THE 2019 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 2019 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 2018 . . . . . . . 6

C. ASSUMPTIONS ABOUT THE FUTURE . . . . . . . . . . . . . . . . 8

D. PROJECTIONS OF FUTURE FINANCIAL STATUS . . . . . . . 9

E. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR . . . . . . . . . . 24

A. OPERATIONS OF THE OLD-AGE AND SURVIVORS 

INSURANCE (OASI) AND DISABILITY INSURANCE (DI) 

TRUST FUNDS, IN CALENDAR YEAR 2018 . . . . . . . . . . . . 24

1. OASI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

2. DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

3. OASI and DI Trust Funds, Combined . . . . . . . . . . . . . . . . . . 31

B. SOCIAL SECURITY AMENDMENTS SINCE 

THE 2018 REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

IV. ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

A. SHORT-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . 39

1. Operations of the OASI Trust Fund. . . . . . . . . . . . . . . . . . . . 39

2. Operations of the DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . 43

3. Operations of the Combined OASI and DI Trust Funds . . . . . 46

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

Estimates From Last Year’s Report . . . . . . . . . . . . . . . . . . . 48

B. LONG-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . 50

1. Annual Income Rates, Cost Rates, and Balances . . . . . . . . . . 51

2. Comparison of Workers to Beneficiaries. . . . . . . . . . . . . . . . 60

3. Trust Fund Ratios and Test of Long-Range 

Close Actuarial Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63

4. Summarized Income Rates, Summarized Cost Rates, 

and Actuarial Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

5. Open-Group Unfunded Obligation . . . . . . . . . . . . . . . . . . . . 70

6. Reasons for Change in Actuarial Balance From Last Report . . 72
(VI)

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

A. DEMOGRAPHIC ASSUMPTIONS AND METHODS . . . . . . . 80

1. Fertility Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

2. Mortality Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81

3. Immigration Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 85

4. Total Population Estimates. . . . . . . . . . . . . . . . . . . . . . . . . . 91

5. Life Expectancy Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 93

B. ECONOMIC ASSUMPTIONS AND METHODS . . . . . . . . . . . 97

1. Productivity Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 98

2. Price Inflation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . 98

3. Average Earnings Assumptions . . . . . . . . . . . . . . . . . . . . . . 100

4. Assumed Real-Wage Differential . . . . . . . . . . . . . . . . . . . . . 103

5. Labor Force and Unemployment Projections . . . . . . . . . . . . . 105

6. Gross Domestic Product Projections . . . . . . . . . . . . . . . . . . . 108

7. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109

C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS . . . 113

1. Automatically Adjusted Program Parameters. . . . . . . . . . . . . 113

2. Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

3. Insured Population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

4. Old-Age and Survivors Insurance Beneficiaries. . . . . . . . . . . 125

5. Disability Insurance Beneficiaries. . . . . . . . . . . . . . . . . . . . . 131

6. Covered and Taxable Earnings, Taxable Payroll, and Payroll Tax 

Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141

7. Income From Taxation of Benefits . . . . . . . . . . . . . . . . . . . . 146

8. Average Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

9. Scheduled Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

10. Illustrative Scheduled Benefit Amounts . . . . . . . . . . . . . . . . 148

11. Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 150

12. Railroad Retirement Financial Interchange . . . . . . . . . . . . . . 150

VI. APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS. . 152

B. HISTORY OF ACTUARIAL STATUS ESTIMATES . . . . . . . . 163

C. FISCAL YEAR HISTORICAL AND PROJECTED 

TRUST FUND OPERATIONS THROUGH 2028 . . . . . . . . . . . 170

D. LONG-RANGE SENSITIVITY ANALYSIS . . . . . . . . . . . . . . 177

1. Total Fertility Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177

2. Death Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178

3. Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

4. Real-Wage Differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181

5. Consumer Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182

6. Real Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184
(VII)

7. Taxable Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185

8. Disability Incidence Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 186

9. Disability Termination Rates . . . . . . . . . . . . . . . . . . . . . . . . 187

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY . . . . . . 189

1. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

2. Stochastic Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . 189

3. Stochastic Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

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

Intermediate, and High-Cost Alternatives . . . . . . . . . . . . . . . 193

F. INFINITE HORIZON PROJECTIONS . . . . . . . . . . . . . . . . . . 199

G. ESTIMATES FOR OASDI AND HI, SEPARATE AND 

COMBINED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203

1. Estimates as a Percentage of Taxable Payroll. . . . . . . . . . . . . 203

2. Estimates as a Percentage of Gross Domestic Product . . . . . . 209

3. Estimates in Dollars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214

H. ANALYSIS OF BENEFIT PAYMENTS FROM THE 

OASI TRUST FUND WITH RESPECT TO DISABLED 

BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226

I. GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230

LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248

LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253

INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

STATEMENT OF ACTUARIAL OPINION . . . . . . . . . . . . . . . 260

THE 2019 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 2019 report is the 79th such report.
Overview

2

II. OVERVIEW

A. HIGHLIGHTS

This section summarizes the report’s major findings.

In 2018

At the end of 2018, the OASDI program was providing benefit payments1 to

about 63 million people: 47 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

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

taxes on those earnings. The total cost of the program in 2018 was

$1,000 billion. Total income was $1,003 billion, which consisted of

$920 billion in non-interest income and $83 billion in interest earnings.

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

$2,892 billion at the beginning of the year to $2,895 billion at the end of the

year.

Short-Range Results

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

projected to be less than its total income in 2019 and higher than its total

income in 2020 and all later years. Social Security’s cost has exceeded its

non-interest income since 2010. For 2019, program cost is projected to be

less than total income by about $1 billion and exceed non-interest income by

about $81 billion.

To illustrate the actuarial status of the Social Security program as a whole,

the operations of the OASI and DI 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 $2,895 billion at the beginning of 2019 to $2,148 billion at the end of 2028.

The reserves of the combined OASI and DI Trust Funds along with projected

program income are adequate to cover projected program cost over the next

10 years under the intermediate assumptions. The ratio of reserves to annual

cost is projected to decline from 273 percent at the beginning of 2019 to

130 percent at the beginning of 2028. By remaining at or above 100 percent,

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

Highlights

the combined OASI and DI Trust Funds satisfy the Trustees’ test of shortrange financial adequacy.1 Considered separately, the OASI Trust Fund also

satisfies the test, but the DI Trust Fund does not. For last year’s report, the

Trustees projected that combined reserves would be 272 percent of annual

cost at the beginning of 2019 and 120 percent at the beginning of 2028. 

Long-Range Results

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

exceed total income starting in 2020, 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 2052.2 In last year’s report, the projected reserve depletion years were 2034 for OASDI, 2034 for OASI, and 2032 for DI.

The large change in the reserve depletion date for DI is mainly due to continuing favorable experience for DI applications and benefit awards, both of

which fell well below levels projected in last year’s report for 2018. Disability applications have been declining steadily 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 assumption of 5.2 per thousand

exposed by the end of the short-range projection period, compared to 5.4 per

thousand assumed in last year’s report. See page 37 for more details on these

changes in the DI projections.

Projected OASDI cost increases more rapidly than projected non-interest

income through 2040 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 2040 through

2051, the cost rate (the ratio of program cost to taxable payroll) generally

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

 1 The test of short-range financial adequacy for a trust fund is met if (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, reaches at least 100 percent within

5 years (without reserve depletion at any time during this period) and remains at or above 100 percent

throughout the remainder of the 10-year short-range period.

 2 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

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 2040.

The projected OASDI annual cost rate increases from 13.91 percent of taxable payroll for 2019 to 16.62 percent for 2040 and to 17.47 percent for

2093, a level that is 4.11 percent of taxable payroll more than the projected

income rate (the ratio of non-interest income to taxable payroll) for 2093.

For last year’s report, the Trustees estimated the OASDI cost for 2093 at

17.72 percent, or 4.36 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 4.9 percent of GDP for 2019 to

about 5.9 percent by 2039, then declines to 5.8 percent by 2052, and then

generally increases to 6.0 percent by 2093.

For the 75-year projection period, the actuarial deficit is 2.78 percent of taxable payroll, decreased from 2.84 percent of taxable payroll in last year’s

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

the 75-year period is 2.61 percent of taxable payroll, decreased from

2.68 percent of payroll in last year’s report. The open-group unfunded obligation for OASDI over the 75-year period is $13.9 trillion in present value

and is $0.7 trillion more than the measured level of $13.2 trillion a year ago.

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

unchanged, the actuarial deficit would have increased to 2.90 percent of taxable payroll, and the unfunded obligation would have risen to about

2.74 percent of taxable payroll and $13.7 trillion in present value due to the

change in the valuation date.

To illustrate the magnitude of the 75-year actuarial deficit, consider that for

the combined OASI and DI Trust Funds to remain fully solvent throughout

the 75-year projection period: (1) revenue would have to increase by an

amount equivalent to an immediate and permanent payroll tax rate increase

of 2.70 percentage points1 to 15.10 percent, (2) scheduled benefits would

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

reduction of about 17 percent applied to all current and future beneficiaries,

or about 20 percent if the reductions were applied only to those who become

 1 The necessary tax rate increase of 2.70 percent differs from the 2.78 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.
5

Highlights

initially eligible for benefits in 2019 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. Much 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 3.65 percentage point payroll tax rate increase to 16.05 percent starting in 2035, (2) a reduction in scheduled benefits by an amount equivalent to

a permanent 23 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 80 percent of scheduled benefits. The OASI Trust

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

income would be sufficient to pay 77 percent of OASI scheduled benefits. DI

Trust Fund asset reserves are projected to become depleted in 2052, at which

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

91 percent of DI scheduled benefits. 

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

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

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

The Trustees recommend that lawmakers address the projected trust fund

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

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

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

needed revenue increases or reductions in scheduled benefits. Social Security

will play a critical role in the lives of 64 million beneficiaries and

178 million covered workers and their families during 2019. With informed

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

can continue to protect future generations.
Overview

6

B. TRUST FUND FINANCIAL OPERATIONS IN 2018

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 2018.

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

In 2018, net payroll tax contributions accounted for 88.2 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 $128,400 in 2018. Table II.B2 shows the payroll

tax rates for 2018. 

Interest earned on invested trust fund asset reserves accounted for

8.3 percent of OASI and DI combined trust fund income in 2018. Revenue

from subjecting up to 50 percent of Social Security benefits to Federal personal income taxation for beneficiaries with income (including half of benefits and all non-taxable interest received) exceeding specified levels

accounted for 3.5 percent of OASDI income. The remaining income to the

combined OASI and DI Trust Funds, less than 0.01 percent, came from reimbursements from the General Fund of the Treasury.1

Table II.B1.—Summary of 2018 Trust Fund Financial Operations

[In billions]

OASI DI OASDI

Asset reserves at the end of 2017. . . . . . . . . . . . . . . . . . . . $2,820.3 $71.5 $2,891.8

Total income in 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831.0 172.3 1,003.4

Net payroll tax contributions . . . . . . . . . . . . . . . . . . . . . 715.9 169.2 885.1

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80.7 2.6 83.3

Taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34.5 .5 35.0

Reimbursement from General Fund of the Treasury . . . a

a Less than $50 million.

a a

Total cost in 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853.5 146.8 1,000.2

Benefit payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844.9 143.7 988.6

Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 3.8 2.9 6.7

Railroad Retirement financial interchange . . . . . . . . . . 4.8 .2 4.9

Net increase in asset reserves in 2018 . . . . . . . . . . . . . . . . -22.4 25.6 3.1

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

 1 Public Laws 111-312, 112-78, and 112-96 account for most of the reimbursement for the year. These acts

specified General Fund reimbursement for temporary reductions in revenue due to reduced payroll tax rates

for employees and for self-employed workers for 2011 and 2012.
7

Calendar Year 2018 Operations

The Department of the Treasury invests trust fund reserves in interest-bearing securities issued by the U.S. Government. In 2018, the combined trust

fund reserves earned interest at an effective annual rate of 2.9 percent. 

Retirement, survivor, and disability benefits accounted for 98.8 percent of

OASI and DI combined trust fund cost in 2018. The expenses for administering the Social Security program were 0.7 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. 

The trust fund investments provide the basis for paying benefits. Combined

trust fund reserves increased by $3.1 billion during 2018 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 start declining in 2018. At the end of 2018, the combined reserves of the

OASI and the DI Trust Funds were $2,895 billion, or 273 percent of estimated cost1 for 2019. In comparison, the combined reserves at the end of

2017 were 289 percent of actual cost for 2018.

Note: Section 833 of Public Law 114-74, the Bipartisan Budget Act of 2015, requires a temporary reallocation of the payroll tax rates between the OASI and DI Trust Funds. For earnings in calendar years 2016

through 2018, this section increases from 1.80 percent to 2.37 percent the portion of the total 12.40 percent

OASDI payroll tax that is directed to the DI Trust Fund. There is a corresponding decrease in the portion of

the tax rates directed to the OASI Trust Fund for these years.

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

Table II.B2.—Payroll Tax Contribution Rates for 2018

[In percent]

OASI DI OASDI

Payroll tax contribution rate for employees. . . . . . . . . . . . . . . . . . . . . . . 5.015 1.185 6.20

Payroll tax contribution rate for employers . . . . . . . . . . . . . . . . . . . . . . . 5.015 1.185 6.20

Payroll tax contribution rate for self-employed persons . . . . . . . . . . . . . 10.030 2.370 12.40
Overview

8

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 17, 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 2027 and later . . . . 2.0 2.2 1.8

Average annual percentage reduction in total age-sex-adjusted 

death rates from 2018 to 2093. . . . . . . . . . . . . . . . . . . . . . . . . . .77 .41 1.16

Average annual net immigration (in thousands) for 2019 

to 2093. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,265 1,601 949

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 2028 to 2093 . . . 3.81 5.04 2.60

Consumer Price Index (CPI-W), for 2021 and later. . . . . . . . . 2.60 3.20 2.00

Average annual real-wage differential (percent) for 2029 

to 2093. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21 1.84 .60

Unemployment rate (percent, age-sex-adjusted), for 2025 and 

later . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 4.5 6.5

Annual trust fund real interest rate (percent), for 2029 and later. 2.5 3.0 2.0

Programmatic:

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

in 2093. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 4.2 6.2

Disability recovery rate (per 1,000 beneficiaries, age-sexadjusted) in 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.3 12.5 8.2
9

Future Financial Status

D. PROJECTIONS OF FUTURE FINANCIAL STATUS

Short-Range Actuarial Estimates

For the short-range period (2019 through 2028), the Trustees measure financial adequacy by comparing projected asset reserves at the beginning of each

year to projected program cost for that year under the intermediate set of

assumptions. Maintaining a trust fund ratio of 100 percent or more—that is,

reserves at the beginning of each 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 projected trust fund ratios under the intermediate assumptions for the OASI Trust Fund exceed 100 percent throughout the short-range

period. Therefore, OASI satisfies the Trustees’ test of short-range financial

adequacy. The DI Trust Fund fails the Trustees’ test of short-range financial

adequacy. The Trustees estimate that the DI trust fund ratio was at 65 percent

at the beginning of 2019. The projected DI trust fund ratio declines to

56 percent at the beginning of 2022, and then increases to 68 percent by the

beginning of 2028. On a combined basis, OASDI also satisfies the Trustees’

test of short-range financial adequacy. Figure II.D1 shows that the trust fund

ratio for the combined OASI and DI Trust Funds declines consistently after

2010, but remains above 100 percent throughout the short-range period.

Projected OASDI cost is less than total income in 2019, so that combined

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

trust fund reserves were projected to decline starting in 2018. For this report,

combined reserves are projected to start declining in 2020 and to continue to

decline throughout the remainder of the short-range period. The trust fund

ratio declines throughout the short-range period, as shown in figure II.D1. 
Overview

10

Long-Range Actuarial Estimates

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

program over the next 75 years: (1) annual cash-flow measures, including

income rates, cost rates, and balances; (2) trust fund ratios; and (3) summary

measures such as actuarial balances and open-group unfunded obligations.

The Trustees express these measures as 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 as a percentage of annual cost, under Intermediate Assumptions]

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Calendar year

Historical Estimated

Minimum level for "short-range financial adequacy"
11

Future Financial Status

Annual Income Rates, Cost Rates, and Balances

Figure II.D2 illustrates the year-by-year relationship among OASDI income

(excluding interest), cost (including scheduled benefits), and expenditures

(including payable benefits) for the full 75-year period (2019 through 2093).

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 most recent recession 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 2020, 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 80 percent of program cost for the rest of 2035, declining to

75 percent for 2093. 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 2052 for DI.
Overview

12

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 2018. This ratio had been stable, remaining

between 3.2 and 3.4 from 1974 through 2008, and has declined since then

due to the most recent economic recession and the beginning of the demographic shift that will continue to drive this ratio down over the next

20 years. The ratio of workers to beneficiaries will continue to decline due to

this demographic shift, as workers of lower-birth-rate generations replace

workers of the baby-boom generation. The ratio of workers to beneficiaries

reaches 2.2 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:

2018-34: 100%

2035: 80%

2093: 75%

Cost: Scheduled but not 

fully payable benefits

Expenditures: Payable benefits = 

income after trust fund depletion in 2035
13

Future Financial Status

Another important way to look at Social Security’s future 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 4.9 percent in 2019 to about 5.9 percent by 2039,

then decline to 5.8 percent by 2052, and generally increase thereafter to

6.0 percent by 2093. Social Security’s non-interest income is projected to

rise from 4.6 percent of GDP in 2019 to 4.8 percent by 2029. Thereafter,

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

4.6 percent by 2093, 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
Overview

14

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

(2019 through 2093) and the year of trust fund asset reserve depletion. Trust

fund ratios for OASI and OASDI are projected to decline from their current

levels until reserve depletion. For DI, the trust fund ratio is projected to rise

to 91 in 2037, 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). . . . . . 307 91 273

Year attained. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 2037 2019

Projected year of trust fund reserve depletion . . . . . . 2034 2052 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
15

Future Financial Status

Summary Measures

The actuarial balance is a summary measure of the program’s financial status

through the end of the 75-year valuation period. The actuarial balance 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 2.78 percent of taxable payroll.

The actuarial deficit was 2.84 percent in the 2018 report. If the assumptions,

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

year, the actuarial deficit would have increased to 2.90 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 2018

to 2093. 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 2018. The combined trust fund reserves

decline on a present value basis after 2018, 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 2093, the combined funds have a present-value unfunded obligation of $13.9 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

$13.7 trillion due to the change in the valuation date.

This unfunded obligation represents 2.61 percent of taxable payroll

(decreased from 2.68 percent in last year’s report) and 0.9 percent of GDP

(decreased from 1.0 percent in last year’s report) for the 75-year valuation

period. The unfunded obligation as a share of taxable payroll (2.61 percent)
Overview

16

and the actuarial deficit (2.78 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. Trends in annual balances and

cumulative values toward the end of the 75-year period provide an indication

of the program’s ability 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 2018-2093

[Present value as of January 1, 2019, in trillions, under Intermediate Assumptions]

-$14

-$13

-$12

-$11

-$10

-$9

-$8

-$7

-$6

-$5

-$4

-$3

-$2

-$1

$0

$1

$2

$3

2018 2033 2048 2063 2078 2093

Ending year of accumulation

Unfunded 

obligation

(negative)

Trust fund 

reserves

(positive)

2035
17

Future Financial Status

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 4.1 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, remain above 100 percent of annual cost

throughout the projection period under the low-cost alternative, and become

depleted in 2030 under the high-cost alternative. 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.
Overview

18

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 (i.e., the point at which

the trust fund ratio reaches zero) is very likely by mid-century. In particular,

figure II.D7 suggests that based on these stochastic simulations, trust fund

asset reserves will become depleted between 2031 and 2044 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
19

Future Financial Status

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 decreased from

2.84 percent of taxable payroll for last year’s report to 2.78 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 2.90 percent.

