growth in real

GDP averages 2.0 percent, based on the projected average annual growth

rate of 0.4 percent for total employment and the assumed ultimate growth

rates of 1.63 percent for productivity and -0.05 percent for average hours

worked. The projected growth rate of real GDP is slower than the past average growth rate mainly because the working-age population is expected to

grow more slowly than in the past.

 1 The assumed ultimate unemployment rate is an age-sex-adjusted rate. 

 2 Total employment is the sum of the U.S. Armed Forces and total civilian employment, which depends on

the total civilian labor force and unemployment rate.
Assumptions and Methods

112

For the low-cost assumptions, the annual growth in real GDP averages

2.9 percent over the decade ending in 2029. The relatively fast growth is due

mostly to high assumed rates of growth for employment and worker productivity. For the high-cost assumptions, the annual growth in real GDP averages 1.4 percent for the decade ending in 2029.

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 generally compounded semiannually. 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 five complete economic cycles. For the period from

1969 to 2007, the real interest rate averaged 2.9 percent per year. The real

interest rates averaged 1.6, -1.0, 5.1, 4.1, and 2.0 percent per year over the

economic cycles 1969-73, 1973-79, 1979-90, 1990-2001, and 2001-07,

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 0.2 percentage point lower than in

the 2019 report.

The actual average annual nominal interest rate was approximately

2.9 percent for 2018, which means that securities newly issued in 2018

would yield 2.9 percent if held one year. Estimated average prices rose from

2018 to 2019 by approximately 1.7 percent. The annual real interest rate for

2019 is 1.2 percent, the approximate difference between the nominal interest

rate and the rate of price increase. For the 10-year short-range projection

period, 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 highcost assumptions. These nominal rates for newly issued trust fund securities

reach their ultimate levels by 2029, the end of the short-range period.
113

Economic Assumptions and Methods

Table V.B2.—Additional Economic Factors

Calendar year 

Average annual

unemployment

ratea

Annual percentage changeb in— Average annual interest rate

Labor

forcec Totalemploymentd RealGDPe Nominalf Realg

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

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:

2009 . . . . . . . . . . . 9.3 -.1 -3.7 -2.5 2.9 4.4

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 2.9 2.0 2.7

2016 . . . . . . . . . . . 4.9 1.3 1.7 1.6 1.8 1.0

2017 . . . . . . . . . . . 4.4 .7 1.2 2.4 2.3 -.3

2018 . . . . . . . . . . . 3.9 1.1 1.6 2.9 2.9 -.2

2019j. . . . . . . . . . . 3.7 .9 1.1 2.3 2.2 1.2
Assumptions and Methods

114

Intermediate:

2020 . . . . . . . . . . . 3.8 1.1 0.9 2.1 2.3 h

2021 . . . . . . . . . . . 4.2 .7 .3 2.3 2.9 -.1

2022 . . . . . . . . . . . 4.6 .8 .3 2.2 3.3 .5

2023 . . . . . . . . . . . 5.0 .8 .4 2.1 3.6 .9

2024 . . . . . . . . . . . 5.0 .6 .6 2.1 4.0 1.2

2025 . . . . . . . . . . . 5.0 .5 .5 2.1 4.2 1.6

2026 . . . . . . . . . . . 5.0 .5 .5 2.1 4.4 1.8

2027 . . . . . . . . . . . 5.0 .5 .5 2.1 4.6 2.0

2028 . . . . . . . . . . . 5.0 .5 .5 2.1 4.6 2.2

2029 . . . . . . . . . . . 5.0 .5 .5 2.1 4.7 2.2

2030 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2035 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2040 . . . . . . . . . . . 5.0 .3 .3 1.9 4.7 2.3

2045 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2050 . . . . . . . . . . . 5.0 .5 .5 2.0 4.7 2.3

2055 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2060 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2065 . . . . . . . . . . . 5.0 .3 .3 1.9 4.7 2.3

2070 . . . . . . . . . . . 5.0 .3 .3 1.9 4.7 2.3

2075 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2080 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2085 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2090 . . . . . . . . . . . 5.0 .4 .4 2.0 4.7 2.3

2095 . . . . . . . . . . . 5.0 .4 .4 1.9 4.7 2.3

Low-cost:

2020 . . . . . . . . . . . 3.7 1.5 1.5 3.2 3.3 -.7

2021 . . . . . . . . . . . 3.9 1.2 .9 3.6 3.8 .4

2022 . . . . . . . . . . . 4.0 .8 .7 3.1 4.4 .9

2023 . . . . . . . . . . . 4.0 .8 .8 2.8 4.7 1.4

2024 . . . . . . . . . . . 4.0 .8 .7 2.8 5.0 1.7

2025 . . . . . . . . . . . 4.0 .7 .7 2.7 5.3 2.0

2026 . . . . . . . . . . . 4.0 .7 .7 2.7 5.5 2.3

2027 . . . . . . . . . . . 4.0 .6 .6 2.6 5.6 2.5

2028 . . . . . . . . . . . 4.0 .6 .6 2.6 5.8 2.6

2029 . . . . . . . . . . . 4.0 .6 .6 2.6 5.8 2.8

2030 . . . . . . . . . . . 4.0 .5 .5 2.5 5.8 2.8

2035 . . . . . . . . . . . 4.0 .5 .5 2.5 5.8 2.8

2040 . . . . . . . . . . . 4.0 .5 .5 2.5 5.8 2.8

2045 . . . . . . . . . . . 4.0 .7 .6 2.6 5.8 2.8

2050 . . . . . . . . . . . 4.0 .7 .7 2.7 5.8 2.8

2055 . . . . . . . . . . . 4.0 .7 .7 2.7 5.8 2.8

2060 . . . . . . . . . . . 4.0 .6 .6 2.6 5.8 2.8

2065 . . . . . . . . . . . 4.0 .6 .6 2.6 5.8 2.8

2070 . . . . . . . . . . . 4.0 .6 .6 2.6 5.8 2.8

2075 . . . . . . . . . . . 4.0 .7 .7 2.7 5.8 2.8

2080 . . . . . . . . . . . 4.0 .7 .7 2.7 5.8 2.8

2085 . . . . . . . . . . . 4.0 .7 .7 2.7 5.8 2.8

2090 . . . . . . . . . . . 4.0 .7 .7 2.7 5.8 2.8

2095 . . . . . . . . . . . 4.0 .6 .6 2.6 5.8 2.8

Table V.B2.—Additional Economic Factors (Cont.)

Calendar year 

Average annual

unemployment

ratea

Annual percentage changeb in— Average annual interest rate

Labor

forcec Totalemploymentd RealGDPe Nominalf Realg
115

Economic Assumptions and Methods

High-cost:

2020 . . . . . . . . . . . 4.7 0.5 -0.5 -0.2 1.2 0.7

2021 . . . . . . . . . . . 6.4 .1 -1.7 -1.0 1.1 h

2022 . . . . . . . . . . . 6.3 .3 .3 2.1 2.4 -.4

2023 . . . . . . . . . . . 6.3 .5 .6 1.9 3.0 .6

2024 . . . . . . . . . . . 6.2 .5 .6 1.9 3.2 1.2

2025 . . . . . . . . . . . 6.2 .5 .6 1.9 3.3 1.4

2026 . . . . . . . . . . . 6.1 .7 .7 2.1 3.5 1.5

2027 . . . . . . . . . . . 6.0 .7 .7 2.1 3.6 1.7

2028 . . . . . . . . . . . 6.0 .7 .8 2.0 3.6 1.8

2029 . . . . . . . . . . . 6.0 .5 .5 1.7 3.6 1.8

2030 . . . . . . . . . . . 6.0 .3 .3 1.5 3.6 1.8

2035 . . . . . . . . . . . 6.0 .3 .3 1.4 3.6 1.8

2040 . . . . . . . . . . . 6.0 .2 .2 1.4 3.6 1.8

2045 . . . . . . . . . . . 6.0 .2 .2 1.4 3.6 1.8

2050 . . . . . . . . . . . 6.0 .2 .2 1.4 3.6 1.8

2055 . . . . . . . . . . . 6.0 .2 .2 1.3 3.6 1.8

2060 . . . . . . . . . . . 6.0 .1 .1 1.3 3.6 1.8

2065 . . . . . . . . . . . 6.0 h h 1.2 3.6 1.8

2070 . . . . . . . . . . . 6.0 h h 1.2 3.6 1.8

2075 . . . . . . . . . . . 6.0 h h 1.2 3.6 1.8

2080 . . . . . . . . . . . 6.0 .1 h 1.2 3.6 1.8

2085 . . . . . . . . . . . 6.0 .1 .1 1.3 3.6 1.8

2090 . . . . . . . . . . . 6.0 .1 .1 1.2 3.6 1.8

2095 . . . . . . . . . . . 6.0 h h 1.2 3.6 1.8

a The Office of the Chief Actuary adjusts the civilian unemployment rates for 2030 and later to the age-sex

distribution of the civilian labor force in 2011. For years through 2029, the values are the total rates without

adjustment for the changing age-sex distribution.

b For rows with a single year listed, the value is the annual percentage change from the prior year. For rows

with a range of years listed, the value is the compounded average annual percentage change.

c The U.S. civilian labor force.

d Total U.S. military and civilian employment.

e The value of the total output of goods and services in 2012 dollars.

f The average of the nominal interest rates, compounded semiannually, for special public-debt obligations

issuable to the trust funds in each of the 12 months of the year.

g The realized or expected annual real yield for each year on securities issuable in the prior year.

h Greater than -0.05 and less than 0.05 percent.

i Economic cycles are shown from peak to peak, except for the last cycle, which is not yet complete.

j Historical data are not available for the full year. Estimated values vary slightly by alternative and are shown

for the intermediate assumptions.

Table V.B2.—Additional Economic Factors (Cont.)

Calendar year 

Average annual

unemployment

ratea

Annual percentage changeb in— Average annual interest rate

Labor

forcec Totalemploymentd RealGDPe Nominalf Realg
Assumptions and Methods

116

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 covered 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 determination 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 2029. 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 CPIbased benefit increases, the AWI series, and the values of many of the wageindexed 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 benefits based on increases in the CPI. Volatility in

oil prices has resulted in substantial volatility in recent cost-of-living

adjustments. A large cost-of-living adjustment for December 2008 was

followed by no cost-of-living adjustments for December 2009 and

December 2010. More recent volatility in oil prices again affected the

 1 The Federal Register publishes details of these indexation procedures annually. Also see

www.ssa.gov/OACT/COLA/.
117

Program Assumptions and Methods

CPI, resulting in no cost-of-living adjustment for December 2015. Costof-living adjustments resumed in December 2016. All three sets of

assumptions include annual cost-of-living adjustments for all future

years.

 • The annual levels of and percentage increases in the AWI. Under section 215(b)(3) of the Social Security Act, Social Security benefit computations 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 approximately average-wage-indexed equivalent values near the time of his or

her benefit eligibility. Other program parameters presented in this section that are subject to the automatic-adjustment provisions also rely on

the AWI.

 • The wage-indexed contribution and benefit base. For any year, the contribution 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 benefit 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 beneficiaries 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.
Assumptions and Methods

118

Table V.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and 

Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2029

Calendar year

Cost-of-living

benefit

increasea

(percent)

Average

wage index (AWI) b Contribution

and benefit

base c

Retirement earnings

test exempt amount

Amount

Increase

(percent)

Under

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 . . . . . . . . . . . f2.5 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

Intermediate:

2019 . . . . . . . . . . . g1.6 53,756.28 3.1 g132,900 g17,640 g46,920

2020 . . . . . . . . . . . 2.3 55,641.66 3.5 g137,700 g18,240 g48,600

2021 . . . . . . . . . . . 2.5 58,112.16 4.4 141,900 18,840 50,160

2022 . . . . . . . . . . . 2.4 60,499.07 4.1 147,000 19,560 51,960

2023 . . . . . . . . . . . 2.4 62,823.60 3.8 153,600 20,400 54,240

2024 . . . . . . . . . . . 2.4 65,207.33 3.8 159,900 21,240 56,400

2025 . . . . . . . . . . . 2.4 67,697.32 3.8 165,900 22,080 58,560

2026 . . . . . . . . . . . 2.4 70,300.71 3.8 172,200 22,800 60,840

2027 . . . . . . . . . . . 2.4 73,036.06 3.9 178,800 23,760 63,120

2028 . . . . . . . . . . . 2.4 75,872.79 3.9 185,700 24,600 65,640

2029 . . . . . . . . . . . 2.4 78,696.64 3.7 192,900 25,560 68,160
119

Program Assumptions and Methods

Table V.C2 shows values for other wage-indexed parameters. The table provides historical values from 1978, when indexing of the amount of earnings

required for a quarter of coverage first began, through 2020, and also shows

projected values through 2029. These other wage-indexed program parameters 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 facLow-cost:

2019 . . . . . . . . . . . g1.6 $53,803.50 3.2 g$132,900 g$17,640 g$46,920

2020 . . . . . . . . . . . 3.2 56,306.64 4.7 g137,700 g18,240 g48,600

2021 . . . . . . . . . . . 2.9 59,561.94 5.8 142,200 18,840 50,160

2022 . . . . . . . . . . . 3.0 62,888.94 5.6 148,800 19,680 52,560

2023 . . . . . . . . . . . 3.0 66,034.38 5.0 157,500 20,880 55,560

2024 . . . . . . . . . . . 3.0 69,330.23 5.0 166,200 22,080 58,680

2025 . . . . . . . . . . . 3.0 72,801.80 5.0 174,600 23,160 61,560

2026 . . . . . . . . . . . 3.0 76,455.72 5.0 183,300 24,360 64,680

2027 . . . . . . . . . . . 3.0 80,341.39 5.1 192,300 25,560 67,920

2028 . . . . . . . . . . . 3.0 84,435.87 5.1 201,900 26,760 71,280

2029 . . . . . . . . . . . 3.0 88,628.34 5.0 212,400 28,200 75,000

High-cost:

2019 . . . . . . . . . . . g1.6 53,734.72 3.0 g132,900 g17,640 g46,920

2020 . . . . . . . . . . . 1.3 54,616.25 1.6 g137,700 g18,240 g48,600

2021 . . . . . . . . . . . 1.5 54,751.12 0.2 141,900 18,840 50,160

2022 . . . . . . . . . . . 1.6 56,458.29 3.1 144,300 19,200 51,000

2023 . . . . . . . . . . . 1.8 58,230.18 3.1 144,600 19,200 51,120

2024 . . . . . . . . . . . 1.8 60,076.63 3.2 149,100 19,800 52,680

2025 . . . . . . . . . . . 1.8 61,905.50 3.0 153,900 20,400 54,360

2026 . . . . . . . . . . . 1.8 63,776.47 3.0 158,700 21,000 56,040

2027 . . . . . . . . . . . 1.8 65,702.99 3.0 163,500 21,720 57,720

2028 . . . . . . . . . . . 1.8 67,603.95 2.9 168,600 22,320 59,520

2029 . . . . . . . . . . . 1.8 69,365.52 2.6 173,700 23,040 61,320

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.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and 

Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2029 (Cont.)

Calendar year

Cost-of-living

benefit

increasea

(percent)

Average

wage index (AWI) b Contribution

and benefit

base c

Retirement earnings

test exempt amount

Amount

Increase

(percent)

Under

NRAd At NRAe
Assumptions and Methods

120

tor by the portion of the worker’s AIME that falls within the three

respective ranges, and then adds the resulting products together.

 • 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.

 Figure V.C1.—Primary-Insurance-Amount Formula for Those Newly Eligible in 2020

90% 

32% 

15% 

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000

Primary Insurance Amount 

Average Indexed Monthly Earnings

First 

bend point

($960)

Second 

bend point

($5,785)
121

Program Assumptions and Methods

 • 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-minimum 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 noncovered 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.

 Figure V.C2.—OASI Maximum-Family-Benefit Formula 

for Those Newly Eligible in 2020

150% 

272% 

134% 

175% 

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

Maximum family benefit 

Primary Insurance Amount

Third 

bend point

($2,309)

Second 

bend point

($1,770)

First 

bend point

($1,226)
Assumptions and Methods

122

Table V.C2.—Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2029

Calendar year

AIME bend

points in PIA

formulaa

PIA bend points

in OASI maximumfamily-benefit formulab

Earnings

required for

a quarter of

coverage

Old-law

contribution

and benefit

basec First Second First Second Third

Historical data:

1978 . . . . . . . . . d d d d de $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

Intermediate:

2021 . . . . . . . . . 989 5,964 1,264 1,825 2,380 1,460 105,600

2022 . . . . . . . . . 1,024 6,173 1,309 1,889 2,464 1,510 109,200

2023 . . . . . . . . . 1,070 6,447 1,367 1,973 2,573 1,570 114,000

2024 . . . . . . . . . 1,114 6,712 1,423 2,054 2,679 1,640 118,800

2025 . . . . . . . . . 1,156 6,970 1,478 2,133 2,782 1,700 123,300

2026 . . . . . . . . . 1,200 7,235 1,534 2,214 2,887 1,770 127,800

2027 . . . . . . . . . 1,246 7,511 1,592 2,298 2,997 1,830 132,900

2028 . . . . . . . . . 1,294 7,800 1,653 2,387 3,113 1,900 138,000

2029 . . . . . . . . . 1,344 8,103 1,718 2,479 3,234 1,980 143,400
123

Program Assumptions and Methods

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.

Low-cost:

2021 . . . . . . . . . $990 $5,969 $1,265 $1,827 $2,382 $1,460 $105,600

2022 . . . . . . . . . 1,036 6,247 1,324 1,912 2,493 1,530 110,400

2023 . . . . . . . . . 1,096 6,608 1,401 2,022 2,637 1,610 117,000

2024 . . . . . . . . . 1,158 6,977 1,479 2,135 2,785 1,700 123,300

2025 . . . . . . . . . 1,215 7,326 1,553 2,242 2,924 1,790 129,600

2026 . . . . . . . . . 1,276 7,692 1,631 2,354 3,070 1,880 135,900

2027 . . . . . . . . . 1,340 8,077 1,712 2,472 3,223 1,970 142,800

2028 . . . . . . . . . 1,407 8,483 1,798 2,596 3,385 2,070 150,000

2029 . . . . . . . . . 1,479 8,914 1,890 2,727 3,557 2,180 157,500

High-cost:

2021 . . . . . . . . . 989 5,962 1,264 1,824 2,379 1,460 105,300

2022 . . . . . . . . . 1,005 6,060 1,285 1,854 2,418 1,480 107,100

2023 . . . . . . . . . 1,008 6,074 1,288 1,859 2,424 1,480 107,400

2024 . . . . . . . . . 1,039 6,264 1,328 1,917 2,500 1,530 110,700

2025 . . . . . . . . . 1,072 6,460 1,369 1,977 2,578 1,580 114,300

2026 . . . . . . . . . 1,106 6,665 1,413 2,040 2,660 1,630 117,900

2027 . . . . . . . . . 1,139 6,868 1,456 2,102 2,741 1,680 121,500

2028 . . . . . . . . . 1,174 7,076 1,500 2,165 2,824 1,730 125,100

2029 . . . . . . . . . 1,209 7,290 1,545 2,231 2,909 1,780 129,000

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 benefits.

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.

Table V.C2.—Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2029 (Cont.)

Calendar year

AIME bend

points in PIA

formulaa

PIA bend points

in OASI maximumfamily-benefit formulab

Earnings

required for

a quarter of

coverage

Old-law

contribution

and benefit

basec First Second First Second Third
Assumptions and Methods

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 Current 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 earnings (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 shortrange period, the age-sex-adjusted average weeks worked declines slightly as

the age-sex-adjusted unemployment rate rises to its ultimate assumed value

of 5.0 percent. After 2029, the average weeks worked for each age-sex group

Table V.C3.—Legislated Changes in Normal Retirement Age and Delayed Retirement

Credits for Persons Attaining Age 62 in Each Year 1986 and Later

Year of birth

Year of

attainment of

age 62

Normal

retirement

age (NRA)

Credit for each 

year of delayed 

retirement after

NRA (percent)

Benefit, as a percentage of PIA, 

beginning at age —

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 80 100 105 1/2 111 127 1/2

1934 . . . . . . . . 1996. . . . . . . . 65 . . . . . . . . 5 1/2 80 100 105 1/2 111 127 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

 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.
125

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 Amendments. It also reflects changes in the number and employment status of otherthan-LPR immigrants residing within the Social Security coverage area, such

as undocumented immigrants and foreign workers and students with temporary 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 ageadjusted covered-worker rates1 for 2094 are 69.5, 69.1, and 68.9 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

2094 are 66.5, 65.2, and 63.9 percent for the low-cost, intermediate, and

high-cost assumptions, respectively. For men, the intermediate projected rate

for 2094 is lower than the 2018 age-adjusted rate of 70.5 percent primarily

due to the projected increase in the portion of the Social Security area population that consists of other-than-LPR immigrants. For women, the intermediate projected rate for 2094 is higher than the 2018 age-adjusted rate of

64.9 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 2020 is $1,410.

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 attainment 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.
Assumptions and Methods

126

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 current 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 members under the OASDI program. A worker must be fully insured to be eligible 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 benefit 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 employment 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 population 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. For the other-than-LPR immigrant population, the

model generates substantially lower percentages attaining fully insured status. The model constructs simulated work histories using past coverage rates,
127

Program Assumptions and Methods

earnings distributions, and amounts required for crediting QCs, and develops

them in a manner that replicates historical individual variations in work patterns. 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 population. The short-range model projects these percentages by using the relationship 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 periods into close agreement with those estimated from the CWHS and the shortrange 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 population aged 62 and over that is fully insured is projected to change from its

estimated level of 87.7 for December 31, 2017, to 87.1, 88.1, and 89.3 for

December 31, 2095, under the low-cost, intermediate, and high-cost alternatives, respectively. Over the projection period, the percentages for both males

and females change significantly. The percentage for males declines, reflecting, 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 females increases, reflecting the

past substantial growth in the employment of younger cohorts of women.

Under the intermediate assumptions, for example, the percentage for males

decreases from 94.0 to 87.4, and the percentage for females increases from

82.4 to 88.8.
Assumptions and Methods

128

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 earnings the benefits are based and by the age of the beneficiary. For the longrange 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 agedspouse benefits, and by applying termination rates to the number of retiredworker 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 relationship between this percentage, the labor force participation rate at age 62, and

the number 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 beneficiaries, excluding those who are also receiving a retired-worker benefit, from

the population projected by age and sex. Benefits of aged-spouse beneficiaries depend on the earnings records of their husbands or wives, who are

referred to as “earners.” The short-range model projects insured aged-spouse

beneficiaries in conjunction with the retired-worker beneficiaries. This

model projects uninsured aged-spouse beneficiaries by applying award rates

 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.
129

Program Assumptions and Methods

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 agedspouse 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 benefits, and (6) the spouse is not eligible to receive a significant government

pension based on earnings from noncovered employment. To calculate the

estimated number of aged-spouse beneficiaries, the model applies a projected prevalence rate to the resulting number of spouses. Due to the Bipartisan Budget Act of 2015, 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 beneficiaries, 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 (former 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 paragraph because, effective January 1985, a divorced person is generally no longer 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.
Assumptions and Methods

130

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 projected 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 retiredworker 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 termination 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 benefits. The long-range model projects the number of young-spouse beneficiaries with a child in their care as a proportion of the number of child

beneficiaries of retired workers, including projected changes in average family size.

The Office of the Chief Actuary projects the number of aged-widow(er) beneficiaries, 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 agedwidow(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-
131

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) beneficiaries. In addition, the model assumes that some insured widow(er)s who

had not applied for their retired-worker benefits will receive widow(er) benefits. The model projects insured aged-widow(er) beneficiaries over age 70 by

applying termination rates to the population that started receiving such benefits prior to age 70.

The short-range model develops the number of disabled-widow(er) beneficiaries by applying award rates to the uninsured male or female population

and by applying termination rates to the population already receiving a disabled-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 widowed and divorced populations, adjusted for the insured status of the

deceased spouse, the prevalence of disability, and the probability that the disabled 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 children 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-disabledchild beneficiaries, aged 18 and over, from the adult population. The shortrange model applies award rates to the population and applies termination

rates to the number of surviving-disabled-child beneficiaries already receiving benefits. The long-range model projects the number of surviving-disabled-child beneficiaries in a manner similar to that for surviving-studentchild 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
Assumptions and Methods

132

under age 16 or disabled, and by applying termination rates to the number of

surviving-mother and surviving-father beneficiaries already receiving benefits. 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 beneficiaries.

Table V.C4 shows the projected number of beneficiaries under the OASI program by type of benefit. The retired-worker beneficiary counts include those

persons who receive a residual auxiliary benefit in addition to their retiredworker 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]

Calendar year

Retired workers and auxiliaries Survivors

Worker Total a Spouse Child

WidowwidowerMotherfather Child Parent

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

Intermediate:

2020 . . . . . . . . . . 46,545 2,329 715 3,837 114 1,934 1 55,475

2025 . . . . . . . . . . 53,386 1,845 792 3,720 106 2,003 1 61,853

2030 . . . . . . . . . . 60,111 1,792 905 3,562 107 2,073 1 68,551

2035 . . . . . . . . . . 64,577 1,707 1,008 3,315 120 2,097 1 72,825

2040 . . . . . . . . . . 66,801 1,579 1,092 3,082 130 2,151 1 74,835
133

Program Assumptions and Methods

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. Totals do not necessarily equal the sums of rounded components.

Intermediate (Cont.):

2045 . . . . . . . . . . 67,736 1,519 1,104 2,934 127 2,150 1 75,571

2050 . . . . . . . . . . 69,269 1,508 1,128 2,815 122 2,092 1 76,934

2055 . . . . . . . . . . 71,616 1,509 1,156 2,726 117 2,024 1 79,149

2060 . . . . . . . . . . 74,772 1,505 1,186 2,653 112 1,954 1 82,183

2065 . . . . . . . . . . 77,906 1,509 1,193 2,609 110 1,910 1 85,238

2070 . . . . . . . . . . 81,236 1,535 1,217 2,590 108 1,898 1 88,586

2075 . . . . . . . . . . 84,494 1,558 1,254 2,564 107 1,896 1 91,873

2080 . . . . . . . . . . 86,634 1,567 1,273 2,512 104 1,881 1 93,973

2085 . . . . . . . . . . 87,720 1,578 1,273 2,460 101 1,850 1 94,983

2090 . . . . . . . . . . 88,882 1,628 1,283 2,443 98 1,817 1 96,152

2095 . . . . . . . . . . 91,555 1,682 1,328 2,435 96 1,794 1 98,890

Low-cost:

2020 . . . . . . . . . . 46,534 2,329 715 3,836 114 1,935 1 55,464

2025 . . . . . . . . . . 53,232 1,848 796 3,713 108 2,024 1 61,722

2030 . . . . . . . . . . 59,528 1,778 924 3,584 105 2,176 1 68,096

2035 . . . . . . . . . . 63,390 1,699 1,044 3,367 118 2,290 1 71,910

2040 . . . . . . . . . . 65,000 1,563 1,153 3,158 129 2,446 1 73,450

2045 . . . . . . . . . . 65,387 1,488 1,184 3,028 127 2,525 1 73,741

2050 . . . . . . . . . . 66,431 1,454 1,225 2,918 125 2,510 1 74,664

2055 . . . . . . . . . . 68,435 1,435 1,276 2,829 122 2,484 1 76,582

2060 . . . . . . . . . . 71,281 1,408 1,333 2,747 121 2,462 1 79,354

2065 . . . . . . . . . . 74,127 1,385 1,364 2,691 124 2,486 1 82,178

2070 . . . . . . . . . . 77,111 1,378 1,414 2,658 128 2,557 1 85,246

2075 . . . . . . . . . . 79,918 1,373 1,481 2,618 131 2,636 1 88,159

2080 . . . . . . . . . . 81,597 1,359 1,520 2,560 133 2,687 1 89,856

2085 . . . . . . . . . . 82,368 1,360 1,535 2,521 133 2,707 1 90,626

2090 . . . . . . . . . . 83,916 1,408 1,571 2,542 133 2,728 1 92,300

2095 . . . . . . . . . . 87,782 1,470 1,663 2,589 135 2,766 1 96,406

High-cost:

2020 . . . . . . . . . . 46,558 2,329 714 3,839 114 1,933 1 55,487

2025 . . . . . . . . . . 53,563 1,843 789 3,728 105 1,983 1 62,010

2030 . . . . . . . . . . 60,706 1,814 885 3,520 109 1,965 1 68,999

2035 . . . . . . . . . . 65,968 1,729 973 3,233 119 1,897 1 73,921

2040 . . . . . . . . . . 68,972 1,613 1,031 2,969 125 1,854 1 76,565

2045 . . . . . . . . . . 70,577 1,579 1,021 2,800 118 1,784 1 77,880

2050 . . . . . . . . . . 72,686 1,589 1,025 2,671 110 1,697 1 79,780

2055 . . . . . . . . . . 75,444 1,614 1,028 2,582 101 1,605 1 82,375

2060 . . . . . . . . . . 78,936 1,635 1,027 2,513 93 1,510 1 85,715

2065 . . . . . . . . . . 82,365 1,671 1,011 2,477 87 1,433 1 89,046

2070 . . . . . . . . . . 86,035 1,742 1,013 2,462 82 1,379 1 92,713

2075 . . . . . . . . . . 89,724 1,808 1,024 2,442 77 1,337 1 96,412

2080 . . . . . . . . . . 92,279 1,855 1,025 2,392 72 1,295 1 98,918

2085 . . . . . . . . . . 93,608 1,880 1,014 2,326 67 1,247 1 100,143

2090 . . . . . . . . . . 94,275 1,921 1,005 2,281 62 1,200 1 100,745

2095 . . . . . . . . . . 95,488 1,964 1,012 2,234 58 1,158 1 101,916

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.

Table V.C4.—OASI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1945-2095 (Cont.)

[In thousands]

Calendar year

Retired workers and auxiliaries Survivors

Worker Total a Spouse Child

WidowwidowerMotherfather Child Parent
Assumptions and Methods

134

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 impairment 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 beneficiaries in current-payment status (disability prevalence) for each future

year. The projections start with the number in current-payment status as of

December 2019. 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 currentpayment status in later years. Beneficiaries leave the rolls due to death and

recovery (disability terminations) and due to conversion from disabledworker 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 population1). The Office of the Chief Actuary projects the number of newly

awarded beneficiaries for each future year by multiplying assumed age-sexspecific disability incidence rates and the projected disability-exposed population by age and sex.

Figure V.C3 illustrates the historical and estimated incidence rates under the

three alternatives. 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 administration. The solid lines

in figure V.C3 show the incidence rate adjusted to the age-sex distribution of

the disability-exposed population for 2000. This adjustment allows a comparison of incidence rates over time by focusing on the likelihood of becom-

 1 The disability-exposed population excludes those receiving benefits, while the disability insured population includes them. Section V.C.3 of this report describes the projection of the disability insured population.
135

Program Assumptions and Methods

ing disabled, and by 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 generally increased relative to the age-sex-adjusted rate as the baby-boom generation 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 normal 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 2029), 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 recent

period of high unemployment, 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 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 2019, the actual incidence rate (4.0 per thousand)

was below the level projected in last year’s report (4.4 per thousand). In this

year’s report, incidence rates are assumed to rise more gradually early in the

short-range period than in last year’s report, and are lower later in the period.

Incidence rates are assumed to be somewhat elevated during the period 2020

through 2021, when the Social Security Administration is expected to eliminate a backlog of individuals who have appealed for a hearing on a prior disability claim denial. In 2029, at the end of the short-range period, age-sexspecific incidence rates reach the ultimate rates assumed for the long-range
Assumptions and Methods

136

projections. These ultimate age-sex-specific disability incidence rates were

selected based on careful analysis of historical levels and patterns and

expected future conditions, including the impact of scheduled increases in

the normal retirement age.1 The ultimate incidence rates represent the

expected average rates of incidence for the future.

For the intermediate alternative, the Trustees assume that the ultimate agesex-adjusted incidence rate (adjusted to the disability-exposed population for

the year 2000) will be 5.0 awards per thousand exposed, which is lower than

in last year’s report by 0.2 awards per thousand exposed. 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 2019 (5.1 per thousand). However, a similar comparison using

gross incidence rates gives a very different result. The estimated ultimate

gross incidence rate is substantially greater than the average 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 thousand exposed, or about 1.0 awards per thousand lower and 1.0 awards per

thousand higher, respectively, than the ultimate incidence rate for the intermediate alternative. The low-cost and high-cost ultimate age-sex-adjusted

incidence rates are both lower than those in last year’s report by 0.2 awards

per thousand exposed.

 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.
137

Program Assumptions and Methods

b. Disability Termination

Beneficiaries stop receiving disability benefits when they die, recover from

their medically-determinable disabling condition, 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-2029).

In the short-range period (through 2029), the projected age-sex-adjusted

death rate (adjusted to the 2000 disabled-worker population) under the intermediate assumptions gradually declines from 24.8 deaths per thousand beneficiaries for 2019 to about 23.7 per thousand for 2029. The projected agesex-adjusted recovery rate (medical improvement and return to work) under

the intermediate assumptions decreases from the relatively high level of

 Figure V.C3.—DI Disability Incidence Rates, 1970-2095

[Awards per thousand disability-exposed]

0

1

2

3

4

5

6

7

8

9

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Gross incidence rates

Age-sex-adjusted

incidence rates

I

II

III

Historical Estimated
Assumptions and Methods

138

18.9 per thousand beneficiaries for 2019 to 10.3 per thousand beneficiaries

for 2029. The recovery rate has been high in recent years due to an ongoing

administrative effort to eliminate a backlog of continuing disability reviews.

The rate is expected to decrease as the backlog is reduced. Under the lowcost 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 assumptions.

For the long-range period (post-2029), the Office of the Chief Actuary projects 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 10.3 per thousand beneficiaries. The assumed ultimate agesex-adjusted recovery rates for the low-cost and high-cost alternatives are

about 12.5 and 8.2 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. From the age-sex-adjusted death

rate of 24.8 per thousand beneficiaries in 2019, this rate decreases to 18.9,

12.0, and 7.1 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 distribution 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-retirement ages, increases gross death termination rates relative to the age-sexadjusted rates.
139

Program Assumptions and Methods

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 retirement 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-sexadjusted 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. Termination 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-

 Figure V.C4.—DI Disability Termination Rates, 1970-2095

[Terminations per thousand disabled-worker beneficiaries]

0

20

40

60

80

100

120

140

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Gross termination rates

Age-sex-adjusted

termination rates

II

III

I

Historical Estimated
Assumptions and Methods

140

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 disabledworker 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.

d. DI Beneficiaries and Disability Prevalence Rates

The Office of the Chief Actuary makes detailed projections of disabledworker 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 currentpayment status. The number of disabled workers in current-payment status

grows from 8.4 million at the end of 2019, to 11.2 million, 12.9 million, and

13.9 million at the end of 2095, under the low-cost, intermediate, and highcost assumptions, respectively. Of course, much of this growth results from

 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]

0

20

40

60

80

100

120

140

160

0

1

2

3

4

5

6

7

8

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Termination rates &

Conversion ratios

Incidence rates

Calendar year

Gross incidence rates

Age-sex-adjusted incidence rates

Gross conversion ratios

Age-sex-adjusted conversion ratios

Gross termination rates

Historical Estimated

Age-sex-adjusted termination rates
141

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]

Calendar year

Disabledworker

beneficiaries

Auxiliary beneficiaries

Total

beneficiaries

Disability

prevalence rates

Spouse Child Gross

Age-sexadjusteda

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 29

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

Intermediate:

2020. . . . . . . . . . . . 8,292 111 1,397 9,800 53 39

2025. . . . . . . . . . . . 8,412 120 1,343 9,874 53 38

2030. . . . . . . . . . . . 8,429 117 1,412 9,958 53 39

2035. . . . . . . . . . . . 8,678 120 1,577 10,375 53 40

2040. . . . . . . . . . . . 9,108 124 1,806 11,038 54 41

2045. . . . . . . . . . . . 9,805 137 1,954 11,896 57 42

2050. . . . . . . . . . . . 10,291 140 2,021 12,452 59 43

2055. . . . . . . . . . . . 10,698 141 2,056 12,894 60 44

2060. . . . . . . . . . . . 10,862 137 2,069 13,068 60 44

2065. . . . . . . . . . . . 11,113 141 2,096 13,350 61 44

2070. . . . . . . . . . . . 11,327 147 2,158 13,632 61 44

2075. . . . . . . . . . . . 11,341 146 2,240 13,728 60 45

2080. . . . . . . . . . . . 11,519 147 2,311 13,976 60 45

2085. . . . . . . . . . . . 11,912 150 2,358 14,420 61 45

2090. . . . . . . . . . . . 12,565 162 2,397 15,125 62 45

2095. . . . . . . . . . . . 12,912 164 2,439 15,515 63 45
Assumptions and Methods

142

Note: Totals do not necessarily equal the sums of rounded components.

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 disability 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 termination rates, which are helpful for understanding the trend in prevalence

Low-cost:

2020. . . . . . . . . . . . 8,259 111 1,391 9,762 53 39

2025. . . . . . . . . . . . 7,875 118 1,242 9,235 49 35

2030. . . . . . . . . . . . 7,334 100 1,245 8,680 45 33

2035. . . . . . . . . . . . 7,170 96 1,354 8,619 43 33

2040. . . . . . . . . . . . 7,320 93 1,553 8,966 43 32

2045. . . . . . . . . . . . 7,760 100 1,685 9,545 44 33

2050. . . . . . . . . . . . 8,082 99 1,738 9,919 45 33

2055. . . . . . . . . . . . 8,382 99 1,772 10,252 45 34

2060. . . . . . . . . . . . 8,523 94 1,799 10,416 44 34

2065. . . . . . . . . . . . 8,756 95 1,853 10,705 44 34

2070. . . . . . . . . . . . 8,988 100 1,953 11,040 44 34

2075. . . . . . . . . . . . 9,115 100 2,072 11,287 43 34

2080. . . . . . . . . . . . 9,430 101 2,175 11,705 43 34

2085. . . . . . . . . . . . 9,997 106 2,250 12,354 44 35

2090. . . . . . . . . . . . 10,772 117 2,320 13,209 45 35

2095. . . . . . . . . . . . 11,235 119 2,399 13,753 45 35

High-cost:

2020. . . . . . . . . . . . 8,324 112 1,402 9,837 53 39

2025. . . . . . . . . . . . 9,024 122 1,453 10,599 58 41

2030. . . . . . . . . . . . 9,569 136 1,579 11,284 61 45

2035. . . . . . . . . . . . 10,233 147 1,777 12,157 63 48

2040. . . . . . . . . . . . 10,971 161 1,998 13,131 66 50

2045. . . . . . . . . . . . 11,948 183 2,136 14,267 71 52

2050. . . . . . . . . . . . 12,607 189 2,209 15,005 75 53

2055. . . . . . . . . . . . 13,119 194 2,238 15,550 78 54

2060. . . . . . . . . . . . 13,282 189 2,228 15,699 79 55

2065. . . . . . . . . . . . 13,515 195 2,214 15,923 80 55

2070. . . . . . . . . . . . 13,648 205 2,220 16,073 81 55

2075. . . . . . . . . . . . 13,462 201 2,242 15,905 80 56

2080. . . . . . . . . . . . 13,371 200 2,264 15,836 80 56

2085. . . . . . . . . . . . 13,399 197 2,272 15,869 80 56

2090. . . . . . . . . . . . 13,741 208 2,272 16,221 82 56

2095. . . . . . . . . . . . 13,863 210 2,269 16,342 83 56

a Adjusted to the age-sex distribution of the disability insured population for the year 2000.

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]

Calendar year

Disabledworker

beneficiaries

Auxiliary beneficiaries

Total

beneficiaries

Disability

prevalence rates

Spouse Child Gross

Age-sexadjusteda
143

Program Assumptions and Methods

rates. Annual incidence and termination rates are not directly comparable or

combinable because their denominators differ.

Age-sex-adjusted prevalence rates have increased primarily because: (1) termination 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 disability 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 requirements were eased for those under age 31 in 1968). Gross prevalence rates

have increased more than age-sex-adjusted prevalence rates since the babyboom 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 gender, and

(4) DI program age and insured requirements. As these factors gradually sta-

 Figure V.C6.—DI Disability Prevalence Rates, 1970-2095

[Rate per thousand persons insured for disability benefits]

0

10

20

30

40

50

60

70

80

90

100

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Gross prevalence rates

Age-sex-adjusted

prevalence rates

III

II

II

I

I

Historical Estimated

III
Assumptions and Methods

144

bilize, the declining death termination rate continues to have a small influence 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 underlying likelihood of receiving benefits for the insured population, without

reflecting changes in the age distribution of the population. As with incidence rates, gross disability prevalence rates declined relative to the age-sexadjusted rate when the baby-boom generation reached working age between

1970 and 1990; this trend reflects the lower disability prevalence rates associated 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 disability prevalence rate grows from 39.7 per thousand disability insured at the end

of 2019 to 45.3 per thousand at the end of 2095. As mentioned above, the

Office of the Chief Actuary projects that the growth in prevalence will slow

relative to the historical period.

Under the low-cost and high-cost assumptions, the age-sex-adjusted disability prevalence rate decreases to 34.8 per thousand and increases to 56.4 per

thousand insured workers at the end of 2095, respectively.

Table V.C5 presents projections of the numbers of auxiliary beneficiaries

paid from the DI Trust Fund. As indicated at the beginning of this subsection, 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 projected number of disabled-worker beneficiaries. In the short-range period

(2020 through 2029), the Office of the Chief Actuary projects incidence and

termination rates for each category of auxiliary beneficiary. After 2029, the

office projects child beneficiaries at ages 18 and under in relation to the projected 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.
145

Program Assumptions and Methods

6. Covered and Taxable Earnings, Taxable Payroll, and Payroll Tax

Contributions

Covered earnings include both covered wages and covered self-employment

net earnings. The Office of the Chief Actuary projects covered wages for

component sectors of the economy (i.e., private, State and local, 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-covered 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. economy.

Taxable earnings are the portion of covered earnings subject to the Social

Security payroll tax. Taxable wages for an employee are total covered wages

from all wage employment up to the contribution and benefit base. Taxable

wages for an employer are the sum of all covered wages paid to each

employee up to the base. Employees with multiple jobs whose total wages

exceed the base are eligible for a refund of excess employee taxes withheld;

employers are not eligible for a refund on this basis. For self-employed

workers with no taxable wages, taxable earnings are the amount of covered

self-employment net earnings up to the base. For self-employed workers

with taxable wages less than the base, covered self-employment net earnings

are taxable up to the difference between the base and their taxable wages.

For projection purposes, the Office of the Chief Actuary computes taxable

earnings based on a proportion of covered earnings that is at or below the

base.

The OASDI taxable payroll (see table VI.G6) for a year is computed as the

amount of earnings which, when multiplied by the combined OASDI

employee-employer payroll tax rate for that year, yields the total amount of

payroll taxes due from wages paid and self-employment net earnings for the

year. The Trustees use taxable payroll to determine income rates, cost rates,

and actuarial balances. Taxable payroll is derived by adjusting total taxable

earnings to account for categories of earnings that are taxed at rates other

than the combined employee-employer rate and to take into account amounts

credited as wages that were not included in normally reported wages. For

1951 and later, taxable earnings are reduced by one-half of the amount of

wages paid to employees with multiple jobs that exceed the contribution and

benefit base. For 1983 through 2001, deemed wage credits for military service after 1956 are added to taxable earnings. The self-employment tax rates

for 1951 through 1983 were less than the combined employee-employer
Assumptions and Methods

146

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 paying 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 2018.

For this report, the Trustees assume a level for the taxable ratio at the end of

the short-range period (2029) of 82.5 percent for the intermediate assumptions, 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 (2028) for the 2019 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 earnings for that year. The office then splits these liabilities into amounts by collection 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 Department 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 contributions related to wages into amounts paid in the same quarter as incurred and

 1 The taxable ratio drifts down slightly after 2029, to 82.3, 83.9, and 80.6 percent in 2094 for the intermediate, 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 employers have three banking days in which to make their deposits. Larger employers must make payment on the

next business day after paying their employees.
147

Program Assumptions and Methods

in the following quarter. Self-employed workers must make estimated tax

payments on their earnings four times during the year and make up any

underestimate on their individual income tax returns. The projection splits

the self-employed tax liabilities by collection quarter to reflect this pattern. 

The projected tax contributions also reflect the method used to ensure that

money transferred to the trust funds is adjusted, over time, to equal the actual

liability owed. Because payers generally make tax payments without identifying the separate OASDI contribution amounts, Treasury makes daily transfers 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 contributions 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 General Fund for contributions on wages in excess of the contribution and benefit 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 2020.

 1 Table VI.G1 shows the payroll tax contribution rates for the Hospital Insurance (HI) program.
Assumptions and Methods

148

Table V.C6.—Contribution and Benefit Base and Payroll Tax Contribution Rates

Calendar years

Contribution

and benefit 

base

Payroll tax contribution rates (percent)

Employees and employers, 

combineda Self-employedb

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

1984c . . . . . . . . . . . 37,800 11.40 10.40 1.00 11.4000 10.4000 1.0000

1985c . . . . . . . . . . . 39,600 11.40 10.40 1.00 11.4000 10.4000 1.0000

1986c . . . . . . . . . . . 42,000 11.40 10.40 1.00 11.4000 10.4000 1.0000

1987c . . . . . . . . . . . 43,800 11.40 10.40 1.00 11.4000 10.4000 1.0000

1988c . . . . . . . . . . . 45,000 12.12 11.06 1.06 12.1200 11.0600 1.0600

1989c . . . . . . . . . . . 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
149

Program Assumptions and Methods

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 taxed for beneficiaries with “combined income” (adjusted gross income, plus half of benefits and all non-taxable interest) exceeding specified threshold amounts. The threshold amounts

are $25,000 for single filers, $32,000 for joint filers, and $0 for those married

but filing separately.

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 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 earnings, 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.

Table V.C6.—Contribution and Benefit Base and Payroll Tax Contribution Rates (Cont.)

Calendar years

Contribution

and benefit 

base

Payroll tax contribution rates (percent)

Employees and employers, 

combineda Self-employedb

OASDI OASI DI OASDI OASI DI
Assumptions and Methods

150

For the short-range period, the Office of the Chief Actuary estimates the

income to the trust funds from taxation of benefits by applying 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.

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 specified 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 projected 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 distribution. 

8. Average Benefits

Projections of average benefits for each benefit type reflect recent historical

averages, projected average primary insurance amounts (PIAs), and projected 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 initial entitlement depend on automatic benefit increases, recomputations to

reflect additional covered earnings, and differences in mortality by level of

lifetime earnings. Calculations of future average PIAs at initial entitlement

are based on projected earnings histories, which in turn reflect a combination

of the actual earnings histories associated with a sample of 2016 initial enti-
151

Program Assumptions and Methods

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 percentage 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 shortrange model calculates scheduled benefits on a quarterly basis. The longrange 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 percentage of the fully insured population that will qualify for lump-sum death payments; 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 2020 and subsequent

years. The illustrative benefit amounts in table V.C7 are presented in CPIindexed 2020 dollars—that is, adjusted to 2020 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 2020 and subsequent years

in CPI-indexed 2020 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

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
Assumptions and Methods

152

retirement age to reflect the expected additional years benefits will be collected. 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

patterns1 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 workers during 1997-2016. These earnings levels differ by age. The career-average level of earnings for each scaled case targets a percent of the AWI. 

For the scaled medium earner, the career-average earnings level is about

equal to the AWI (or $55,642 for 2020). For the scaled very low, low, and

high earners, the career-average earnings level is about 25 percent,

45 percent, and 160 percent of the AWI, respectively (or $13,910, $25,039,

and $89,027, respectively, for 2020). The steady maximum earner has earnings at or above the contribution and benefit base for each year starting at

age 22 through the year prior to retirement (or $137,700 for 2020).

 1 Actuarial Note 2020.3 has more details on scaled-earnings patterns.

See www.ssa.gov/OACT/NOTES/ran3/.

Table V.C7.—Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, Calendar Years 2020-2095

Year attain 

age 65a Age atretirement

Scaled very

low

earningsb Scaled lowearningsc

Scaled

medium

earningsd Scaled highearningse

Steady

maximum

earningsf

National

Average Wage

Index in 2020

dollarsg

Benefits in 2020 dollarsh with retirement at normal retirement age

2020 . . . . 66:2 $10,683 $13,974 $23,049 $30,529 $37,327 $55,642

2025 . . . . 67:0 11,089 14,529 23,978 31,716 39,057 60,110

2030 . . . . 67:0 11,982 15,690 25,891 34,256 42,223 64,330

2035 . . . . 67:0 12,820 16,787 27,694 36,650 45,188 68,331

2040 . . . . 67:0 13,625 17,835 29,413 38,929 47,968 72,374

2045 . . . . 67:0 14,428 18,882 31,142 41,223 50,822 76,268

2050 . . . . 67:0 15,206 19,905 32,825 43,445 53,518 80,400

2055 . . . . 67:0 16,030 20,983 34,603 45,800 56,336 84,962

2060 . . . . 67:0 16,941 22,175 36,572 48,403 59,492 89,859

2065 . . . . 67:0 17,917 23,453 38,680 51,192 62,891 95,001

2070 . . . . 67:0 18,943 24,795 40,890 54,121 66,497 100,340

2075 . . . . 67:0 20,007 26,190 43,189 57,164 70,240 105,963

2080 . . . . 67:0 21,129 27,657 45,608 60,366 74,180 111,857

2085 . . . . 67:0 22,304 29,197 48,147 63,726 78,308 118,055

2090 . . . . 67:0 23,541 30,816 50,816 67,257 82,643 124,696

2095 . . . . 67:0 24,865 32,550 53,677 71,042 87,288 131,796
153

Program Assumptions and Methods

11. Administrative Expenses

The projection of administrative expenses through the short-range period is

based on historical experience and the projected growth in average wages.

The Office of Budget of the Social Security Administration provides estimates for the first several years of the projection. For years after the shortrange period, projected administrative expenses reflect increases in the number 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.

Benefits in 2020 dollarsh with retirement at age 65

2020 . . . . 65:0 $9,859 $12,901 $21,269 $28,182 $34,349 $55,642

2025 . . . . 65:0 9,608 12,577 20,755 27,470 33,587 60,110

2030 . . . . 65:0 10,383 13,589 22,417 29,671 36,337 64,330

2035 . . . . 65:0 11,109 14,545 23,986 31,751 38,902 68,331

2040 . . . . 65:0 11,804 15,447 25,478 33,729 41,306 72,374

2045 . . . . 65:0 12,497 16,364 26,981 35,718 43,771 76,268

2050 . . . . 65:0 13,171 17,243 28,436 37,642 46,093 80,400

2055 . . . . 65:0 13,889 18,176 29,974 39,681 48,522 84,962

2060 . . . . 65:0 14,677 19,211 31,682 41,937 51,238 89,859

2065 . . . . 65:0 15,525 20,321 33,506 44,355 54,170 95,001

2070 . . . . 65:0 16,411 21,482 35,422 46,894 57,279 100,340

2075 . . . . 65:0 17,335 22,691 37,413 49,527 60,505 105,963

2080 . . . . 65:0 18,305 23,960 39,510 52,303 63,898 111,857

2085 . . . . 65:0 19,325 25,294 41,707 55,215 67,457 118,055

2090 . . . . 65:0 20,398 26,698 44,020 58,275 71,189 124,696

2095 . . . . 65:0 21,545 28,198 46,496 61,552 75,189 131,796

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 earnings at approximately the 57th 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 2020 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 2020 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.

Table V.C7.—Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, Calendar Years 2020-2095 (Cont.)

Year attain 

age 65a Age atretirement

Scaled very

low

earningsb Scaled lowearningsc

Scaled

medium

earningsd Scaled highearningse

Steady

maximum

earningsf

National

Average Wage

Index in 2020

dollarsg
Assumptions and Methods

154

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 interchange 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 administrative expenses associated with these benefits; and (2) the amount of OASDI

payroll tax and income tax that would be received with allowances for interest 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.
155

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 established 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 combined trust funds1 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. Employees

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 payroll tax contributions on their covered net earnings from self-employment.