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

decrease the actuarial deficit by 0.11 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%

400%

2019 2034 2049 2064 2079 2094

Projection year

50%

97.5%

2.5%

90%

10%
Overview

20

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 higher (less negative) throughout the 75-year projection

period. For the full 75-year projection period, the annual balances average

0.18 percentage point higher. See page 78 for details.

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.99 1.86 13.84

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.62 2.07 16.69

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.63 -.21 -2.84

Changes in actuarial balance due to changes in:

Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . .00 .00 .00

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 2093. 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. . . . . . . . . . . . . . .06 .00 .06

Economic data and assumptions. . . . . . . . . . . . . . . . . -.03 .00 -.04

Disability data and assumptions. . . . . . . . . . . . . . . . . -.02 .09 .07

Methods and programmatic data . . . . . . . . . . . . . . . . .00 .02 .01

Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.04 .09 .06

Shown in this report:

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

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.96 1.85 13.81

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.63 1.97 16.60
21

Future Financial Status

 Figure II.D8.—OASDI Annual Balances: 2018 and 2019 Trustees Reports

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

-6%

-4%

-2%

0%

2%

2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

2018 Report

2019 Report
Overview

22

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 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 2020, 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 2052, 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 77 percent of OASI benefits

and 91 percent of DI benefits. 

Social Security’s combined trust funds are projected to cover full payment of

scheduled benefits on a timely basis until the trust fund reserves become

depleted in 2035. (Full payment of benefits until combined reserve depletion

in 2035 implicitly assumes that the law will have been changed to permit the

transfer of funds between OASI and DI as needed.) At that time, projected

continuing income to the combined trust funds equals about 80 percent of the

program cost. By 2093, continuing income equals about 75 percent of the

program cost.

The 75-year actuarial deficit for the combined trust funds under the intermediate assumptions is 2.78 percent of taxable payroll, decreased from the

2.84 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 2.70 percentage points to 15.10 percent;

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

an immediate and permanent reduction of about 17 percent applied to all current and future beneficiaries, or about 20 percent if the reductions were

applied only to those who become initially eligible for benefits in 2019 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
23

Conclusion

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 64 million beneficiaries and

178 million covered workers and their families during 2019. 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/2019/

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

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

 • www.treasury.gov/resource-center/economic-policy/ss-medicare/Pages/

Soc-Sec-and-Medicare.aspx
Financial Operations and Legislative Changes

24

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 2018

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

DI Trust Funds1 during calendar year 2018. Chapter IV provides projections

for calendar years 2019 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 2018, 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 2018 amounted to

$831.0 billion, while cost totaled $853.5 billion, a decrease in trust fund

reserves during 2018 of $22.4 billion.

Total income during calendar year 2018 included $718.3 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 $2.4 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 $715.9 billion in 2018.

Net reimbursements from the General Fund of the Treasury amounted to

$18 million in 2018. 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 $34.5 billion in 2018. As first required by the 1983 Social Secu-

 1 See www.ssa.gov/oact/ProgData/fundsQuery.html.
25

Calendar Year 2018 Operations

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 two such adjustments made in 2018 totaling $2.2 billion.

The amount of income from direct Federal income taxation on OASI benefits

constituted approximately 99 percent of income from benefit taxation. The

remaining one percent of the income from benefit taxation is the amounts

withheld from the benefits paid to nonresident aliens.

In 2018, the OASI Trust Fund earned $80.7 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 $188 thousand, consisted of gifts received

under the provisions authorizing the deposit of monetary gifts or bequests in

the trust funds.
Financial Operations and Legislative Changes

26

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

Table III.A1.—Operations of the OASI Trust Fund, Calendar Year 2018

[In millions]

Total asset reserves, December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,820,309

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior calendar years.

$718,285

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,420

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715,865

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 217

All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,271

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,488

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,655

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. . . . . . . . . . . . . . . . . . . . . . . . 80,655

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 831,026

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

844,924

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

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 7

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 844,895

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,769

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,277

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530

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.

-6

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,800

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 853,464

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -22,437

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,797,974

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.

-102

Total asset reserves, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,797,872
27

Calendar Year 2018 Operations

Of the $853.5 billion in total OASI cost in 2018, $844.9 billion were 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 5.8

percent from calendar year 2017 to calendar year 2018. 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 2018 was due in part to the automatic cost-of-living benefit increase of 2.0 percent which became effective

for December 2017 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

$4.8 billion from the OASI Trust Fund to the Social Security Equivalent

Benefit Account for June 2018.

The remaining $3.8 billion of cost for the OASI Trust Fund were 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 2018, the cost incurred by the Social Security Administration to administer the OASI program was 86 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.
Financial Operations and Legislative Changes

28

the amount of $3.3 billion in 2018. In addition, the Department of the Treasury charged the trust fund $0.5 billion in 2018 for services provided in

administering the OASI program. A relatively small offset to administrative

expenses of $1 million in 2018 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 $5 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 2018. These miscellaneous reimbursements totaled

$6 million in 2018.

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

year 2018 totaled $2,797.9 billion, consisting of $2,798.0 billion in U.S.

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

$102 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 2018 was 2.9 percent,

slightly lower than the 3.0 percent earned during calendar year 2017.

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 2017 and 2018.

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
29

Calendar Year 2018 Operations

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, 2018, so that the maturity dates of the total

portfolio of special issue securities were spread evenly to the extent possible

over the 15-year period 2019 through 2033. The bonds purchased on that

date have an interest rate of 2.875 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 2018, including the amounts of bonds purchased on June 30, 2018.

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 2018, 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 $172.3 billion in total income, $169.2 billion was net payroll tax contributions.

Of the $146.8 billion of total cost, $143.7 billion was net benefit payments.

The total level of net benefit payments in 2018 increased by 0.7 percent from

total net benefit payments paid in 2017, largely due to an increase in average

benefit amounts and an offsetting decrease in the average number of beneficiaries. Non-interest income, and total income, exceeded total cost in 2018

due primarily to the temporary reallocation of the payroll tax rate from OASI

to DI for years 2016 through 2018. DI total cost exceeded non-interest

income from 2005 to 2015, and exceeded total income to the trust fund from

2009 to 2015.
Financial Operations and Legislative Changes

30

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

Table III.A2.—Operations of the DI Trust Fund, Calendar Year 2018

[In millions]

Total asset reserves, December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $71,480

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior calendar years.

$169,769

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

subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -583

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169,186

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L. 111-312, P.L. 112-78, 

and P.L. 112-96a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

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

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Income based on taxation of benefit payments:

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

All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 530

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,626

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. . . . . . . . . . . . . . . . . . . . . . . . 2,628

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172,347

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

143,656

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -19

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 103

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,741

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,745

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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

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

administering the DI program.

-4

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,856

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,770

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,577

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,201

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.

-144

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

Calendar Year 2018 Operations

During 2018, the reserves in the DI Trust Fund increased by $25.6 billion,

from $71.5 billion at the end of 2017 to $97.1 billion at the end of 2018. This

$97.1 billion consisted of $97.2 billion in U.S. Government obligations and,

as an offset, an extension of credit of $144 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 2018 was 3.1 percent, slightly lower than the

3.2 percent earned during calendar year 2017. 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 2017 and 2018.

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. However, as of June 2018, the Trustees projected that the reserves in the DI Trust Fund would be depleted within

15 years. Therefore, the Department of the Treasury, in consultation with the

Chief Actuary of the Social Security Administration, selected the amounts

and maturity dates of the DI special-issue bonds purchased on June 30, 2018,

so that the bonds would mature over the 14-year period 2019-32. The bonds

purchased have an interest rate of 2.875 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. As of June 30, 2018, most of the invested asset reserves of the DI

Trust Fund had maturity dates of June 30 in 2019 through 2023, so this

investment approach required that all bond purchases on June 30, 2018 be

split over the maturity dates of June 30, 2024 through June 30, 2032. Table

III.A7 shows details on investment transactions during 2018.

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.
Financial Operations and Legislative Changes

32

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 2018

[In millions]

Total asset reserves, December 31, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,891,789

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior calendar years.

$888,054

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,003

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 885,051

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

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

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 220

All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,797

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,017

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,280

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.

3

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 83,283

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,003,373

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

988,580

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -55

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 111

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 988,635

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,942

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,022

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625

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

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

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.

-10

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,656

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,233

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,140

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,895,175

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.

-246

Total asset reserves, December 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,894,929
33

Calendar Year 2018 Operations

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

year 2018 from the intermediate projections in the 2014 through 2018 Trustees Reports to the corresponding actual amounts for 2018.

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 2018, the OASDI program was providing

monthly benefits to about 62.9 million people. The OASI Trust Fund was

Table III.A4.—Comparison of Actual Calendar Year 2018 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 2018 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 2014 report . . . . . . . . . . . . . . $965.3 16.2 $920.5 7.9

Estimate in 2015 report . . . . . . . . . . . . . . 949.7 14.3 909.8 6.6

Estimate in 2016 report . . . . . . . . . . . . . . 873.2 5.1 873.2 2.3

Estimate in 2017 report . . . . . . . . . . . . . . 873.6 5.1 859.0 .6

Estimate in 2018 report . . . . . . . . . . . . . . 828.2 -.3 853.6 c

c Between -0.05 and 0.05 percent.

Actual amount . . . . . . . . . . . . . . . . . . . . . 831.0 — 853.5 —

DI Trust Fund:

Estimate in 2014 report . . . . . . . . . . . . . . d

d In the annual reports for 2014 and 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 2018 in those earlier reports. 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 2018 in

the 2016 through 2018 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 167.1 13.9

Estimate in 2015 report . . . . . . . . . . . . . . d d 165.7 12.9

Estimate in 2016 report . . . . . . . . . . . . . . 181.4 5.3 159.4 8.6

Estimate in 2017 report . . . . . . . . . . . . . . 182.6 6.0 152.5 3.9

Estimate in 2018 report . . . . . . . . . . . . . . 172.9 .3 149.3 1.7

Actual amount . . . . . . . . . . . . . . . . . . . . . 172.3 — 146.8 —

OASI and DI Trust Funds, combined:

Estimate in 2014 report . . . . . . . . . . . . . . 1,105.0 10.1 1,087.6 8.7

Estimate in 2015 report . . . . . . . . . . . . . . 1,088.4 8.5 1,075.5 7.5

Estimate in 2016 report . . . . . . . . . . . . . . 1,054.7 5.1 1,032.5 3.2

Estimate in 2017 report . . . . . . . . . . . . . . 1,056.2 5.3 1,011.5 1.1

Estimate in 2018 report . . . . . . . . . . . . . . 1,001.1 -.2 1,002.8 .3

Actual amount . . . . . . . . . . . . . . . . . . . . . 1,003.4 — 1,000.2 —
Financial Operations and Legislative Changes

34

providing benefits to about 52.7 million people and the DI Trust Fund was

providing benefits to about 10.2 million people. The number of people

receiving benefits from the OASI Trust Fund grew by 2.4 percent while the

number of people receiving DI benefits fell by 2.4 percent during calendar

year 2018. 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 2017 and 2018, 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 2018 totaled $6.7 billion, equal to 0.7 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 2017 and 2018

[Amounts in millions]

Calendar year 2017 Calendar year 2018

Amount

Percentage

of total Amount

Percentage

of total

Total OASDI benefit payments . . . . . . . . . . $941,461 100.0 $988,580 100.0

OASI benefit payments . . . . . . . . . . . . . . 798,722 84.8 844,924 85.5

DI benefit payments . . . . . . . . . . . . . . . . . 142,740 15.2 143,656 14.5

OASI benefit payments, total. . . . . . . . . . . . 798,722 100.0 844,924 100.0

Monthly benefits:

Retired workers and auxiliaries . . . . . . 680,233 85.2 723,542 85.6

Retired workers . . . . . . . . . . . . . . . . 644,181 80.7 686,099 81.2

Spouses . . . . . . . . . . . . . . . . . . . . . . . 30,493 3.8 31,615 3.7

Children . . . . . . . . . . . . . . . . . . . . . . 5,559 .7 5,828 .7

Survivors of deceased workers. . . . . . . 118,279 14.8 121,175 14.3

Aged widows and widowers. . . . . . . 94,307 11.8 96,623 11.4

Disabled widows and widowers . . . . 2,375 .3 2,372 .3

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

a Less than 0.05 percent.

20 a

Children . . . . . . . . . . . . . . . . . . . . . . 20,048 2.5 20,660 2.4

Widowed mothers and fathers 

caring for child beneficiaries . . . . 1,529 .2 1,500 .2

Lump-sum death payments . . . . . . . . . . . 210 a 207 a

DI benefit payments, total . . . . . . . . . . . . . . 142,740 100.0 143,656 100.0

Disabled workers . . . . . . . . . . . . . . . . . 133,871 93.8 134,962 93.9

Spouses. . . . . . . . . . . . . . . . . . . . . . . . . 551 .4 536 .4

Children . . . . . . . . . . . . . . . . . . . . . . . . 8,318 5.8 8,158 5.7
35

Calendar Year 2018 Operations

The acquisition and redemption of securities during calendar year 2018

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 2014-2018

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

2014 . . . . . . . . . . . 0.4 0.4 2.6 2.0 0.7 0.7

2015 . . . . . . . . . . . .4 .4 2.4 1.9 .7 .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

Table III.A7.—Trust Fund Investment Transactions, Calendar Year 2018

[In millions]

OASI

Trust Fund

DI

Trust Fund

OASI and DI

Trust Funds,

combined

Invested asset reserves, 

December 31, 2017a . . . . . . . . . . . . . . . . . .

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

tables VI.A4 and VI.A5 for details.

$2,820,368 $71,624 $2,891,992

Acquisitions:

Special issue securities:

Certificates of indebtedness . . . . . . . . . . . 801,981 174,308 976,289

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

b Purchased on June 30, 2018. The interest rate on these purchases was 2.875 percent.

176,890 32,617 209,507

Total acquisitions . . . . . . . . . . . . . . . . . . . 978,870 206,925 1,185,795

Redemptions:

Special issue securities:

Certificates of indebtedness . . . . . . . . . . . 797,475 172,027 969,502

Bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203,789 9,321 213,110

Total redemptions . . . . . . . . . . . . . . . . . . . 1,001,265 181,348 1,182,613

Net increase in invested asset reserves . . . . . . -22,394 25,577 3,183

Invested asset reserves, 

December 31, 2018a . . . . . . . . . . . . . . . . . . 2,797,974 97,201 2,895,175
Financial Operations and Legislative Changes

36

B. SOCIAL SECURITY AMENDMENTS SINCE THE 2018 REPORT

Since the Trustees submitted the 2018 report to Congress, one policy change

has been implemented that is expected to have notable effects on the OASDI

program.

The Social Security Administration (SSA) implemented the Disability Redesign Prototype model in ten states in 1999. Among other features, the prototype model eliminated the reconsideration step in the disability appeals

process. Beginning in 2019, SSA is reinstating the reconsideration step in

these states, which will make the process uniform nationwide. This reinstatement is expected to decrease disability incidence rates very slightly beginning in 2020, and thus has a small but significant positive effect on the

financial status of the DI program over the short-range period and a negligible positive effect over the long-range projection period.

This report also incorporates the effects of one change in law and one change

in policy with negligible effects over the short-range and long-range projection periods: 

 • The Tribal Social Security Fairness Act of 2018, Public Law 115-243,

was enacted on September 20, 2018. At the request of any Indian tribe,

the Social Security Administration is directed to enter into an agreement

to extend Social Security coverage to tribal council members. Such

agreements, which are irrevocable, apply to all members of the council

and to all services performed in their capacity as council members. 

 • 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 accordingly assumes the phase out will be completed

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.
37

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 (2019 through 2028) first, followed by estimates and measures of actuarial status for the long-range period

(2019 through 2093). 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 three reports. The experience for disability beneficiaries

and benefit levels following the last economic recession has not followed

expectations, so substantial revisions have been required in the reports of

2016, 2017, 2018, and 2019. 

In 2014, initial disability applications to the states’ Disability Determination

Services (DDS) dropped by 4.3 percent compared to 2013. For the 2015

report, the Trustees assumed that applications would drop by another
Actuarial Estimates

38

1.0 percent in 2015, but the decline was actually 4.8 percent. This largerthan-anticipated decline in applications extended reserve depletion by about

one year, in addition to the six-year extension due to the reallocation of tax

rates included in the Bipartisan Budget Act of 2015. Together, these changes

extended the DI Trust Fund reserve depletion year from 2016 for the 2015

report to 2023 for the 2016 report. The change in the reserve depletion date

due to DI application experience in the 2016 report was relatively modest,

because the Trustees had assumed a 9.1 percent rebound in applications for

2016. However, applications instead dropped again in 2016, by 7.1 percent.

Largely on this basis, the 2017 report assumed a more gradual rise in applications after the very low level in 2016, with an increase of only 2.6 percent

for 2017. This more gradual path resulted in an additional five-year extension of the projected DI reserve depletion date, to 2028 for the 2017 report. 

Applications once again dropped in 2017, by 4.1 percent, a yet lower starting

point. For the 2018 report, the Trustees assumed a steeper rise in applications

and incidence rates in order to reach the unchanged ultimate levels of incidence rates by 2027. Even with this steep rise, applications and incidence

rates were lower for much of the first ten years of the projection period. The

extension of the reserve depletion date from 2028 to 2032 for the 2018 report

owes largely to this further drop in applications in 2017, partially mitigated

by the more rapid rebound to the ultimate assumed level. 

This year’s projections reflect an additional 4.8 percent drop in disability

applications for 2018 compared to 2017. Steady declines in applications

since 2010, and the resulting lower levels of disability beneficiaries, 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. As a result, lower applications in 2018 and

a slightly more gradual rise to the ultimate incidence rate have, by themselves, extended the reserve depletion date by 14 years.

In addition, the Trustees have changed the assumed ultimate age-sexadjusted incidence rate, taking into account long-term averages of incidence

rates over multiple economic cycles. The drop in incidence rates since 2010,

which is due to many factors including the recent economic recovery and the

declining unemployment rate, has lowered long-term average incidence

rates. Therefore, the Trustees have reduced the assumed ultimate age-sexadjusted incidence rate from 5.4 per thousand to 5.2 per thousand exposed,

the same incidence rate that had been assumed for the 2008 through 2011

Trustees Reports. This change in the ultimate disability incidence rate added

another five years to the reserve depletion date. Finally, restoring the reconsideration step for disability determinations added one more year to the

reserve depletion date. The 20-year increase in the projected reserve deple-
39

Short-Range Estimates

tion date for the DI Trust Fund, from 2032 in last year’s report to 2052 for

this report, extends the projected DI depletion date beyond the projected

OASI depletion date 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.