The Federal Government pays amounts equivalent to the combined employer

and employee contributions that would be paid on deemed wage credits

attributable to military service 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 selfemployment 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 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

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

Law 110-246; and (6) payroll tax revenue forgone under the provisions of

Public Laws 111-147, 111-312, 112-78, and 112-96.

 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.
Appendices

156

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 circumstances. 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 investments held by the trust funds. On a daily basis, Treasury invests trust fund

income not required to meet current operating expenses, primarily in interest-bearing obligations of the U.S. Government. These investments include

the special public-debt obligations described in the next paragraph. 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 obligations 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 outstanding 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 operating expenses. As a result, changes in market yield rates after issuance of spe-

 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 marketable obligations has been quite limited and has not occurred since 1980.
157

History of Trust Fund Operations

cial issue securities do not cause fluctuations in the principal 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 payments1, 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 technology 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 disabilities, 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 Security Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for

benefits scheduled for January 3, 1982. The most recent such accelerated payment affected benefits scheduled to be paid on January 3, 2016. 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 without regard to the accelerated payments described above.
Appendices

158

Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2019

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

1937f . . $0.8 $0.8 — — gg g — — $0.8 $0.8 —

1938f . . .4 .4 — — gg g — — .4 1.1 7,660

1939f . . .6 .6 — — gg 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 i

20

1985 . . 184.2 175.1 4.0 3.2 1.9 171.2 167.2 1.6 2.3 h8.7 35.8 i

24

1986 . . 197.4 189.1 1.8 3.4 3.1 181.0 176.8 1.6 2.6 h3.2 39.1 i

28

1987 . . 210.7 201.1 1.7 3.3 4.7 187.7 183.6 1.5 2.6 23.1 62.1 i

30

1988 . . 240.8 227.7 2.1 3.4 7.6 200.0 195.5 1.8 2.8 40.7 102.9 i

41

1989 . . 264.7 248.1 2.1 2.4 12.0 212.5 208.0 1.7 2.8 52.2 155.1 i

59

1990 . . 286.7 266.1 -.7 4.8 16.4 227.5 223.0 1.6 3.0 59.1 214.2 i

78

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
159

History of Trust Fund Operations

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

a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security

Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust

fund 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 relatively small amounts of gifts to the fund. Net interest for 1983-86 reflects payments for interest on amounts

owed under the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements

paid from the trust fund to the General Fund on advance tax transfers.

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 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. 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: Totals do not necessarily equal the sums of rounded components.

Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2019 (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Appendices

160

Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2019

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsa d

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

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 g2.4 6.3 h27

1986 . . 19.4 18.2 .2 .2 .8 20.5 19.9 .6 $0.1 g1.5 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
161

History of Trust Fund Operations

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

a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security

Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust

fund 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 selfemployment 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 relatively small amounts of gifts to the fund. Net interest for 1983-86 reflects payments for interest on amounts

owed under the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements

paid from the trust fund to the General Fund on advance tax transfers.

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 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. 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: Totals do not necessarily equal the sums of rounded components.

Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2019 (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsa d

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Appendices

162

Table VI.A3.— Operations of the Combined OASI and DI Trust Funds,

Calendar Years 1957-2019

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

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 g11.1 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
163

History of Trust Fund Operations

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 2018

and 2019. The tables show the invested asset reserves by interest rate and

year of maturity. Bonds issued to the trust funds in 2019 had an interest rate

of 2.250 percent, compared with an interest rate of 2.875 percent for bonds

issued in 2018.

2005 . . $701.8 $592.9 -$0.3 $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

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

a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security

Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust

fund 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 relatively small amounts of gifts to the funds. Net interest for 1983-86 reflects payments for interest on amounts

owed under the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements

paid from the trust funds to the General Fund on advance tax transfers.

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: Totals do not necessarily equal the sums of rounded components.

Table VI.A3.— Operations of the Combined OASI and DI Trust Funds,

Calendar Years 1957-2019 (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Appendices

164

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.

Table VI.A4.—OASI Trust Fund Asset Reserves, End of 

Calendar Years 2018 and 2019

[In thousands]

December 31, 2018 December 31, 2019

Obligations sold only to the trust funds (special issue securities): 

Certificates of indebtedness: 

 1.875 percent, 2020 — $53,898,934

 3.000 percent, 2019 $52,867,020 —

Bonds:

 1.375 percent, 2020 6,693,020 —

 1.375 percent, 2021-25 33,465,100 33,465,100

 1.375 percent, 2026 6,693,019 6,693,019

 1.375 percent, 2027 173,240,401 173,240,401

 1.750 percent, 2020 4,908,185 —

 1.750 percent, 2021-25 24,540,925 24,540,925

 1.750 percent, 2026-27 9,816,372 9,816,372

 1.750 percent, 2028 178,148,587 178,148,587

 1.875 percent, 2020 2,320,956 —

 1.875 percent, 2021-27 16,246,692 16,246,692

 1.875 percent, 2028-30 6,962,865 6,962,865

 1.875 percent, 2031 188,111,583 188,111,583

 2.000 percent, 2020 3,655,628 —

 2.000 percent, 2021-25 18,278,140 18,278,140

 2.000 percent, 2026-29 14,622,516 14,622,516

 2.000 percent, 2030 185,790,628 185,790,628

 2.250 percent, 2020 5,582,927 —

 2.250 percent, 2021-25 27,914,635 27,914,635

 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

 2.250 percent, 2034 — 177,899,339

 2.500 percent, 2020 5,971,787 —

 2.500 percent, 2021-25 29,858,935 29,858,935

 2.500 percent, 2026 166,547,382 166,547,382

 2.875 percent, 2020 7,264,432 —

 2.875 percent, 2021-24 29,057,728 29,057,728

 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, 2020 10,628,270 —

 3.250 percent, 2021-23 31,884,810 31,884,810

 3.250 percent, 2024 153,311,163 153,311,163

 4.000 percent, 2020 12,075,192 —

 4.000 percent, 2021-22 24,150,384 24,150,384

 4.000 percent, 2023 142,682,893 142,682,893

 4.125 percent, 2020 106,585,700 82,329,713

 4.625 percent, 2019 77,990,001 —

 5.000 percent, 2019 12,454,232 —

 5.000 percent, 2020-21 24,908,464 24,908,464

 5.000 percent, 2022 130,607,701 130,607,701

 5.125 percent, 2019 11,567,866 —

 5.125 percent, 2020 11,567,769 11,567,769

 5.125 percent, 2021 118,153,469 118,153,469

Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,797,973,953 2,804,355,261

Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. 

-102,175 -33,356

Total asset reserves 2,797,871,778 2,804,321,905
165

History of Trust Fund Operations

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.

Table VI.A5.—DI Trust Fund Asset Reserves, End of Calendar Years 2018 and 2019

[In thousands]

December 31, 2018 December 31, 2019

Obligations sold only to the trust funds (special issue securities):

Certificates of indebtedness: 

 1.875 percent, 2020 — $6,293,202

 3.000 percent, 2019 $9,771,433 —

 3.125 percent, 2019 7,340,572 —

Bonds:

 1.875 percent, 2020 3,011,390 —

 1.875 percent, 2021 3,011,390 —

 1.875 percent, 2022 3,011,390 3,011,390

 2.250 percent, 2020 6,309,802 —

 2.250 percent, 2021 6,309,801 4,458,053

 2.250 percent, 2024-25 — 2,489,358

 2.250 percent, 2026 — 1,244,680

 2.250 percent, 2027-32 — 7,468,074

 2.250 percent, 2033-34 — 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,200,992 93,137,565

Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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. 

-143,908 -54,812

Total asset reserves 97,057,084 93,082,753
Appendices

166

B. HISTORY OF ACTUARIAL STATUS ESTIMATES

This appendix chronicles the history of the long-range OASDI actuarial balance 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 positive. 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 present value of the cost for the period, each divided by the present value of taxable 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 produced 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
167

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 payas-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 average-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 actuarial balance.

A positive actuarial balance indicates that estimated income (plus starting

reserves, beginning with the 1988 report) is more than sufficient to meet estimated trust fund obligations (plus the ending target fund, beginning with the

1991 report) for the period as a whole. Even with a positive actuarial balance, 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, beginning with the 1991 report) for the period as a whole. A negative actuarial balance 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 estimated long-range OASDI actuarial balances,

summarized income rates, and summarized cost rates for the 1982 report

through the current report. The reports presented these values on the basis of

the intermediate assumptions, which recent reports refer to as alternative II

and reports from 1982 to 1990 referred to as alternative II-B.
Appendices

168

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.B1.—Long-Range OASDI Actuarial Balances and Trust Fund Reserve 

Depletion Dates as Shown in the Trustees Reports for 1982-2020 

under Intermediate Assumptionsa

[As a percentage of taxable payroll]

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.

Year of report

Summarized

income rate

Summarized

cost rate

Actuarial

balanceb

b The definition and method of calculating the actuarial balance were changed in 1988 and 1991. See text

for details.

Change from

previous yearc

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 2020.8 at www.ssa.gov/OACT/NOTES/ran8/.

Year of

combined trust

fund reserve

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

d Between -0.005 and 0.005 percent of taxable payroll.

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
169

History of Actuarial Status

For several of the years included in the table, significant legislative changes

or definitional changes affected the estimated 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 estimated actuarial balance changed

largely because of an adjustment made to the method for estimating the age

distribution of immigrants.

Rebenchmarking of the National Income and Product Accounts and changes

in demographic assumptions contributed to the change in the actuarial balance 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 estimated 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 benefit 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, disability rates, and the earnings sample used for projecting average benefit levels accounted for most of the change in the actuarial balance. In 1995,

numerous small changes had largely offsetting effects on the actuarial balance, 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 demographic 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 estimated 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 estimated 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. 
Appendices

170

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 estimated 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 levels for higher earners more than offset decreases in the actuarial balance arising 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 improvements in calculating mortality for disabled workers, were greater in aggregate than increases in the actuarial balance due to changes in demographic

starting values and the ultimate total fertility rate, as well as other programmatic data and method changes. For the 2007 report, increases in the actuarial 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
171

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 contributing to the increase in the deficit. In 2012, changes in economic assumptions 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 ultimate 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 Taxpayer 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 economic 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
Appendices

172

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 higherthan-expected death rates and lower near-term and ultimate disability incidence rate assumptions. Partially offsetting these factors were the effects of a

lower ultimate real interest rate assumption and the change in the valuation

period.

Section IV.B.6 describes changes affecting the actuarial balance shown for

the 2020 report.
173

Fiscal Year Operations and Projections

C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND 

OPERATIONS THROUGH 2029

Tables VI.C1, VI.C2, and VI.C3 contain details of the fiscal year 2019 operations of the OASI, DI, and the combined OASI and DI Trust Funds, respectively. The fiscal year for the U.S. Government is the 12-month period

ending September 30. Fiscal year 2019 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.
Appendices

174

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.C1.—Operations of the OASI Trust Fund, Fiscal Year 2019

[In millions]

Total asset reserves, September 30, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,801,066

Income:

Net payroll tax contributions:

Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

a Includes adjustments for prior years

$788,458

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,882

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 785,576

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . 14

Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa 15

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 225

All other, not subject to withholdinga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,671

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,896

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79,588

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

b

Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 79,589

Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,075

Cost:

Benefit payments:

Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

888,091

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -36

Payment for costs of vocational rehabilitation services for disabled beneficiaries 12

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 888,068

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,880

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,350

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 537

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1

Miscellaneous reimbursements from the General Fund e . . . . . . . . . . . . . . . . . . . . 

e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly

related to administering the OASI program.

-4

Net administrative expenses 3,881

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 896,829

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,246

Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804,396

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

-84

Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804,312
175

Fiscal Year Operations and Projections

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.C2.—Operations of the DI Trust Fund, Fiscal Year 2019

[In millions]

Total asset reserves, September 30, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $93,141

Income:

Net payroll tax contributions:

Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes adjustments for prior years.

$147,531

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -683

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,848

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a. 2

Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 4

All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,205

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,209

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,915

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

3

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 2,918

Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,978

Cost:

Benefit payments:

Monthly benefitsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

144,824

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -19

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 88

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,893

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,643

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Miscellaneous reimbursements from the General Funde . . . . . . . . . . . . . . . . . . . . .

e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly

related to administering the DI program.

-3

Net administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,751

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,710

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,267

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,520

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

-111

Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,409
Appendices

176

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.C3.—Operations of the Combined OASI and DI Trust Funds, Fiscal Year 2019

[In millions]

Total asset reserves, September 30, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,894,208

Income:

Net payroll tax contributions:

Payroll tax contributionsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes adjustments for prior years.

$935,989

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,565

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 932,424

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a. 17

Payroll tax credits due to P.L. 98-21a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa 17

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 228

All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,876

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,104

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82,503

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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.

4

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 82,507

Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,051,053

Cost:

Benefit payments:

Monthly benefits and lump-sum death paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

1,032,915

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -55

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 100

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,032,961

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,946

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,992

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 633

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Miscellaneous reimbursements from the General Funde . . . . . . . . . . . . . . . . . . . . .

e Reimbursements for costs incurred in performing certain legislatively mandated activities not directly

related to administering the OASI and DI programs.

-7

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,632

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044,540

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,513

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900,916

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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 payments. In this situation, future net redemption of additional invested securities will be required to pay for this

shortfall.

-195

Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,900,721
177

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 2015 through 2029. 

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.C4.—Operations of the OASI Trust Fund, Fiscal Years 2015-2029

[Dollar amounts in billions]

Fiscal 

year

Income Cost Asset Reserves

Total

Net payroll tax

contributions

GF

reimbursementsa

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.

Taxation of

benefitsb

b Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

Net

interest Total

Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioc

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. 

Historical data:

2015 . . $795.3 $672.2 $0.2 $29.6 $93.2 $741.5 $733.7 $3.5 $4.3 $53.9 $2,766.6 366

2016 . . 799.9 679.6 .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

d Between -$50 million and $50 million.

34.9 79.6 896.8 888.1 3.9 4.9 3.2 2,804.3 312

Intermediate:

2020 . . 954.6 840.7 d 37.7 76.2 949.9 940.9 3.9 5.2 4.7 2,809.0 295

2021 . . 989.9 875.2 d 41.3 73.4 1,004.8 996.3 3.6 4.9 -14.9 2,794.1 280

2022 . . 1,029.6 914.0 d 44.9 70.7 1,066.4 1,057.5 3.7 5.2 -36.8 2,757.3 262

2023 . . 1,067.0 950.0 d 48.8 68.2 1,132.3 1,123.1 3.8 5.3 -65.3 2,692.0 244

2024 . . 1,111.0 992.1 d 53.0 66.0 1,202.5 1,193.1 4.0 5.4 -91.5 2,600.5 224

2025 . . 1,155.2 1,032.4 d 57.8 65.0 1,276.2 1,266.6 4.1 5.4 -121.0 2,479.6 204

2026 . . 1,212.0 1,078.0 d 70.2 63.8 1,354.2 1,344.3 4.3 5.6 -142.2 2,337.4 183

2027 . . 1,263.0 1,120.5 d 78.8 63.6 1,436.3 1,426.3 4.4 5.6 -173.4 2,164.0 163

2028 . . 1,322.7 1,175.6 d 85.5 61.6 1,525.7 1,515.5 4.5 5.7 -202.9 1,961.1 142

2029 . . 1,369.4 1,220.2 d 92.6 56.6 1,617.9 1,607.5 4.7 5.7 -248.5 1,712.6 121

Low-cost:

2020 . . 959.4 845.2 d 37.7 76.4 949.7 940.6 3.9 5.2 9.8 2,814.1 295

2021 . . 1,021.1 903.1 d 41.6 76.4 1,010.6 1,002.0 3.6 4.9 10.5 2,824.6 278

2022 . . 1,082.9 960.6 d 45.4 76.9 1,076.9 1,068.0 3.7 5.2 6.0 2,830.6 262

2023 . . 1,140.9 1,014.5 d 49.5 76.9 1,148.2 1,138.9 3.9 5.3 -7.3 2,823.3 247

2024 . . 1,210.4 1,076.2 d 54.0 80.1 1,224.9 1,215.3 4.1 5.4 -14.5 2,808.8 231

2025 . . 1,280.8 1,137.7 d 59.1 83.9 1,305.6 1,295.8 4.3 5.5 -24.9 2,784.0 215

2026 . . 1,366.4 1,205.9 d 72.2 88.3 1,391.7 1,381.6 4.5 5.6 -25.3 2,758.6 200

2027 . . 1,447.8 1,271.6 d 81.4 94.9 1,483.0 1,472.6 4.7 5.7 -35.2 2,723.4 186

2028 . . 1,542.2 1,353.0 d 88.7 100.5 1,583.0 1,572.3 4.9 5.7 -40.7 2,682.7 172

2029 . . 1,625.4 1,424.7 d 96.5 104.2 1,687.2 1,676.2 5.1 5.8 -61.8 2,620.9 159

High-cost:

2020 . . 947.8 834.0 d 37.8 76.0 950.2 941.1 3.9 5.2 -2.4 2,801.9 295

2021 . . 927.4 815.9 d 41.1 70.5 998.5 989.9 3.6 4.9 -71.0 2,730.9 281

2022 . . 945.5 837.8 d 44.3 63.4 1,050.6 1,041.6 3.7 5.3 -105.0 2,625.9 260

2023 . . 964.9 859.3 d 47.7 57.9 1,107.6 1,098.5 3.8 5.4 -142.7 2,483.2 237

2024 . . 990.8 885.4 d 51.6 53.8 1,170.4 1,161.1 3.9 5.4 -179.7 2,303.5 212

2025 . . 1,016.5 911.8 d 56.0 48.8 1,236.5 1,227.2 4.0 5.4 -220.0 2,083.5 186

2026 . . 1,055.8 944.2 d 67.7 44.0 1,306.3 1,296.7 4.0 5.5 -250.4 1,833.1 160

2027 . . 1,089.0 973.2 d 75.6 40.2 1,379.0 1,369.4 4.1 5.5 -290.0 1,543.1 133

2028 . . 1,127.9 1,011.9 d 81.7 34.2 1,457.6 1,447.8 4.2 5.5 -329.7 1,213.4 106

2029 . . 1,152.0 1,038.3 d 88.0 25.7 1,537.5 1,527.6 4.3 5.6 -385.5 827.9 79
Appendices

178

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.C5.—Operations of the DI Trust Fund, Fiscal Years 2015-2029a

[Dollar amounts in billions]

a The DI Trust Fund becomes depleted in fiscal year 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.

Fiscal 

year

Income Cost Asset Reserves

Total

Net payroll tax

contributions

GF

reimbursementsb

b Includes reimbursements from the General Fund of the Treasury to the DI 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.

Taxation of

benefitsc

c Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

Net

interest Total

Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratiod

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. 

Historical data:

2015. . $118.0 $114.2 e

e Between -$50 million and $50 million.

$1.0 $2.7 $146.2 $142.9 $2.9 $0.4 -$28.3 $41.7 48

2016. . 150.3 147.6 e 1.2 1.5 146.2 143.1 2.8 .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

Intermediate:

2020. . 147.3 142.9 e 1.7 2.8 148.4 145.5 2.8 .1 -1.0 95.4 65

2021. . 153.2 148.6 e 1.8 2.9 151.0 148.4 2.5 .1 2.2 97.6 63

2022. . 159.9 155.2 e 1.9 2.8 154.4 151.8 2.6 .1 5.4 103.0 63

2023. . 166.2 161.3 e 2.0 2.9 158.9 156.1 2.7 e 7.3 110.4 65

2024. . 173.9 168.5 e 2.1 3.3 164.1 161.2 2.9 e 9.7 120.1 67

2025. . 181.4 175.3 e 2.3 3.8 170.8 167.8 3.1 e 10.5 130.6 70

2026. . 190.2 183.1 e 2.8 4.3 178.0 174.7 3.2 e 12.2 142.8 73

2027. . 198.4 190.3 e 3.1 5.0 185.5 182.1 3.4 e 12.9 155.7 77

2028. . 208.7 199.6 e 3.3 5.8 191.9 188.2 3.6 e 16.9 172.6 81

2029. . 217.5 207.2 e 3.6 6.7 198.4 194.6 3.8 e 19.1 191.7 87

Low-cost:

2020. . 148.1 143.6 e 1.7 2.9 147.6 144.7 2.8 .1 .5 96.9 65

2021. . 158.2 153.4 e 1.7 3.1 150.0 147.4 2.5 .1 8.2 105.2 65

2022. . 168.5 163.1 e 1.8 3.6 152.5 149.8 2.6 e 16.0 121.2 69

2023. . 178.5 172.3 e 1.9 4.3 155.5 152.7 2.8 e 22.9 144.1 78

2024. . 190.5 182.8 e 2.0 5.7 159.0 156.1 2.9 e 31.4 175.6 91

2025. . 202.9 193.2 e 2.2 7.5 163.7 160.6 3.1 e 39.2 214.8 107

2026. . 217.3 204.8 e 2.6 10.0 168.8 165.5 3.3 e 48.6 263.3 127

2027. . 231.8 215.9 e 2.9 13.0 174.3 170.8 3.5 e 57.6 320.9 151

2028. . 249.5 229.8 e 3.1 16.7 178.9 175.1 3.7 e 70.7 391.6 179

2029. . 266.4 241.9 e 3.3 21.2 183.9 179.9 3.9 e 82.6 474.2 213

High-cost:

2020. . 146.2 141.7 e 1.7 2.8 149.1 146.2 2.8 .1 -2.9 93.5 65

2021. . 142.9 138.5 e 1.8 2.6 152.8 150.3 2.5 .1 -9.9 83.5 61

2022. . 146.2 142.3 e 1.9 2.0 157.6 154.9 2.6 .1 -11.4 72.1 53

2023. . 149.5 145.9 e 2.0 1.6 163.2 160.4 2.8 .1 -13.7 58.4 44

2024. . 153.8 150.4 e 2.2 1.3 169.6 166.6 2.9 e -15.7 42.6 34

2025. . 158.1 154.8 e 2.4 .9 177.1 174.0 3.1 e -19.0 23.7 24

2026. . 163.6 160.3 e 2.9 .4 185.1 181.8 3.2 e -21.5 2.2 13

2027. . f 165.3 e 3.2 f 193.6 190.2 3.4 e ff 1

2028. . f

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.

171.8 e 3.5 f 201.0 197.4 3.5 .1 f ff

2029. . f 176.3 e 3.8 f 208.4 204.6 3.7 .1 f ff
179

Fiscal Year Operations and Projections

Table VI.C6.—Operations of the Combined OASI and DI Trust Funds,

Fiscal Years 2015-2029

[Dollar amounts in billions]

Fiscal

year

Income Cost Asset Reserves

Total

Net payroll tax

contributions

GF

reimbursementsa

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.

Taxation of

benefitsb

b Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioc

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. 

Historical data:

2015 . . $913.3 $786.4 $0.3 $30.7 $96.0 $887.7 $876.6 $6.4 $4.7 $25.6 $2,808.2 313

2016 . . 950.2 827.1 .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

d Between -$50 million and $50 million.

36.1 82.5 1,044.5 1,033.0 6.6 4.9 6.5 2,900.7 277

Intermediate:

2020 . . 1,102.0 983.6 d 39.4 79.0 1,098.3 1,086.3 6.7 5.3 3.7 2,904.4 264

2021 . . 1,143.1 1,023.8 d 43.1 76.3 1,155.8 1,144.7 6.1 5.0 -12.7 2,891.7 251

2022 . . 1,189.5 1,069.2 d 46.8 73.5 1,220.8 1,209.3 6.3 5.2 -31.3 2,860.4 237

2023 . . 1,233.2 1,111.4 d 50.8 71.1 1,291.2 1,279.2 6.6 5.3 -57.9 2,802.4 222

2024 . . 1,284.9 1,160.5 d 55.1 69.2 1,366.7 1,354.3 6.9 5.4 -81.8 2,720.6 205

2025 . . 1,336.5 1,207.7 d 60.1 68.7 1,447.0 1,434.3 7.2 5.5 -110.4 2,610.2 188

2026 . . 1,402.2 1,261.1 d 73.0 68.1 1,532.2 1,519.1 7.5 5.6 -130.0 2,480.2 170

2027 . . 1,461.3 1,310.8 d 81.9 68.6 1,621.8 1,608.4 7.8 5.6 -160.5 2,319.8 153

2028 . . 1,531.5 1,375.3 d 88.9 67.4 1,717.5 1,703.7 8.1 5.7 -186.0 2,133.7 135

2029 . . 1,586.9 1,427.4 d 96.1 63.3 1,816.2 1,802.0 8.4 5.8 -229.4 1,904.4 117

Low-cost:

2020 . . 1,107.6 988.9 d 39.4 79.3 1,097.3 1,085.3 6.7 5.3 10.3 2,911.0 264

2021 . . 1,179.3 1,056.4 d 43.3 79.5 1,160.6 1,149.5 6.1 5.0 18.7 2,929.7 251

2022 . . 1,251.4 1,123.7 d 47.2 80.4 1,229.3 1,217.8 6.3 5.2 22.1 2,951.8 238

2023 . . 1,319.4 1,186.7 d 51.4 81.2 1,303.7 1,291.7 6.7 5.3 15.7 2,967.4 226

2024 . . 1,400.8 1,259.0 d 56.0 85.8 1,383.9 1,371.4 7.1 5.4 16.9 2,984.4 214

2025 . . 1,483.7 1,330.9 d 61.3 91.4 1,469.3 1,456.4 7.4 5.5 14.3 2,998.7 203

2026 . . 1,583.7 1,410.6 d 74.8 98.3 1,560.5 1,547.0 7.8 5.6 23.2 3,021.9 192

2027 . . 1,679.7 1,487.5 d 84.3 107.9 1,657.3 1,643.4 8.2 5.7 22.4 3,044.3 182

2028 . . 1,791.8 1,582.7 d 91.8 117.2 1,761.8 1,747.4 8.7 5.7 29.9 3,074.2 173

2029 . . 1,891.8 1,666.6 d 99.8 125.4 1,871.0 1,856.1 9.1 5.8 20.8 3,095.1 164

High-cost:

2020 . . 1,093.9 975.7 d 39.4 78.9 1,099.3 1,087.4 6.7 5.3 -5.3 2,895.4 264

2021 . . 1,070.3 954.4 d 42.8 73.1 1,151.3 1,140.1 6.1 5.0 -81.0 2,814.4 251

2022 . . 1,091.7 980.1 d 46.2 65.4 1,208.1 1,196.5 6.3 5.3 -116.4 2,698.0 233

2023 . . 1,114.5 1,005.2 d 49.7 59.5 1,270.9 1,258.9 6.5 5.4 -156.4 2,541.6 212

2024 . . 1,144.6 1,035.8 d 53.8 55.1 1,340.0 1,327.8 6.8 5.5 -195.4 2,346.2 190

2025 . . 1,174.7 1,066.6 d 58.3 49.7 1,413.7 1,401.2 7.0 5.4 -239.0 2,107.2 166

2026 . . 1,219.4 1,104.5 d 70.6 44.3 1,491.3 1,478.5 7.3 5.5 -271.9 1,835.3 141

2027 . . 1,257.2 1,138.4 d 78.9 39.8 1,572.6 1,559.5 7.5 5.6 -315.5 1,519.8 117

2028 . . 1,302.0 1,183.8 d 85.2 33.0 1,658.5 1,645.2 7.8 5.6 -356.5 1,163.3 92

2029 . . 1,329.8 1,214.7 d 91.7 23.5 1,745.8 1,732.2 8.0 5.7 -416.0 747.4 67
Appendices

180

D. LONG-RANGE SENSITIVITY ANALYSIS

This appendix presents estimates that illustrate the sensitivity of the longrange actuarial status of the OASDI program to changes in selected individual assumptions. The estimates based on the three alternative sets of assumptions, 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 analysis 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 assumption on the OASDI summarized income rates, summarized cost rates, and

actuarial balances for 25-year, 50-year, and 75-year valuation periods. Following 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 taxation 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 about the ultimate total fertility rate. The Trustees assume that total fertility will ultimately

be 1.75, 1.95, and 2.15 children per woman under alternatives III, II, and I,

respectively. The total fertility rate reaches ultimate values in 2026, 2029,

and 2029 under alternatives III, II, and I, respectively.
181

Long-Range Sensitivity Analysis

For the 25-year period, the cost rate for the three fertility assumptions varies

by only about 0.03 percent of taxable payroll. In contrast, the 75-year cost

rate varies over a wide range, decreasing from 17.55 to 16.59 percent, as the

assumed ultimate total fertility rate increases from 1.75 to 2.15. Similarly,

while the 25-year actuarial balance varies by only 0.03 percent of taxable

payroll, the 75-year actuarial balance varies over a much wider range, from

-3.66 to -2.79 percent.