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 2019 through 2028. These estimates assume that there are no further changes in the statutory provisions and regulations under which the

 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.
Actuarial Estimates

40

OASDI program currently operates beyond the changes since last year’s

report indicated in section III.B.1

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 2019 under the intermediate assumptions, increase in all

years after 2018 under the low-cost assumptions, and decrease in all years

through 2028 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

continue to exceed 100 percent of annual cost through 2028. Consequently,

the OASI Trust Fund satisfies the test of short-range financial adequacy. See

figure IV.A1 for an illustration of these results.

 1 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.

Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2014-2028a

[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:

2014 . . $769.4 $646.2 $0.4 $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 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

Intermediate:

2019 . . 917.6 803.4 f 35.3 79.0 910.3 901.6 3.7 4.9 7.3 2,805.2 307

2020 . . 961.3 844.6 f 38.5 78.2 962.9 954.0 3.9 4.9 -1.6 2,803.6 291

2021 . . 1,005.2 886.0 f 42.3 76.9 1,025.7 1,016.8 4.1 4.9 -20.5 2,783.1 273

2022 . . 1,052.1 930.7 f 46.2 75.2 1,092.8 1,083.4 4.2 5.2 -40.7 2,742.4 255

2023 . . 1,100.9 976.1 f 50.2 74.6 1,164.2 1,154.6 4.3 5.3 -63.3 2,679.1 236

2024 . . 1,153.8 1,024.1 f 54.7 74.9 1,240.2 1,230.4 4.4 5.4 -86.4 2,592.7 216

2025 . . 1,206.4 1,071.9 f 59.7 74.8 1,319.2 1,309.2 4.6 5.5 -112.8 2,479.9 197

2026 . . 1,272.5 1,122.1 f 75.2 75.2 1,402.1 1,391.8 4.7 5.6 -129.7 2,350.2 177

2027 . . 1,330.3 1,173.6 f 81.7 75.0 1,489.8 1,479.3 4.9 5.6 -159.5 2,190.7 158

2028 . . 1,388.0 1,226.3 f 88.8 72.9 1,584.6 1,573.9 5.0 5.7 -196.6 1,994.1 138

Low-cost:

2019 . . 926.6 810.8 f 35.3 80.4 909.9 901.3 3.7 4.9 16.7 2,814.5 307

2020 . . 994.3 872.6 f 38.8 82.8 969.5 960.7 3.9 4.9 24.8 2,839.3 290

2021 . . 1,061.1 933.4 f 42.8 84.9 1,037.1 1,028.2 4.1 4.9 24.0 2,863.3 274

2022 . . 1,131.9 997.1 f 46.9 87.9 1,110.5 1,101.1 4.3 5.2 21.4 2,884.7 258

2023 . . 1,207.1 1,062.8 f 51.3 92.9 1,189.0 1,179.2 4.4 5.3 18.1 2,902.8 243
41

Short-Range Estimates

2024 . . $1,288.5 $1,133.0 f $56.2 $99.3 $1,273.0 $1,262.9 $4.6 $5.4 $15.5 $2,918.3 228

2025 . . 1,373.2 1,205.2 f 61.6 106.4 1,361.0 1,350.6 4.9 5.5 12.2 2,930.5 214

2026 . . 1,474.4 1,281.1 f 78.0 115.4 1,454.3 1,443.6 5.1 5.6 20.1 2,950.6 202

2027 . . 1,569.7 1,359.5 f 85.2 125.0 1,554.2 1,543.2 5.3 5.7 15.6 2,966.2 190

2028 . . 1,669.5 1,442.1 f 93.2 134.2 1,662.9 1,651.6 5.5 5.7 6.6 2,972.8 178

High-cost:

2019 . . 909.2 796.0 f 35.3 77.9 910.9 902.3 3.7 4.9 -1.7 2,796.1 307

2020 . . 918.3 806.5 f 38.4 73.4 959.4 950.5 3.9 5.0 -41.1 2,755.0 291

2021 . . 933.7 823.6 f 42.0 68.1 1,018.2 1,009.1 4.0 5.0 -84.5 2,670.5 271

2022 . . 959.7 850.9 f 45.6 63.1 1,080.6 1,071.2 4.1 5.3 -120.9 2,549.6 247

2023 . . 987.8 879.9 f 49.5 58.4 1,146.6 1,137.1 4.2 5.4 -158.8 2,390.8 222

2024 . . 1,019.3 911.4 f 53.7 54.2 1,216.4 1,206.7 4.3 5.5 -197.1 2,193.7 197

2025 . . 1,051.6 943.9 f 58.3 49.5 1,288.2 1,278.4 4.4 5.5 -236.6 1,957.1 170

2026 . . 1,095.9 978.2 f 73.1 44.6 1,363.1 1,353.1 4.4 5.6 -267.2 1,690.0 144

2027 . . 1,130.0 1,011.8 f 79.1 39.1 1,441.5 1,431.4 4.5 5.6 -311.5 1,378.5 117

2028 . . 1,160.9 1,044.4 f 85.5 31.0 1,525.6 1,515.3 4.6 5.6 -364.7 1,013.8 90

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. 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 2014-2028a (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

42

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 2028

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

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

workers increases under alternatives I, II, and III from 176 million during

calendar year 2018 to about 190 million, 186 million, and 182 million,

respectively, in 20281. The total annual amount of taxable payroll increases

in every year through 2028 for each alternative. Total taxable payroll

increases from $7,262 billion in 2018 to $13,639 billion, $11,591 billion, and

$9,865 billion in 2028, 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, temporarily higher than trend, as the

 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%

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Calendar year

DI

OASI

Historical Estimated

Minimumlevelfor "short-range financial adequacy"

I

II

III

I

II

III
43

Short-Range Estimates

economy continues to recover from the severe economic downturn that

began in late 2007.

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 5 percent of total trust fund

income for 2028, as compared to 10 percent for 2018.

Rising OASI cost from 2018 through 2028 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 eligible 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 2019 through 2028 under the three sets of

assumptions, together with values for actual experience during 2014 through

2018. 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 is less than DI cost. Noninterest income increases steadily thereafter under each alternative, with the

exception of a small decrease in 2020 under the high-cost assumptions, due

to most of the same factors described previously for the OASI Trust Fund

beginning on page 42. DI cost grows steadily throughout the period under

each alternative. Under the intermediate assumptions, reserves decline

through 2020, then increase through 2028. Under the high-cost assumptions,

DI reserves decline after 2018 until depletion in the first quarter of 2025.

 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 2019 Medicare Trustees Report.
Actuarial Estimates

44

Under the low-cost assumptions, reserves increase throughout the shortrange projection period except for a small decrease in 2019.

Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2014-2028a

[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:

2014 . . .$114.9 $109.7 $0.1 $1.7 $3.4 $145.1 $141.7 $2.9 $0.4 -$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

Intermediate:

2019 . . . 143.4 138.8 f 1.6 3.0 149.8 146.9 2.8 .1 -6.4 90.7 65

2020 . . . 148.1 143.4 f 1.7 3.0 150.9 147.8 3.0 .1 -2.7 87.9 60

2021 . . . 155.2 150.4 f 1.8 3.0 154.6 151.5 3.1 .1 .6 88.5 57

2022 . . . 163.0 158.0 f 1.9 3.0 159.2 155.8 3.3 .1 3.8 92.3 56

2023 . . . 171.1 165.7 f 2.0 3.3 164.5 160.8 3.6 .1 6.6 99.0 56

2024 . . . 179.9 173.9 f 2.2 3.8 171.3 167.4 3.9 f 8.6 107.5 58

2025 . . . 188.7 182.0 f 2.4 4.3 179.2 175.1 4.1 f 9.5 117.0 60

2026 . . . 198.5 190.5 f 3.0 4.9 187.7 183.3 4.4 f 10.7 127.8 62

2027 . . . 208.1 199.3 f 3.3 5.5 196.6 191.9 4.7 f 11.5 139.3 65

2028 . . . 218.1 208.2 f 3.5 6.3 204.0 199.0 4.9 f 14.1 153.4 68

Low-cost:

2019 . . . 144.9 140.1 f 1.6 3.2 147.7 144.9 2.8 .1 -2.8 94.2 66

2020 . . . 153.4 148.2 f 1.7 3.6 148.3 145.2 3.0 .1 5.2 99.4 64

2021 . . . 164.4 158.5 f 1.8 4.2 150.9 147.7 3.1 .1 13.5 112.9 66

2022 . . . 176.3 169.3 f 1.9 5.1 154.5 151.1 3.4 .1 21.8 134.7 73

2023 . . . 189.1 180.5 f 2.0 6.7 158.8 155.1 3.7 f 30.3 165.0 85

2024 . . . 203.3 192.4 f 2.1 8.8 164.6 160.6 4.0 f 38.7 203.7 100

2025 . . . 218.3 204.6 f 2.3 11.4 171.5 167.2 4.3 f 46.8 250.5 119

2026 . . . 235.1 217.5 f 2.9 14.7 179.3 174.6 4.6 f 55.8 306.3 140

2027 . . . 252.4 230.9 f 3.1 18.5 187.5 182.5 5.0 f 65.0 371.3 163

2028 . . . 271.4 244.9 f 3.4 23.1 194.5 189.1 5.3 f 76.9 448.2 191
45

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 2018, the number of DI

beneficiaries in current-payment status continued the declining trend of the

prior four years. Under the intermediate assumptions, that number of DI beneficiaries is projected to drop further through the end of 2021, then increase

through the remainder of the short-range projection period. The rate of

increase after 2021 is much slower than was experienced on average from

1990 to 2010, when the population with the highest disability prevalence

rates was growing rapidly due to the aging of the baby-boom generation. See

section V.C.5 for further details.

High-cost:

2019 . . . $142.0 $137.5 f $1.6 $2.9 $152.1 $149.3 $2.8 $0.1 -$10.1 $86.9 64

2020 . . . 141.2 136.9 f 1.7 2.5 155.2 152.1 3.0 .1 -14.0 73.0 56

2021 . . . 143.6 139.9 f 1.9 1.9 160.2 157.0 3.1 .1 -16.5 56.4 46

2022 . . . 147.8 144.5 f 2.0 1.3 165.0 161.6 3.3 .1 -17.2 39.2 34

2023 . . . 152.4 149.4 f 2.1 .9 170.3 166.7 3.5 .1 -17.9 21.3 23

2024 . . . 157.4 154.8 f 2.3 .4 177.4 173.6 3.8 .1 -20.0 1.4 12

2025 . . . g 160.3 f 2.5 g 185.6 181.5 4.0 .1 g g 1

2026 . . . g 166.1 f 3.1 g 194.3 190.1 4.2 .1 g gg

2027 . . . g 171.8 f 3.4 g 203.3 198.9 4.4 f g gg

2028 . . . g 177.3 f 3.7 g 210.7 206.0 4.6 .1 g gg

a The DI Trust Fund reserves become depleted in the first quarter of 2025 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. 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 2014-2028a (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

46

At the beginning of calendar year 2018, the reserves of the DI Trust Fund

represented 49 percent of annual cost. During 2018, DI income substantially

exceeded cost due to the 2016-18 reallocation of the payroll tax rate from

OASI to DI, and the estimated trust fund ratio for the beginning of 2019

increased to about 65 percent. Under the intermediate assumptions, DI total

cost is projected to exceed income in 2019 and 2020, causing reserves to

decrease. Thereafter, income exceeds total cost and trust fund reserves

steadily increase through the remainder of the short-range projection period.

Because the reserves of the DI Trust Fund at the beginning of 2019 were less

than the estimated annual cost for 2019, 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 2019 through 2028 under the

three alternatives, together with actual experience in 2014 through 2018.

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 shortrange period, although it is important to note that under current law, one trust

fund cannot share financial resources with another trust fund. In addition, the

combined OASI and DI Trust Funds would satisfy the test of short-range

financial adequacy. 

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

Calendar Years 2014-2028a

[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:

2014 . . $884.3 $756.0 $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
47

Short-Range Estimates

Intermediate:

2019 . . $1,061.0 $942.1 f $36.9 $82.0 $1,060.0 $1,048.6 $6.5 $5.0 $1.0 $2,895.9 273

2020 . . 1,109.4 988.0 f 40.2 81.2 1,113.7 1,101.8 6.9 5.0 -4.3 2,891.6 260

2021 . . 1,160.4 1,036.4 f 44.1 79.8 1,180.3 1,168.2 7.1 5.0 -19.9 2,871.6 245

2022 . . 1,215.1 1,088.8 f 48.1 78.2 1,252.0 1,239.2 7.5 5.3 -36.9 2,834.7 229

2023 . . 1,272.0 1,141.8 f 52.3 77.9 1,328.7 1,315.4 7.9 5.4 -56.6 2,778.0 213

2024 . . 1,333.7 1,198.0 f 56.9 78.7 1,411.5 1,397.8 8.3 5.5 -77.9 2,700.2 197

2025 . . 1,395.1 1,253.9 f 62.1 79.1 1,498.4 1,484.2 8.7 5.5 -103.3 2,596.9 180

2026 . . 1,470.9 1,312.7 f 78.2 80.1 1,589.9 1,575.1 9.1 5.6 -118.9 2,478.0 163

2027 . . 1,538.4 1,372.8 f 85.0 80.6 1,686.4 1,671.3 9.5 5.6 -148.0 2,330.0 147

2028 . . 1,606.2 1,434.6 f 92.3 79.2 1,788.6 1,773.0 9.9 5.7 -182.5 2,147.5 130

Low-cost:

2019 . . 1,071.4 950.9 f 36.9 83.7 1,057.6 1,046.1 6.5 5.0 13.8 2,908.8 274

2020 . . 1,147.7 1,020.8 f 40.5 86.4 1,117.8 1,105.9 6.9 5.0 29.9 2,938.7 260

2021 . . 1,225.6 1,092.0 f 44.6 89.0 1,188.1 1,176.0 7.2 4.9 37.5 2,976.2 247

2022 . . 1,308.2 1,166.4 f 48.8 93.1 1,265.0 1,252.1 7.6 5.2 43.2 3,019.4 235

2023 . . 1,396.2 1,243.3 f 53.3 99.6 1,347.8 1,334.3 8.1 5.3 48.4 3,067.8 224

2024 . . 1,491.7 1,325.4 f 58.3 108.1 1,437.6 1,423.5 8.6 5.4 54.2 3,122.0 213

2025 . . 1,591.5 1,409.8 f 63.9 117.8 1,532.5 1,517.9 9.2 5.5 59.0 3,181.0 204

2026 . . 1,709.5 1,498.6 f 80.8 130.0 1,633.5 1,618.2 9.7 5.6 76.0 3,256.9 195

2027 . . 1,822.2 1,590.4 f 88.3 143.4 1,741.6 1,725.7 10.3 5.7 80.5 3,337.5 187

2028 . . 1,940.9 1,687.0 f 96.6 157.3 1,857.4 1,840.8 10.9 5.7 83.5 3,421.0 180

High-cost:

2019 . . 1,051.2 933.5 f 37.0 80.7 1,063.0 1,051.6 6.5 5.0 -11.9 2,883.1 272

2020 . . 1,059.5 943.4 f 40.1 75.9 1,114.6 1,102.6 6.9 5.1 -55.1 2,828.0 259

2021 . . 1,077.3 963.5 f 43.9 70.0 1,178.3 1,166.1 7.1 5.1 -101.0 2,727.0 240

2022 . . 1,107.5 995.4 f 47.6 64.4 1,245.6 1,232.8 7.4 5.4 -138.2 2,588.8 219

2023 . . 1,140.3 1,029.4 f 51.6 59.3 1,316.9 1,303.8 7.7 5.5 -176.7 2,412.1 197

2024 . . 1,176.7 1,066.2 f 56.0 54.6 1,393.8 1,380.2 8.0 5.5 -217.0 2,195.1 173

2025 . . 1,214.0 1,104.1 f 60.8 49.1 1,473.8 1,459.9 8.3 5.5 -259.8 1,935.3 149

2026 . . 1,263.8 1,144.3 f 76.2 43.3 1,557.4 1,543.1 8.6 5.6 -293.6 1,641.8 124

2027 . . 1,302.7 1,183.7 f 82.5 36.6 1,644.8 1,630.3 8.9 5.6 -342.1 1,299.6 100

2028 . . 1,338.1 1,221.7 f 89.2 27.2 1,736.3 1,721.4 9.2 5.7 -398.2 901.4 75

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. 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 2014-2028a (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

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 2018 report under the intermediate assumptions, the trust fund ratio for

OASI reached 154 percent at the beginning of 2027—the tenth projection

year for that report. The change in the short-range valuation period alone,

from 2018 through 2027 to 2019 through 2028, lowered the estimated trust

fund ratio for the tenth year by 19 percentage points, to 135 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 increase in the ratio

for the tenth projection year of 3 percentage points. Therefore, the total

change in the tenth year projected trust fund ratio from last year’s report to

this year’s report is a reduction of 16 percentage points to 138 percent.

Legislative and regulatory changes since the 2018 report was published did

not have a significant effect on the projected tenth year OASI trust fund

ratio. Changes in demographic assumptions over the short-range period

increased the projected tenth year trust fund ratio for OASI by 3 percentage

points. Several relatively small changes in economic data and assumptions

combined to cause a net reduction in the OASI trust fund ratio of

1 percentage point by the beginning of 2028. 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 48-percentage-point increase in the DI trust fund ratio from the beginning of 2027 in last year’s report to the beginning of 2028 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 a large increase of 50 points

due to programmatic data and assumptions. This increase reflects lower estimated disabled-worker incidence rates throughout the short-range projection

period, incorporating both more favorable recent experience and the lower

ultimate disabled-worker incidence rate assumption in this report. Disability

applications have been declining steadily since 2010, and the total number of

disabled-worker beneficiaries in current payment status has been falling

since 2014. In last year’s report, the number of disabled-worker beneficiaries
49

Short-Range Estimates

was projected to remain essentially the same at 8.7 million from the end of

2017 to the end of 2018. In fact, the number dropped to around 8.5 million

by the end of 2018. For this report, the ultimate disability incidence rate

assumption has been lowered from 5.4 to 5.2 awards per thousand exposed

population. This year’s report has lower incidence rates throughout the shortrange period, and a more gradual rise from recent low levels to the new ultimate DI incidence rate by the end of the short-range period. In addition, the

policy change reinstating the reconsideration step in the DI adjudication process in the ten states where this step had previously been eliminated

increased the tenth year DI Trust Fund ratio by 2 percentage points.

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

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 2027 . 154 20 137

Change in trust fund ratio due to changes in: 

Legislation and regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . a 2 a

Valuation period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19 -4 -17

Demographic data and assumptions. . . . . . . . . . . . . . . . . . . . . . . 3 a

a Between -0.5 and 0.5 percent.

3

Economic data and assumptions . . . . . . . . . . . . . . . . . . . . . . . . . -1 a a

Programmatic data and assumptions . . . . . . . . . . . . . . . . . . . . . . 1 50 7

Projection methods and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . aa a

Total change in trust fund ratio -16 48 -7

Trust fund ratio shown in this report for calendar year 2028. . . . . . . 138 68 130
Actuarial Estimates

50

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 funds 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.
51

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 income rate minus the cost rate is the “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 10.33 percent of payroll for 2018 to

11.01 percent of payroll for 2019. The OASI income rate was lower for 2016

through 2018 because of the payroll tax rate reallocation of 0.57 percentage

point from OASI to DI for those years, as enacted in the Bipartisan Budget

Act of 2015. After returning to the pre-reallocation level for 2019, the

income rate generally rises at a very gradual rate to 11.52 percent of taxable

payroll for 2093. 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 benefit-taxation threshold amounts

are fixed (not indexed), and therefore an increasing share of total benefits

will be subject to tax as incomes and benefits rise. There is also a one-time

upward shift in the income rate, from 11.17 percent of payroll for 2025 to

11.29 percent of payroll for 2026, because of increased taxation of benefits

due to expiration of the personal income tax provisions in Public Law 115-

97, the Tax Cuts and Jobs Act. 

From 2019 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

 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

52

ages. From 2039 to 2052, the cost rate declines because the aging baby-boom

generation is gradually replaced at retirement ages by the subsequently

lower-birth-rate generation born between 1966 and 1989. After 2052, the

projected OASI cost rate generally rises, reaching 15.37 percent of taxable

payroll for 2093, with the increase primarily because of projected reductions

in death rates at older ages.

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 decreases between 2019 and 2020, and

then rises until it peaks in 2034 at 12.55 percent of payroll. The cost rate then

declines to 11.52 percent for 2055, rises to 11.72 percent for 2072, and

declines again to 11.10 percent for 2089 before rising to 11.22 percent for

2093, at which point the income rate reaches 11.26 percent. For the high-cost

assumptions, the OASI cost rate rises throughout the 75-year period. It rises

relatively rapidly through about 2039 because of the aging of the baby-boom

generation. Thereafter, the cost rate continues to rise and reaches

21.80 percent of payroll for 2093, at which point the income rate reaches

11.91 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. This

annual deficit was temporarily higher for 2018 in part because of the

0.57-percentage-point payroll tax rate reallocation from OASI to DI. After

the annual deficit declines from 1.42 percent of payroll for 2018 to 0.94 percent for 2019, it then rises relatively rapidly to 3.29 percent for 2039. It then

declines to 2.90 percent of payroll for 2052, and generally rises thereafter,

reaching 3.85 percent of taxable payroll for 2093.

Under the low-cost assumptions, after the 2016 through 2018 payroll tax rate

reallocation period, the OASI annual deficit decreases from 0.82 percent of

payroll in 2019 to 0.69 percent in 2021, and then generally rises to

1.25 percent of payroll for 2034. Then the annual deficit declines to 0.25 percent of payroll for 2055, rises through 2072, and then declines until it

becomes a positive annual balance in 2085. The annual balance increases to

0.16 percent in 2089, and then decreases to 0.05 percent of payroll in 2093.

Under the high-cost assumptions, the OASI balance worsens throughout the

projection period. Annual deficits rise to 1.50 percent for 2020, 6.26 percent

for 2050, and 9.89 percent of payroll for 2093.
53

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 12.63 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. . . . . 10.96 11.60 -.64 1.81 2.36 -.55 12.77 13.96 -1.19

2015. . . . . 11.01 11.63 -.62 1.81 2.27 -.47 12.81 13.90 -1.09

2016. . . . . 10.71 11.70 -.99 2.39 2.20 .19 13.10 13.90 -.80

2017. . . . . 10.65 11.57 -.92 2.43 2.09 .33 13.07 13.66 -.59

2018. . . . . 10.33 11.75 -1.42 2.34 2.02 .32 12.67 13.77 -1.10

Intermediate:

2019. . . . . 11.01 11.95 -.94 1.84 1.97 -.12 12.85 13.91 -1.06

2020. . . . . 11.05 12.05 -1.00 1.82 1.89 -.07 12.87 13.94 -1.07

2021. . . . . 11.08 12.24 -1.16 1.82 1.85 -.03 12.90 14.09 -1.19

2022. . . . . 11.10 12.42 -1.32 1.82 1.81 .01 12.92 14.23 -1.31

2023. . . . . 11.12 12.61 -1.49 1.82 1.78 .04 12.94 14.40 -1.46

2024. . . . . 11.15 12.82 -1.67 1.82 1.77 .05 12.97 14.59 -1.62

2025. . . . . 11.17 13.02 -1.85 1.82 1.77 .05 12.99 14.79 -1.80

2026. . . . . 11.29 13.22 -1.93 1.82 1.77 .06 13.11 14.99 -1.88

2027. . . . . 11.31 13.42 -2.11 1.82 1.77 .05 13.13 15.19 -2.06

2028. . . . . 11.35 13.67 -2.32 1.83 1.76 .07 13.17 15.43 -2.26

2030. . . . . 11.38 14.04 -2.67 1.83 1.76 .07 13.20 15.81 -2.60

2035. . . . . 11.42 14.58 -3.16 1.83 1.82 .01 13.25 16.40 -3.15

2040. . . . . 11.44 14.72 -3.28 1.83 1.89 -.06 13.27 16.62 -3.34

2045. . . . . 11.44 14.51 -3.07 1.83 1.98 -.15 13.27 16.49 -3.22

2050. . . . . 11.43 14.35 -2.92 1.84 2.01 -.18 13.27 16.37 -3.10

2055. . . . . 11.44 14.38 -2.93 1.84 2.03 -.20 13.28 16.41 -3.13

2060. . . . . 11.46 14.61 -3.15 1.84 2.02 -.18 13.30 16.63 -3.33

2065. . . . . 11.48 14.87 -3.39 1.84 2.02 -.19 13.32 16.90 -3.58

2070. . . . . 11.50 15.16 -3.66 1.84 2.03 -.20 13.34 17.20 -3.86

2075. . . . . 11.52 15.42 -3.90 1.84 2.01 -.17 13.36 17.43 -4.07

2080. . . . . 11.52 15.46 -3.93 1.84 2.01 -.17 13.36 17.46 -4.10

2085. . . . . 11.52 15.31 -3.80 1.84 2.04 -.20 13.35 17.36 -4.00

2090. . . . . 11.51 15.26 -3.74 1.84 2.10 -.26 13.35 17.36 -4.00

2095. . . . . 11.53 15.48 -3.95 1.84 2.10 -.26 13.37 17.58 -4.21

First year balance becomes

negative and remains negative

throughout the 75-year

projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2036 . . . . . . . . . . . . . . . . 2010
Actuarial Estimates

54

Low-cost:

2019. . . . . 10.94 11.76 -0.82 1.83 1.91 -0.08 12.77 13.67 -0.90

2020. . . . . 11.03 11.74 -.70 1.81 1.79 .02 12.85 13.53 -.68

2021. . . . . 11.05 11.74 -.69 1.81 1.71 .11 12.86 13.45 -.58

2022. . . . . 11.07 11.77 -.71 1.81 1.64 .18 12.88 13.41 -.53

2023. . . . . 11.08 11.82 -.74 1.81 1.58 .24 12.89 13.40 -.51

2024. . . . . 11.10 11.88 -.78 1.82 1.54 .28 12.92 13.42 -.50

2025. . . . . 11.11 11.94 -.83 1.81 1.50 .31 12.92 13.44 -.52

2026. . . . . 11.21 12.00 -.79 1.82 1.48 .34 13.03 13.48 -.45

2027. . . . . 11.23 12.08 -.85 1.82 1.46 .36 13.05 13.53 -.49

2028. . . . . 11.26 12.19 -.94 1.82 1.43 .39 13.08 13.62 -.54

2030. . . . . 11.28 12.38 -1.10 1.82 1.40 .42 13.10 13.78 -.68

2035. . . . . 11.30 12.54 -1.24 1.82 1.38 .44 13.12 13.92 -.80

2040. . . . . 11.30 12.39 -1.09 1.82 1.38 .44 13.13 13.78 -.65

2045. . . . . 11.29 11.96 -.68 1.82 1.41 .41 13.11 13.37 -.26

2050. . . . . 11.27 11.65 -.37 1.82 1.40 .42 13.10 13.05 .05

2055. . . . . 11.27 11.52 -.25 1.82 1.40 .43 13.09 12.92 .17

2060. . . . . 11.28 11.59 -.31 1.82 1.37 .45 13.10 12.96 .14

2065. . . . . 11.28 11.65 -.37 1.82 1.37 .45 13.11 13.03 .08

2070. . . . . 11.29 11.71 -.42 1.82 1.37 .45 13.11 13.08 .03

2075. . . . . 11.29 11.71 -.42 1.82 1.35 .47 13.11 13.06 .05

2080. . . . . 11.28 11.51 -.23 1.82 1.35 .47 13.10 12.86 .24

2085. . . . . 11.26 11.21 .05 1.82 1.39 .43 13.09 12.60 .49

2090. . . . . 11.26 11.11 .15 1.82 1.44 .39 13.08 12.54 .54

2095. . . . . 11.27 11.33 -.06 1.82 1.44 .39 13.10 12.77 .33

First year balance becomes

negative and remains negative

throughout the 75-year 

projection period . . . . . . . . . . . c . . . . . . . . . . . . . . . . c . . . . . . . . . . . . . . . . c

High-cost:

2019. . . . . 11.07 12.14 -1.06 1.85 2.03 -.17 12.93 14.16 -1.23

2020. . . . . 11.09 12.59 -1.50 1.82 2.04 -.22 12.91 14.62 -1.72

2021. . . . . 11.12 13.08 -1.96 1.82 2.06 -.24 12.94 15.14 -2.20

2022. . . . . 11.16 13.45 -2.29 1.82 2.05 -.23 12.98 15.50 -2.52

2023. . . . . 11.18 13.79 -2.61 1.82 2.05 -.23 13.00 15.84 -2.84

2024. . . . . 11.21 14.13 -2.92 1.82 2.06 -.24 13.04 16.19 -3.16

2025. . . . . 11.24 14.44 -3.21 1.82 2.08 -.26 13.06 16.52 -3.46

2026. . . . . 11.37 14.75 -3.37 1.83 2.10 -.27 13.20 16.85 -3.64

2027. . . . . 11.40 15.07 -3.66 1.83 2.13 -.29 13.23 17.19 -3.96

2028. . . . . 11.45 15.46 -4.01 1.83 2.14 -.30 13.29 17.60 -4.31

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
55

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

1.97 percent for 2019 to 1.77 percent for 2025, and remains relatively stable

through 2032. After 2032, the DI cost rate increases gradually to

2.03 percent for 2055. From 2055 to 2078, the DI cost rate stays relatively

stable before generally increasing slowly to 2.10 percent of payroll for 2093.

The projected DI income rate decreases from 2.34 percent of payroll for

2018 to 1.84 percent for 2019 because the temporary payroll tax reallocation

of 2016 through 2018 expires. Thereafter, the income rate remains relatively

stable, reaching 1.84 percent for 2093. The annual balance is positive for

years 2016 through 2018, reflecting the reallocation. The annual balance is

negative from 2019 through 2021 before becoming positive in 2022, reaching a peak of 0.07 percent of payroll for 2029. The annual balance then

declines and becomes negative in 2036, generally decreasing thereafter, and

reaching a deficit of 0.26 percent of payroll for 2093.

Under the low-cost assumptions, the projected DI cost rate declines from

1.91 percent of payroll for 2019 to 1.38 percent for 2033, and remains relaHigh-cost (Cont.):

2030. . . . . 11.49 16.02 -4.53 1.84 2.18 -0.34 13.33 18.20 -4.87

2035. . . . . 11.56 16.97 -5.41 1.84 2.34 -.50 13.40 19.30 -5.90

2040. . . . . 11.60 17.51 -5.91 1.84 2.50 -.66 13.44 20.01 -6.56

2045. . . . . 11.62 17.69 -6.07 1.85 2.69 -.84 13.47 20.38 -6.91

2050. . . . . 11.64 17.90 -6.26 1.85 2.78 -.93 13.49 20.68 -7.19

2055. . . . . 11.67 18.24 -6.57 1.85 2.85 -1.00 13.52 21.09 -7.57

2060. . . . . 11.71 18.80 -7.09 1.85 2.85 -1.00 13.56 21.64 -8.08

2065. . . . . 11.75 19.40 -7.65 1.85 2.88 -1.02 13.60 22.27 -8.67

2070. . . . . 11.79 20.09 -8.29 1.85 2.90 -1.05 13.65 22.99 -9.34

2075. . . . . 11.84 20.81 -8.97 1.85 2.87 -1.02 13.70 23.68 -9.99

2080. . . . . 11.88 21.31 -9.43 1.85 2.85 -1.00 13.73 24.16 -10.43

2085. . . . . 11.89 21.53 -9.64 1.85 2.87 -1.01 13.75 24.40 -10.65

2090. . . . . 11.90 21.66 -9.75 1.86 2.92 -1.07 13.76 24.58 -10.82

2095. . . . . 11.92 21.91 -9.99 1.86 2.93 -1.07 13.78 24.84 -11.06

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 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

56

tively stable thereafter, reaching 1.44 percent for 2093. The annual balance is

negative for 2019 and positive throughout the remainder of the long-range

period. Under the high-cost assumptions, the DI cost rate generally rises

throughout the projection period, reaching 2.93 percent for 2093. The annual

deficit is negative throughout the projection period, reaching 0.22 percent for

2020, 0.93 percent for 2050, and 1.07 percent for 2093.

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, and further

declines are projected until about 2030. OASI cost rates increase rapidly

through about 2040 as the baby-boom generation ages and is replaced by

lower birth-rate generations at working ages. Thereafter, increasing life

expectancy results in generally much more modest increases in cost rates

through the balance of the projection period. 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. Increases in income

from taxation of benefits reflect: (1) increases in the total amount of benefits

scheduled to be paid and (2) the increasing share of individual benefits that

will be subject to taxation because benefit taxation threshold amounts are not

indexed.

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. 
57

Long-Range Estimates

In the future, the costs of OASI, DI, and the combined OASDI programs as a

percentage of taxable payroll are unlikely to fall outside the range encompassed by alternatives I and III because alternatives I and III define a wide

range of demographic and economic conditions.

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 4.9 percent of GDP for 2019 to

about 5.9 percent for 2039. After 2039, OASDI cost as a percentage of GDP

declines to a low of about 5.8 percent for 2052 and thereafter generally

increases slowly, reaching about 6.0 percent by 2093. 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 51. 

 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

58

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 . . 10.50 .45 .01 10.96 1.78 .03 d 1.81 12.28 .48 .01 12.77

2015 . . 10.53 .47 d 11.01 1.79 .02 d 1.81 12.32 .49 .01 12.81

2016 . . 10.23 .48 d 10.71 2.37 .02 d 2.39 12.60 .49 d 13.10

2017 . . 10.13 .51 d 10.65 2.40 .03 d 2.43 12.53 .54 d 13.07

2018 . . 9.86 .47 d 10.33 2.33 .01 d 2.34 12.19 .48 d 12.67

Intermediate:

2019 . . 10.54 .46 d 11.01 1.82 .02 d 1.84 12.36 .48 d 12.85

2020 . . 10.57 .48 d 11.05 1.80 .02 d 1.82 12.37 .50 d 12.87

2021 . . 10.57 .51 d 11.08 1.80 .02 d 1.82 12.37 .53 d 12.90

2022 . . 10.58 .52 d 11.10 1.80 .02 d 1.82 12.37 .55 d 12.92

2023 . . 10.58 .54 d 11.12 1.80 .02 d 1.82 12.37 .57 d 12.94

2024 . . 10.58 .57 d 11.15 1.80 .02 d 1.82 12.38 .59 d 12.97

2025 . . 10.58 .59 d 11.17 1.80 .02 d 1.82 12.37 .61 d 12.99

2026 . . 10.58 .71 d 11.29 1.80 .03 d 1.82 12.37 .74 d 13.11

2027 . . 10.57 .74 d 11.31 1.80 .03 d 1.82 12.37 .77 d 13.13

2028 . . 10.58 .77 d 11.35 1.80 .03 d 1.83 12.38 .80 d 13.17

2030 . . 10.58 .79 d 11.38 1.80 .03 d 1.83 12.38 .83 d 13.20

2035 . . 10.58 .84 d 11.42 1.80 .03 d 1.83 12.38 .87 d 13.25

2040 . . 10.58 .86 d 11.44 1.80 .04 d 1.83 12.38 .89 d 13.27

2045 . . 10.58 .86 d 11.44 1.80 .04 d 1.83 12.38 .89 d 13.27

2050 . . 10.58 .85 d 11.43 1.80 .04 d 1.84 12.38 .89 d 13.27

2055 . . 10.58 .86 d 11.44 1.80 .04 d 1.84 12.38 .90 d 13.28

2060 . . 10.58 .88 d 11.46 1.80 .04 d 1.84 12.38 .92 d 13.30

2065 . . 10.58 .90 d 11.48 1.80 .04 d 1.84 12.38 .94 d 13.32

2070 . . 10.58 .92 d 11.50 1.80 .04 d 1.84 12.38 .96 d 13.34

2075 . . 10.58 .94 d 11.52 1.80 .04 d 1.84 12.38 .98 d 13.36

2080 . . 10.58 .94 d 11.52 1.80 .04 d 1.84 12.38 .98 d 13.36

2085 . . 10.58 .94 d 11.52 1.80 .04 d 1.84 12.38 .98 d 13.35

2090 . . 10.58 .93 d 11.51 1.80 .04 d 1.84 12.38 .98 d 13.35

2095 . . 10.58 .95 d 11.53 1.80 .04 d 1.84 12.38 .99 d 13.37

Low-cost:

2019 . . 10.48 .46 d 10.94 1.81 .02 d 1.83 12.29 .48 d 12.77

2020 . . 10.56 .47 d 11.03 1.79 .02 d 1.81 12.36 .49 d 12.85

2021 . . 10.57 .48 d 11.05 1.79 .02 d 1.81 12.36 .50 d 12.86

2022 . . 10.57 .50 d 11.07 1.79 .02 d 1.81 12.36 .52 d 12.88

2023 . . 10.57 .51 d 11.08 1.79 .02 d 1.81 12.36 .53 d 12.89

2024 . . 10.58 .52 d 11.10 1.80 .02 d 1.82 12.37 .54 d 12.92

2025 . . 10.57 .54 d 11.11 1.79 .02 d 1.81 12.36 .56 d 12.92

2026 . . 10.57 .64 d 11.21 1.80 .02 d 1.82 12.37 .67 d 13.03

2027 . . 10.56 .66 d 11.23 1.79 .02 d 1.82 12.36 .69 d 13.05

2028 . . 10.57 .68 d 11.26 1.80 .02 d 1.82 12.37 .71 d 13.08
59

Long-Range Estimates

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

Low-cost (Cont.):