During the 25-year period, the very slight increases in the working-age population 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 beneficiaries. 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 population than on the beneficiary population. As a result, an increase in fertility

significantly reduces the cost rate. Each increase of 0.1 in the ultimate total

fertility rate increases the long-range actuarial balance by about 0.22 percent

of taxable payroll.

Table VI.D1.—Sensitivity of OASDI Measures to Fertility Assumptions

[As a percentage of taxable payroll]

Valuation period

Ultimate total fertility ratea b

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 ultimate total fertility rate is reached in 2026, 2029,

and 2029 under alternatives III, II, and I, respectively.

b Ultimate total fertility rates used for this analysis are: 1.75 from the alternative III assumptions, 1.95 from

the alternative II assumptions, and 2.15 from the alternative I assumptions. All other assumptions used for

this analysis are from alternative II.

1.75 1.95 2.15

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.02 14.00 13.98

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.89 13.85 13.80

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.55 16.57 16.59

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.95 16.76 16.57

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.55 17.06 16.59

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.00 -2.02 -2.03

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.93 -2.75 -2.59

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.66 -3.21 -2.79

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.11 -4.51 -3.17

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
Appendices

182

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 2019 to 2094. These assumptions are described in section V.A.2. The Trustees assume that the age-sexadjusted death rates will decline at average annual rates of 0.40 percent,

0.76 percent, and 1.15 percent for alternatives I, II, and III, respectively. 

The variation in cost for the 25-year period is less pronounced than the variation for the 75-year period because decreases in death rates have cumulative

effects. The 25-year cost rate increases from 16.43 percent (for an average

annual death-rate reduction of 0.40 percent over the entire long-range period)

to 16.73 percent (for an average annual death-rate reduction of 1.15 percent

over the entire long-range period). The 75-year cost rate increases from

16.54 to 17.62 percent. The actuarial balance decreases from -1.88 to

-2.17 percent for the 25-year period, and from -2.71 to -3.75 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, reducTable VI.D2.—Sensitivity of OASDI Measures to Death-Rate Assumptions

[As a percentage of taxable payroll]

Valuation period

Average annual death-rate reductiona b

a The average annual death-rate reduction is the average annual geometric rate of decline in the age-sexadjusted death rate for the period from 2019 to 2094. The overall age-sex-adjusted death rate decreases from

2019 to 2094 by 26 percent, 44 percent, and 58 percent for alternatives I, II, and III, respectively.

b The average annual death-rate reductions used for this analysis are: 0.40 percent from the alternative I

assumptions, 0.76 percent from the alternative II assumptions, and 1.15 percent from the alternative III

assumptions. All other assumptions used for this analysis are from alternative II.

0.40 percent 0.76 percent 1.15 percent

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.99 14.00 14.02

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.83 13.85 13.87

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.43 16.57 16.73

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.41 16.76 17.14

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.54 17.06 17.62

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.88 -2.02 -2.17

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.42 -2.75 -3.13

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.71 -3.21 -3.75

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -3.47 -4.51 -5.57

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
183

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 beneficiaries (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 mentioned 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 relative 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) immigration and net other-than-LPR immigration). See section V.A.3 for more information on immigration assumptions and methods. The Trustees assume

annual levels of immigration and emigration, with total net annual immigration averaging 946,000 persons, 1,261,000 persons, and 1,598,000 persons

over the long-range period under alternatives III, II, and I, respectively. 
Appendices

184

For all three periods, when total net immigration increases, the cost rate

decreases. For the 25-year period, the cost rate decreases from 16.74 percent

of taxable payroll (for an average annual total net immigration of 946,000

persons over the entire long-range period) to 16.40 percent (for an average

annual total net immigration of 1,598,000 persons over the entire long-range

period). For the 50-year period, it decreases from 17.00 percent to

16.51 percent, and for the 75-year period, it decreases from 17.35 percent to

16.78 percent. The actuarial balance increases from -2.16 to -1.87 percent for

the 25-year period, from -2.97 to -2.54 percent for the 50-year period, and

from -3.47 to -2.96 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 longrange actuarial balance by about 0.08 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 realwage differential. The Trustees assume the ultimate real-wage differential

will be 0.52 percentage point, 1.14 percentage points, and 1.76 percentage

Table VI.D3.—Sensitivity of OASDI Measures to Total Net Immigration Assumptions

[As a percentage of taxable payroll]

Valuation period

Average annual total net immigrationa b

a Average annual total net immigration is the annual total net immigration to the Social Security area, including both LPR and other-than-LPR immigration, averaged over the 75-year projection period.

b The average annual total net immigration assumptions used for this analysis are: 946,000 from the alternative III assumptions, 1,261,000 from the alternative II assumptions, and 1,598,000 from the alternative I

assumptions. All other assumptions used for this analysis are from alternative II.

946,000 1,261,000 1,598,000

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.58 14.55 14.53

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03 14.00 13.97

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.88 13.85 13.81

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.74 16.57 16.40

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.00 16.76 16.51

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.35 17.06 16.78

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.16 -2.02 -1.87

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.97 -2.75 -2.54

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.47 -3.21 -2.96

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.99 -4.51 -4.10

Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2035
185

Long-Range Sensitivity Analysis

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 ultimate percentage increases in average annual wages in covered employment are 2.92, 3.54, and 4.16 percent.

For the 25-year period, the cost rate decreases from 17.39 percent (for a realwage differential of 0.52 percentage point) to 15.77 percent (for a differential

of 1.76 percentage points). For the 50-year period, it decreases from 17.95 to

15.60 percent, and for the 75-year period it decreases from 18.39 to

15.77 percent. The actuarial balance increases from -2.71 to -1.34 percent for

the 25-year period, from -3.78 to -1.75 percent for the 50-year period, and

from -4.36 to -2.09 percent for the 75-year period.

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

changes in prices. Each 0.1-percentage-point increase in the real-wage differential increases the long-range actuarial balance by about 0.18 percent of

taxable payroll.

Table VI.D4.—Sensitivity of OASDI Measures to Real-Wage Assumptions

[As a percentage of taxable payroll]

Valuation period

Ultimate percentage increase in wages-CPI a b

a The first value in each pair is the ultimate annual percentage increase in average wages in covered employment. The second value is the ultimate annual percentage increase in the Consumer Price Index. The difference between the two values is the ultimate real-wage differential.

b The ultimate real-wage differentials of 0.52, 1.14, and 1.76 percentage points are the same as in alternatives III, II, and I, respectively. All other assumptions used for this analysis are from alternative II.

2.92-2.40 3.54-2.40 4.16-2.40

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.68 14.55 14.43

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.17 14.00 13.85

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03 13.85 13.68

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.39 16.57 15.77

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.95 16.76 15.60

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.39 17.06 15.77

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.71 -2.02 -1.34

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.78 -2.75 -1.75

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.36 -3.21 -2.09

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.53 -4.51 -2.76

Year of combined trust fund reserve depletion . . . . . . . . 2033 2035 2037
Appendices

186

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). The Trustees assume the

annual increase in the CPI will be 3.00 percent, 2.40 percent, and

1.80 percent under alternatives I, II, and III, respectively.1 In each case, the

ultimate real-wage differential is 1.14 percentage points (consistent with

alternative II), yielding ultimate percentage increases in average annual

wages in covered employment of 4.14, 3.54, and 2.94 percent.

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 16.46 (for CPI increases of 3.00 percent) to 16.67 percent (for CPI

increases of 1.80 percent). For the 50-year period, it increases from 16.62 to

16.89 percent, and for the 75-year period, it increases from 16.90 to

17.21 percent. The actuarial balance decreases from -1.93 to -2.10 percent

for the 25-year period, from -2.63 to -2.87 percent for the 50-year period,

and from -3.07 to -3.35 percent for the 75-year period.

 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.

Table VI.D5.—Sensitivity of OASDI Measures to CPI-Increase Assumptions

[As a percentage of taxable payroll]

Valuation period

Ultimate percentage increase in wages-CPIa b

a The first value in each pair is the ultimate annual percentage increase in average wages in covered employment. The second value is the ultimate annual percentage increase in the Consumer Price Index. The difference between the two values is the ultimate real-wage differential.

b The ultimate CPI increases of 3.00, 2.40, and 1.80 percent are the same as in alternatives I, II, and III,

respectively. The ultimate real-wage differential of 1.14 percentage points is the same as in alternative II. All

other assumptions used for this analysis are also from alternative II.

4.14-3.00 3.54-2.40 2.94-1.80

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.53 14.55 14.57

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.99 14.00 14.02

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.83 13.85 13.86

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.46 16.57 16.67

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.62 16.76 16.89

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.90 17.06 17.21

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.93 -2.02 -2.10

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.63 -2.75 -2.87

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.07 -3.21 -3.35

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.33 -4.51 -4.68

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
187

Long-Range Sensitivity Analysis

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 taxable 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. The Trustees assume that the ultimate annual real

interest rate will be 1.8 percent, 2.3 percent, and 2.8 percent under alternatives III, II, and I, respectively. 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.

Table VI.D6.—Sensitivity of OASDI Measures to Real-Interest Assumptions

[As a percentage of taxable payroll]

Valuation period

Ultimate annual real interest ratea b

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 ultimate annual real interest rates used for this analysis are: 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. All other assumptions used for this analysis are from alternative II.

1.8 percent 2.3 percent 2.8 percent

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.50 14.55 14.60

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.94 14.00 14.07

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.78 13.85 13.92

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 16.57 16.51

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.85 16.76 16.67

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.19 17.06 16.93

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.13 -2.02 -1.90

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.91 -2.75 -2.60

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.41 -3.21 -3.02

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.51 -4.51 -4.51

Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2035
Appendices

188

For the 25-year period, the cost rate decreases with increasing real interest

rates from 16.64 percent (for an ultimate real interest rate of 1.8 percent) to

16.51 percent (for an ultimate real interest rate of 2.8 percent). For the

50-year period, it decreases from 16.85 to 16.67 percent and, for the 75-year

period, it decreases from 17.19 to 16.93 percent. The actuarial balance

increases from -2.13 to -1.90 percent for the 25-year period, from -2.91 to

-2.60 percent for the 50-year period, and from -3.41 to -3.02 percent for the

75-year period. It should be noted that a relatively higher real interest rate

has the effect of discounting more distant future years relatively more. To the

extent that annual income rates, annual cost rates, and annual deficits are

larger in later years, a higher interest rate decreases all summarized rates, and

a lower interest rate increases all summarized rates. Each 0.1-percentagepoint 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 taxable payroll to covered earnings (the taxable ratio). Note that covered earnings are the sum of wages and net self-employment earnings covered by

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 ($137,700 for 2020). The Trustees assume that the taxable ratio

at the end of the short-range period (2029) will be 81.0 percent, 82.5 percent,

and 84.0 percent under alternatives III, II, and I, respectively.
189

Long-Range Sensitivity Analysis

Because the combined employee-employer tax rate of 12.4 percent is

unchanged across all alternatives, the income rate changes a relatively small

amount as the taxable ratio increases, due to changes in taxation of benefits

and the initial fund as a percentage of taxable payroll.

For the 25-year period, the cost rate decreases with increasing taxable ratios,

from 16.80 percent (for a taxable ratio in 2029 of 81.0 percent) to

16.34 percent (for a taxable ratio in 2029 of 84.0 percent). For the 50-year

period, it decreases from 16.97 to 16.55 percent and, for the 75-year period,

it decreases from 17.25 to 16.87 percent. The actuarial balance increases

from -2.22 to -1.82 percent for the 25-year period, from -2.95 to

-2.57 percent for the 50-year period, and from -3.39 to -3.04 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 2029 increases

(improves) the long-range actuarial balance by about 0.11 percent of taxable

payroll.

Table VI.D7.—Sensitivity of OASDI Measures to Taxable Ratio Assumptions

[As a percentage of taxable payroll]

Valuation period

Taxable ratio in 2029a b

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 ratios at the end of the short-range period (2029) used for this analysis are: 81.0 percent from

the alternative 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. 

81.0 percent 82.5 percent 84.0 percent

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.59 14.55 14.52

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.03 14.00 13.98

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.87 13.85 13.83

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.80 16.57 16.34

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.97 16.76 16.55

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.25 17.06 16.87

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.22 -2.02 -1.82

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.95 -2.75 -2.57

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.39 -3.21 -3.04

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.63 -4.51 -4.40

Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2035
Appendices

190

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 concerning

future disability incidence rates. The Trustees assume that the ultimate agesex-adjusted1 incidence rates will be 4.0, 5.0, and 6.0 awards per thousand

exposed for alternatives I, II, and III, respectively. For all three alternatives,

the Trustees assume that incidence rates by age and sex will vary during the

early years of the projection period before attaining ultimate levels.

For the 25-year period, the cost rate increases with increasing disability incidence rates, from 16.36 percent (for the relatively low rates assumed for

alternative I) to 16.78 percent (for the relatively high rates assumed for alternative III). For the 50-year period, it increases from 16.50 to 17.01 percent,

and for the 75-year period, it increases from 16.80 to 17.31 percent. The

actuarial balance decreases from -1.81 to -2.22 percent for the 25-year

period, from -2.50 to -3.00 percent for the 50-year period, and from -2.96 to

-3.46 percent for the 75-year period.

 1 Age-sex-adjusted to the disability-exposed population as of the year 2000.

Table VI.D8.—Sensitivity of OASDI Measures to Disability Incidence Assumptions

[As a percentage of taxable payroll]

Valuation period

Disability incidence ratea

a The ultimate age-sex-adjusted incidence rates used for this analysis are: 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.

4.0 5.0 6.0

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.56

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.00 14.00 14.01

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.85 13.85 13.85

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.36 16.57 16.78

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.50 16.76 17.01

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.80 17.06 17.31

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.81 -2.02 -2.22

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.50 -2.75 -3.00

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.96 -3.21 -3.46

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.24 -4.51 -4.78

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
191

Long-Range Sensitivity Analysis

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. 

For all three alternatives, the Trustees assume that death rates for disabledworker beneficiaries will decline throughout the long-range period. The

Trustees assume that the age-sex-adjusted1 death rate of 24.8 deaths per

thousand disabled-worker beneficiaries in 2019 will decline to 19.0, 12.1,

and 7.2 deaths per thousand in 2094 for alternatives I, II, and III, respectively. These levels are about 23 percent, 51 percent, and 71 percent lower,

respectively, than the level in 2019.

The ultimate age-sex-adjusted1 recovery rates used for this analysis are

12.5 recoveries per thousand disabled-worker beneficiaries for the alternative I assumptions, 10.3 recoveries per thousand disabled-worker beneficiaries for the alternative II assumptions, and 8.2 recoveries per thousand

disabled-worker beneficiaries for the alternative III assumptions.

 1 Age-sex-adjusted to the disabled-worker population as of the year 2000.

Table VI.D9.—Sensitivity of OASDI Measures to Disability Termination Assumptions

[As a percentage of taxable payroll]

Valuation period

Disability termination rates

(death; recovery)a

a The age-sex-adjusted death rates in 2094 used for this analysis are: 19.0 deaths per thousand disabledworker beneficiaries for the alternative I assumptions, 12.1 deaths per thousand disabled-worker beneficiaries for the alternative II assumptions, and 7.2 deaths per thousand disabled-worker beneficiaries for the

alternative III assumptions. The ultimate age-sex-adjusted recovery rates used for this analysis are:

12.5 recoveries per thousand disabled-worker beneficiaries for the alternative I assumptions, 10.3 recoveries

per thousand disabled-worker beneficiaries for the alternative II assumptions, and 8.2 recoveries per thousand disabled-worker beneficiaries for the alternative III assumptions. All other assumptions used for this

analysis are from alternative II.

19.0; 12.5 12.1; 10.3 7.2; 8.2

Summarized income rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.00 14.00 14.00

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.85 13.85 13.85

Summarized cost rate:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.54 16.57 16.59

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.73 16.76 16.78

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 17.06 17.07

Actuarial balance:

25-year: 2020-44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.99 -2.02 -2.04

50-year: 2020-69 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.73 -2.75 -2.78

75-year: 2020-94 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.19 -3.21 -3.22

Annual balance for 2094 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.51 -4.51 -4.48

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2034
Appendices

192

For the 25-year period, the cost rate increases with decreasing disability termination rates, from 16.54 percent (for the relatively high termination rates

assumed for alternative I) to 16.59 percent (for the relatively low termination

rates assumed for alternative III). For the 50-year period, it increases from

16.73 to 16.78 percent, and for the 75-year period, it increases from 17.04 to

17.07 percent. The actuarial balance decreases from -1.99 to -2.04 percent

for the 25-year period, from -2.73 to -2.78 percent for the 50-year period,

and from -3.19 to -3.22 percent for the 75-year period.
193

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 presents stochastic projections, a way to illustrate the uncertainty of these estimates. The stochastic projections supplement the traditional methods of

examining such uncertainty.

1. Background

The Trustees have traditionally shown estimates using the low-cost and highcost sets of specified assumptions to illustrate the potential implications of

uncertainty. These low-cost and high-cost estimates provide a range of possible 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, which was first incorporated in the 2003 report, is in the process of further development for the

future, most notably by incorporating parameter uncertainty. This will allow

the stochastic model to better reflect the uncertainty in the estimates of the

underlying factors for these projections.

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 about levels of fertility, rates of change in mortality, lawful permanent resident (LPR) and

other-than-LPR immigration levels, legal and other-than-LPR emigration

levels, 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 stochastic simulations. Each simulation allows the above variables to vary

throughout the long-range period. The fluctuation of each variable over time
Appendices

194

is simulated using historical data and standard time-series techniques. Generally, each variable is modeled using an equation that: (1) captures a relationship between current and prior years’ values of the variable, and

(2) introduces year-by-year random variation based on variation observed in

the historical period. For some variables, the equations also reflect relationships with other variables. The equations contain parameters that are estimated using historical data for periods from 13 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 under the intermediate

assumptions.1

For each simulation, the stochastic model develops year-by-year random

variation for each variable using Monte Carlo techniques. Each simulation

produces an estimate of the 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 caution and 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 variation 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. Furthermore, more variability would result if statistical approaches were used to model uncertainty

in the central tendencies of the variables. 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,

readers should understand that the true range of uncertainty is larger than

indicated in this appendix.

 1 More detail on this model, and stochastic modeling in general, is available at

www.ssa.gov/OACT/stochastic/index.html.
195

Stochastic Projections 

3. Stochastic Results

This section illustrates the results for the stochastic simulations of two fundamental measures of actuarial status: annual cost rates and trust fund ratios.

The latter measure is highlighted in section II.D of this report. Section 4 follows 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 the income rate only under the intermediate assumptions. The two

outermost 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-percent 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 stochastic simulations for that year. 
Appendices

196

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

depletion year ranges from 2031 to 2042, and that there is a 50-percent probability of trust fund reserve depletion by the end of 2035 (the median reserve

depletion year). The median reserve depletion year is the same as the Trustees project under the intermediate assumptions. 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 41 to 155 percent of annual cost. 

 Figure VI.E1.—Long-Range OASDI Cost Rates From Stochastic Modeling

5%

10%

15%

20%

25%

30%

2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

50%

97.5%

2.5%

90%

10%

Income Rate Under the 

Intermediate Assumptions
197

Stochastic Projections 

4. Comparison of Results: Stochastic to Low-Cost, Intermediate, and

High-Cost Alternatives

This section compares results from two different approaches for illustrating

ranges of uncertainty for trust fund actuarial status. One approach uses

results from the low-cost, intermediate, and high-cost alternative scenarios.

The other approach uses distributions of results from the stochastic simulations. 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 lowcost, intermediate, and high-cost alternatives 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 alternatives are results

from a single specified scenario, the values on each stochastic line may be

results from different simulations for different years. The one stochastic simulation (from the 5,000 simulations) that yields results closest to a particular

 Figure VI.E2.—Long-Range OASDI Trust Fund Ratios From Stochastic Modeling

0%

100%

200%

300%

2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

50%

97.5%

2.5%

90%

10%
Appendices

198

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 alternatives. In spite of this effect, the range from low-cost to high-cost annual rates

for the stochastic distribution is generally contained slightly within the range

for the low-cost and high-cost alternatives. With introduction of parameter

uncertainty for the stochastic simulations expected in future reports, the

range for the 95-percent confidence interval is expected to expand.

Both the alternatives and the stochastic results suggest that the range of

potential cost rates above the central levels (those for the intermediate alternative and for the 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 and the upper end of the 95-percent confidence range, respectively) is about 1.5 times as large as the difference

between the central and lower cost levels for both models by the end of the

projection period.

 Figure VI.E3.—OASDI Cost Rates: Comparison of Stochastic to Low-Cost, Intermediate, 

and High-Cost Alternatives

[As a percentage of taxable payroll]

10%

15%

20%

25%

30%

2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Low-Cost

Intermediate

High-Cost

Stochastic 2.5%

Stochastic 50%

Stochastic 97.5%
199

Stochastic Projections 

Another fundamental difference between the alternatives and the stochastic

simulations is the method of assigning values for assumptions. For the alternatives, specific values are assigned for each of the key demographic, economic, and program-specific variables. The high-cost alternative uses

parameter values that increase estimated annual cost as a percent of payroll,

while the low-cost alternative 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 alternatives or the stochastic

simulations.) In contrast, the stochastic method essentially randomly assigns

values for each of the key demographic and economic variables for each year

in each of the 5,000 independent stochastic simulations. For each of the stochastic simulations, randomly 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 reduce the range of cost as a percent of payroll

across the 95-percent confidence interval. Again, the future introduction of

parameter uncertainty is expected to broaden this range.

It is important to understand that the stochastic model’s 95-percent confidence intervals for any summary measure of trust fund finances would tend

to be narrower than the range produced for the low-cost and high-cost alternatives, even if the stochastic model’s 95-percent confidence interval for

annual cost rates were identical to the range defined by the low-cost and

high-cost projections. 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 fundamentally different for the stochastic model than it is for the low-cost and highcost alternatives.

Figure VI.E4 compares the ranges of trust fund (unfunded obligation) ratios

for the alternative scenarios to the 95-percent confidence interval of the stochastic simulations. This figure extends figure VI.E2 to show unfunded obligation 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.
Appendices

200

As mentioned above, a summary measure that accumulates annual values

tends to smooth the kind of annual fluctuations that occur in stochastic simulations. Therefore, one might expect the range across the stochastic confidence interval for trust fund (unfunded obligation) ratios to be narrower and

fall within the range seen across the high-cost and low-cost alternatives, 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

essentially randomly, 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 and lower for the high-cost alternative.

High interest rates raise the level of the positive trust fund ratio in the lowcost alternative somewhat, but this effect is limited because the magnitude of

reserves is small. However, low interest rates substantially reduce the magnitude of the unfunded obligation ratio for the high-cost alternative because the

 Figure VI.E4.—OASDI Trust Fund (Unfunded Obligation) Ratios: Comparison of 

Stochastic to Low-Cost, Intermediate, and High-Cost Alternativesa

[Trust fund reserves (unfunded obligation) as a percentage of annual cost]

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.

-5,000%

-4,500%

-4,000%

-3,500%

-3,000%

-2,500%

-2,000%

-1,500%

-1,000%

-500%

0%

500%

1,000%

2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Low-Cost

Intermediate

High-Cost

Stochastic 2.5%

Stochastic 50%

Stochastic 97.5%

Trust fund reserves (positive)

Unfunded obligation (negative)
201

Stochastic Projections 

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 alternatives. 

This interest rate effect on the alternatives 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 pronounced.

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 simulations. 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: alternative scenarios and stochastic simulations. The table shows scenario-based

estimates for the intermediate, low-cost, and high-cost assumptions. It also

shows stochastic estimates for the median (50th percentile) and for the

80-percent and 95-percent confidence intervals. Each individual stochastic

estimate in the table is the level at that percentile from the distribution of the

5,000 simulations. For each given percentile, the values in the table for each

long-range actuarial measure are generally from different stochastic simulations.

The median stochastic estimates displayed in table VI.E1 are similar to the

intermediate scenario-based estimates. The median estimate of the longrange actuarial balance is -3.27 percent of taxable payroll, about

0.05 percentage point lower (more negative) than projected under the intermediate assumptions. The median estimate for the open-group unfunded

obligation is $17.0 trillion, about $0.2 trillion larger than the $16.8 trillion

estimate under the intermediate assumptions. The median first projected year

for which cost exceeds non-interest income (as it did in 2010 through 2019),

and remains in excess of non-interest income throughout the remainder of

the long-range period, is 2020. This is the same year as projected under the

intermediate assumptions. The median projected year in which trust fund

reserves first become depleted is 2035, also the same as projected under the

intermediate assumptions. The median estimates of the annual cost rate for

the 75th year of the projection period are 18.39 percent of taxable payroll

and 6.00 percent of gross domestic product (GDP). The comparable esti-
Appendices

202

mates under the intermediate assumptions are 17.94 percent of payroll and

5.85 percent of GDP.

For three measures in table VI.E1 (the actuarial balance, the first projected

year cost exceeds non-interest income and remains in excess through 2094,

and the first year trust fund reserves become depleted), the 95-percent stochastic confidence interval falls within the range defined by the low-cost and

high-cost alternatives. For the remaining three measures (the open-group

unfunded obligation, the annual cost in the 75th year as a percent of taxable

payroll, and the annual cost in the 75th year as a percent of GDP), one or

both of the bounds of the 95-percent stochastic confidence interval fall outside the range defined by the low-cost and high-cost alternatives.

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

IntermediateLowcostHighcost

Median

50th

percentile

80-percent

confidence interval

95-percent

confidence interval

10th

percentile

90th

percentile

2.5th

percentile

97.5th

percentile

Actuarial balance . . . . . . -3.21 -0.13 -7.10 -3.27 -4.74 -2.01 -5.59 -1.37

Open-group unfunded 

obligation 

(in trillions) . . . . . . . . . $16.8 -$.1 $30.9 $17.0 $9.3 $28.7 $6.3 $37.2

First projected year cost 

exceeds non-interest 

income and remains

in excess 

through 2094. . . . . . . . 2020 a

a The annual balance is projected to be negative for a temporary period, returning to positive levels before the

end of the projection period.

2020 2020 2020 2020 2020 2092

First year trust fund 

reserves become 

depleted b . . . . . . . . . .

b For some stochastic simulations, the first year in which trust fund reserves become depleted does not indicate a permanent depletion of reserves.

2035 2079 2031 2035 2032 2039 2031 2042

Annual cost in 75th year 

(percent of taxable

payroll) . . . . . . . . . . . . 17.94 12.93 25.48 18.39 14.99 23.07 13.40 26.23

Annual cost in 75th year 

(percent of GDP). . . . . 5.85 4.60 7.64 6.00 4.92 7.46 4.41 8.41
203

Infinite Horizon Projections 

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 balances, 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 $53.0 trillion in present value, which is $36.2 trillion

larger than for the 75-year period. The $36.2 trillion increment reflects a significant financing gap projected for OASDI for years after 2094 into perpetuity. Of course, the degree of uncertainty associated with estimates increases

substantially for years further in the future.

The $53.0 trillion infinite horizon open-group unfunded obligation is equivalent 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, consider 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 17.1 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 The indicated increase in the payroll tax rate of 4.7 percent is somewhat larger than the 4.6 percent infinite

horizon actuarial deficit because the indicated increase reflects a behavioral response to tax rate changes. In

particular, the calculation assumes that an increase in payroll taxes results in a small shift of wages and salaries to forms of employee compensation that are not subject to the payroll tax.
Appendices

204

Notes:

1. The present values of future taxable payroll for 2020-94 and for 2020 through the infinite horizon are

$554.6 trillion and $1,161.1 trillion, respectively.

2. The present values of GDP for 2020-94 and for 2020 through the infinite horizon are $1,614.2 trillion and

$3,845.6 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 $43.2 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 $1.2 trillion, to

$44.4 trillion. The net effects of changes in assumptions, methods, law, and

starting values increased the infinite horizon unfunded obligation by

$8.6 trillion. One major change affecting the infinite horizon unfunded obligation for this report is the reduction in the ultimate real interest rate from

2.5 percent to 2.3 percent, which provides less discounting of annual shortfalls in the future. Other significant reasons for the increase in the infinite

horizon unfunded obligation include a change in law repealing the excise tax

on employer-sponsored group health insurance premiums and a reduction in

the ultimate total fertility rate.

The infinite horizon unfunded obligation expressed as a share of taxable payroll is higher than in last year’s report by 0.5 percentage point, but it is higher

than in last year’s report by less than 0.05 percentage point when expressed

as a share of GDP. The increase as a share of taxable payroll is much larger

primarily because the repeal of the ACA excise tax is projected to reduce

wages and taxable payroll significantly but to have no effect on total

employee compensation or on GDP. See section IV.B.6 for details regarding

changes in law, data, methods, and assumptions.

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, 2020; dollar amounts in trillions]

Present

value

Expressed as a percentage

of future payroll and GDP

Taxable

payroll GDP

Unfunded obligation through the infinite horizona . . . . . . . . . . . . 

a Present value of future cost less future non-interest income, reduced by the amount of trust fund asset

reserves at the beginning of 2020. Expressed as a percentage of payroll and GDP for the period 2020 through

the infinite horizon.

$53.0 4.6 1.4

Unfunded obligation through 2094b . . . . . . . . . . . . . . . . . . . . . . . 

b Present value of future cost less future non-interest income through 2094, reduced by the amount of trust

fund reserves at the beginning of 2020. Expressed as a percentage of payroll and GDP for the period 2020

through 2094.

16.8 3.0 1.0
205

Infinite Horizon Projections 

a. Unfunded Obligations for Past, Current, and Future Participants

Table VI.F2 separates the components of the infinite horizon unfunded obligation (with the exception of General Fund reimbursements) among past,

current, and future participants. The table does not separate past General

Fund reimbursements among participants because there is no clear basis for

attributing the reimbursements across generations.

Past participants are defined as those no longer alive as of the valuation date.

Current participants are those age 15 and older as of 2020. Future participants 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

$39.6 trillion. Table VI.F2 also shows an unfunded obligation of

$38.9 trillion for past and current participants, including past and future General Fund reimbursements. Future participants are scheduled to pay dedicated taxes of $14.1 trillion less into the system than the cost of their

scheduled benefits ($119.0 trillion of dedicated tax income as compared to

$133.1 trillion of cost). The unfunded obligation for all participants through

the infinite horizon thus equals $53.0 trillion.

Making Social Security solvent over the infinite horizon requires some combination of increased revenue or reduced benefits for current and future participants amounting to $53.0 trillion in present value, 4.6 percent of future

taxable payroll, or 1.4 percent of future GDP.
Appendices

206

Notes:

1. The present value of future taxable payroll for 2020 through the infinite horizon is $1,161.1 trillion.

2. The present value of GDP for 2020 through the infinite horizon is $3,845.6 trillion.

3. Totals do not necessarily equal the sums of rounded components.

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, 2020; dollar amounts in trillions]

Present

value

Expressed as a 

percentage of future 

payroll and GDP

Taxable

payroll GDP

Present value of past cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $67.6 5.8 1.8

Less present value of past dedicated tax income . . . . . . . . . . . . . . . . . . 69.8 6.0 1.8

Plus present value of future cost for current participants . . . . . . . . . . . 78.8 6.8 2.0

Less present value of future dedicated tax income for current 

participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37.0 3.2 1.0

Equals unfunded obligation for past and current participants 

excluding General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 39.6 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 horizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cdb

Equals unfunded obligation for past and current participants 

including General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 38.9 3.3 1.0

Plus present value of cost for future participants through the infinite 

horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133.1 11.5 3.5

Less present value of dedicated tax income for future participants 

through the infinite horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119.0 10.2 3.1

Equals unfunded obligation for all participants through the infinite 

horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53.0 4.6 1.4

a Distribution of General Fund reimbursements among past, current, and future participants cannot be determined.

b Less than 0.05 percent of GDP.

c Less than $50 billion.

d Less than 0.05 percent of taxable payroll.
207

OASDI and HI: Percent of Payroll

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 combined 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 2020 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 percentages of taxable payroll requires a note of caution. The taxable payrolls

for the HI program are larger than those estimated 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 26 percent larger than the OASDI

taxable payroll on average over the long-range period.

As with the OASI and DI Trust Funds, income to the HI Trust Fund comes

primarily from contributions paid by employees, employers, and selfemployed persons. Table VI.G1 shows the OASDI and HI contribution rates

that are authorized in the Federal Insurance Contributions Act.
Appendices

208

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

Table VI.G1.—Payroll Tax Contribution Rates for the OASDI and HI Programs

[In percent]

Calendar years

Employees and employers, 

combineda

a Except as noted below, the combined employee/employer rate is divided equally between employees and

employers.

Employees 

only Self employedb

b Beginning in 1990, self-employed persons receive a deduction, for purposes of computing their net earnings, 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.

OASDI

up to basec

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 $137,700 for 2020.

HI

all earningsd

d Prior to 1994, the payroll tax on earnings for the HI program applied to annual earnings up to a contribution base. The HI contribution base was eliminated beginning in 1994.

HI

over limite

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.

OASDI

up to basec HIall earningsd HIover limite

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. . . . . . . . . . . . .

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. 

11.40 2.60 — 11.40 2.60 —

1985f . . . . . . . . . . . . 11.40 2.70 — 11.40 2.70 —

1986-87f. . . . . . . . . . 11.40 2.90 — 11.40 2.90 —

1988-89f. . . . . . . . . . 12.12 2.90 — 12.12 2.90 —

1990-2010g. . . . . . . .

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.

12.40 2.90 — 12.40 2.90 —

2011-2012h. . . . . . . .

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.

10.40 2.90 — 10.40 2.90 —

2013 and later. . . . . . 12.40 2.90 0.90 12.40 2.90 0.90
209

OASDI and HI: Percent of Payroll

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-percent 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 assumptions. The greatest increase occurs from 2020 to about 2038 under the intermediate assumptions for OASDI and under both sets of assumptions for HI.

Under the intermediate assumptions, the OASDI cost rate increases by

29 percent from its current level by 2094, while under the high-cost assumptions, the cost rate increases by 78 percent by 2094. For HI, cost rates

increase by 39 percent and 188 percent from 2020 to 2094 under the intermediate and high-cost assumptions, respectively. Under the low-cost assumptions, the OASDI and HI cost rates decrease from 2020 to 2094 by 5 percent

and 33 percent, respectively. 

The Trustees project annual deficits for every year of the projection period

under the intermediate and high-cost assumptions for both the OASDI and

HI programs. Under the low-cost assumptions, OASDI annual balances are

negative through 2083, and are positive thereafter, increasing to 0.27 percent

of payroll for 2091, and then decreasing through 2094. After a 0.04 deficit in

2020, HI annual balances as a percent of payroll are positive and mostly

increasing from 2021 through the remainder of the projection period under

the low-cost assumptions.
Appendices

210

Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2020-2095

[As a percentage of taxable payrolla]

Calendar year

OASDI HI

Income

rate

Cost

rateb Balanceb Incomerate

Cost

rate Balance

Intermediate:

2020 . . . . . . . . . . 13.00 13.92 -0.92 3.36 3.52 -0.16

2021 . . . . . . . . . . 12.90 14.05 -1.15 3.38 3.58 -.19

2022 . . . . . . . . . . 12.93 14.25 -1.32 3.40 3.65 -.25

2023 . . . . . . . . . . 12.94 14.43 -1.49 3.42 3.74 -.31

2024 . . . . . . . . . . 12.98 14.64 -1.67 3.44 3.81 -.36

2025 . . . . . . . . . . 13.00 14.88 -1.88 3.47 3.88 -.41

2026 . . . . . . . . . . 13.12 15.11 -1.99 3.55 3.94 -.39

2027 . . . . . . . . . . 13.15 15.35 -2.20 3.57 4.00 -.43

2028 . . . . . . . . . . 13.19 15.58 -2.39 3.60 4.06 -.46

2029 . . . . . . . . . . 13.23 15.83 -2.61 3.63 4.11 -.48

2030 . . . . . . . . . . 13.24 16.02 -2.78 3.65 4.28 -.63

2035 . . . . . . . . . . 13.29 16.63 -3.33 3.74 4.58 -.84

2040 . . . . . . . . . . 13.32 16.85 -3.53 3.81 4.80 -.99

2045 . . . . . . . . . . 13.32 16.82 -3.50 3.86 4.94 -1.08

2050 . . . . . . . . . . 13.32 16.79 -3.46 3.92 4.95 -1.03

2055 . . . . . . . . . . 13.33 16.89 -3.56 3.98 4.90 -.92

2060 . . . . . . . . . . 13.36 17.14 -3.79 4.05 4.86 -.81

2065 . . . . . . . . . . 13.38 17.46 -4.08 4.12 4.88 -.76

2070 . . . . . . . . . . 13.41 17.80 -4.40 4.19 4.94 -.75

2075 . . . . . . . . . . 13.43 18.08 -4.65 4.26 5.00 -.74

2080 . . . . . . . . . . 13.43 18.14 -4.70 4.31 5.02 -.71

2085 . . . . . . . . . . 13.43 18.00 -4.57 4.35 5.00 -.65

2090 . . . . . . . . . . 13.42 17.87 -4.45 4.38 4.95 -.57

2095 . . . . . . . . . . 13.42 17.97 -4.55 4.42 4.90 -.48

Low-cost:

2020 . . . . . . . . . . 12.91 13.67 -.76 3.36 3.40 -.04

2021 . . . . . . . . . . 12.88 13.63 -.75 3.37 3.34 .03

2022 . . . . . . . . . . 12.90 13.60 -.71 3.39 3.35 .04

2023 . . . . . . . . . . 12.91 13.60 -.70 3.40 3.36 .05

2024 . . . . . . . . . . 12.93 13.62 -.69 3.42 3.35 .06

2025 . . . . . . . . . . 12.94 13.66 -.72 3.44 3.35 .09

2026 . . . . . . . . . . 13.05 13.72 -.67 3.51 3.34 .17

2027 . . . . . . . . . . 13.07 13.78 -.71 3.54 3.33 .20

2028 . . . . . . . . . . 13.10 13.85 -.76 3.56 3.32 .24

2029 . . . . . . . . . . 13.12 13.93 -.81 3.58 3.29 .29

2030 . . . . . . . . . . 13.13 14.00 -.86 3.60 3.36 .24

2035 . . . . . . . . . . 13.16 14.13 -.97 3.69 3.26 .44

2040 . . . . . . . . . . 13.17 14.02 -.85 3.77 3.09 .68

2045 . . . . . . . . . . 13.15 13.70 -.55 3.83 2.88 .95

2050 . . . . . . . . . . 13.14 13.44 -.30 3.90 2.64 1.26

2055 . . . . . . . . . . 13.14 13.36 -.21 3.97 2.45 1.52

2060 . . . . . . . . . . 13.15 13.42 -.26 4.04 2.32 1.72

2065 . . . . . . . . . . 13.16 13.51 -.34 4.11 2.27 1.84

2070 . . . . . . . . . . 13.17 13.59 -.42 4.17 2.28 1.88

2075 . . . . . . . . . . 13.17 13.59 -.42 4.22 2.31 1.91

2080 . . . . . . . . . . 13.16 13.39 -.23 4.25 2.32 1.93

2085 . . . . . . . . . . 13.14 13.06 .08 4.27 2.31 1.97

2090 . . . . . . . . . . 13.13 12.86 .27 4.30 2.29 2.01

2095 . . . . . . . . . . 13.13 12.97 .16 4.34 2.18 2.15
211

OASDI and HI: Percent of Payroll

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. Totals do not necessarily equal the sums of rounded components.

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.

High-cost:

2020 . . . . . . . . . . 13.11 14.33 -1.22 3.37 3.68 -0.31

2021 . . . . . . . . . . 12.95 15.07 -2.12 3.40 3.90 -.50

2022 . . . . . . . . . . 12.98 15.41 -2.43 3.43 4.03 -.60

2023 . . . . . . . . . . 13.01 15.78 -2.77 3.45 4.20 -.75

2024 . . . . . . . . . . 13.04 16.13 -3.09 3.47 4.36 -.88

2025 . . . . . . . . . . 13.06 16.48 -3.42 3.50 4.52 -1.02

2026 . . . . . . . . . . 13.21 16.82 -3.61 3.59 4.69 -1.09

2027 . . . . . . . . . . 13.24 17.16 -3.92 3.62 4.85 -1.23

2028 . . . . . . . . . . 13.29 17.51 -4.22 3.65 5.02 -1.37

2029 . . . . . . . . . . 13.34 17.93 -4.59 3.68 5.18 -1.49

2030 . . . . . . . . . . 13.36 18.26 -4.90 3.71 5.49 -1.78

2035 . . . . . . . . . . 13.44 19.49 -6.05 3.81 6.47 -2.66

2040 . . . . . . . . . . 13.49 20.20 -6.71 3.88 7.47 -3.59

2045 . . . . . . . . . . 13.52 20.66 -7.15 3.95 8.50 -4.55

2050 . . . . . . . . . . 13.55 21.07 -7.52 4.00 9.28 -5.28

2055 . . . . . . . . . . 13.58 21.56 -7.98 4.06 9.82 -5.76

2060 . . . . . . . . . . 13.62 22.17 -8.54 4.13 10.20 -6.08

2065 . . . . . . . . . . 13.67 22.87 -9.20 4.20 10.50 -6.31

2070 . . . . . . . . . . 13.73 23.67 -9.94 4.27 10.70 -6.43

2075 . . . . . . . . . . 13.78 24.45 -10.67 4.34 10.83 -6.48

2080 . . . . . . . . . . 13.82 25.00 -11.18 4.41 10.87 -6.46

2085 . . . . . . . . . . 13.84 25.26 -11.42 4.46 10.82 -6.36

2090 . . . . . . . . . . 13.85 25.36 -11.51 4.50 10.71 -6.21

2095 . . . . . . . . . . 13.86 25.51 -11.65 4.55 10.97 -6.42

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 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.

Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2020-2095 (Cont.)

[As a percentage of taxable payrolla]

Calendar year

OASDI HI

Income

rate

Cost

rateb Balanceb Incomerate

Cost

rate Balance
Appendices

212

Note: Totals do not necessarily equal the sums of rounded components.

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.

Table VI.G3.—Summarized OASDI and HI Income Rates and Cost Rates for Valuation 

Periods,a Calendar Years 2020-2094

[As a percentage of taxable payrollb]

Valuation

period 

OASDI HI

Income

rate

 Cost

ratec Actuarialbalance

Income

rate

 Cost

rate

Actuarial

balance

Intermediate:

25-year:

2020-44 . . . . . . 14.55 16.57 -2.02 3.73 4.49 -0.77

50-year:

2020-69 . . . . . . 14.00 16.76 -2.75 3.86 4.67 -.81

75-year:

2020-94 . . . . . . 13.85 17.06 -3.21 3.98 4.74 -.76

Low-cost:

25-year:

2020-44 . . . . . . 14.31 14.46 -.15 3.69 3.36 .33

50-year:

2020-69 . . . . . . 13.76 13.95 -.19 3.83 2.91 .92

75-year:

2020-94 . . . . . . 13.58 13.72 -.13 3.96 2.72 1.24

High-cost:

25-year:

2020-44 . . . . . . 14.86 19.03 -4.17 3.79 6.14 -2.35

50-year:

2020-69 . . . . . . 14.31 20.21 -5.90 3.92 7.73 -3.82

75-year:

2020-94 . . . . . . 14.19 21.29 -7.10 4.04 8.46 -4.42

a Income rates include beginning trust fund asset reserves and cost rates include the cost of reaching an ending 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 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.
213

OASDI and HI: Percent of GDP

2. Estimates as a Percentage of Gross Domestic Product

This section presents long-range projections of the operations of the combined 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 operations as a percentage of taxable payroll is a very useful approach for assessing 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 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

employment), up to an additional 0.9 percent tax on earned income for relatively 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 outlays (benefits and administrative expenses) for beneficiaries. The Trustees

show income and cost estimates generally on a cash basis for the OASDI

program1 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

through 2024, increases in 2025, and then decreases in 2026, in part because

of a permanent level shift upward in taxation of benefits 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 to a peak in 2034 and

 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.
Appendices

214

then decrease through 2055. After 2055, the annual deficits increase through

2072 and then decrease through 2083 before becoming positive for 2084 and

later. Under the intermediate assumptions, the annual deficits increase

through 2041, decrease slightly through 2051, and then generally increase

thereafter. Under the high-cost assumptions, annual deficits mostly increase

throughout the projection period.

The Trustees project that the HI annual balance as a percentage of GDP will

be negative in 2020, 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 slowly thereafter.

The combined OASDI and HI annual balance as a percentage of GDP is negative throughout the projection period under both the intermediate and highcost assumptions. Under the low-cost assumptions, the combined OASDI

and HI annual balance is negative through 2040, and then positive and

mostly rising thereafter. Under the intermediate assumptions, the combined

OASDI and HI annual deficits increase from 2020 through 2043, decrease

through 2054, increase through 2077, and then mostly decline thereafter,

reaching 1.68 percent of GDP by 2094. Under the high-cost assumptions,

combined annual deficits rise to a peak of 6.02 percent in 2080 and decrease

thereafter.

By 2094, the combined OASDI and HI annual balances as percentages of

GDP range from a positive annual balance of 0.97 percent for the low-cost

assumptions to an annual deficit of 5.83 percent for the high-cost assumptions. Annual balances differ by a much smaller amount for the tenth projection year, 2029, ranging from an annual deficit of 0.17 percent for the lowcost assumptions to an annual deficit of 2.28 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

0.50 percent under the low-cost assumptions to an actuarial deficit of

4.21 percent under the high-cost assumptions. The 25-year summarized actuarial balance varies by a smaller amount, from a positive actuarial balance of

0.09 percent to an actuarial deficit of 2.49 percent. Summarized rates are calculated on a present-value basis. They include the trust fund reserve balances

on January 1, 2020 and the cost of reaching a target trust fund level equal to
215

OASDI and HI: Percent of GDP

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 2020-2095

Calendar year

Percentage of GDP GDP in

dollars

(billions)

OASDI HI Combined

Incomea Costb Balanceb Incomea Cost Balance Incomea Costb Balanceb

Intermediate:

2020 . . . . . 4.65 4.98 -0.33 1.50 1.57 -0.07 6.15 6.55 -0.40 $22,341

2021 . . . . . 4.61 5.02 -.41 1.51 1.60 -.09 6.12 6.62 -.50 23,342

2022 . . . . . 4.61 5.08 -.47 1.52 1.63 -.11 6.14 6.72 -.58 24,344

2023 . . . . . 4.63 5.16 -.53 1.53 1.67 -.14 6.16 6.83 -.67 25,369

2024 . . . . . 4.64 5.24 -.60 1.54 1.71 -.16 6.19 6.95 -.76 26,441

2025 . . . . . 4.65 5.33 -.67 1.55 1.74 -.18 6.21 7.07 -.86 27,552

2026 . . . . . 4.70 5.41 -.71 1.59 1.77 -.18 6.29 7.18 -.89 28,709

2027 . . . . . 4.71 5.50 -.79 1.61 1.80 -.19 6.32 7.30 -.98 29,917

2028 . . . . . 4.73 5.59 -.86 1.62 1.83 -.21 6.35 7.41 -1.07 31,179

2029 . . . . . 4.74 5.67 -.93 1.63 1.85 -.22 6.37 7.52 -1.15 32,475

2030 . . . . . 4.73 5.73 -.99 1.64 1.92 -.28 6.37 7.65 -1.28 33,806

2035 . . . . . 4.71 5.89 -1.18 1.66 2.04 -.37 6.38 7.93 -1.55 41,307

2040 . . . . . 4.67 5.91 -1.24 1.68 2.11 -.44 6.35 8.02 -1.67 50,291

2045 . . . . . 4.63 5.84 -1.21 1.69 2.16 -.47 6.31 8.00 -1.68 61,380

2050 . . . . . 4.59 5.78 -1.19 1.70 2.14 -.45 6.28 7.92 -1.64 75,119

2055 . . . . . 4.56 5.78 -1.22 1.71 2.10 -.39 6.27 7.88 -1.61 91,939

2060 . . . . . 4.54 5.83 -1.29 1.73 2.08 -.35 6.27 7.90 -1.63 112,240

2065 . . . . . 4.52 5.90 -1.38 1.75 2.07 -.32 6.27 7.97 -1.70 136,656

2070 . . . . . 4.50 5.97 -1.48 1.77 2.08 -.32 6.27 8.06 -1.79 166,204

2075 . . . . . 4.48 6.03 -1.55 1.79 2.10 -.31 6.26 8.13 -1.86 202,410

2080 . . . . . 4.45 6.01 -1.56 1.80 2.09 -.30 6.25 8.10 -1.86 247,188

2085 . . . . . 4.42 5.92 -1.50 1.80 2.07 -.27 6.22 7.99 -1.77 302,272

2090 . . . . . 4.39 5.85 -1.46 1.80 2.04 -.23 6.20 7.89 -1.69 369,382

2095 . . . . . 4.38 5.86 -1.48 1.81 2.01 -.20 6.19 7.87 -1.68 450,425

Summarized rates: c

25-year:

 2020-44 . . 5.17 5.88 -.72 1.66 2.00 -.34 6.82 7.88 -1.06

50-year:

 2020-69 . . 4.88 5.84 -.96 1.69 2.04 -.35 6.57 7.88 -1.31

75-year:

 2020-94 . . 4.76 5.86 -1.10 1.72 2.05 -.33 6.48 7.91 -1.43

Low-cost:

2020 . . . . . 4.62 4.89 -.27 1.50 1.52 -.02 6.12 6.41 -.29 22,716

2021 . . . . . 4.60 4.87 -.27 1.51 1.50 .01 6.11 6.37 -.26 24,162

2022 . . . . . 4.62 4.87 -.25 1.52 1.50 .02 6.14 6.37 -.23 25,603

2023 . . . . . 4.64 4.89 -.25 1.53 1.51 .02 6.17 6.40 -.23 27,045

2024 . . . . . 4.67 4.92 -.25 1.54 1.51 .03 6.20 6.42 -.22 28,565

2025 . . . . . 4.68 4.95 -.26 1.55 1.51 .04 6.23 6.45 -.22 30,153

2026 . . . . . 4.74 4.98 -.24 1.58 1.50 .08 6.32 6.48 -.16 31,804

2027 . . . . . 4.76 5.02 -.26 1.59 1.50 .09 6.35 6.52 -.17 33,538

2028 . . . . . 4.78 5.06 -.28 1.60 1.50 .11 6.39 6.55 -.17 35,356

2029 . . . . . 4.80 5.10 -.29 1.61 1.48 .13 6.42 6.58 -.17 37,255

2030 . . . . . 4.80 5.12 -.32 1.62 1.51 .11 6.42 6.63 -.21 39,249

2035 . . . . . 4.79 5.14 -.35 1.65 1.46 .20 6.44 6.60 -.16 50,909

2040 . . . . . 4.76 5.06 -.31 1.68 1.38 .30 6.44 6.44 d 65,841

2045 . . . . . 4.73 4.92 -.20 1.70 1.28 .42 6.42 6.20 .22 85,611

2050 . . . . . 4.70 4.81 -.11 1.72 1.17 .55 6.42 5.98 .45 111,916

2055 . . . . . 4.69 4.77 -.08 1.75 1.08 .67 6.44 5.85 .59 146,363

2060 . . . . . 4.69 4.79 -.09 1.78 1.02 .76 6.47 5.80 .66 190,854

2065 . . . . . 4.69 4.81 -.12 1.80 1.00 .81 6.49 5.81 .68 248,184

2070 . . . . . 4.69 4.84 -.15 1.83 1.00 .83 6.51 5.84 .68 322,704

2075 . . . . . 4.68 4.83 -.15 1.85 1.01 .84 6.53 5.85 .69 420,844

2080 . . . . . 4.68 4.76 -.08 1.86 1.02 .85 6.54 5.78 .76 550,991

2085 . . . . . 4.67 4.64 .03 1.87 1.01 .86 6.54 5.65 .89 722,271

2090 . . . . . 4.66 4.57 .10 1.88 1.00 .88 6.55 5.57 .98 944,908

2095 . . . . . 4.67 4.62 .06 1.90 .96 .94 6.57 5.57 1.00 1,232,021
Appendices

216

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. Totals do not necessarily equal the sums of rounded components.