2030 . . 10.58 0.70 d 11.28 1.80 0.02 d 1.82 12.37 0.73 d 13.10

2035 . . 10.58 .73 d 11.30 1.80 .03 d 1.82 12.37 .75 d 13.12

2040 . . 10.58 .73 d 11.30 1.80 .03 d 1.82 12.37 .76 d 13.13

2045 . . 10.57 .71 d 11.29 1.80 .03 d 1.82 12.37 .74 d 13.11

2050 . . 10.57 .70 d 11.27 1.80 .03 d 1.82 12.37 .73 d 13.10

2055 . . 10.57 .70 d 11.27 1.80 .03 d 1.82 12.37 .72 d 13.09

2060 . . 10.57 .70 d 11.28 1.80 .03 d 1.82 12.37 .73 d 13.10

2065 . . 10.57 .71 d 11.28 1.80 .03 d 1.82 12.37 .74 d 13.11

2070 . . 10.57 .71 d 11.29 1.80 .03 d 1.82 12.37 .74 d 13.11

2075 . . 10.57 .72 d 11.29 1.80 .03 d 1.82 12.37 .74 d 13.11

2080 . . 10.57 .70 d 11.28 1.80 .03 d 1.82 12.37 .73 d 13.10

2085 . . 10.57 .69 d 11.26 1.80 .03 d 1.82 12.37 .72 d 13.09

2090 . . 10.57 .68 d 11.26 1.80 .03 d 1.82 12.37 .71 d 13.08

2095 . . 10.57 .70 d 11.27 1.80 .03 d 1.82 12.37 .73 d 13.10

High-cost:

2019 . . 10.60 .47 d 11.07 1.83 .02 d 1.85 12.44 .49 d 12.93

2020 . . 10.58 .50 d 11.09 1.80 .02 d 1.82 12.38 .53 d 12.91

2021 . . 10.58 .54 d 11.12 1.80 .02 d 1.82 12.38 .56 d 12.94

2022 . . 10.59 .57 d 11.16 1.80 .02 d 1.82 12.39 .59 d 12.98

2023 . . 10.58 .60 d 11.18 1.80 .03 d 1.82 12.38 .62 d 13.00

2024 . . 10.59 .62 d 11.21 1.80 .03 d 1.82 12.39 .65 d 13.04

2025 . . 10.58 .65 d 11.24 1.80 .03 d 1.82 12.38 .68 d 13.06

2026 . . 10.58 .79 d 11.37 1.80 .03 d 1.83 12.38 .82 d 13.20

2027 . . 10.58 .83 d 11.40 1.80 .04 d 1.83 12.37 .86 d 13.23

2028 . . 10.59 .87 d 11.45 1.80 .04 d 1.83 12.38 .90 d 13.29

2030 . . 10.59 .90 d 11.49 1.80 .04 d 1.84 12.39 .94 d 13.33

2035 . . 10.59 .97 d 11.56 1.80 .04 d 1.84 12.39 1.01 d 13.40

2040 . . 10.59 1.01 d 11.60 1.80 .05 d 1.84 12.39 1.06 d 13.44

2045 . . 10.59 1.03 d 11.62 1.80 .05 d 1.85 12.39 1.08 d 13.47

2050 . . 10.59 1.05 d 11.64 1.80 .05 d 1.85 12.39 1.10 d 13.49

2055 . . 10.59 1.08 d 11.67 1.80 .05 d 1.85 12.39 1.13 d 13.52

2060 . . 10.59 1.12 d 11.71 1.80 .05 d 1.85 12.39 1.17 d 13.56

2065 . . 10.59 1.16 d 11.75 1.80 .06 d 1.85 12.39 1.22 d 13.60

2070 . . 10.59 1.21 d 11.79 1.80 .06 d 1.85 12.39 1.26 d 13.65

2075 . . 10.59 1.25 d 11.84 1.80 .06 d 1.85 12.39 1.31 d 13.70

2080 . . 10.59 1.29 d 11.88 1.80 .06 d 1.85 12.39 1.34 d 13.73

2085 . . 10.59 1.30 d 11.89 1.80 .06 d 1.85 12.39 1.36 d 13.75

2090 . . 10.59 1.32 d 11.90 1.80 .06 d 1.86 12.39 1.37 d 13.76

2095 . . 10.59 1.33 d 11.92 1.80 .06 d 1.86 12.39 1.39 d 13.78

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 -0.005 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

60

2. Comparison of Workers to Beneficiaries

Under the intermediate assumptions, the Trustees project the OASDI cost

rate will rise rapidly between 2019 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 the baby-boom generation

retires. 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 . . . . . . . . . 120,441 32,763 3,874 36,636 3.3 30

1990 . . . . . . . . . 133,008 35,255 4,204 39,459 3.4 30

1995 . . . . . . . . . 140,803 37,364 5,731 43,096 3.3 31

2000 . . . . . . . . . 154,707 38,556 6,606 45,162 3.4 29

2005 . . . . . . . . . 159,038 39,961 8,172 48,133 3.3 30

2010 . . . . . . . . . 157,058 43,440 9,958 53,398 2.9 34

2011 . . . . . . . . . 158,594 44,388 10,428 54,816 2.9 35

2012 . . . . . . . . . 160,705 45,377 10,799 56,176 2.9 35

2013 . . . . . . . . . 163,012 46,517 10,954 57,471 2.8 35

2014 . . . . . . . . . 165,429 47,603 10,971 58,574 2.8 35

2015 . . . . . . . . . 168,276 48,663 10,881 59,543 2.8 35

2016 . . . . . . . . . 170,964 49,811 10,728 60,539 2.8 35

2017 . . . . . . . . . 173,010 50,962 10,517 61,480 2.8 36

2018 . . . . . . . . . 175,999 52,168 10,296 62,464 2.8 35

Intermediate:

2019 . . . . . . . . . 177,624 53,527 10,115 63,642 2.8 36

2020 . . . . . . . . . 178,484 54,948 9,993 64,941 2.7 36

2025 . . . . . . . . . 183,928 62,012 10,065 72,077 2.6 39

2030 . . . . . . . . . 187,117 68,517 10,404 78,921 2.4 42

2035 . . . . . . . . . 189,589 73,061 10,923 83,983 2.3 44

2040 . . . . . . . . . 192,363 75,371 11,613 86,984 2.2 45

2045 . . . . . . . . . 196,845 76,200 12,462 88,662 2.2 45
61

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.

Intermediate (Cont.):

2050 . . . . . . . . . 201,906 77,551 13,024 90,575 2.2 45

2055 . . . . . . . . . 206,737 79,664 13,512 93,176 2.2 45

2060 . . . . . . . . . 211,082 82,680 13,740 96,419 2.2 46

2065 . . . . . . . . . 215,112 85,717 14,088 99,806 2.2 46

2070 . . . . . . . . . 219,413 89,061 14,457 103,518 2.1 47

2075 . . . . . . . . . 224,375 92,441 14,662 107,103 2.1 48

2080 . . . . . . . . . 229,944 94,684 15,003 109,687 2.1 48

2085 . . . . . . . . . 235,834 95,990 15,605 111,595 2.1 47

2090 . . . . . . . . . 241,609 97,914 16,358 114,273 2.1 47

2095 . . . . . . . . . 247,016 101,389 16,757 118,146 2.1 48

Low-cost:

2019 . . . . . . . . . 178,004 53,520 10,071 63,591 2.8 36

2020 . . . . . . . . . 179,297 54,926 9,855 64,781 2.8 36

2025 . . . . . . . . . 186,997 61,851 9,376 71,228 2.6 38

2030 . . . . . . . . . 191,232 68,052 9,233 77,285 2.5 40

2035 . . . . . . . . . 194,581 72,155 9,328 81,484 2.4 42

2040 . . . . . . . . . 198,875 73,950 9,619 83,570 2.4 42

2045 . . . . . . . . . 205,923 74,293 10,107 84,400 2.4 41

2050 . . . . . . . . . 213,973 75,206 10,445 85,651 2.5 40

2055 . . . . . . . . . 221,808 77,013 10,790 87,802 2.5 40

2060 . . . . . . . . . 229,162 79,775 10,992 90,766 2.5 40

2065 . . . . . . . . . 236,449 82,582 11,337 93,919 2.5 40

2070 . . . . . . . . . 244,586 85,659 11,749 97,408 2.5 40

2075 . . . . . . . . . 254,133 88,682 12,093 100,775 2.5 40

2080 . . . . . . . . . 264,850 90,538 12,605 103,142 2.6 39

2085 . . . . . . . . . 276,048 91,688 13,403 105,092 2.6 38

2090 . . . . . . . . . 286,989 94,286 14,311 108,598 2.6 38

2095 . . . . . . . . . 297,451 99,270 14,864 114,134 2.6 38

High-cost:

2019 . . . . . . . . . 177,178 53,535 10,164 63,699 2.8 36

2020 . . . . . . . . . 177,253 54,972 10,171 65,143 2.7 37

2025 . . . . . . . . . 179,231 62,202 10,762 72,964 2.5 41

2030 . . . . . . . . . 182,816 69,219 11,558 80,776 2.3 44

2035 . . . . . . . . . 184,567 74,267 12,472 86,740 2.1 47

2040 . . . . . . . . . 186,023 77,156 13,551 90,708 2.1 49

2045 . . . . . . . . . 188,064 78,579 14,767 93,347 2.0 50

2050 . . . . . . . . . 190,269 80,500 15,557 96,056 2.0 50

2055 . . . . . . . . . 192,233 83,035 16,168 99,202 1.9 52

2060 . . . . . . . . . 193,712 86,351 16,384 102,735 1.9 53

2065 . . . . . . . . . 194,736 89,630 16,672 106,302 1.8 55

2070 . . . . . . . . . 195,577 93,239 16,906 110,144 1.8 56

2075 . . . . . . . . . 196,489 96,967 16,848 113,816 1.7 58

2080 . . . . . . . . . 197,581 99,583 16,855 116,438 1.7 59

2085 . . . . . . . . . 198,868 101,036 17,040 118,076 1.7 59

2090 . . . . . . . . . 200,175 102,206 17,425 119,630 1.7 60

2095 . . . . . . . . . 201,336 103,956 17,568 121,524 1.7 60

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

62

The effect of the demographic shift under the three alternatives on the

OASDI cost rates is clear when one considers the projected number of

OASDI beneficiaries per 100 covered workers. Compared to the 2018 level

of 35 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 60 under the highcost assumptions. Under the low-cost assumptions, this ratio rises to 42 by

2038 and then generally declines, reaching 38 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.

 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
63

Long-Range Estimates

Table IV.B3 also shows the number of covered workers per OASDI beneficiary, which was about 2.8 for 2018. Under the intermediate assumptions,

this ratio declines generally throughout the long-range period, reaching 2.2

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 1.7 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 307 percent at the beginning of 2019 until the trust fund

reserves become depleted late in 2034 (about the same time as last year’s

report), at which time 77 percent of scheduled benefits would be payable.

The DI trust fund ratio decreases from 65 percent at the beginning of 2019 to

56 percent by 2022. After 2022, the DI trust fund ratio increases for a time,

reflecting the period of recent and near-term expected low incidence rates,

reaching a peak of 91 percent by 2037. The ratio then declines until the trust

fund reserves become depleted in 2052 (20 years later than projected in last

year’s report). At that time, 91 percent of scheduled benefits would be payable. The difference in depletion year from last year’s report is largely due to

a combination of a lower assumed ultimate disability incidence rate and a
Actuarial Estimates

64

more gradual assumed path from recent low rates to the ultimate incidence

rate. See page 38 for additional details.

Under the intermediate assumptions, the trust fund ratio for the combined

OASI and DI Trust Funds declines from 273 percent at the beginning of

2019 until the combined fund reserves become depleted in 2035 (one year

later than projected in last year’s report), at which time 80 percent of scheduled benefits would be payable.

Under the low-cost assumptions, the trust fund ratio for the DI program

decreases from 66 percent at the beginning of 2019 to 64 percent at the

beginning of 2020. The DI trust fund ratio then rises thereafter, reaching the

extremely high level of 2,559 percent for 2094. For the OASI program, the

trust fund ratio declines steadily, from 307 percent for 2019 until the reserves

become depleted in 2057, at which time 98 percent of scheduled benefits

would be payable. For the combined OASDI program, the trust fund ratio

declines from 274 percent for 2019 to a low of 112 percent in 2047, then

rises thereafter, reaching 228 percent by 2094. Because the trust fund ratio is

positive throughout the projection period and increasing at the end of the

period, under the low-cost assumptions, the DI program and the combined

OASDI program achieve sustainable solvency.

Under the high-cost assumptions, the OASI trust fund ratio declines continually 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 64 percent for 2019 until the reserves become depleted in 2025. At that

time, 88 percent of scheduled benefits would still be payable. The combined

OASI and DI trust fund ratio declines from 272 percent for 2019 until

reserves become depleted in 2030, at which time 72 percent of scheduled

benefits would still be payable.

The Trustees project trust fund reserve depletion within the 75-year projection period with the exceptions of the combined OASI and DI Trust Funds

and 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 by 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 2030. Under the intermediate

assumptions, the combined starting fund reserves plus estimated future

income are sufficient to fully cover cost until 2035. In the 2018 report, the

Trustees projected that the combined trust fund reserves would become
65

Long-Range Estimates

depleted in 2030 and 2034 under the high-cost and intermediate assumptions,

respectively, and would achieve sustainable solvency under the low-cost

assumptions.

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, allowTable IV.B4.—Trust Fund Ratios, Calendar Years 2019-2095a

[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

2019 . . . . . . . . . . . . . 307 65 273 307 66 274 307 64 272

2020 . . . . . . . . . . . . . 291 60 260 290 64 260 291 56 259

2021 . . . . . . . . . . . . . 273 57 245 274 66 247 271 46 240

2022 . . . . . . . . . . . . . 255 56 229 258 73 235 247 34 219

2023 . . . . . . . . . . . . . 236 56 213 243 85 224 222 23 197

2024 . . . . . . . . . . . . . 216 58 197 228 100 213 197 12 173

2025 . . . . . . . . . . . . . 197 60 180 214 119 204 170 1 149

2026 . . . . . . . . . . . . . 177 62 163 202 140 195 144 b 124

2027 . . . . . . . . . . . . . 158 65 147 190 163 187 117 b 100

2028 . . . . . . . . . . . . . 138 68 130 178 191 180 90 b

b Trust fund reserves would be depleted at the beginning of this year.

75

2030 . . . . . . . . . . . . . 100 76 97 158 253 167 36 b 24

2035 . . . . . . . . . . . . . b 90 10 112 422 143 bbb

2040 . . . . . . . . . . . . . b 87 b 71 595 123 bbb

2045 . . . . . . . . . . . . . b 61 b 38 751 113 bbb

2050 . . . . . . . . . . . . . b 23 b 18 916 114 bbb

2055 . . . . . . . . . . . . . bbb 6 1,088 123 bbb

2060 . . . . . . . . . . . . . bbb b 1,289 132 bbb

2065 . . . . . . . . . . . . . bbb b 1,489 140 bbb

2070 . . . . . . . . . . . . . bbb b 1,692 146 bbb

2075 . . . . . . . . . . . . . bbb b 1,921 152 bbb

2080 . . . . . . . . . . . . . bbb b 2,132 162 bbb

2085 . . . . . . . . . . . . . bbb b 2,284 184 bbb

2090 . . . . . . . . . . . . . bbb b 2,407 210 bbb

2095 . . . . . . . . . . . . . bbb b 2,603 231 bbb

Trust fund reserves 

permanently 

become 

depleted in . . . . . . 2034 2052 2035 2057 c

c Trust fund reserves would not be depleted within the projection period.

c 2031 2025 2030

Payable benefits as 

percent of scheduled benefits:

At the time of 

permanent 

reserve

depletion . . . . . 77 91 80 98 c c 69 88 72

For 2093 . . . . . 73 87 75 100 c c 52 63 53
Actuarial Estimates

66

ing scheduled benefits to be paid in a timely manner throughout the period.

Both the long-range test and the short-range test are applied based on the

intermediate set of assumptions. As discussed in section IV.A, the DI Trust

Fund fails the test of short-range financial adequacy because the trust fund

ratio does not reach 100 percent at any time during the 10-year period. Under

the intermediate assumptions, the OASI Trust Fund reserves become

depleted in 2034, DI Trust Fund reserves become depleted in 2052, 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

III II
67

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 earlier on page

51. 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

68

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 0.08 percent of taxable payroll under the low-cost assumptions,

-1.73 percent under the intermediate assumptions, and -3.88 percent under

the high-cost assumptions. These balances indicate that the program is adequately financed for the 25-year valuation period under only the low-cost

assumptions.

For the 50-year valuation period, the OASDI program has actuarial balances

of 0.11 percent under the low-cost assumptions, -2.38 percent under the

intermediate assumptions, and -5.50 percent under the high-cost assumptions. These actuarial balances mean that the OASDI program is adequately

financed for the 50-year valuation period under only the low-cost assumptions.

For the entire 75-year valuation period, the combined OASDI program has

actuarial balances of 0.19 percent of taxable payroll under the low-cost

assumptions, -2.78 percent under the intermediate assumptions, and

-6.60 percent under the high-cost assumptions. These balances indicate that

the combined OASDI program is adequately financed for the 75-year valuation period under only the low-cost 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 15.10 percent (a relative increase of 21.8 percent), cost

could be reduced in a manner equivalent to an immediate and permanent

reduction in scheduled benefits of about 17 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
69

Long-Range Estimates

15.29 percent (a relative increase of 23.3 percent),1 reducing cost in a manner equivalent to an immediate reduction in scheduled benefits of about

18 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

4.11 percent of payroll for 2093 (see table IV.B1). These large deficits indicate that annual cost continues to exceed non-interest income after 2093, 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 4.1 percent of payroll

under the intermediate assumptions.

 1 The indicated increase in the payroll tax rate of 2.89 percent is somewhat larger than the 2.78 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 2019-2093

[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:

2019-43. . . . . 11.33 1.34 12.67 13.81 0.56 14.37 -1.70

2019-68. . . . . 11.39 .72 12.12 14.15 .25 14.41 -2.29

2019-93. . . . . 11.43 .53 11.96 14.47 .15 14.63 -2.67

Low-cost:

2019-43. . . . . 11.24 1.21 12.45 12.23 .49 12.71 -.27

2019-68. . . . . 11.27 .62 11.89 11.95 .22 12.17 -.28

2019-93. . . . . 11.27 .44 11.71 11.80 .13 11.93 -.22

High-cost:

2019-43. . . . . 11.44 1.50 12.94 15.71 .65 16.36 -3.43

2019-68. . . . . 11.55 .84 12.39 16.92 .30 17.22 -4.83

2019-93. . . . . 11.63 .64 12.27 17.93 .18 18.11 -5.85

DI:

Intermediate:

2019-43. . . . . 1.83 .05 1.88 1.83 .08 1.90 -.03

2019-68. . . . . 1.83 .03 1.86 1.92 .03 1.95 -.09

2019-93. . . . . 1.83 .02 1.85 1.95 .02 1.97 -.12

Low-cost:

2019-43. . . . . 1.82 .04 1.86 1.47 .06 1.52 .34

2019-68. . . . . 1.82 .02 1.84 1.43 .03 1.46 .39

2019-93. . . . . 1.82 .02 1.84 1.42 .02 1.43 .41

High-cost:

2019-43. . . . . 1.84 .05 1.89 2.25 .10 2.35 -.46

2019-68. . . . . 1.84 .03 1.87 2.50 .04 2.54 -.67

2019-93. . . . . 1.85 .02 1.87 2.59 .02 2.62 -.75
Actuarial Estimates

70

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 2093. 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

2093.

The open-group unfunded obligation increased from $13.2 trillion shown in

last year's report to $13.9 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 $13.7 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, 2019, rather than to January 1, 2018, which tends to

increase the unfunded obligation by the annual nominal interest rate; and

(2) the unfunded obligation now includes an additional year (2093). However, changes in the law, assumptions, methods, and starting values resulted

in a net increase in the unfunded obligation that rounds to $0.1 trillion. 