Low-cost (Cont.):

Summarized rates: c

25-year:

 2020-44 . . 5.19 5.24 -0.05 1.65 1.50 0.15 6.84 6.74 0.09

50-year:

 2020-69 . . 4.95 5.02 -.07 1.70 1.29 .41 6.66 6.31 .34

75-year:

 2020-94 . . 4.87 4.92 -.05 1.75 1.20 .55 6.62 6.12 .50

High-cost:

2020 . . . . . 4.69 5.13 -.44 1.50 1.64 -.14 6.20 6.77 -.57 $21,713

2021 . . . . . 4.61 5.36 -.76 1.50 1.72 -.22 6.11 7.09 -.97 21,706

2022 . . . . . 4.60 5.46 -.86 1.51 1.78 -.27 6.11 7.24 -1.13 22,402

2023 . . . . . 4.58 5.56 -.98 1.53 1.86 -.33 6.11 7.42 -1.31 23,145

2024 . . . . . 4.59 5.68 -1.09 1.54 1.94 -.39 6.14 7.62 -1.48 23,900

2025 . . . . . 4.60 5.80 -1.20 1.56 2.01 -.46 6.16 7.82 -1.66 24,689

2026 . . . . . 4.65 5.92 -1.27 1.60 2.09 -.49 6.25 8.01 -1.76 25,540

2027 . . . . . 4.65 6.03 -1.38 1.62 2.17 -.55 6.27 8.20 -1.93 26,420

2028 . . . . . 4.67 6.15 -1.48 1.64 2.25 -.61 6.31 8.40 -2.10 27,312

2029 . . . . . 4.67 6.28 -1.61 1.65 2.32 -.67 6.32 8.60 -2.28 28,154

2030 . . . . . 4.67 6.38 -1.71 1.66 2.46 -.80 6.33 8.84 -2.51 28,957

2035 . . . . . 4.64 6.73 -2.09 1.68 2.86 -1.18 6.32 9.58 -3.26 33,323

2040 . . . . . 4.59 6.88 -2.28 1.69 3.26 -1.56 6.28 10.13 -3.85 38,206

2045 . . . . . 4.54 6.94 -2.40 1.70 3.65 -1.95 6.23 10.59 -4.35 43,766

2050 . . . . . 4.49 6.98 -2.49 1.70 3.94 -2.24 6.19 10.92 -4.73 50,106

2055 . . . . . 4.45 7.06 -2.61 1.70 4.12 -2.42 6.15 11.18 -5.03 57,319

2060 . . . . . 4.41 7.18 -2.77 1.71 4.24 -2.52 6.13 11.42 -5.29 65,399

2065 . . . . . 4.38 7.33 -2.95 1.72 4.31 -2.59 6.10 11.64 -5.54 74,419

2070 . . . . . 4.34 7.49 -3.15 1.73 4.34 -2.61 6.08 11.84 -5.76 84,497

2075 . . . . . 4.31 7.65 -3.34 1.74 4.35 -2.60 6.06 12.00 -5.94 95,885

2080 . . . . . 4.27 7.73 -3.46 1.75 4.31 -2.56 6.02 12.04 -6.02 108,941

2085 . . . . . 4.23 7.71 -3.49 1.75 4.24 -2.50 5.97 11.96 -5.98 123,915

2090 . . . . . 4.18 7.66 -3.48 1.75 4.16 -2.41 5.93 11.81 -5.89 140,993

2095 . . . . . 4.15 7.63 -3.49 1.75 4.22 -2.47 5.89 11.85 -5.96 160,299

Summarized rates: c

25-year:

 2020-44 . . 5.16 6.61 -1.45 1.67 2.71 -1.04 6.83 9.32 -2.49

50-year:

 2020-69 . . 4.83 6.83 -1.99 1.69 3.33 -1.65 6.52 10.16 -3.64

75-year:

 2020-94 . . 4.68 7.03 -2.34 1.70 3.57 -1.86 6.39 10.59 -4.21

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 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 Summarized rates are calculated on a present-value basis. They include the value of the trust funds on

January 1, 2020 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 -0.005 and 0 percent of GDP.

Table VI.G4.—OASDI and HI Annual and Summarized Income, Cost, and Balance

as a Percentage of GDP, Calendar Years 2020-2095 (Cont.)

Calendar year

Percentage of GDP GDP in

dollars

(billions)

OASDI HI Combined

Incomea Costb Balanceb Incomea Cost Balance Incomea Costb Balanceb
217

OASDI and HI: Percent of GDP

Table VI.G5 displays annual ratios of OASDI taxable payroll to GDP. These

ratios facilitate comparisons of trust fund operations expressed as percentages of taxable payroll and those expressed as percentages of GDP. HI taxable payroll is about 26 percent larger than the OASDI taxable payroll on

average over the long-range period; see section 1 of this appendix for a

detailed description of the difference. For each year, the cost as a percentage

of GDP is equal to the cost as a percentage of taxable payroll multiplied by

the ratio of taxable payroll to GDP.

Projections of GDP reflect projected increases in U.S. employment, labor

productivity, average hours worked, and the GDP price index (GDP deflator). 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 five complete economic cycles, the ratio of wages and salaries to employee compensation

declined at an average annual rate of 0.23 percent. Over the 65-year period

ending in 2094, the ratio of wages and salaries to employee compensation is

projected to decline at an average annual rate of 0.13, 0.03, and 0.23 percent

for the intermediate, low-cost, and high-cost assumptions, respectively.

Table VI.G5.—Ratio of OASDI Taxable Payroll to GDP, Calendar Years 2020-2095 

Calendar year Intermediate Low-cost High-cost

2020 . . . . . . . . . . . . . . . . . . . . . . . . . 0.358 0.358 0.358

2021 . . . . . . . . . . . . . . . . . . . . . . . . . .357 .358 .356

2022 . . . . . . . . . . . . . . . . . . . . . . . . . .357 .358 .354

2023 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .360 .352

2024 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .361 .352

2025 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .362 .352

2026 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .363 .352

2027 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .364 .352

2028 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .365 .351

2029 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .366 .350

2030 . . . . . . . . . . . . . . . . . . . . . . . . . .358 .366 .350

2035 . . . . . . . . . . . . . . . . . . . . . . . . . .354 .364 .345

2040 . . . . . . . . . . . . . . . . . . . . . . . . . .351 .361 .340

2045 . . . . . . . . . . . . . . . . . . . . . . . . . .347 .359 .336

2050 . . . . . . . . . . . . . . . . . . . . . . . . . .344 .358 .331

2055 . . . . . . . . . . . . . . . . . . . . . . . . . .342 .357 .328

2060 . . . . . . . . . . . . . . . . . . . . . . . . . .340 .357 .324

2065 . . . . . . . . . . . . . . . . . . . . . . . . . .338 .356 .320

2070 . . . . . . . . . . . . . . . . . . . . . . . . . .336 .356 .317

2075 . . . . . . . . . . . . . . . . . . . . . . . . . .334 .356 .313

2080 . . . . . . . . . . . . . . . . . . . . . . . . . .331 .355 .309

2085 . . . . . . . . . . . . . . . . . . . . . . . . . .329 .355 .305

2090 . . . . . . . . . . . . . . . . . . . . . . . . . .328 .355 .302

2095 . . . . . . . . . . . . . . . . . . . . . . . . . .326 .356 .299
Appendices

218

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 corresponding 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 Consumer 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 values 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 3.5, 4.8, and 2.3 percent under the

intermediate, low-cost, and high-cost assumptions, respectively, between

2029 and 2094. 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 multiple-employer excess wages. A series of values, divided by the taxable payroll, indicates the percentage of payroll that each value represents, and thus
219

OASDI and HI: Estimates in Dollars

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 economic 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 special 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 factor 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.
Appendices

220

Table VI.G6.—Selected Economic Variables, Calendar Years 2019-2095

[GDP and taxable payroll in billions]

Calendar year

Adjusted

CPIa Averagewage index

Taxable

payrollb

Gross

domestic

product

Compound

new-issue

interest

factorc

Compound

effective

trust-fund

interest

factord

Intermediate:

2019. . . . . . . . 97.78 $53,756.28 $7,643 $21,426 0.9782 0.9861

2020. . . . . . . . 100.00 55,641.66 7,988 22,341 1.0000 1.0135

2021. . . . . . . . 102.43 58,112.16 8,334 23,342 1.0228 1.0403

2022. . . . . . . . 104.89 60,499.07 8,687 24,344 1.0529 1.0669

2023. . . . . . . . 107.41 62,823.60 9,071 25,369 1.0881 1.0937

2024. . . . . . . . 109.98 65,207.33 9,464 26,441 1.1281 1.1212

2025. . . . . . . . 112.62 67,697.32 9,864 27,552 1.1732 1.1501

2026. . . . . . . . 115.33 70,300.71 10,282 28,709 1.2229 1.1809

2027. . . . . . . . 118.09 73,036.06 10,720 29,917 1.2776 1.2142

2028. . . . . . . . 120.93 75,872.79 11,176 31,179 1.3364 1.2501

2029. . . . . . . . 123.83 78,696.64 11,629 32,475 1.3989 1.2888

2030. . . . . . . . 126.80 81,571.95 12,088 33,806 1.4654 1.3316

2035. . . . . . . . 142.77 97,553.46 14,639 41,307 1.8485 1.6415

2040. . . . . . . . 160.74 116,333.72 17,640 50,291 2.3319 2.0707

2045. . . . . . . . 180.98 138,027.12 21,319 61,380 2.9416 2.6122

2050. . . . . . . . 203.76 163,825.17 25,874 75,119 3.7108 3.2952

2055. . . . . . . . 229.42 194,916.95 31,448 91,939 4.6810 4.1568

2060. . . . . . . . 258.30 232,104.78 38,154 112,240 5.9050 5.2437

2065. . . . . . . . 290.82 276,280.79 46,155 136,656 7.4490 6.6147

2070. . . . . . . . 327.43 328,546.45 55,768 166,204 9.3967 8.3443

2075. . . . . . . . 368.66 390,640.80 67,504 202,410 11.8537 10.5261

2080. . . . . . . . 415.07 464,287.88 81,907 247,188 14.9531 13.2784

2085. . . . . . . . 467.33 551,706.00 99,517 302,272 18.8629 16.7503

2090. . . . . . . . 526.17 656,106.73 120,981 369,382 23.7951 21.1301

2095. . . . . . . . 592.41 780,772.56 146,900 450,425 30.0168 26.6551

Low-cost:

2019. . . . . . . . 97.12 53,803.50 7,648 21,446 .9782 .9861

2020. . . . . . . . 100.00 56,306.64 8,126 22,716 1.0000 1.0137

2021. . . . . . . . 102.85 59,561.94 8,639 24,162 1.0329 1.0415

2022. . . . . . . . 105.93 62,888.94 9,166 25,603 1.0730 1.0700

2023. . . . . . . . 109.11 66,034.38 9,727 27,045 1.1202 1.0999

2024. . . . . . . . 112.38 69,330.23 10,311 28,565 1.1729 1.1320

2025. . . . . . . . 115.76 72,801.80 10,915 30,153 1.2322 1.1670

2026. . . . . . . . 119.23 76,455.72 11,546 31,804 1.2977 1.2057

2027. . . . . . . . 122.81 80,341.39 12,211 33,538 1.3697 1.2489

2028. . . . . . . . 126.49 84,435.87 12,909 35,356 1.4480 1.2972

2029. . . . . . . . 130.28 88,628.34 13,632 37,255 1.5324 1.3508

2030. . . . . . . . 134.19 92,969.62 14,351 39,249 1.6226 1.4108

2035. . . . . . . . 155.57 118,010.03 18,517 50,909 2.1596 1.8347

2040. . . . . . . . 180.34 149,221.69 23,792 65,841 2.8742 2.4418

2045. . . . . . . . 209.07 187,520.88 30,761 85,611 3.8253 3.2499

2050. . . . . . . . 242.37 235,857.53 40,060 111,916 5.0912 4.3253

2055. . . . . . . . 280.97 297,656.20 52,281 146,363 6.7760 5.7567

2060. . . . . . . . 325.72 376,060.02 68,092 190,854 9.0183 7.6617

2065. . . . . . . . 377.60 474,853.73 88,429 248,184 12.0026 10.1971

2070. . . . . . . . 437.74 598,879.00 114,843 322,704 15.9745 13.5715

2075. . . . . . . . 507.46 755,076.36 149,691 420,844 21.2608 18.0626

2080. . . . . . . . 588.29 951,608.70 195,835 550,991 28.2964 24.0398

2085. . . . . . . . 681.99 1,199,158.41 256,531 722,271 37.6602 31.9950

2090. . . . . . . . 790.61 1,512,260.87 335,754 944,908 50.1227 42.5828

2095. . . . . . . . 916.54 1,907,985.50 438,269 1,232,021 66.7093 56.6743
221

OASDI and HI: Estimates in Dollars

Table VI.G7 shows the operations of the combined OASI and DI Trust Funds

in CPI-indexed 2020 dollars—that is, adjusted by the CPI indexing series as

discussed above. The following items are presented in the table: (1) noninterest 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.

High-cost:

2019. . . . . . . . 98.53 $53,734.72 $7,640 $21,417 0.9782 0.9861

2020. . . . . . . . 100.00 54,616.25 7,769 21,713 1.0000 1.0133

2021. . . . . . . . 101.26 54,751.12 7,727 21,706 1.0123 1.0392

2022. . . . . . . . 102.84 56,458.29 7,937 22,402 1.0238 1.0639

2023. . . . . . . . 104.68 58,230.18 8,156 23,145 1.0482 1.0880

2024. . . . . . . . 106.57 60,076.63 8,419 23,900 1.0794 1.1120

2025. . . . . . . . 108.48 61,905.50 8,693 24,689 1.1146 1.1364

2026. . . . . . . . 110.44 63,776.47 8,986 25,540 1.1520 1.1615

2027. . . . . . . . 112.43 65,702.99 9,289 26,420 1.1930 1.1877

2028. . . . . . . . 114.45 67,603.95 9,595 27,312 1.2366 1.2150

2029. . . . . . . . 116.51 69,365.52 9,861 28,154 1.2821 1.2426

2030. . . . . . . . 118.61 71,046.74 10,120 28,957 1.3287 1.2712

2035. . . . . . . . 129.67 80,029.78 11,503 33,323 1.5908 1.5052

2040. . . . . . . . 141.77 89,980.00 13,006 38,206 1.9045 1.7992

2045. . . . . . . . 155.00 100,776.19 14,693 43,766 2.2800 2.1506

2050. . . . . . . . 169.46 112,836.78 16,608 50,106 2.7297 2.5706

2055. . . . . . . . 185.27 126,523.32 18,779 57,319 3.2680 3.0726

2060. . . . . . . . 202.55 141,949.83 21,190 65,399 3.9124 3.6727

2065. . . . . . . . 221.45 159,206.91 23,837 74,419 4.6840 4.3900

2070. . . . . . . . 242.11 178,420.38 26,748 84,497 5.6077 5.2474

2075. . . . . . . . 264.70 199,949.48 30,003 95,885 6.7136 6.2722

2080. . . . . . . . 289.40 224,015.49 33,677 108,941 8.0375 7.4972

2085. . . . . . . . 316.40 250,928.33 37,842 123,915 9.6226 8.9614

2090. . . . . . . . 345.92 281,345.76 42,590 140,993 11.5202 10.7116

2095. . . . . . . . 378.19 315,721.87 47,954 160,299 13.7921 12.8035

a CPI-W indexed to calendar year 2020.

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 obligations 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 obligations 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.G6.—Selected Economic Variables, Calendar Years 2019-2095 (Cont.)

[GDP and taxable payroll in billions]

Calendar year

Adjusted

CPIa Average

wage index

Taxable

payrollb

Gross

domestic

product

Compound

new-issue

interest

factorc

Compound

effective

trust-fund

interest

factord
Appendices

222

Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2020 Dollars,a Calendar Years 2020-2095

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costb

Asset

reserves at

end of yearb

Intermediate:

2020 . . . . . . . . . . . . . $1,038.8 $77.6 $1,116.4 $1,112.0 $2,901.8

2021 . . . . . . . . . . . . . 1,049.5 73.0 1,122.5 1,143.1 2,812.3

2022 . . . . . . . . . . . . . 1,070.6 68.5 1,139.1 1,180.1 2,705.5

2023 . . . . . . . . . . . . . 1,093.2 64.9 1,158.1 1,219.1 2,581.1

2024 . . . . . . . . . . . . . 1,116.7 62.8 1,179.4 1,260.2 2,439.9

2025 . . . . . . . . . . . . . 1,138.3 60.8 1,199.1 1,303.1 2,278.6

2026 . . . . . . . . . . . . . 1,170.1 59.3 1,229.4 1,347.4 2,107.3

2027 . . . . . . . . . . . . . 1,193.5 57.5 1,251.1 1,393.1 1,915.8

2028 . . . . . . . . . . . . . 1,219.0 54.3 1,273.2 1,440.2 1,703.9

2029 . . . . . . . . . . . . . 1,242.1 49.5 1,291.7 1,486.9 1,468.8

2030c . . . . . . . . . . . . 1,262.4 46.6 1,308.9 1,527.3 1,216.0

Low-cost: 

2020 . . . . . . . . . . . . . 1,049.0 79.2 1,128.2 1,110.5 2,915.1

2021 . . . . . . . . . . . . . 1,081.6 77.2 1,158.7 1,145.0 2,848.1

2022 . . . . . . . . . . . . . 1,115.8 75.7 1,191.6 1,177.0 2,779.8

2023 . . . . . . . . . . . . . 1,150.4 76.4 1,226.8 1,212.5 2,713.2

2024 . . . . . . . . . . . . . 1,186.2 78.8 1,264.9 1,249.6 2,649.4

2025 . . . . . . . . . . . . . 1,220.2 81.8 1,302.0 1,288.3 2,585.9

2026 . . . . . . . . . . . . . 1,263.9 86.4 1,350.3 1,328.3 2,532.5

2027 . . . . . . . . . . . . . 1,299.1 91.4 1,390.5 1,370.1 2,479.2

2028 . . . . . . . . . . . . . 1,336.7 96.1 1,432.7 1,413.8 2,425.9

2029 . . . . . . . . . . . . . 1,373.1 100.0 1,473.1 1,457.4 2,370.9

2030 . . . . . . . . . . . . . 1,404.6 105.7 1,510.3 1,497.0 2,315.1

2035 . . . . . . . . . . . . . 1,566.6 118.6 1,685.2 1,681.5 2,035.8

2040 . . . . . . . . . . . . . 1,737.0 101.5 1,838.4 1,849.1 1,724.7

2045 . . . . . . . . . . . . . 1,935.2 87.1 2,022.3 2,015.6 1,477.6

2050 . . . . . . . . . . . . . 2,172.3 81.3 2,253.6 2,221.4 1,382.7

2055 . . . . . . . . . . . . . 2,445.5 81.4 2,526.9 2,485.1 1,382.0

2060 . . . . . . . . . . . . . 2,749.3 80.6 2,829.9 2,804.4 1,351.7

2065 . . . . . . . . . . . . . 3,082.1 73.0 3,155.1 3,162.8 1,194.7

2070 . . . . . . . . . . . . . 3,454.8 56.0 3,510.8 3,565.7 863.3

2075 . . . . . . . . . . . . . 3,885.1 29.1 3,914.2 4,008.3 362.0

2080 . . . . . . . . . . . . . ddddd

2085 . . . . . . . . . . . . . ddddd

2090 . . . . . . . . . . . . . 5,574.1 21.7 5,595.8 5,460.3 306.3

2095 . . . . . . . . . . . . . 6,280.1 59.7 6,339.8 6,203.9 953.2
223

OASDI and HI: Estimates in Dollars

Note: Totals do not necessarily equal the sums of rounded components.

Figure VI.G1 compares annual cost with annual total income and annual

non-interest income. The figure shows only the OASDI program under intermediate assumptions, and presents values in CPI-indexed 2020 dollars, consistent 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 2035.

Estimates after reserve depletion are not shown. In 2020, total income

slightly exceeds annual cost. For 2021 through 2034 (the year preceding the

year of trust fund reserve depletion), annual cost is covered by drawing down

combined trust fund reserves.

High-cost:

2020 . . . . . . . . . . . . . $1,018.8 $76.3 $1,095.1 $1,113.5 $2,879.0

2021 . . . . . . . . . . . . . 988.1 68.4 1,056.5 1,150.1 2,749.7

2022 . . . . . . . . . . . . . 1,001.7 60.6 1,062.4 1,189.2 2,580.6

2023 . . . . . . . . . . . . . 1,013.5 54.4 1,067.9 1,229.6 2,373.5

2024 . . . . . . . . . . . . . 1,030.3 49.0 1,079.3 1,274.2 2,136.6

2025 . . . . . . . . . . . . . 1,046.8 43.4 1,090.3 1,320.5 1,868.6

2026 . . . . . . . . . . . . . 1,074.7 38.2 1,112.9 1,368.3 1,580.2

2027 . . . . . . . . . . . . . 1,093.9 32.5 1,126.4 1,417.6 1,261.0

2028 . . . . . . . . . . . . . 1,114.1 25.0 1,139.1 1,467.9 909.8

2029 . . . . . . . . . . . . . 1,128.9 16.5 1,145.4 1,517.3 521.8

2030c . . . . . . . . . . . . 1,140.0 7.8 1,147.9 1,558.0 102.5

a CPI-indexed 2020 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 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

values for historical years and the projections in this report, all trust fund operations and asset reserves

reflect the 12 months of benefits scheduled for payment each year.

c The combined OASI and DI Trust Funds become depleted in 2035 under the intermediate assumptions and

in 2031 under the high-cost assumptions, so estimates for later years are not shown.

d The combined OASI and DI Trust Funds become depleted in 2079 under the low-cost assumptions, but

combined asset reserves become positive again in 2088 and remain positive through the remainder of the

projection period. Estimates are not shown for years in which asset reserves are negative.

Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2020 Dollars,a Calendar Years 2020-2095 (Cont.)

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costb

Asset

reserves at

end of yearb
Appendices

224

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 inflation. 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, lowcost, and high-cost sets of demographic and economic assumptions to facilitate independent analysis.