OASDI:

Intermediate:

2019-43. . . . . 13.16 1.39 14.55 15.64 0.64 16.28 -1.73

2019-68. . . . . 13.23 .75 13.97 16.07 .29 16.36 -2.38

2019-93. . . . . 13.27 .55 13.81 16.42 .17 16.60 -2.78

Low-cost:

2019-43. . . . . 13.06 1.25 14.31 13.69 .54 14.23 .08

2019-68. . . . . 13.09 .65 13.74 13.38 .24 13.63 .11

2019-93. . . . . 13.10 .45 13.55 13.22 .15 13.36 .19

High-cost:

2019-43. . . . . 13.27 1.56 14.83 17.96 .75 18.71 -3.88

2019-68. . . . . 13.39 .87 14.26 19.41 .35 19.76 -5.50

2019-93. . . . . 13.48 .66 14.13 20.52 .21 20.73 -6.60

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 2019-2093 (Cont.)

[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
71

Long-Range Estimates

The 75-year unfunded obligation is equivalent to 2.61 percent of future

OASDI taxable payroll and 0.9 percent of GDP through 2093.1 These percentages were 2.68 and 1.0, 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 2.84 percent of payroll in last year’s report, and was

expected to increase to a deficit of 2.90 percent of payroll solely due to the

change in the valuation period. Changes in the law, assumptions, methods,

and starting values combined to account for a 0.11 percent decrease

(improvement) in the actuarial deficit to 2.78 percent of payroll. For additional details on these changes, see section IV.B.6.

As mentioned above, the open-group unfunded obligation expressed in dollars increased (worsened) more than would be expected from changing the

valuation period alone. In large part, this increase occurred because nearterm and ultimate real interest rates are significantly reduced in this report,

thus discounting more distant years’ annual shortfalls less. The actuarial balance, in contrast, increased (improved) relative to the change based on the

valuation period alone. Lower interest rates have a much smaller worsening

effect on the actuarial balance because interest rate changes affect the numerator and denominator similarly.

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 $13.9 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 -$14.8 trillion for the OASDI program. 

 1 The present value of future taxable payroll for 2019-93 is $531.2 trillion. The present value of GDP for

2019-93 is $1,497.0 trillion.
Actuarial Estimates

72

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 50.)

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 4.1 percent of

taxable payroll or 1.4 percent of GDP. These percentages were 4.0 and 1.3,

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, 2019 (in billions):

A. Payroll tax revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $56,247 $9,554 $65,801

B. Reimbursements from general revenue. . . . . . . . . . . . . . . . . . . a

a Less than $0.5 billion.

a a

C. Taxation of benefits revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,473 192 4,665

D. Non-interest income (A + B + C) . . . . . . . . . . . . . . . . . . . . . . . 60,720 9,745 70,465

E. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,877 10,352 87,229

F. Cost minus non-interest income (E - D) . . . . . . . . . . . . . . . . . . 16,157 607 16,764

G. Trust fund asset reserves at start of period . . . . . . . . . . . . . . . . 2,798 97 2,895

H. Open-group unfunded obligation (F - G) . . . . . . . . . . . . . . . . . 13,359 510 13,869

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.

812 111 923

J. Income minus cost, plus reserves at start of period, minus

ending target trust fund (D - E + G - I = - H - I) . . . . . . . . . . . . -14,171 -621 -14,792

K. Taxable payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 531,166 531,166 531,166

Percent of taxable payroll:

Actuarial balance (100 × J ÷ K) . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.67 -.12 -2.78
73

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 increase (improve) the long-range OASDI actuarial

balance from -2.84 percent of taxable payroll in last year’s report to

-2.78 percent in this report.

Since the last report, there have been no new laws, regulations, or policy

changes that are expected to have significant long-range financial effects on

the OASDI actuarial balance. However, this year’s report does incorporate

one notable policy change. The Social Security Administration (SSA) started

running the Disability Redesign Prototype model in ten states in 1999.

Among other features, the prototype model eliminated the reconsideration

step in the disability appeals process. Beginning in 2019, SSA is reinstating

the reconsideration step in these states, which will make the process uniform

nationwide. This reinstatement is expected to decrease disability incidence

rates very slightly beginning in 2020 and has a negligible (less than 0.005

percent of taxable payroll) effect on the long-range actuarial balance.

Table IV.B7.—Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions

[As a percentage of taxable payroll]

Item OASI DI OASDI

Shown in last year’s report:

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.99 1.86 13.84

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.62 2.07 16.69

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.63 -.21 -2.84

Changes in actuarial balance due to changes in:

Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . .00 .00 .00

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 2093. 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. . . . . . . . . . . . . . .06 .00 .06

Economic data and assumptions. . . . . . . . . . . . . . . . . -.03 .00 -.04

Disability data and assumptions. . . . . . . . . . . . . . . . . -.02 .09 .07

Methods and programmatic data . . . . . . . . . . . . . . . . .00 .02 .01

Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.04 .09 .06

Shown in this report:

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

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.96 1.85 13.81

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.63 1.97 16.60
Actuarial Estimates

74

As mentioned above, changing the 75-year valuation period from 2018

through 2092 for last year’s report to 2019 through 2093 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 2093 in this year’s 75-year projection period. Note that the actuarial balance calculation includes trust fund

asset reserves at the beginning of the projection period. These reserves

reflect the program’s net financial flows for all past years, including 2018, up

to the start of the projection period.

New demographic data and changes in demographic assumptions combine to

increase the long-range OASDI actuarial balance by 0.06 percent of taxable

payroll. Ultimate demographic assumptions are unchanged from those in last

year’s report. However, this year’s report does include two changes to the

near-term demographic assumptions. First, for this year’s report, slightly

lower numbers of new lawful permanent residents (LPRs) are assumed for

calendar years 2018 and 2019, due to recent lower annual refugee ceilings

set by the Administration. These ceilings, 45,000 refugees for fiscal year

2018 and 30,000 refugees for fiscal year 2019, compare to annual ceilings

that ranged from 70,000 to 85,000 refugees for fiscal years 2001 through

2016, and 50,000 refugees for fiscal year 2017. This change in assumed LPR

immigration levels decreases the actuarial balance by a negligible amount

(less than 0.005 percent of taxable payroll). Second, last year’s report

included a surge in the number of other-than-LPR immigrants for years 2016

through 2021 to a level above the assumed ultimate level of 1.35 million.

This surge reflected the assumption that the drop in other-than-LPR immigration levels during the recent economic downturn was, in part, a deferral of

migration that would be partially offset during the latter stages of the economic recovery. However, as the economic recovery has continued to near

completion, recent estimates have not shown a trend toward levels above the

ultimate assumption. Therefore, this year’s report eliminates the temporary

surge above the ultimate other-than-LPR immigration level and instead

incorporates a gradual rise in 2017 and 2018, reaching the ultimate assumed

level in 2019. This change in near-term assumed levels of other-than-LPR

immigration decreases the actuarial balance by 0.01 percent of taxable payroll.

In addition to these assumption changes, three demographic data updates

resulted in significant changes in the long-range OASDI actuarial balance.

First, final fertility (birth) data for 2017 indicate somewhat lower birth rates

than were assumed in last year’s report for 2017. These updated data result in

slightly lower birth rates during the transition period to the ultimate levels,

decreasing the actuarial balance by 0.02 percent of taxable payroll. Second,

incorporating 2016 mortality data for ages under 65 from the National Center
75

Long-Range Estimates

for Health Statistics (NCHS) and 2016 and preliminary 2017 mortality data

for ages 65 and older from Medicare experience resulted 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 0.09 percent of taxable

payroll. Third, updates to LPR immigration data, historical population data,

and other minor data updates combine to change the actuarial balance by a

negligible amount.

New economic data and changes in economic assumptions combine to

decrease the long-range OASDI actuarial balance by 0.04 percent of payroll.

Four ultimate economic assumptions were changed for this year’s report.

First, the ultimate annual rate of change in total-economy labor productivity

was lowered from 1.68 percent to 1.63 percent, reflecting an expected slower

rate of productivity growth in the long term. This change decreases the actuarial balance by 0.09 percent of taxable payroll. Second, the difference

between the ultimate growth rates for the CPI-W and the GDP implicit price

deflator (the “price differential”), was decreased from 0.40 percentage point

to 0.35 percentage point. Recent data indicate that the part of the price differential that is due to the difference in the composition of the two indices is

about 0.05 percentage point, slightly less than the 0.10 percentage point

effect assumed for the 2018 report. This assumed change in the compositional component of the price differential increases the long-range actuarial

balance by 0.09 percent of taxable payroll. Third, the average real-wage differential over the last 65 years of the projection period is 1.21 percentage

points per year in this year’s report, increased slightly from the 1.20 value in

last year’s report. This higher long-term real-wage differential assumption is

due to slower assumed growth in employer-sponsored group health insurance

premiums, based on updated projections by the Centers for Medicare and

Medicaid Services (CMS). Because these premiums are not subject to the

payroll tax, slower growth in these premiums means that a larger share of

employee compensation will be in the form of wages that are subject to the

payroll tax. This change to the real-wage differential assumption increases

the long-range actuarial balance by 0.03 percent of taxable payroll. Fourth,

the ultimate real interest rate was lowered by 0.2 percentage point, from 2.7

percent for last year’s report to 2.5 percent for this year’s report. Real interest

rates have been low since 2000, and particularly low since the start of the

most recent recession. 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 0.08 percent of payroll. Other changes to data and

near-term economic assumptions, including the July 2018 revisions in histor-
Actuarial Estimates

76

ical GDP estimated by the Bureau of Economic Analysis (BEA) of the

Department of Commerce, combine for a net increase in the actuarial balance

of 0.01 percent of taxable payroll. 

New disability data and changes in disability assumptions combine to

increase the OASDI actuarial balance by 0.07 percent of payroll. Disabledworker applications have continued to drop substantially since 2010 and

have now reached levels well below those recorded at the peak of the last

economic cycle, in 2007-08. As a result, disability incidence rates have continued to fall well below expectations. Based on this experience, the Trustees

reduced the ultimate disability incidence rate for this report from 5.4 to

5.2 per thousand exposed, returning to the ultimate rate that was used in the

2008 through 2011 reports. 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 0.03 percent of taxable payroll. Recent data

have shown significantly lower levels of disability applications and awards

than expected in last year’s report, and much lower levels than had been

assumed in prior recent reports. Based on this experience, estimated disability incidence rates are assumed to increase somewhat more gradually toward

the ultimate assumed level for this report through the short-range period.

These new disability data and changes in assumptions are almost entirely

responsible for the change in the DI Trust Fund reserve depletion date from

2032 in last year’s report to 2052 in this year’s report. The short-range

effects are noted in section IV.A.4.

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 to

increase the long-range OASDI actuarial balance by 0.01 percent of taxable

payroll. Descriptions of six significant methodological changes and programmatic data updates follow. 

First, the fertility model was improved to better incorporate detailed provisional birth rate data available from NCHS. This methodological improvement decreases the actuarial balance by 0.02 percent of taxable payroll.

Second, CMS is now providing Medicare mortality data using a modernized

and improved data system. This system allowed for more complete and better specified data, including data from Puerto Rico and the Virgin Islands.

This year’s report also reflects a minor method change, incorporating data

for all Medicare enrollees at ages 65 through 69, rather than just those

receiving Social Security benefits. The combined effect of the more comprehensive data and the related method changes is an increase in the actuarial

balance of 0.01 percent of taxable payroll.
77

Long-Range Estimates

The third significant change is an improvement to the way the labor force

participation model incorporates projected changes in disability prevalence.

In prior years’ reports, the labor force model incorporated disability prevalence projections from the immediate prior report (for example, the labor

force model for the 2018 Trustees Report incorporated disability prevalence

projections from the 2017 Trustees Report). However, the large magnitude of

changes in the assumed near-term and long-term disability incidence rates

for this year’s report has a direct and substantial impact on projected disability prevalence rates. In order to consistently reflect the large change in disability prevalence for this report, the labor force model has been modified to

incorporate the current year’s disability prevalence projections. This modification increases the actuarial balance by 0.02 percent of payroll. 

The fourth significant change is in the long-range model for projecting average benefit levels of retired-worker and disabled-worker beneficiaries newly

entitled for benefits. This model uses a large sample of 10 percent of all

newly entitled retired-worker beneficiaries in a recent year. For this year’s

report, the model’s projection of earnings for workers becoming newly entitled in future years was improved to better reflect the “dispersion” in taxable

earnings levels observed from 1970 to 2010. Over this historical period,

increases in taxable earnings were higher for workers with taxable earnings

above the median than for workers with taxable earnings below the median.

This improvement in the average benefits model increases the actuarial balance by 0.04 percent of payroll.

Fifth, this year’s report includes an improvement in the method for projecting future benefits, to better reflect benefit levels for those who are awarded

benefits more than two years after their date of initial benefit entitlement.

This change mainly affects average DI benefit levels because the appeals

process extends the date of disabled worker benefit award more than two

years beyond the date of initial benefit entitlement in a significant number of

cases. The effect on OASI benefit levels is much smaller. In general, individuals who are awarded benefits more than two years after the initial date of

entitlement have lower benefit levels than those who are awarded sooner.

This change results in an increase in the actuarial balance of 0.03 percent of

taxable payroll.

The sixth significant change is updating of two sets of benefit adjustment

factors based on new programmatic data: the post-entitlement adjustment

factors and the Windfall Elimination Provision (WEP) reduction factors.

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. WEP reduction factors are used to adjust benefits for individuals

who receive a pension based on specified categories of non-covered employ-
Actuarial Estimates

78

ment. These updates reflecting programmatic data combine to decrease the

actuarial balance by 0.02 percent of payroll.

In addition to these six 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

OASDI actuarial balance by 0.05 percent of taxable payroll.

Figure IV.B4 compares the annual cash-flow 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 higher (less negative) throughout the 75-year projection period, principally due to higher mortality rates

and lower disability incidence rates. For the full 75-year projection period,

the annual balances average 0.18 percentage point higher. For 2092, the projected annual deficit is 4.07 percent of taxable payroll in this report, compared to 4.32 percent in last year's report.

 Figure IV.B4.—OASDI Annual Balances: 2018 and 2019 Trustees Reports

[As a percentage of taxable payroll, under Intermediate Assumptions]

-6%

-4%

-2%

0%

2%

2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

2018 Report

2019 Report
79

Demographic Assumptions and Methods

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

The future income and cost of the OASDI program will depend on many

demographic, economic, and program-specific factors. Trust fund income

will depend on how these factors affect the size and composition of the

working population as well as the level and distribution of earnings. 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 2019.

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).
Assumptions and Methods

80

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/2019/.

 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.
81

Demographic Assumptions and Methods

remained through 2009, but dropped below 1.90 for 2011 through 2017 and

is estimated to be 1.74 in 2018. 

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 2.20, 2.00, and 1.80 children per woman for the lowcost, intermediate, and high-cost assumptions, respectively. These ultimate

rates are unchanged from last year’s report.

For the intermediate assumptions, the projected total fertility rate gradually

increases from 2018 through the year the ultimate value is reached (2027)

with somewhat more rapid increases in the middle of the 2018-2027 period.

The assumed low-cost and high-cost total fertility rates trend away from the

intermediate path and reach the ultimate values in 2027 and 2024, 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 2016 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 2015 and preliminary data

for 2016 and 2017 were used.2 Death rates by cause of death were produced

for all ages for years 1979-2016 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.
Assumptions and Methods

82

The total age-sex-adjusted death rate1 declined at an average annual rate of

1.03 percent between 1900 and 2016. Between 1979 and 2016, 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 0.87 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 2016, the agesex-adjusted death rate declined at an average rate of 0.78 percent per year

for ages 65 and over, and 3.00 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 2006 to 2016 for NCHS data, and 2007 to 2017 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

2043 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.
83

Demographic Assumptions and Methods

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 0.41 percent, 0.77 percent, and 1.16 percent between 2018

and 2093 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 2018 and 2093 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 0.80 percent,

1.58 percent, and 2.57 percent between 2018 and 2093 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. 
Assumptions and Methods

84

.

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 7,795.4

1965 . . . . . . . . . 2.88 1,428.8 495.2 7,653.3

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 . . . . . . . . . 1.89 820.7 249.1 4,631.3

2012 . . . . . . . . . 1.87 811.7 248.6 4,565.6

2013 . . . . . . . . . 1.85 812.2 249.4 4,564.6

2014 . . . . . . . . . 1.86 804.9 251.4 4,495.1

2015 . . . . . . . . . 1.84 815.0 254.9 4,549.7

2016 . . . . . . . . . 1.82 d808.2 260.5 d4,460.0

2017 . . . . . . . . . 1.76 d 802.7 d250.6 d4,483.6

2018 . . . . . . . . . e1.74 e791.8 e249.3 e4,408.3

Intermediate: 

2020 . . . . . . . . . 1.76 779.9 245.9 4,339.7

2025 . . . . . . . . . 1.98 748.2 234.8 4,170.8

2030 . . . . . . . . . 2.00 716.5 222.6 4,009.3

2035 . . . . . . . . . 2.00 686.2 210.6 3,857.2

2040 . . . . . . . . . 2.00 657.7 199.3 3,714.4

2045 . . . . . . . . . 2.00 631.0 188.6 3,580.6

2050 . . . . . . . . . 2.00 606.0 178.7 3,455.2

2055 . . . . . . . . . 2.00 582.6 169.4 3,337.4

2060 . . . . . . . . . 2.00 560.6 160.7 3,226.7

2065 . . . . . . . . . 2.00 540.0 152.6 3,122.5

2070 . . . . . . . . . 2.00 520.6 145.0 3,024.3

2075 . . . . . . . . . 2.00 502.3 137.9 2,931.6

2080 . . . . . . . . . 2.00 485.1 131.3 2,844.0

2085 . . . . . . . . . 2.00 468.8 125.0 2,761.1

2090 . . . . . . . . . 2.00 453.5 119.1 2,682.6

2095 . . . . . . . . . 2.00 438.9 113.6 2,608.1

Low-cost: 

2020 . . . . . . . . . 1.82 792.3 250.1 4,407.3

2025 . . . . . . . . . 2.14 778.5 245.6 4,331.3

2030 . . . . . . . . . 2.20 762.3 239.5 4,248.2

2035 . . . . . . . . . 2.20 745.8 233.0 4,164.8

2040 . . . . . . . . . 2.20 729.5 226.5 4,083.1

2045 . . . . . . . . . 2.20 713.7 220.2 4,003.7

2050 . . . . . . . . . 2.20 698.3 214.1 3,926.8

2055 . . . . . . . . . 2.20 683.5 208.2 3,852.6

2060 . . . . . . . . . 2.20 669.2 202.5 3,780.7

2065 . . . . . . . . . 2.20 655.3 197.0 3,711.2

2070 . . . . . . . . . 2.20 642.0 191.7 3,643.9

2075 . . . . . . . . . 2.20 629.0 186.6 3,578.8

2080 . . . . . . . . . 2.20 616.5 181.6 3,515.7

2085 . . . . . . . . . 2.20 604.3 176.8 3,454.5

2090 . . . . . . . . . 2.20 592.6 172.2 3,395.3

2095 . . . . . . . . . 2.20 581.2 167.8 3,337.8
85

Demographic Assumptions and Methods

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:

 • 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. 

High-cost:

2020 . . . . . . . . . 1.70 766.4 241.4 4,266.7

2025 . . . . . . . . . 1.80 714.2 222.5 3,992.9

2030 . . . . . . . . . 1.80 665.3 203.4 3,744.9

2035 . . . . . . . . . 1.80 620.9 185.8 3,521.8

2040 . . . . . . . . . 1.80 580.9 169.8 3,321.2

2045 . . . . . . . . . 1.80 544.8 155.6 3,140.3

2050 . . . . . . . . . 1.80 512.4 142.8 2,976.6

2055 . . . . . . . . . 1.80 483.0 131.3 2,828.0

2060 . . . . . . . . . 1.80 456.4 121.0 2,692.6

2065 . . . . . . . . . 1.80 432.2 111.8 2,568.7

2070 . . . . . . . . . 1.80 410.1 103.4 2,455.0

2075 . . . . . . . . . 1.80 389.8 95.8 2,350.3

2080 . . . . . . . . . 1.80 371.2 88.9 2,253.5

2085 . . . . . . . . . 1.80 354.1 82.6 2,163.8

2090 . . . . . . . . . 1.80 338.2 76.9 2,080.4

2095 . . . . . . . . . 1.80 323.5 71.7 2,002.7

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.

e Estimated, intermediate alternative.

 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.

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
Assumptions and Methods

86

 • 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

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 most recent recession. Although net other-thanLPR immigration was greatly reduced during the economic downturn, it has

begun to rise since then. Under the intermediate assumptions, annual otherthan-LPR immigration is expected to continue increasing, reflecting a con-
87

Demographic Assumptions and Methods

tinued recovery from levels experienced during the recession. In last year’s

report, other-than-LPR immigration under the intermediate assumptions was

projected to increase to a peak level in 2018 and then decrease to the ultimate

level in 2022, based on the expectation that the continuing economic recovery would result in other-than-LPR immigration levels that would make up

for the lower levels experienced during the recession. However, recent otherthan-LPR immigration levels have not followed this pattern. Under the intermediate assumptions for this year’s report, other-than-LPR immigration is

assumed to attain the ultimate level in 2019. The ultimate levels of otherthan-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.

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 422,000

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 496,000 and 346,000, 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.

Under the assumptions described above, the projected size of the other-thanLPR immigrant population grows substantially. 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.
Assumptions and Methods

88

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 other-than-LPR immigration and

emigration 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 otherthan-LPR immigration over the 75-year projection period is about 478,000

persons. For the low-cost and high-cost assumptions, projected average

annual net other-than-LPR immigration is about 601,000 persons and

354,000 persons, respectively.

The projected average annual level of total net immigration (LPR and otherthan-LPR, combined) is about 1,265,000 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 1,601,000 persons and 949,000 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. 
89

Demographic Assumptions and Methods

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 1,373

2005 . . . . 561 290 597 869 1,827 84 597 1,146 2,015

2010 . . . . 622 262 426 786 681 206 426 50 835

2011 . . . . 647 264 408 791 590 251 408 -69 722

2012 . . . . 621 255 401 766 725 443 401 -118 648

2013 . . . . 589 249 409 748 832 341 409 82 830

2014 . . . . 627 256 398 769 1,327 156 398 772 1,541

2015 . . . . 689 271 395 813 1,111 259 395 457 1,270

2016 . . . . 763 292 407 877 1,192 695 407 90 968

2017 . . . . e724 e282 e403 e845 f

1,250 e237 e403 f610 f1,456

2018 . . . . f620 f268 f450 f803 f1,300 f249 f450 f601 f1,404

Intermediate: 

2020 . . . . 600 263 450 788 1,350 275 450 625 1,413

2025 . . . . 600 263 450 788 1,350 329 450 571 1,359

2030 . . . . 600 263 450 788 1,350 358 450 542 1,329

2035 . . . . 600 263 450 788 1,350 384 450 516 1,304

2040 . . . . 600 263 450 788 1,350 407 450 493 1,280

2045 . . . . 600 263 450 788 1,350 424 450 476 1,263

2050 . . . . 600 263 450 788 1,350 436 450 464 1,251

2055 . . . . 600 263 450 788 1,350 445 450 455 1,243

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 1,220

2090 . . . . 600 263 450 788 1,350 469 450 431 1,218

2095 . . . . 600 263 450 788 1,350 470 450 430 1,218
Assumptions and Methods

90

Low-cost: 

2020 . . . . 700 250 550 1,000 1,600 279 550 771 1,771

2025 . . . . 700 250 550 1,000 1,650 353 550 747 1,747

2030 . . . . 700 250 550 1,000 1,650 396 550 704 1,704

2035 . . . . 700 250 550 1,000 1,650 435 550 665 1,665

2040 . . . . 700 250 550 1,000 1,650 470 550 630 1,630

2045 . . . . 700 250 550 1,000 1,650 496 550 604 1,604

2050 . . . . 700 250 550 1,000 1,650 515 550 585 1,585

2055 . . . . 700 250 550 1,000 1,650 530 550 570 1,570

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 1,650 566 550 534 1,534

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 1,050 265 350 435 1,030

2025 . . . . 500 255 350 595 1,050 300 350 400 995

2030 . . . . 500 255 350 595 1,050 316 350 384 979

2035 . . . . 500 255 350 595 1,050 330 350 370 965

2040 . . . . 500 255 350 595 1,050 342 350 358 953

2045 . . . . 500 255 350 595 1,050 350 350 350 945

2050 . . . . 500 255 350 595 1,050 355 350 345 940

2055 . . . . 500 255 350 595 1,050 358 350 342 937

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 1,050 368 350 332 927

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 2016,

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
91

Demographic Assumptions and Methods

4. Total Population Estimates

The starting Social Security area population for December 31, 2016, 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 2017 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).
Assumptions and Methods

92

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 10,900 148,130 0.124 0.681

1950 . . . . . . . . . . . . . . 53,903 92,382 12,769 159,053 .138 .722

1955 . . . . . . . . . . . . . . 63,293 96,207 15,075 174,576 .157 .815

1960 . . . . . . . . . . . . . . 73,074 99,802 17,277 190,153 .173 .905

1965 . . . . . . . . . . . . . . 80,020 104,885 19,071 203,975 .182 .945

1970 . . . . . . . . . . . . . . 81,020 112,991 20,895 214,906 .185 .902

1975 . . . . . . . . . . . . . . 78,629 122,642 23,307 224,578 .190 .831

1980 . . . . . . . . . . . . . . 74,833 134,108 26,306 235,247 .196 .754

1985 . . . . . . . . . . . . . . 72,946 144,579 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 . . . . . . . . . . . . . . 82,003 170,182 35,505 287,689 .209 .690

2005 . . . . . . . . . . . . . . 83,982 181,065 37,172 302,219 .205 .669

2010 . . . . . . . . . . . . . . 85,688 188,334 41,052 315,075 .218 .673

2011 . . . . . . . . . . . . . . 85,337 189,780 42,043 317,160 .222 .671

2012 . . . . . . . . . . . . . . 85,006 190,638 43,449 319,092 .228 .674

2013 . . . . . . . . . . . . . . 84,738 191,364 44,932 321,034 .235 .678

2014 . . . . . . . . . . . . . . 84,660 192,406 46,345 323,412 .241 .681

2015 . . . . . . . . . . . . . . 84,688 193,518 47,786 325,993 .247 .685

2016c . . . . . . . . . . . . . 84,689 194,261 49,270 328,220 .254 .690

2017d . . . . . . . . . . . . . 84,707 194,926 50,818 330,451 .261 .695

2018d . . . . . . . . . . . . . 84,706 195,714 52,401 332,821 .268 .701

Intermediate:

2020 . . . . . . . . . . . . . . 84,651 197,101 55,763 337,514 .283 .712

2025 . . . . . . . . . . . . . . 85,927 199,694 64,590 350,212 .323 .754

2030 . . . . . . . . . . . . . . 88,162 202,907 72,323 363,391 .356 .791

2035 . . . . . . . . . . . . . . 91,799 206,482 77,020 375,301 .373 .818

2040 . . . . . . . . . . . . . . 95,883 210,276 79,566 385,725 .378 .834

2045 . . . . . . . . . . . . . . 98,211 215,250 81,363 394,824 .378 .834

2050 . . . . . . . . . . . . . . 98,955 220,681 83,752 403,389 .380 .828

2055 . . . . . . . . . . . . . . 100,182 225,380 86,874 412,436 .385 .830

2060 . . . . . . . . . . . . . . 102,340 229,372 90,793 422,506 .396 .842

2065 . . . . . . . . . . . . . . 105,241 233,562 94,459 433,262 .404 .855

2070 . . . . . . . . . . . . . . 108,172 237,474 98,368 444,015 .414 .870

2075 . . . . . . . . . . . . . . 110,527 241,357 102,522 454,407 .425 .883

2080 . . . . . . . . . . . . . . 112,228 247,305 104,975 464,508 .424 .878

2085 . . . . . . . . . . . . . . 113,842 254,297 106,550 474,688 .419 .867

2090 . . . . . . . . . . . . . . 115,884 259,948 109,385 485,218 .421 .867

2095 . . . . . . . . . . . . . . 118,353 264,065 113,636 496,055 .430 .879
93

Demographic Assumptions and Methods

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 . . . . . . . . . . . . . . 85,055 197,478 55,731 338,265 0.282 0.713

2025 . . . . . . . . . . . . . . 88,253 201,366 64,351 353,970 .320 .758

2030 . . . . . . . . . . . . . . 93,435 205,903 71,684 371,021 .348 .802

2035 . . . . . . . . . . . . . . 100,188 210,789 75,830 386,808 .360 .835

2040 . . . . . . . . . . . . . . 107,246 216,061 77,748 401,055 .360 .856

2045 . . . . . . . . . . . . . . 111,615 223,569 78,935 414,118 .353 .852

2050 . . . . . . . . . . . . . . 113,803 232,562 80,809 427,175 .347 .837

2055 . . . . . . . . . . . . . . 117,073 240,930 83,549 441,553 .347 .833

2060 . . . . . . . . . . . . . . 122,042 248,563 87,195 457,799 .351 .842

2065 . . . . . . . . . . . . . . 128,137 256,469 90,633 475,239 .353 .853

2070 . . . . . . . . . . . . . . 134,090 264,540 94,283 492,913 .356 .863

2075 . . . . . . . . . . . . . . 139,021 273,367 98,111 510,499 .359 .867

2080 . . . . . . . . . . . . . . 143,022 285,036 100,253 528,311 .352 .853

2085 . . . . . . . . . . . . . . 147,129 298,069 101,715 546,913 .341 .835

2090 . . . . . . . . . . . . . . 152,139 309,065 105,384 566,589 .341 .833

2095 . . . . . . . . . . . . . . 157,905 317,916 111,324 587,146 .350 .847

High-cost:

2020 . . . . . . . . . . . . . . 84,147 196,542 55,796 336,485 .284 .712

2025 . . . . . . . . . . . . . . 83,515 197,900 64,866 346,280 .328 .750

2030 . . . . . . . . . . . . . . 82,851 199,878 73,074 355,803 .366 .780

2035 . . . . . . . . . . . . . . 83,504 202,238 78,431 364,173 .388 .801

2040 . . . . . . . . . . . . . . 84,773 204,645 81,728 371,147 .399 .814

2045 . . . . . . . . . . . . . . 85,306 207,138 84,256 376,699 .407 .819

2050 . . . . . . . . . . . . . . 84,923 209,089 87,258 381,269 .417 .823

2055 . . . . . . . . . . . . . . 84,499 210,271 90,819 385,589 .432 .834

2060 . . . . . . . . . . . . . . 84,379 210,783 95,022 390,184 .451 .851

2065 . . . . . . . . . . . . . . 84,701 211,446 98,881 395,028 .468 .868

2070 . . . . . . . . . . . . . . 85,230 211,475 102,985 399,690 .487 .890

2075 . . . . . . . . . . . . . . 85,610 210,822 107,382 403,814 .509 .915

2080 . . . . . . . . . . . . . . 85,655 211,583 110,052 407,290 .520 .925

2085 . . . . . . . . . . . . . . 85,547 213,173 111,607 410,327 .524 .925

2090 . . . . . . . . . . . . . . 85,551 214,279 113,344 413,175 .529 .928

2095 . . . . . . . . . . . . . . 85,757 214,601 115,551 415,910 .538 .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
Assumptions and Methods

94

 • 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. 
95

Demographic Assumptions and Methods

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 . . . . 67.2 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 81.0 17.8 20.3

2016b . . .

b Estimated.

76.0 81.0 17.9 20.5

2017b . . . 76.4 81.1 17.9 20.5

2018c . . .

c Estimated, intermediate alternative.

76.5 81.3 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 . . . . 76.7 81.4 18.2 20.7 76.5 81.3 18.1 20.6 77.0 81.6 18.4 20.8

2025 . . . . 77.3 81.9 18.6 21.0 76.8 81.5 18.2 20.7 77.9 82.4 18.9 21.3

2030 . . . . 77.9 82.4 18.9 21.3 77.1 81.7 18.4 20.9 78.9 83.2 19.5 21.8

2035 . . . . 78.5 82.8 19.2 21.6 77.4 81.9 18.6 21.0 79.8 83.9 20.0 22.3

2040 . . . . 79.0 83.3 19.6 21.9 77.7 82.2 18.7 21.2 80.6 84.6 20.5 22.7

2045 . . . . 79.6 83.7 19.9 22.2 78.0 82.4 18.9 21.3 81.4 85.2 21.0 23.2

2050 . . . . 80.1 84.2 20.2 22.4 78.2 82.7 19.1 21.5 82.2 85.9 21.4 23.6

2055 . . . . 80.6 84.6 20.5 22.7 78.5 82.9 19.2 21.6 82.9 86.4 21.9 24.0

2060 . . . . 81.1 85.0 20.7 23.0 78.8 83.1 19.4 21.8 83.5 87.0 22.3 24.3

2065 . . . . 81.5 85.4 21.0 23.2 79.1 83.4 19.6 21.9 84.1 87.5 22.7 24.7

2070 . . . . 82.0 85.7 21.3 23.5 79.3 83.6 19.7 22.1 84.7 88.0 23.0 25.0

2075 . . . . 82.4 86.1 21.5 23.7 79.6 83.8 19.9 22.2 85.3 88.5 23.4 25.4

2080 . . . . 82.8 86.4 21.8 23.9 79.9 84.0 20.0 22.3 85.8 88.9 23.7 25.7

2085 . . . . 83.2 86.7 22.0 24.1 80.1 84.2 20.2 22.5 86.3 89.3 24.1 26.0

2090 . . . . 83.6 87.1 22.3 24.4 80.4 84.4 20.3 22.6 86.8 89.7 24.4 26.3

2095 . . . . 84.0 87.4 22.5 24.6 80.6 84.6 20.5 22.7 87.3 90.1 24.7 26.6
Assumptions and Methods

96

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 2016. For birth years after 2016, 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 2015 depends on

actual death rates or on a combination of actual, estimated, and projected death rates. After 2015, 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 . . . . 72.1 78.1 13.0 15.4 71.9 77.9 13.0 15.4 72.3 78.4 13.0 15.4

1950 . . . . 73.2 79.4 13.1 16.2 72.9 79.1 13.1 16.2 73.6 79.9 13.1 16.2

1955 . . . . 73.8 80.0 13.1 16.7 73.3 79.5 13.1 16.7 74.3 80.6 13.1 16.7

1960 . . . . 74.4 80.4 13.2 17.4 73.8 79.7 13.2 17.4 75.2 81.1 13.2 17.4

1965 . . . . 75.4 80.9 13.5 18.0 74.6 80.1 13.5 18.0 76.4 81.9 13.5 18.0

1970 . . . . 76.6 81.8 13.8 18.5 75.6 80.8 13.8 18.5 77.8 83.0 13.8 18.5

1975 . . . . 77.5 82.5 14.2 18.7 76.2 81.3 14.2 18.7 79.0 83.9 14.2 18.7

1980 . . . . 78.3 83.1 14.7 18.8 76.9 81.8 14.7 18.8 80.0 84.7 14.7 18.8

1985 . . . . 79.0 83.7 15.4 19.1 77.3 82.2 15.4 19.1 80.9 85.5 15.4 19.1

1990 . . . . 79.6 84.2 16.0 19.4 77.7 82.5 16.0 19.4 81.8 86.2 16.0 19.4

1995 . . . . 80.3 84.7 16.7 19.7 78.3 82.9 16.7 19.7 82.7 86.9 16.7 19.7

2000 . . . . 80.9 85.2 17.4 20.1 78.6 83.2 17.4 20.0 83.5 87.5 17.5 20.2

2005 . . . . 81.4 85.6 17.9 20.5 78.9 83.4 17.8 20.4 84.1 88.0 18.1 20.7

2010 . . . . 81.9 86.0 18.4 20.9 79.2 83.7 18.1 20.6 84.8 88.5 18.7 21.2

2011 . . . . 82.0 86.0 18.4 21.0 79.3 83.7 18.2 20.7 85.0 88.6 18.8 21.3

2012 . . . . 82.1 86.1 18.5 21.0 79.3 83.7 18.2 20.7 85.1 88.7 18.9 21.4

2013 . . . . 82.2 86.2 18.6 21.1 79.4 83.8 18.2 20.8 85.2 88.8 19.0 21.5

2014 . . . . 82.3 86.3 18.6 21.2 79.5 83.8 18.3 20.8 85.3 88.9 19.1 21.6

2015 . . . . 82.3 86.3 18.7 21.2 79.5 83.9 18.3 20.8 85.4 89.0 19.2 21.7

2016 . . . . 82.4 86.4 18.8 21.3 79.6 83.9 18.3 20.9 85.6 89.1 19.3 21.8

2017 . . . . 82.5 86.5 18.8 21.4 79.6 84.0 18.4 20.9 85.7 89.2 19.4 22.0

2018 . . . . 82.6 86.6 18.9 21.4 79.7 84.0 18.4 20.9 85.8 89.3 19.5 22.1

2020 . . . . 82.8 86.7 19.1 21.6 79.8 84.1 18.5 21.0 86.1 89.5 19.8 22.3

2025 . . . . 83.3 87.1 19.4 21.9 80.1 84.3 18.6 21.2 86.7 90.0 20.3 22.8

2030 . . . . 83.7 87.4 19.7 22.2 80.3 84.5 18.8 21.3 87.2 90.5 20.8 23.2

2035 . . . . 84.1 87.8 20.0 22.5 80.6 84.8 19.0 21.5 87.8 90.9 21.3 23.7

2040 . . . . 84.5 88.1 20.4 22.7 80.8 85.0 19.2 21.6 88.3 91.3 21.8 24.1

2045 . . . . 84.9 88.4 20.7 23.0 81.1 85.2 19.3 21.8 88.8 91.7 22.3 24.5

2050 . . . . 85.2 88.7 21.0 23.3 81.3 85.4 19.5 21.9 89.2 92.1 22.7 24.8

2055 . . . . 85.6 89.0 21.2 23.5 81.5 85.6 19.6 22.0 89.7 92.5 23.1 25.2

2060 . . . . 85.9 89.3 21.5 23.8 81.8 85.7 19.8 22.2 90.1 92.8 23.5 25.6

2065 . . . . 86.3 89.5 21.8 24.0 82.0 85.9 20.0 22.3 90.5 93.2 23.8 25.9

2070 . . . . 86.6 89.8 22.0 24.2 82.2 86.1 20.1 22.5 90.9 93.5 24.2 26.2

2075 . . . . 86.9 90.1 22.3 24.5 82.4 86.3 20.3 22.6 91.3 93.8 24.5 26.5

2080 . . . . 87.2 90.3 22.5 24.7 82.7 86.5 20.4 22.7 91.7 94.1 24.9 26.8

2085 . . . . 87.5 90.6 22.8 24.9 82.9 86.6 20.6 22.9 92.0 94.4 25.2 27.1

2090 . . . . 87.8 90.8 23.0 25.1 83.1 86.8 20.7 23.0 92.4 94.7 25.5 27.4

2095 . . . . 88.1 91.0 23.2 25.3 83.3 87.0 20.8 23.1 92.7 95.0 25.8 27.7
97

Economic Assumptions and Methods

B. ECONOMIC ASSUMPTIONS AND METHODS

The three alternative sets of economic assumptions provide a reasonable

range for estimating the financial status of the trust funds. The intermediate

assumptions reflect the Trustees’ consensus expectation of sustained 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 2018 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. 