 Figure VI.G1.—Estimated OASDI Income and Cost in CPI-indexed 2020 Dollars,

Based on Intermediate Assumptions

[In billions]

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

2020 2025 2030 2035

Calendar year

Cost

Total income

Non-interest income
225

OASDI and HI: Estimates in Dollars

Table VI.G8.—Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2020-2095

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costa

Asset

reserves at

end of yeara

Intermediate:

2020 . . . . . . . . . . . . . $1,038.8 $77.6 $1,116.4 $1,112.0 $2,901.8

2021 . . . . . . . . . . . . . 1,075.0 74.8 1,149.8 1,170.9 2,880.7

2022 . . . . . . . . . . . . . 1,123.0 71.8 1,194.8 1,237.8 2,837.7

2023 . . . . . . . . . . . . . 1,174.2 69.7 1,243.9 1,309.3 2,772.3

2024 . . . . . . . . . . . . . 1,228.1 69.0 1,297.2 1,386.0 2,683.5

2025 . . . . . . . . . . . . . 1,282.0 68.4 1,350.4 1,467.6 2,566.2

2026 . . . . . . . . . . . . . 1,349.4 68.4 1,417.9 1,553.9 2,430.2

2027 . . . . . . . . . . . . . 1,409.5 67.9 1,477.4 1,645.1 2,262.5

2028 . . . . . . . . . . . . . 1,474.1 65.6 1,539.7 1,741.7 2,060.5

2029 . . . . . . . . . . . . . 1,538.2 61.3 1,599.5 1,841.2 1,818.8

2030b . . . . . . . . . . . . 1,600.7 59.1 1,659.7 1,936.7 1,541.9

Low-cost:

2020 . . . . . . . . . . . . . 1,049.0 79.2 1,128.2 1,110.5 2,915.1

2021 . . . . . . . . . . . . . 1,112.4 79.4 1,191.7 1,177.6 2,929.3

2022 . . . . . . . . . . . . . 1,182.1 80.2 1,262.3 1,246.8 2,944.7

2023 . . . . . . . . . . . . . 1,255.3 83.3 1,338.6 1,323.0 2,960.4

2024 . . . . . . . . . . . . . 1,333.1 88.5 1,421.6 1,404.4 2,977.6

2025 . . . . . . . . . . . . . 1,412.4 94.7 1,507.1 1,491.3 2,993.4

2026 . . . . . . . . . . . . . 1,506.9 103.0 1,609.9 1,583.8 3,019.5

2027 . . . . . . . . . . . . . 1,595.4 112.3 1,707.7 1,682.6 3,044.6

2028 . . . . . . . . . . . . . 1,690.7 121.5 1,812.3 1,788.4 3,068.5

2029 . . . . . . . . . . . . . 1,788.9 130.3 1,919.2 1,898.7 3,088.9

2030 . . . . . . . . . . . . . 1,884.8 141.8 2,026.7 2,008.8 3,106.7

2035 . . . . . . . . . . . . . 2,437.1 184.5 2,621.6 2,615.9 3,167.0

2040 . . . . . . . . . . . . . 3,132.6 183.0 3,315.5 3,334.8 3,110.4

2045 . . . . . . . . . . . . . 4,046.0 182.1 4,228.1 4,213.9 3,089.2

2050 . . . . . . . . . . . . . 5,265.0 197.0 5,462.0 5,383.9 3,351.3

2055 . . . . . . . . . . . . . 6,871.2 228.6 7,099.8 6,982.3 3,883.0

2060 . . . . . . . . . . . . . 8,955.1 262.4 9,217.6 9,134.6 4,402.9

2065 . . . . . . . . . . . . . 11,638.0 275.8 11,913.9 11,942.7 4,511.2

2070 . . . . . . . . . . . . . 15,123.1 245.2 15,368.3 15,608.5 3,779.3

2075 . . . . . . . . . . . . . 19,715.4 147.9 19,863.3 20,340.9 1,837.1

2080 . . . . . . . . . . . . . ccccc

2085 . . . . . . . . . . . . . ccccc

2090 . . . . . . . . . . . . . 44,069.7 171.7 44,241.4 43,170.0 2,421.9

2095 . . . . . . . . . . . . . 57,559.4 547.5 58,106.9 56,860.7 8,736.2

High-cost:

2020 . . . . . . . . . . . . . 1,018.8 76.3 1,095.1 1,113.5 2,879.0

2021 . . . . . . . . . . . . . 1,000.5 69.3 1,069.7 1,164.5 2,784.3

2022 . . . . . . . . . . . . . 1,030.2 62.4 1,092.5 1,223.0 2,653.8

2023 . . . . . . . . . . . . . 1,061.0 57.0 1,117.9 1,287.1 2,484.6

2024 . . . . . . . . . . . . . 1,097.9 52.2 1,150.2 1,357.9 2,276.9
Appendices

226

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.G9 presents values in CPI-indexed 2020 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 employment), up to an additional 0.9 percent tax on earned income for relatively

high earners, proceeds from the taxation of scheduled OASDI benefits, premium 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 program1 and on

High-cost (Cont.):

2025 . . . . . . . . . . . . . $1,135.7 $47.1 $1,182.8 $1,432.5 $2,027.2

2026 . . . . . . . . . . . . . 1,186.9 42.2 1,229.1 1,511.1 1,745.1

2027 . . . . . . . . . . . . . 1,229.8 36.6 1,266.3 1,593.8 1,417.7

2028 . . . . . . . . . . . . . 1,275.0 28.6 1,303.6 1,680.0 1,041.3

2029 . . . . . . . . . . . . . 1,315.3 19.2 1,334.5 1,767.8 608.0

2030b . . . . . . . . . . . . 1,352.1 9.3 1,361.4 1,847.8 121.5

a 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

values for historical years and the projections in this report, all trust fund operations and asset reserves

reflect the 12 months of benefits scheduled for payment each year.

b The combined OASI and DI Trust Funds become depleted in 2035 under the intermediate assumptions and

in 2031 under the high-cost assumptions, so estimates for later years are not shown.

c The combined OASI and DI Trust Funds become depleted in 2079 under the low-cost assumptions, but

combined asset reserves become positive again in 2088 and remain positive through the remainder of the

projection period. Estimates are not shown for years in which asset reserves are negative.

 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.

Table VI.G8.—Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2020-2095 (Cont.)

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costa

Asset

reserves at

end of yeara
227

OASDI and HI: Estimates in Dollars

an incurred basis for the HI program. Table VI.G9 also shows the annual balance, which equals the difference between non-interest income and cost.
Appendices

228

Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2020 Dollars,a Calendar Years 2020-2095

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costb Balanceb

Noninterest

income Cost Balance

Noninterest

income Costb Balanceb

Intermediate:

2020 . . . . . $1,039 $1,112 -$73 $336 $351 -$16 $1,374 $1,463 -$89

2021 . . . . . 1,050 1,143 -94 345 365 -20 1,394 1,508 -113

2022 . . . . . 1,071 1,180 -109 354 379 -26 1,424 1,559 -135

2023 . . . . . 1,093 1,219 -126 362 395 -33 1,455 1,614 -159

2024 . . . . . 1,117 1,260 -144 371 410 -39 1,488 1,670 -183

2025 . . . . . 1,138 1,303 -165 380 425 -45 1,519 1,729 -210

2026 . . . . . 1,170 1,347 -177 396 440 -44 1,567 1,788 -221

2027 . . . . . 1,194 1,393 -200 407 456 -49 1,600 1,849 -249

2028 . . . . . 1,219 1,440 -221 418 471 -54 1,637 1,911 -275

2029 . . . . . 1,242 1,487 -245 428 484 -57 1,670 1,971 -302

2030 . . . . . 1,262 1,527 -265 437 512 -75 1,699 2,040 -340

2035 . . . . . 1,363 1,705 -342 481 589 -108 1,844 2,294 -450

2040 . . . . . 1,461 1,849 -387 525 661 -136 1,986 2,510 -524

2045 . . . . . 1,569 1,981 -412 572 731 -159 2,141 2,712 -571

2050 . . . . . 1,692 2,132 -440 625 789 -164 2,317 2,921 -604

2055 . . . . . 1,828 2,316 -488 686 844 -158 2,514 3,159 -646

2060 . . . . . 1,973 2,532 -559 752 902 -150 2,725 3,435 -710

2065 . . . . . 2,124 2,771 -647 822 974 -151 2,946 3,744 -798

2070 . . . . . 2,283 3,032 -749 898 1,058 -160 3,181 4,091 -910

2075 . . . . . 2,459 3,310 -852 980 1,151 -171 3,439 4,462 -1,023

2080 . . . . . 2,651 3,579 -928 1,069 1,246 -177 3,720 4,825 -1,105

2085 . . . . . 2,859 3,832 -973 1,164 1,339 -175 4,023 5,171 -1,148

2090 . . . . . 3,085 4,108 -1,023 1,266 1,431 -164 4,351 5,539 -1,187

2095 . . . . . 3,329 4,457 -1,128 1,378 1,527 -149 4,707 5,984 -1,277

Low-cost:

2020 . . . . . 1,049 1,111 -62 341 345 -4 1,390 1,455 -65

2021 . . . . . 1,082 1,145 -63 355 352 3 1,436 1,497 -60

2022 . . . . . 1,116 1,177 -61 367 363 5 1,483 1,540 -57

2023 . . . . . 1,150 1,212 -62 379 374 5 1,529 1,586 -57

2024 . . . . . 1,186 1,250 -63 390 383 7 1,576 1,633 -56

2025 . . . . . 1,220 1,288 -68 402 392 10 1,623 1,680 -58

2026 . . . . . 1,264 1,328 -64 421 401 20 1,685 1,729 -44

2027 . . . . . 1,299 1,370 -71 435 410 25 1,734 1,780 -46

2028 . . . . . 1,337 1,414 -77 448 418 30 1,785 1,832 -47

2029 . . . . . 1,373 1,457 -84 461 424 37 1,834 1,882 -47

2030 . . . . . 1,405 1,497 -92 475 443 32 1,879 1,940 -61

2035 . . . . . 1,567 1,682 -115 542 478 64 2,108 2,159 -51

2040 . . . . . 1,737 1,849 -112 613 502 110 2,350 2,352 -2

2045 . . . . . 1,935 2,016 -80 695 523 172 2,630 2,538 92

2050 . . . . . 2,172 2,221 -49 794 538 256 2,966 2,759 207

2055 . . . . . 2,446 2,485 -40 910 561 349 3,355 3,046 310

2060 . . . . . 2,749 2,804 -55 1,041 597 444 3,790 3,401 389

2065 . . . . . 3,082 3,163 -81 1,185 655 531 4,267 3,817 450

2070 . . . . . 3,455 3,566 -111 1,347 738 609 4,802 4,304 498

2075 . . . . . 3,885 4,008 -123 1,532 840 693 5,417 4,848 569

2080 . . . . . 4,381 4,458 -77 1,743 952 792 6,124 5,409 715

2085 . . . . . 4,942 4,913 29 1,981 1,070 911 6,923 5,983 940

2090 . . . . . 5,574 5,460 114 2,249 1,196 1,054 7,823 6,656 1,168

2095 . . . . . 6,280 6,204 76 2,555 1,287 1,268 8,835 7,491 1,344
229

OASDI and HI: Estimates in Dollars

Note: Totals do not necessarily equal the sums of rounded components.

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.

High-cost:

2020 . . . . . $1,019 $1,113 -$95 $326 $356 -$30 $1,345 $1,470 -$125

2021 . . . . . 988 1,150 -162 322 369 -47 1,310 1,519 -209

2022 . . . . . 1,002 1,189 -188 330 388 -58 1,331 1,577 -246

2023 . . . . . 1,014 1,230 -216 338 411 -73 1,351 1,641 -289

2024 . . . . . 1,030 1,274 -244 346 434 -88 1,376 1,708 -332

2025 . . . . . 1,047 1,320 -274 355 458 -104 1,402 1,779 -377

2026 . . . . . 1,075 1,368 -294 371 484 -113 1,445 1,852 -407

2027 . . . . . 1,094 1,418 -324 381 510 -130 1,475 1,928 -453

2028 . . . . . 1,114 1,468 -354 391 537 -146 1,505 2,005 -500

2029 . . . . . 1,129 1,517 -388 399 560 -161 1,528 2,077 -550

2030 . . . . . 1,140 1,558 -418 405 599 -195 1,545 2,157 -613

2035 . . . . . 1,192 1,729 -536 432 734 -302 1,624 2,463 -838

2040 . . . . . 1,237 1,853 -616 456 877 -421 1,693 2,730 -1,037

2045 . . . . . 1,281 1,959 -677 479 1,031 -552 1,760 2,990 -1,229

2050 . . . . . 1,328 2,065 -737 502 1,165 -663 1,830 3,230 -1,400

2055 . . . . . 1,376 2,185 -809 527 1,275 -748 1,904 3,460 -1,556

2060 . . . . . 1,425 2,319 -894 553 1,368 -814 1,979 3,687 -1,708

2065 . . . . . 1,472 2,462 -990 579 1,449 -870 2,051 3,911 -1,860

2070 . . . . . 1,516 2,615 -1,099 605 1,516 -911 2,121 4,131 -2,010

2075 . . . . . 1,562 2,771 -1,209 632 1,574 -943 2,194 4,345 -2,152

2080 . . . . . 1,608 2,910 -1,301 658 1,624 -965 2,267 4,533 -2,267

2085 . . . . . 1,655 3,021 -1,366 685 1,662 -977 2,340 4,683 -2,343

2090 . . . . . 1,705 3,122 -1,417 712 1,694 -982 2,416 4,816 -2,399

2095 . . . . . 1,757 3,235 -1,478 741 1,787 -1,046 2,498 5,022 -2,524

a CPI-indexed 2020 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 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.

Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2020 Dollars,a Calendar Years 2020-2095 (Cont.)

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costb Balanceb

Noninterest

income Cost Balance

Noninterest

income Costb Balanceb
Appendices

230

Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2020-2095

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costa Balancea

Noninterest

income Cost Balance

Noninterest

income Costa Balancea

Intermediate:

2020 . . . . . $1,039 $1,112 -$73 $336 $351 -$16 $1,374 $1,463 -$89

2021 . . . . . 1,075 1,171 -96 353 374 -20 1,428 1,544 -116

2022 . . . . . 1,123 1,238 -115 371 398 -27 1,494 1,636 -142

2023 . . . . . 1,174 1,309 -135 389 425 -36 1,563 1,734 -171

2024 . . . . . 1,228 1,386 -158 408 451 -43 1,636 1,837 -201

2025 . . . . . 1,282 1,468 -186 428 479 -51 1,710 1,947 -236

2026 . . . . . 1,349 1,554 -204 457 508 -51 1,807 2,062 -255

2027 . . . . . 1,409 1,645 -236 481 538 -58 1,890 2,183 -293

2028 . . . . . 1,474 1,742 -268 505 570 -65 1,979 2,311 -332

2029 . . . . . 1,538 1,841 -303 529 600 -70 2,068 2,441 -374

2030 . . . . . 1,601 1,937 -336 554 649 -95 2,155 2,586 -431

2035 . . . . . 1,946 2,434 -488 687 841 -154 2,633 3,275 -642

2040 . . . . . 2,349 2,972 -623 844 1,063 -219 3,193 4,035 -842

2045 . . . . . 2,839 3,585 -746 1,034 1,323 -288 3,874 4,908 -1,034

2050 . . . . . 3,447 4,343 -896 1,274 1,608 -335 4,721 5,952 -1,231

2055 . . . . . 4,193 5,312 -1,119 1,573 1,935 -362 5,767 7,248 -1,481

2060 . . . . . 5,096 6,541 -1,445 1,943 2,331 -388 7,039 8,872 -1,833

2065 . . . . . 6,176 8,057 -1,882 2,392 2,831 -439 8,568 10,889 -2,321

2070 . . . . . 7,476 9,929 -2,453 2,940 3,465 -525 10,416 13,394 -2,978

2075 . . . . . 9,064 12,204 -3,141 3,614 4,244 -630 12,678 16,449 -3,771

2080 . . . . . 11,003 14,856 -3,853 4,438 5,173 -734 15,441 20,029 -4,587

2085 . . . . . 13,361 17,909 -4,548 5,439 6,257 -817 18,801 24,166 -5,365

2090 . . . . . 16,232 21,615 -5,382 6,662 7,528 -866 22,894 29,142 -6,248

2095 . . . . . 19,721 26,403 -6,682 8,163 9,045 -883 27,884 35,448 -7,564

Low-cost:

2020 . . . . . 1,049 1,111 -62 341 345 -4 1,390 1,455 -65

2021 . . . . . 1,112 1,178 -65 365 362 3 1,477 1,539 -62

2022 . . . . . 1,182 1,247 -65 389 384 5 1,571 1,631 -60

2023 . . . . . 1,255 1,323 -68 413 408 5 1,668 1,731 -62

2024 . . . . . 1,333 1,404 -71 439 430 8 1,772 1,835 -63

2025 . . . . . 1,412 1,491 -79 466 454 12 1,878 1,945 -67

2026 . . . . . 1,507 1,584 -77 502 478 24 2,009 2,062 -52

2027 . . . . . 1,595 1,683 -87 534 503 31 2,129 2,186 -57

2028 . . . . . 1,691 1,788 -98 567 529 38 2,258 2,317 -59

2029 . . . . . 1,789 1,899 -110 601 553 48 2,390 2,452 -62

2030 . . . . . 1,885 2,009 -124 637 594 43 2,522 2,603 -81

2035 . . . . . 2,437 2,616 -179 842 743 100 3,280 3,359 -79

2040 . . . . . 3,133 3,335 -202 1,105 906 199 4,238 4,241 -3

2045 . . . . . 4,046 4,214 -168 1,453 1,093 360 5,499 5,307 192

2050 . . . . . 5,265 5,384 -119 1,924 1,304 620 7,189 6,688 501

2055 . . . . . 6,871 6,982 -111 2,556 1,575 982 9,428 8,557 870

2060 . . . . . 8,955 9,135 -179 3,390 1,944 1,446 12,345 11,078 1,267

2065 . . . . . 11,638 11,943 -305 4,475 2,472 2,003 16,113 14,415 1,699

2070 . . . . . 15,123 15,609 -485 5,896 3,232 2,664 21,019 18,840 2,179

2075 . . . . . 19,715 20,341 -625 7,776 4,261 3,515 27,491 24,602 2,889

2080 . . . . . 25,772 26,224 -452 10,256 5,598 4,658 36,028 31,822 4,206

2085 . . . . . 33,707 33,506 201 13,508 7,299 6,210 47,215 40,805 6,410

2090 . . . . . 44,070 43,170 900 17,783 9,452 8,331 61,853 52,622 9,231

2095 . . . . . 57,559 56,861 699 23,414 11,795 11,620 80,974 68,655 12,318
231

OASDI and HI: Estimates in Dollars

Note: Totals do not necessarily equal the sums of rounded components.

High-cost:

2020 . . . . . $1,019 $1,113 -$95 $326 $356 -$30 $1,345 $1,470 -$125

2021 . . . . . 1,000 1,165 -164 326 374 -48 1,327 1,538 -212

2022 . . . . . 1,030 1,223 -193 339 399 -60 1,369 1,622 -253

2023 . . . . . 1,061 1,287 -226 353 430 -77 1,414 1,717 -303

2024 . . . . . 1,098 1,358 -260 369 463 -94 1,467 1,821 -354

2025 . . . . . 1,136 1,433 -297 385 497 -113 1,521 1,930 -409

2026 . . . . . 1,187 1,511 -324 409 534 -125 1,596 2,045 -449

2027 . . . . . 1,230 1,594 -364 428 574 -146 1,658 2,167 -510

2028 . . . . . 1,275 1,680 -405 447 614 -167 1,722 2,294 -572

2029 . . . . . 1,315 1,768 -453 465 653 -188 1,780 2,420 -641

2030 . . . . . 1,352 1,848 -496 480 711 -231 1,832 2,559 -726

2035 . . . . . 1,546 2,242 -696 560 952 -392 2,106 3,193 -1,087

2040 . . . . . 1,754 2,627 -873 646 1,244 -598 2,401 3,871 -1,470

2045 . . . . . 1,986 3,036 -1,050 742 1,598 -856 2,728 4,634 -1,905

2050 . . . . . 2,250 3,499 -1,249 851 1,974 -1,123 3,101 5,473 -2,372

2055 . . . . . 2,550 4,048 -1,498 977 2,362 -1,385 3,527 6,410 -2,883

2060 . . . . . 2,887 4,697 -1,811 1,121 2,770 -1,650 4,008 7,468 -3,460

2065 . . . . . 3,259 5,452 -2,193 1,283 3,209 -1,927 4,542 8,661 -4,120

2070 . . . . . 3,671 6,331 -2,660 1,465 3,671 -2,206 5,136 10,002 -4,866

2075 . . . . . 4,134 7,335 -3,201 1,672 4,167 -2,495 5,806 11,502 -5,696

2080 . . . . . 4,654 8,420 -3,766 1,905 4,699 -2,794 6,559 13,119 -6,560

2085 . . . . . 5,237 9,558 -4,321 2,166 5,258 -3,092 7,403 14,816 -7,413

2090 . . . . . 5,897 10,799 -4,902 2,461 5,858 -3,397 8,359 16,658 -8,299

2095 . . . . . 6,646 12,235 -5,589 2,801 6,759 -3,958 9,447 18,994 -9,547

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 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.

Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2020-2095 (Cont.)

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costa Balancea

Noninterest

income Cost Balance

Noninterest

income Costa Balancea
231

OASI Benefits for the Disabled

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 disabled children aged 18 and over of retired and deceased workers if the disability 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 2019, the OASI Trust Fund was providing monthly benefit payments to about 1,144,000 people because of their disabilities or the disabilities 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 2019, the OASI Trust Fund paid

a total of $12,148 million to the people described above. Table VI.H1 shows

OASI scheduled benefits for disability for selected calendar years during

1960 through 2019 and estimates for 2020 through 2029 based on the intermediate set of assumptions.
Appendices

232

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.H1.—Scheduled Benefit Payments From the OASI Trust Fund

With Respect to Disabled Beneficiaries

[Beneficiaries in thousands; scheduled benefits in millions]

Calendar year

Disabled beneficiaries, end of year Amount of scheduled benefitsa b

a Beginning in 1966, includes payments for vocational rehabilitation services.

b Amounts for 2015 and 2016 are adjusted to include in 2016 operations those benefit payments regularly

scheduled in the law to be paid on January 3, 2016, which were actually paid on December 31, 2015 as

required by the statutory provision for early benefit payments when the normal delivery date is on a Saturday, Sunday, or public holiday. Such shifts in payments across calendar years occur periodically whenever

January 3rd falls on a Sunday. In order to provide a consistent perspective on scheduled benefits over time,

scheduled benefits in each year reflect the 12 months of benefits that are regularly scheduled for payment in

that year.

Total Children c

c Also includes certain mothers and fathers (see text).

Widowswidowers d

d In 1984 and later years, includes only disabled widows and widowers aged 50-59, because disabled widows and widowers age 60 and older are eligible for the same benefit as a nondisabled aged widow or widower. Therefore, they are not receiving benefits solely because of a disability.

Total Childrenc Widowswidowers e

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).

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

Estimates under the intermediate assumptions:

2020 . . . . . . . . . 1,156 1,058 98 12,533 11,571 948

2021 . . . . . . . . . 1,170 1,075 95 13,058 12,104 940

2022 . . . . . . . . . 1,182 1,092 90 13,630 12,690 923

2023 . . . . . . . . . 1,196 1,109 87 14,209 13,280 912

2024 . . . . . . . . . 1,211 1,126 85 14,832 13,891 922

2025 . . . . . . . . . 1,226 1,142 84 15,497 14,549 929

2026 . . . . . . . . . 1,243 1,159 83 16,220 15,245 955

2027 . . . . . . . . . 1,258 1,176 82 16,974 15,979 974

2028 . . . . . . . . . 1,275 1,193 82 17,760 16,731 1,006

2029 . . . . . . . . . 1,291 1,209 82 18,591 17,521 1,046
233

OASI Benefits for the Disabled

Under the intermediate assumptions, estimated total scheduled benefits paid

from the OASI Trust Fund with respect to disabled beneficiaries will

increase from $12,533 million in calendar year 2020 to $18,591 million in

calendar year 2029.

In calendar year 2019, 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

$157,289 million. Of this amount, $12,148 million, or 7.7 percent, represented payments from the OASI Trust Fund. Table VI.H2 contains these and

similar figures for selected calendar years during 1960 through 2019 and

estimates for calendar years 2020 through 2029.
Appendices

234

Note: Totals do not necessarily equal the sums of rounded components.

Table VI.H2.—Scheduled Benefit Paymentsa Under the OASDI Program

With Respect to Disabled Beneficiaries

[Amounts in millions]

a Amounts for 2015 and 2016 are adjusted to include in 2016 operations those benefit payments regularly

scheduled in the law to be paid on January 3, 2016, which were actually paid on December 31, 2015 as

required by the statutory provision for early benefit payments when the normal delivery date is on a Saturday, Sunday, or public holiday. Such shifts in payments across calendar years occur periodically whenever

January 3rd falls on a Sunday. In order to provide a consistent perspective on scheduled benefits over time,

scheduled benefits in each year reflect the 12 months of benefits that are regularly scheduled for payment in

that year.

Calendar year Totalb

b Beginning in 1966, includes payments for vocational rehabilitation services.

DI Trust Fund c

c Scheduled benefits for disabled workers and their children and spouses.

OASI Trust Fund

Amount d

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).

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

Estimates under the intermediate assumptions:

2020 . . . . . . . . . 158,990 146,458 12,533 7.9

2021 . . . . . . . . . 162,246 149,188 13,058 8.0

2022 . . . . . . . . . 166,382 152,752 13,630 8.2

2023 . . . . . . . . . 171,647 157,438 14,209 8.3

2024 . . . . . . . . . 177,573 162,741 14,832 8.4

2025 . . . . . . . . . 184,857 169,360 15,497 8.4

2026 . . . . . . . . . 192,678 176,458 16,220 8.4

2027 . . . . . . . . . 200,787 183,813 16,974 8.5

2028 . . . . . . . . . 207,558 189,798 17,760 8.6

2029 . . . . . . . . . 214,856 196,265 18,591 8.7
235

Glossary

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 valuation period.

Actuarial deficit. A negative actuarial balance.

Administrative expenses. 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 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 General 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 immigration, marriage, and divorce. Economic assumptions include unemployment 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 demographic, 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 standpoint of program financing) demographic and program-specific conditions.

 • Alternative III is a high-cost set of assumptions—it assumes relatively

slow economic growth, low inflation, and unfavorable (from the standpoint of program financing) demographic and program-specific conditions.

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
Appendices

236

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 average amount of total wages for each year after 1950, including wages in noncovered 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 earnings 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 withheld 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 currentpayment status or withheld.

Benefit award. See “Award.”

Benefit conversion. See “Disability conversion.”
237

Glossary

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 oversee 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 Managing Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security. The President appoints and

the Senate confirms the other two members to serve as public representatives. 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 earnings in employment covered under the OASDI program are neither taxable

nor creditable for benefit-computation purposes. (Also referred to as maximum 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.
Appendices

238

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 receiving 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 individuals who did not receive benefits for months after attaining normal retirement age but before age 70. Delayed retirement credits apply to benefits for
239

Glossary

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 substantial 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 disability 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 disability conversions to the average number of disabled-worker beneficiaries at

all ages during the year.

Disability conversion. Upon attainment of normal retirement age, a disabled-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 onehalf 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 beneficiaries 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-
Appendices

240

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 beneficiaries 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 vocational rehabilitation services for disabled beneficiaries.

Federal Insurance Contributions Act—FICA. Provision authorizing payroll taxes on the wages of employed persons to provide for Old-Age, Survivors, 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 Benefit Account of the Railroad Retirement program in order to place each trust

fund in the same financial position it would have been had railroad employment 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 2020 began October 1, 2019, and will end September

30, 2020.

Full advance funding. A financing method in which contributions are established to match the full cost of future benefits as these costs are incurred

through current service. Such financing methods also provide for amortiza-
241

Glossary

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 permanently 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, including:

 • 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 performed 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 selfemployed 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 mandated activities not directly related to administering the OASI and DI programs.

Gross domestic product—GDP. The total dollar value of all goods and services 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 taxable. (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.”
Appendices

242

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 benefits), 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 coverage to meet the eligibility requirements for retired-worker or disabled-worker

benefits, or to permit the worker’s spouse and children or survivors to establish 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 Federal 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 interest 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 trustfund 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.
243

Glossary

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, sometimes 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 maximum 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 proportionately 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 persons age 65 and over. In 1972, lawmakers extended coverage to persons

receiving Social Security Disability Insurance payments for 2 years and persons with End-Stage Renal Disease. (For beneficiaries whose primary or secondary 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-eligible. In 2006, prescription drug coverage was added as well. Medicare consists 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
Appendices

244

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 December 31, 1956. For years after 1956, the basic pay of military personnel is covered 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 December 1977, in which a person received pay for military service. Noncontributory 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 taxation 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 will

increase gradually to 67 for persons reaching that age in 2027 or later, beginning with an increase to 65 years and 2 months for persons reaching age 65

in 2003. 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 accordance 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 entering with temporary visas.

Par value. The value printed on the face of a bond. For both public and special issues held by the trust funds, par value is also the redemption value at

maturity.
245

Glossary

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, however, 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 benefits, with trust fund asset reserves built up only to the extent needed to prevent 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 Federal 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 government employees covered under the Social Security Act through voluntary agreements under section 218 of the act.

Also referred to as payroll taxes.

Population in the Social Security area. See “Social Security area population.”

Present value. The equivalent value, at the present time, of a stream of values (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 second bend point, plus 15 percent of AIME in excess of the second bend point.
Appendices

246

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 Security, designed for workers in the railroad industry. The provisions of the Railroad Retirement Act provide for a system of coordination and financial

interchange between the Railroad Retirement program and the Social Security 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 relationships among variables. Under such a model, any specified set of assumptions 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
247

Glossary

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 undercount); (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 dependents; (4) non-citizens living abroad who are insured for Social Security benefits; and (5) all other U.S. citizens abroad.

Solvency. A program is solvent at a point in time if it is able to pay scheduled benefits when due with scheduled financing. For example, the OASDI

program is solvent over any period for which the trust funds maintain a positive 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 Federal 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 fluctuations observed in historical data for a selected period. A large number of simulations, 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 certain monthly amount (net of impairment-related work expenses) is ordinarily

considered to be engaging in SGA. The amount of monthly earnings considered as SGA depends on the nature of a person’s disability. The Social Security Act specifies a higher SGA amount for statutorily blind individuals;
Appendices

248

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 difference 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 program, 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. Accordingly, 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 noninterest 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 adequacy 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 noninterest income during the period to (2) the present value of the taxable payroll (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 expenditures 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 covered by the OASDI or HI programs, that is under the applicable annual maxi-
249

Glossary

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-employment 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 terminate 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 conversion 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 throughout 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;
Appendices

250

 • 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 women

aged 14 through 49, where the rate for age 14 includes births to women

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 interestbearing 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 benefits 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 Transitional 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
251

Glossary

prescription drug coverage, beginning in 2006. The Transitional Assistance 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, 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 Federal 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 redemptions 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 Security Administration (SSA) pays benefits and makes payments for other programmatic 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 payments exceeded the amount redeemed from the invested securities. A negative value requires future redemption of additional invested securities. 

In addition, about every seven years, when January 3 falls on a Sunday, benefit 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 benefit payments when the normal payment delivery date is a Saturday, Sunday,

or legal public holiday. Consistent with practice in prior reports and 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. Therefore, such advance payments are
Appendices

252

included as positive values in the undisbursed balance at the end of the calendar 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, discounted 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 outstanding 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 appropriate 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 purposes 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 provide 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 rehabilitation of the beneficiaries.
List of Tables

253

LIST OF TABLE

II. OVERVIEW

II.B1 Summary of 2019 Trust Fund Financial Operations . . . . . . . . 7

II.B2 Payroll Tax Contribution Rates for 2019 . . . . . . . . . . . . . . . . 7

II.C1 Key Assumptions and Summary Measures 

for the Long-Range (75-year) Projection Period . . . . . . . . . . . 9

II.D1 Projected Maximum Trust Fund Ratios During the Long-Range 

Period

and Trust Fund Reserve Depletion Dates . . . . . . . . . . . . . . . . 15

II.D2 Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 21

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR

III.A1 Operations of the OASI Trust Fund, Calendar Year 2019 . . . . 27

III.A2 Operations of the DI Trust Fund, Calendar Year 2019 . . . . . . . 31

III.A3 Operations of the Combined OASI and DI Trust Funds, 

Calendar Year 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

III.A4 Comparison of Actual Calendar Year 2019 Trust Fund 

Operations With Estimates Made in Prior Reports, Based on 

Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 34

III.A5 Distribution of Benefit Payments by Type of Beneficiary or 

Payment, Calendar Years 2018 and 2019 . . . . . . . . . . . . . . . . 35

III.A6 Administrative Expenses as a Percentage of Total Income 

and of Total Cost, Calendar Years 2015-2019 . . . . . . . . . . . . . 36

III.A7 Trust Fund Investment Transactions, Calendar Year 2019 . . . . 36

IV. ACTUARIAL ESTIMATES

IV.A1 Operations of the OASI Trust Fund, 

Calendar Years 2015-2029 . . . . . . . . . . . . . . . . . . . . . . . . . . 42

IV.A2 Operations of the DI Trust Fund, 

Calendar Years 2015-2029 . . . . . . . . . . . . . . . . . . . . . . . . . . 46

IV.A3 Operations of the Combined OASI and DI Trust Funds,

Calendar Years 2015-2029 . . . . . . . . . . . . . . . . . . . . . . . . . . 48

IV.A4 Reasons for Change in Trust Fund (Unfunded Obligation) Ratios 

at the Beginning of the Tenth Year of Projection Under 

Intermediate Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . 51

IV.B1 Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 55

IV.B2 Components of Annual Income Rates, 

Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 60
List of Tables

254

IV.B3 Covered Workers and Beneficiaries, 

Calendar Years 1945-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 62

IV.B4 Trust Fund Ratios, Calendar Years 2020-2095 . . . . . . . . . . . . 67

IV.B5 Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2020-2094 . . . . . . . . . . . . . . . . . . . . . . . . . . 71

IV.B6 Components of 75-Year Actuarial Balance 

and Unfunded Obligation Under Intermediate Assumptions . . 74

IV.B7 Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 75

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

V.A1 Fertility and Mortality Assumptions, 

Calendar Years 1940-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 87

V.A2 Immigration Assumptions, Calendar Years 1940-2095 . . . . . . 92

V.A3 Social Security Area Population on July 1 and 

Dependency Ratios, Calendar Years 1945-2095 . . . . . . . . . . . 95

V.A4 Period Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98

V.A5 Cohort Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99

V.B1 Principal Economic Assumptions . . . . . . . . . . . . . . . . . . . . . 107

V.B2 Additional Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . 113

V.C1 Cost-of-Living Benefit Increases, Average Wage Index, 

Contribution and Benefit Bases, and Retirement 

Earnings Test Exempt Amounts, 1975-2029 . . . . . . . . . . . . . . 118

V.C2 Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2029 . . . . . . . . . . . . . . . . . . . . . . . . . . 122

V.C3 Legislated Changes in Normal Retirement Age and Delayed 

Retirement Credits for Persons Attaining Age 62 in 

Each Year 1986 and Later . . . . . . . . . . . . . . . . . . . . . . . . . . . 124

V.C4 OASI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1945-2095 . . . . . . . . . . . . . . . . 132

V.C5 DI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1960-2095 . . . . . . . . . . . . . . . . 141

V.C6 Contribution and Benefit Base and 

Payroll Tax Contribution Rates . . . . . . . . . . . . . . . . . . . . . . . 148

V.C7 Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, 

Calendar Years 2020-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 152
List of Tables

255

VI. APPENDICES

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS

VI.A1 Operations of the OASI Trust Fund, 

Calendar Years 1937-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . 158

VI.A2 Operations of the DI Trust Fund, 

Calendar Years 1957-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . 160

VI.A3 Operations of the Combined OASI and DI Trust Funds,

Calendar Years 1957-2019 . . . . . . . . . . . . . . . . . . . . . . . . . . 162

VI.A4 OASI Trust Fund Asset Reserves, End of 

Calendar Years 2018 and 2019 . . . . . . . . . . . . . . . . . . . . . . . 164

VI.A5 DI Trust Fund Asset Reserves, End of 

Calendar Years 2018 and 2019 . . . . . . . . . . . . . . . . . . . . . . . 165

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 1982-2020 

under Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . 168

C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND 

OPERATIONS THROUGH 2029

VI.C1 Operations of the OASI Trust Fund, Fiscal Year 2019 . . . . . . . 174

VI.C2 Operations of the DI Trust Fund, Fiscal Year 2019 . . . . . . . . . 175

VI.C3 Operations of the Combined OASI and DI Trust Funds, 

Fiscal Year 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

VI.C4 Operations of the OASI Trust Fund, Fiscal Years 2015-2029 . . 177

VI.C5 Operations of the DI Trust Fund, Fiscal Years 2015-2029 . . . . 178

VI.C6 Operations of the Combined OASI and DI Trust Funds,

Fiscal Years 2015-2029 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 179

D. LONG-RANGE SENSITIVITY ANALYSIS

VI.D1 Sensitivity of OASDI Measures to Fertility Assumptions . . . . 181

VI.D2 Sensitivity of OASDI Measures to Death-Rate Assumptions . . 182

VI.D3 Sensitivity of OASDI Measures to 

Total Net Immigration Assumptions . . . . . . . . . . . . . . . . . . . 184

VI.D4 Sensitivity of OASDI Measures to Real-Wage Assumptions . . 185

VI.D5 Sensitivity of OASDI Measures to 

CPI-Increase Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 186

VI.D6 Sensitivity of OASDI Measures to 

Real-Interest Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 187

VI.D7 Sensitivity of OASDI Measures to 

Taxable Ratio Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . 189
List of Tables

256

VI.D8 Sensitivity of OASDI Measures to 

Disability Incidence Assumptions . . . . . . . . . . . . . . . . . . . . . 190

VI.D9 Sensitivity of OASDI Measures to 

Disability Termination Assumptions . . . . . . . . . . . . . . . . . . . 191

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY

VI.E1 Long-Range Estimates Relating to the Actuarial Status of

the Combined OASDI Program. . . . . . . . . . . . . . . . . . . . . . . 202

F. INFINITE HORIZON PROJECTIONS

VI.F1 Unfunded OASDI Obligations Through the Infinite Horizon and 

the 75-Year Projection Period, 

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 204

VI.F2 Present Values Through the Infinite Horizon 

for Various Categories of Program Participants, 

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 206

G. ESTIMATES FOR OASDI AND HI, SEPARATE AND COMBINED

VI.G1 Payroll Tax Contribution Rates for 

the OASDI and HI Programs . . . . . . . . . . . . . . . . . . . . . . . . 208

VI.G2 OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2020-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 210

VI.G3 Summarized OASDI and HI Income Rates and Cost Rates for 

Valuation Periods, Calendar Years 2020-2094 . . . . . . . . . . . . 212

VI.G4 OASDI and HI Annual and Summarized Income, Cost, and 

Balance as a Percentage of GDP, 

Calendar Years 2020-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 215

VI.G5 Ratio of OASDI Taxable Payroll to GDP, 

Calendar Years 2020-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 217

VI.G6 Selected Economic Variables, Calendar Years 2019-2095 . . . . 220

VI.G7 Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2020 Dollars, Calendar Years 2020-2095 . . . . 222

VI.G8 Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2020-2095 . . . . . . . . . . . . 225

VI.G9 OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2020 Dollars, 

Calendar Years 2020-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 227

VI.G10 OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, 

Calendar Years 2020-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 229
List of Tables

257

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 . . . . . . . . . . . . . . . . . 232

VI.H2 Scheduled Benefit Payments Under the OASDI Program

With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 234
List of Figures

258

LIST OF FIGURES

II. OVERVIEW

II.D1 Short-Range OASI and DI Combined Trust Fund Ratio . . . . . 11

II.D2 OASDI Income, Cost, and Expenditures as Percentages 

of Taxable Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

II.D3 Number of Covered Workers Per OASDI Beneficiary. . . . . . . 14

II.D4 OASDI Cost and Non-interest Income 

as a Percentage of GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

II.D5 Cumulative Scheduled OASDI Income Less Cost,

From Program Inception Through Years 2019-2094 . . . . . . . . 17

II.D6 Long-Range OASI and DI Combined Trust Fund Ratios 

Under Alternative Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . 19

II.D7 Long-Range OASI and DI Combined Trust Fund Ratios 

From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 20

II.D8 OASDI Annual Balances: 2019 and 2020 Trustees Reports. . . 22

IV. ACTUARIAL ESTIMATES

IV.A1 Short-Range OASI and DI Trust Fund Ratios. . . . . . . . . . . . . 44

IV.B1 Long-Range OASI and DI Annual Income Rates 

and Cost Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59

IV.B2 Number of OASDI Beneficiaries Per 100 Covered Workers . . 64

IV.B3 Long-Range OASI and DI Trust Fund Ratios . . . . . . . . . . . . . 68

IV.B4 OASDI Annual Balances: 2019 and 2020 Trustees Reports. . . 81

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

V.C1 Primary-Insurance-Amount Formula 

for Those Newly Eligible in 2020 . . . . . . . . . . . . . . . . . . . . . 120

V.C2 OASI Maximum-Family-Benefit Formula 

for Those Newly Eligible in 2020 . . . . . . . . . . . . . . . . . . . . . 121

V.C3 DI Disability Incidence Rates, 1970-2095 . . . . . . . . . . . . . . . 137

V.C4 DI Disability Termination Rates, 1970-2095 . . . . . . . . . . . . . 139

V.C5 Comparison of DI Disability Incidence Rates, 

Termination Rates and Conversion Ratios 

Under Intermediate Assumptions, 1970-2095 . . . . . . . . . . . . . 140

V.C6 DI Disability Prevalence Rates, 1970-2095 . . . . . . . . . . . . . . 143
List of Figures

259

VI. APPENDICES

VI.E1 Long-Range OASDI Cost Rates From Stochastic Modeling . . 196

VI.E2 Long-Range OASDI Trust Fund Ratios 

From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 197

VI.E3 OASDI Cost Rates: Comparison of Stochastic to Low-Cost, 

Intermediate, and High-Cost Alternatives . . . . . . . . . . . . . . . 198

VI.E4 OASDI Trust Fund (Unfunded Obligation) Ratios: 

Comparison of Stochastic to Low-Cost, Intermediate, 

and High-Cost Alternatives. . . . . . . . . . . . . . . . . . . . . . . . . . 200

VI.G1 Estimated OASDI Income and Cost in CPI-indexed 

2020 Dollars, Based on Intermediate Assumptions . . . . . . . . . 224
Index

260

INDEX

A

Actuarial balance 11, 16, 52, 166, 180

Actuarial deficit 4, 16, 23, 70, 212

Actuarial estimates, LR 52

Actuarial estimates, SR 40

Adjusted program amounts 116

Administrative expenses 7, 35, 53, 153, 157, 174, 213, 221

Advance tax transfers 40, 65, 159

Amendments 37

Annual balance 21, 52, 75

Asset reserves 2, 7, 10, 29, 174, 187, 207

Assumptions 82, 100, 116, 166, 180, 208, 213, 218, 231

Automatic cost-of-living benefit increase 45, 101, 116

Auxiliary benefits 126

Average benefits 150

Average earnings assumptions 103

Average indexed monthly earnings (AIME) 119

Average wage index 116, 218

Award 128

B

Baby-boom generation 3, 23, 53, 62, 109, 135

Bend points 119

Beneficiaries, DI 134

Beneficiary 13, 45, 62, 82, 117, 169, 181, 213, 221, 231

Beneficiary, OASI 128

Benefit payments 7, 53, 151, 157, 174

Benefit termination 9

Best estimate 9, 39, 82

Board of Trustees 39, 100, 155

C

Constant dollars 223

Consumer Price Index 101, 186, 218, 236

Contribution and benefit base 44, 103, 117, 236

Contributions 7, 155, 174, 207, 213, 221, 235

Cost 2, 7, 29, 48

Cost rate 4, 53, 207

Cost-of-living adjustment 116

Covered earnings 7, 116, 217

Covered employment 9, 44, 103, 124, 155, 185

Covered worker 64, 183

Creditable earnings 238

Current dollars 218
261

Index

Current-payment status 47, 139, 140, 141, 236

D

Deemed wage credit 53

Delayed retirement credit 123

Demographic assumptions 9, 21, 39, 83, 109, 116, 166, 219, 235

Deterministic model 193, 202

DI beneficiaries 134

Disability 155, 183, 231

Disability conversion ratio 139

Disability incidence rate 82, 134, 137, 183, 190, 235

Disability Insurance Trust Fund 237

Disability prevalence rate 141, 143

Disability termination rate 191

Disabled-worker benefit 137, 239

Disbursements 39

E

Earnings 2, 7, 53, 103, 117, 155, 167, 207, 217, 218, 235

Earnings test 103, 117, 236

Economic assumptions 9, 21, 39, 50, 100, 109, 116, 166, 219, 235

Excess wages 53, 218

Expenditures 39, 240

F

Federal Insurance Contributions Act 207, 245

Fertility assumptions 83

Financial interchange 7, 154, 157

Fiscal year 159, 173

Full advance funding 240

G

General Fund of the Treasury 43, 45, 47, 49, 159, 161, 163, 177, 178, 179,

235

General fund reimbursement 241

Gross domestic product 4, 11, 59, 82, 101, 111, 213

Gross domestic product projections 111

H

High-cost assumptions 9, 18, 39, 54, 82, 100, 138, 180, 201, 208, 214, 218,

235

Hospital Insurance program 147, 207, 243

Hospital Insurance Trust Fund 213

I

Immigration 9, 82, 88, 183, 193, 235, 242
Index

262

Immigration assumptions 88

Income rate 4, 12, 53, 207

Infinite horizon 11

Inflation 9, 82, 101, 218, 235

Inflation assumptions 101

Insured population 9, 125

Insured status 121

Interest 112, 156, 166, 174, 209, 235

Interest rate 82, 166, 187, 235

Interest rate projections 112

Interest rates 9

Interfund borrowing 159, 242

Intermediate assumptions 9, 39, 45, 54, 82, 137, 180, 209, 214, 218, 223,

226, 231, 235

L

Labor force projections 108

Lawful Permanent Resident (LPR) immigration 89

Legal immigration 242, 243

Life expectancy 4, 23, 82, 97, 108, 243

Life expectancy estimates 96

Long range 11, 52, 83, 128, 166, 207, 213

Low-cost assumptions 9, 18, 39, 54, 82, 100, 138, 180, 201, 208, 218, 235

Lump-sum death payment 151

M

Medicare 84, 243

Military service 53, 155, 159, 161, 163

N

National average wage index 218

Normal retirement age 117, 134, 151, 238

O

OASI beneficiaries 128

Old-Age and Survivors Insurance Trust Fund 155, 237

Old-law base 121

Other immigration 244

Other-than-LPR immigration 89

P

Par value 156

Partial advance funding 245

Pay-as-you-go financing 166

Payroll taxes 2, 116, 145, 169, 203, 207, 221

Population estimates 94
263

Index

Population in the Social Security area 44, 64, 94, 124, 184

Present value 166

Primary insurance amount (PIA) 119

Productivity assumptions 101

Q

Quarters of coverage 125

R

Railroad Retirement 53, 69, 121, 154, 157, 174, 175, 176, 207, 213, 221,

237

Reallocation of tax rates 246

Real-wage differential 105, 184

Retired-worker benefit 128, 183, 231

Retirement age 117, 151, 238

Retirement earnings test 103, 117

Retirement eligibility age 183

S

Scenario-based model 246

Scheduled benefits 187, 213, 221, 233, 246

Self-employment 53, 101, 208, 245

Self-Employment Contributions Act 245, 246

Sensitivity analysis 180

Short range 10, 40, 128

Social Security Act 116, 156, 218, 231, 237

Social Security amendments 37

Solvency 247

Special public-debt obligation 115, 156, 187

Stochastic projections 193

Substantial gainful activity 134, 239

Summarized balance 214

Summarized income and cost rates 69, 166, 180, 211, 235

Supplemental Security Income 174

Supplementary Medical Insurance program 207, 243

Survivor benefit 2, 8, 131, 236

Sustainable solvency 65, 66

T

Taxable earnings 44, 64, 117, 167, 236

Taxable payroll 4, 23, 53, 101, 125, 166, 181, 207, 213, 218, 237

Taxable ratio 188

Taxable self-employment income 248

Taxable wages 149, 208, 249

Taxation of benefits 7, 149, 213, 221, 242
Index

264

Taxes 7, 116, 208

Termination 82

Termination rate 9, 128, 191, 235

Test of long-range close actuarial balance 52, 65, 67

Test of short-range financial adequacy 10, 11, 41, 67, 68, 249

Total fertility rate 83, 180

Trust fund financial operations 7, 25, 41, 155

Trust fund ratio 10, 40, 52, 65, 159, 177, 251

Trust fund reserves 40

U

Unemployment projections 108

Unfunded obligation 4, 11, 16, 18, 52, 72, 73, 205, 244, 251, 252

Unnegotiated check 174

V

Valuation period 16, 50, 52, 166, 180, 211, 235

Vocational rehabilitation 53, 157, 175, 213, 221, 233, 237

Y

Year of depletion 12, 15, 52, 67
265

STATEMENT OF ACTUARIAL OPINION

It is my opinion that, subject to several considerations noted below: (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, individually and in the aggregate, reasonable for the purpose of evaluating the actuarial status of the trust funds,

taking into consideration the past experience and future expectations for the

population, the economy, and the program. I am an Associate of the Society

of Actuaries, 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.

COVID-19

As noted in the introduction of this report, it was too early at the time

assumptions were selected to accurately assess the effects that will be seen as

a result of the evolving pandemic. The magnitude of near-term and longrange effects on the population and the economy is still unclear. Therefore,

the potential effects of the pandemic are not reflected in this report. Assessment of the implications will take time and will be provided by the time of

the next annual report. 

Other Assumptions

Several long-range ultimate assumptions were changed for this report. Based

on strong evidence in recent experience, assumed ultimate disability incidence rates, price inflation rates, and real interest rates were all lowered

below the levels of long-term past averages. The assumed ultimate total fertility rate was also lowered somewhat, consistent with the effect of an

extended period during which women would be choosing to have their

desired number of children at increasingly older ages. In addition, reflecting

recent experience, measured unemployment rates are assumed to be lower in

the future than they have been in the past on average, but employment rates

are assumed to be unaffected, so that measured labor force participation rates

are also assumed to be somewhat lower in the future. No changes were made

to the ultimate mortality, immigration, or productivity assumptions. Each of

these assumptions is reasonable.

Federal Budget Accounting

This report focuses on the actuarial status of the OASI and DI Trust Funds,

as required by law. It includes important information on (1) the years in
266

which trust fund reserves are projected to be depleted and (2) the degree to

which benefits scheduled in the law would no longer be fully payable on a

timely basis after reserve depletion. However, the footnote on page 45 of this

report directs the reader to appendix F in the Medicare Trustees Report,

which states, “The trust fund perspective does not encompass the interrelationship between the Medicare and Social Security trust funds and the overall Federal budget.” The reader of this report should consider this “overall”

Federal unified budget perspective with care because the assumptions underlying unified budget accounting are inconsistent with the assumptions of

trust fund accounting.

In particular, trust fund accounting accurately reflects the laws directly governing the operations of the trust funds, under which benefits cannot be paid

in full on a timely basis after trust fund reserve depletion. In contrast, unified

budget accounting assumes that full scheduled benefits will continue to be

paid through transfers from the General Fund of the Treasury, thus representing “a draw on other Federal resources for which there is no earmarked

source of revenue from the public.” Not only are such “draws” not permissible under current law, no precedent exists for a change in the Social Security

Act to finance unfunded trust fund obligations with such draws on other Federal resources. Under this unified budget accounting assumption, $16.8 trillion of OASDI unfunded obligations, which are not payable under the law

over the next 75 years, are referred to as “expenditures” requiring a “draw”

from the General Fund of the Treasury.

In addition, unified budget accounting treats redemptions of trust fund

reserves as an addition to annual Federal deficits, referring to these redemptions also as “a draw on other Federal resources.” In fact, redemptions of

trust fund reserves represent a deferred use of revenues earmarked for the

trust fund program alone, which have been collected in prior years and saved

for later use. These redemptions utilize the entire $2.9 trillion accumulation

of net past earmarked revenue for OASDI, but are referred to as draws on the

General Fund of the Treasury under the unified budget perspective.

Therefore, the actual operations of the trust funds under current law do not

draw on other Federal resources. Expenditures can only be paid from currently-invested trust fund reserves (that is, deferred earmarked resources) for

the specific program. Assertions that trust fund reserve redemption and

shortfalls after reserve depletion represent draws on other Federal resources

are based on assumptions that are inconsistent with the law and with actual

trust fund annual cash-flow operations.
267

In addition to Federal budget annual cash flows, the budget perspective is

equally concerned with the build-up of Federal debt. The total Federal debt

subject to limit includes trust fund reserves. Thus, as trust fund reserves are

accumulated or redeemed, they are offset in the total Federal debt by securities issued to the public, with no net effect on the total Federal debt. Moreover, even in considering the Federal debt owed to (held by) the public, there

is no net direct effect on that debt from accumulating and then redeeming

trust fund reserves. However, budget analysis frequently refers to both trust

fund reserve redemptions and trust fund obligations not payable under the

law after reserve depletion as factors that increase the Federal debt held by

the public in the future. This assertion is not consistent with a full assessment

of the investment and redemption flows of the trust funds or with the limitations in the law on paying benefits after trust fund reserves are depleted. 

Stephen C. Goss

Associate of the Society of Actuaries

Member of the American Academy of Actuaries

Chief Actuary, Social Security Administration