The economy is projected to return to the assumed sustainable trend level of

output within the first 10 years of the projection period under all three alternatives and to remain on that trend thereafter. However, the speed of the

return varies by alternative. The economy is projected to fully return to its

sustainable trend level of output in 2021 under the intermediate assumptions,

four years earlier than in last year’s report, mainly because economic growth

in 2018 exceeded projections from last year’s report. Under the low-cost

assumptions, the economy is also projected to return to its sustainable trend

level of output by 2021, one year earlier 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 2.5 percent below the sustainable trend level in the second half of 2020, and the subsequent recovery

is assumed to return GDP to the sustainable trend level in 2028. 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 (2019 through 2028).

 1 See www.nber.org/cycles/cyclesmain.html.
Assumptions and Methods

98

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. 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 2.65, 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

1.73 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 0.05 percentage point

lower than in the 2018 report. 

The average annual rate of change in total-economy productivity from 2007

(the end of the last complete economic cycle) to 2018 is estimated to be

1.01 percent. For the intermediate assumptions, the annual change in productivity is 1.82 percent for 2019, 2.17 percent for 2020, and declines to its ultimate value of 1.63 percent by 2023. For the low-cost assumptions, the

annual change in productivity is 2.45 percent for 2019, then increases to

2.96 percent for 2020, and gradually approaches its ultimate value of

1.93 percent for 2023 and thereafter. For the high-cost assumptions, the

annual change in productivity is 1.24 percent for 2019, 1.17 percent for 2020

due to the assumed recession, rebounds to 1.85 percent for 2021, and then

averages 1.34 for 2022 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

 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 non-farm business productivity

of 2.36, 2.00, and 1.63 percent. Compared to total-economy productivity, private non-farm business productivity is a more widely known concept that excludes the farm, government, non-profit institution, and private

household sectors.
99

Economic Assumptions and Methods

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.

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 2018 is

1.74 percent for the CPI and 1.62 percent for the GDP deflator.

The assumed ultimate annual increases in the CPI are 3.20, 2.60, and

2.00 percent for the low-cost, intermediate, and high-cost assumptions,

respectively.1 These assumptions are unchanged from the 2018 report. For a

given rate of growth in average real earnings, a higher price inflation rate

results in faster nominal earnings and revenue growth immediately, while the

resulting added growth in benefit levels occurs with a delay, causing an overall improvement in the actuarial balance. Similarly, a lower price inflation

rate causes an overall decline in the actuarial balance. 

The Federal Reserve Board’s monetary policy changed in the 1980s toward

more vigilance in preventing high inflation. Consistent with the Board’s continued emphasis on containing inflation, as indicated by their current target

for the Personal Consumption Expenditures (PCE) price index,2 the Trustees

lowered the assumed ultimate annual rate of increase in the CPI for the intermediate assumptions from 4.00 percent for the 1996 report to 2.80 percent

for the 2004 through 2013 reports, to 2.70 percent for the 2014 and 2015

reports, and to 2.60 percent for the 2016 through 2019 reports.

For the intermediate assumptions, the annual change in the CPI is

1.83 percent for 2019, 2.63 percent for 2020, and reaches the ultimate

growth rate of 2.60 percent for 2021 and later. For the low-cost assumptions,

 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 1978-2018 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. 2 The Trustees’ assumed ultimate annual growth rate for the GDP deflator of 2.25 percent is based on an

assumed 2.30 percent annual growth rate for the PCE price index. The Trustees’ assumption takes into

account the Federal Open Market Committee target, as well as the potential for inflationary shocks during

the 2028-2093 projection period.
Assumptions and Methods

100

the annual change in the CPI is 2.40 percent for 2019, increases to

3.23 percent for 2020, and reaches its ultimate annual growth rate of

3.20 percent for 2021 and later. For the high-cost assumptions, the annual

rate of change in the CPI is 1.27 percent for 2019, increases to 2.02 percent

for 2020, and reaches its ultimate annual change of 2.00 percent for 2021 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 economic cycle) to 2018, the average annual price differential is estimated to be

0.14 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 2.95 (3.20 less 0.25), 2.25

(2.60 less 0.35), and 1.55 (2.00 less 0.45) percent for the low-cost, intermediate, and high-cost alternatives, respectively. The ultimate price differentials

for the three alternatives are 0.05 percentage point lower than in the 2018

report.

The price differential was 0.21 percentage point in 2017, is estimated to be

0.36 in 2018, and is assumed to be -0.17 for 2019. The negative price differential assumed for 2019 primarily reflects a recent 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 2020 and 0.35 for 2021 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
101

Economic Assumptions and Methods

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.

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 -0.87, -0.54,

-0.10, 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 2018, the average annual change in average

hours worked is estimated to be 0.00 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 2018 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 for wage workers. Assuming that the level of total employee compensation is not affected by the amount of employer-sponsored group health

insurance, any increase or decrease in the cost of employer-sponsored group

health insurance 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 employer-sponsored group

health insurance premiums will increase more slowly than in the past due to

provisions of the Affordable Care Act of 2010, as described in the 2010

report. Data from BEA indicate that the other significant component of nonwage 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.
Assumptions and Methods

102

The average annual rates of change in the ratio of wages to employee compensation from 2028 to 2093 are about 0.04, -0.06, and -0.16 percent for the

low-cost, intermediate, and high-cost assumptions, respectively. These

assumed rates are about 0.02 percentage point higher (less negative) than

those assumed for the 2018 report. Under the intermediate assumptions, the

ratio of wages to employee compensation declines from 0.814 for 2018 to

0.780 for 2093.

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

intermediate assumptions, averages 0.05 percent from 2028 to 2093) 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 0.611 in 2017. This ratio is assumed to rise as the economy

recovers, reaching a level of 0.632 for 2028. For years after 2028, 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 2028 level for each set of assumptions. The ultimate level of this

ratio is 0.001 higher than in last year’s report due to an upward revision of

proprietors’ income in the NIPA.2

The projected average annual growth rate in average nominal U.S. earnings

from 2028 to 2093 is about 3.81 percent for the intermediate assumptions.

This growth rate reflects the average annual growth rate of approximately

-0.05 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 2.25 percent for the GDP

deflator. Similarly, the projected average annual growth rates in average

nominal U.S. earnings are 5.03 percent for the low-cost assumptions and

2.61 percent for the high-cost assumptions.

 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. 2 In July 2018, BEA released a comprehensive revision to NIPA. Under the revision, BEA increased the

estimate of the amount of proprietors’ income that goes unreported for tax purposes. Thus, the estimated

ratio of reported income to GDP is unchanged from last year’s report.
103

Economic Assumptions and Methods

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 projected average annual growth rates in the average covered

wage from 2028 to 2093 are 5.04, 3.81, and 2.60 percent for the low-cost,

intermediate, and high-cost assumptions, respectively. The estimated annual

rate of change in the average covered wage is 2.98 percent for 2018. For the

intermediate assumptions, as the economy continues to recover, the annual

rate of change in the average covered wage averages 4.23 percent from 2018

to 2028. Thereafter, the average annual rate of change in the average covered

wage is 3.81 percent.

4. Assumed Real-Wage Differential

The real increase in the average covered wage has traditionally been

expressed in the form of a real-wage differential—the annual percentage

change in the average covered wage minus the annual percentage change in

the CPI. For the period from 1969 to 2007, covering the last five complete

economic cycles, the real-wage differential averaged 0.80 percentage point,

the result of averages of 1.02, 0.04, 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 2029-93, the projected average annual real-wage differentials

for OASDI covered employment are 1.84, 1.21, and 0.60 percentage points

for the low-cost, intermediate, and high-cost assumptions, respectively. The

rounded average annual real-wage differentials are 0.02, 0.01, and

0.02 percentage point higher than in the 2018 report. 

The estimated real-wage differential averaged 0.56 percentage point for 2008

through 2018 (the years since the peak of the last complete economic cycle).

The real-wage differential increased from 0.05 percentage point in 2016 to

1.19 percentage points in 2017, an increase that reflects faster growth in

GDP and productivity. For the intermediate assumptions, the real-wage differential is projected to rise from 0.40 in 2018 to 2.19 in 2019 before reaching its long-run average of 1.21 percentage points for 2029 through 2093.

For the low-cost assumptions, the real-wage differential is 2.96 percentage

points for 2019, increases to 3.29 percentage points in 2020, and reaches its

long-run average of 1.84 percentage points for 2029 through 2093. For the

high-cost assumptions, the real-wage differential is 1.42 percentage points

for 2019, drops to -1.02 percentage points in 2020 due to the assumed recession, and rises to 1.59 percentage points in 2022 before gradually declining

to its long-run average of 0.60 percentage point for 2029 through 2093.
Assumptions and Methods

104

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 . . . 3.28 -0.18 0.15 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 . . . 2.08 -.49 -.88 6.61 6.58 6.76 -.22

1975 to 1980 . . . .95 -.33 -.17 7.21 8.89 8.91 -.04

1980 to 1985 . . . 1.74 -.36 .01 5.24 6.52 5.22 1.29

1985 to 1990 . . . 1.34 -.20 -.06 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 . . . 1.76 -.02 -.47 1.92 2.51 2.30 .22

2010 to 2015 . . . .49 .15 .37 1.74 2.93 1.61 1.32

Economic cycles:c

1969 to 1973 . . . 2.65 -.34 -.87 5.04 5.93 4.91 1.02

1973 to 1979 . . . 1.07 -.43 -.54 7.54 8.58 8.54 .04

1979 to 1990 . . . 1.41 -.29 -.10 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 2018 . . . 1.01 .05 d 1.62 2.30 1.74 .56

Single years:

2008 . . . . . . . . . . 1.07 -.22 -.75 1.91 2.42 4.09 -1.66

2009 . . . . . . . . . . 3.12 -.57 -1.86 .78 -1.56 -.67 -.89

2010 . . . . . . . . . . 2.59 .21 .55 1.17 2.59 2.07 .53

2011 . . . . . . . . . . .04 .32 .94 2.08 3.14 3.56 -.41

2012 . . . . . . . . . . .48 .47 -.04 1.92 3.36 2.10 1.26

2013 . . . . . . . . . . .60 -.33 .24 1.77 1.20 1.37 -.17

2014 . . . . . . . . . . .56 .26 .27 1.88 3.57 1.50 2.07

2015 . . . . . . . . . . .76 .03 .43 1.03 3.42 -.41 3.83

2016 . . . . . . . . . . .25 .10 -.39 1.09 1.03 .98 .05

2017 . . . . . . . . . . .86 .10 .11 1.92 3.32 2.13 1.19

2018e . . . . . . . . . .82 .17 .55 2.22 2.98 2.58 .40

Intermediate: 

2019 . . . . . . . . . . 1.82 .01 -.04 2.00 4.02 1.83 2.19

2020 . . . . . . . . . . 2.17 -.01 -.35 2.33 4.71 2.63 2.08

2021 . . . . . . . . . . 1.88 .02 -.21 2.25 4.45 2.60 1.85

2022 . . . . . . . . . . 1.66 .02 -.08 2.25 4.21 2.60 1.61

2023 . . . . . . . . . . 1.63 -.06 -.05 2.25 4.09 2.60 1.49

2024 . . . . . . . . . . 1.63 -.06 -.05 2.25 4.15 2.60 1.55

2025 . . . . . . . . . . 1.63 -.04 -.05 2.25 4.21 2.60 1.61

2026 . . . . . . . . . . 1.63 -.04 -.05 2.25 4.25 2.60 1.65

2027 . . . . . . . . . . 1.63 -.04 -.05 2.25 4.26 2.60 1.66

2028 . . . . . . . . . . 1.63 -.04 -.05 2.25 4.01 2.60 1.41

2028 to 2093 . . . 1.63 -.05 -.05 2.25 3.81 2.60 1.21
105

Economic Assumptions and Methods

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: 

2019 . . . . . . . . . . 2.45 0.02 0.04 2.43 5.36 2.40 2.96

2020 . . . . . . . . . . 2.96 d -.25 2.97 6.52 3.23 3.29

2021 . . . . . . . . . . 2.41 .05 -.11 2.95 5.99 3.20 2.79

2022 . . . . . . . . . . 1.99 .05 .02 2.95 5.47 3.20 2.27

2023 . . . . . . . . . . 1.93 -.02 .05 2.95 5.26 3.20 2.06

2024 . . . . . . . . . . 1.93 d .05 2.95 5.28 3.20 2.08

2025 . . . . . . . . . . 1.93 .02 .05 2.95 5.35 3.20 2.15

2026 . . . . . . . . . . 1.93 .03 .05 2.95 5.42 3.20 2.22

2027 . . . . . . . . . . 1.93 .04 .05 2.95 5.46 3.20 2.26

2028 . . . . . . . . . . 1.93 .04 .05 2.95 5.25 3.20 2.05

2028 to 2093 . . . 1.93 .03 .05 2.95 5.04 3.20 1.84

High-cost: 

2019 . . . . . . . . . . 1.24 d -.14 1.54 2.69 1.27 1.42

2020 . . . . . . . . . . 1.17 -.02 -1.04 1.69 1.00 2.02 -1.02

2021 . . . . . . . . . . 1.85 .01 -.36 1.55 2.79 2.00 .79

2022 . . . . . . . . . . 1.43 -.02 -.09 1.55 3.59 2.00 1.59

2023 . . . . . . . . . . 1.41 -.11 -.06 1.55 3.52 2.00 1.52

2024 . . . . . . . . . . 1.38 -.11 -.05 1.55 3.49 2.00 1.49

2025 . . . . . . . . . . 1.33 -.11 -.05 1.55 3.38 2.00 1.38

2026 . . . . . . . . . . 1.32 -.11 -.05 1.55 3.28 2.00 1.28

2027 . . . . . . . . . . 1.30 -.12 -.05 1.55 3.24 2.00 1.24

2028 . . . . . . . . . . 1.30 -.13 -.08 1.55 2.90 2.00 .90

2028 to 2093 . . . 1.33 -.13 -.15 1.55 2.60 2.00 .60

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 Greater than -0.005 and less than 0.005.

e Historical data are not available for the full year. Estimated values vary slightly by alternative and are

shown for the intermediate assumptions.

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
Assumptions and Methods

106

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 0.8 percent per year from 2018 to 2028 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 2.8 percent for 2093.

For men age 16 and over, the projected age-adjusted labor force participation

rates1 for 2093 are 73.3, 73.3, and 73.0 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.
107

Economic Assumptions and Methods

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.1 For women age 16 and over, the projected age-adjusted labor force

participation rates for 2093 are 62.3, 61.7, and 60.8 percent for the low-cost,

intermediate, and high-cost assumptions, respectively. 

The age-adjusted rates for 2093 are higher under all three alternatives than

the age-adjusted rates for 2017 of 70.7 percent for men and 58.5 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. 

The total civilian unemployment rates are presented in table V.B2. For years

through 2028, the table presents total civilian rates without adjustment for

the changing age-sex distribution of the population. For years after 2028, 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 is projected in relation to changes in the economic cycle, as

measured by the ratio of actual to potential GDP.2 For each alternative, the

total civilian unemployment rate moves toward the ultimate assumed rate as

the economy moves toward the long-range sustainable growth path.

The assumed ultimate age-sex-adjusted unemployment rates are 4.5, 5.5, and

6.5 percent for the low-cost, intermediate, and high-cost assumptions,

respectively. These values are unchanged from the 2018 report. Improvements in labor market conditions will eventually draw more nonparticipants

back into the labor force and unemployment rate will increase from an estimated 3.9 percent for 2018 to the assumed 5.5 percent for 2023 under the

 1 The labor force participation rate under the high-cost assumptions is also lower than under the intermediate assumptions because life expectancy has a non-linear effect on labor force participation rates in the

Office of the Chief Actuary’s model.

 2 Potential GDP is the level of GDP assuming the economy is operating at the underlying sustainable trend

rate of growth.
Assumptions and Methods

108

intermediate assumptions. Under the low-cost assumptions, the ultimate

unemployment rate is reached in 2022.1 Under the high-cost assumptions,

the ultimate unemployment rate is reached in 2025.

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

2017 was 15.5 percent above the 2007 level. The estimated real GDP growth

from 2017 to 2018 is 2.9 percent.

For the intermediate assumptions, the average annual growth in real GDP is

2.3 percent from 2018 to 2028, the approximate sum of component growth

rates of 0.6 percent for total employment, 1.7 percent for productivity, and

-0.1 percent for average hours worked. The projected average annual growth

in real GDP of 2.3 percent for this period is approximately 0.1 percentage

point higher than the underlying sustainable trend rate. This growth of

0.1 percentage point above trend reflects a relatively rapid increase in

employment and total economy productivity. After 2028, the assumptions do

not explicitly reflect economic cycles. The projected annual growth rate in

real GDP combines the projected growth rates for total employment, total

U.S. economy productivity, and average hours worked. After 2028, 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.

For the low-cost assumptions, the annual growth in real GDP averages

3.0 percent over the decade ending in 2028. The relatively fast growth is due

mostly to high assumed rates of growth for employment and worker produc-

 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.
109

Economic Assumptions and Methods

tivity. For the high-cost assumptions, the annual growth in real GDP averages 1.5 percent for the decade ending in 2028.

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 3.0 percent,

2.5 percent, and 2.0 percent for the low-cost, intermediate, and high-cost

assumptions, respectively. These rates are 0.2 percentage point lower than in

the 2018 report.

The actual average annual nominal interest rate was approximately

2.3 percent for 2017, which means that securities newly issued in 2017

would yield 2.3 percent if held one year. Estimated average prices rose from

2017 to 2018 by approximately 2.6 percent. The annual real interest rate for

2018 is -0.2 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

3.2, 2.6, and 2.0 percent, the assumed ultimate real interest rates produce

ultimate nominal interest rates of 6.2 percent for the low-cost assumptions,

5.1 percent for the intermediate assumptions, and 4.0 percent for the highcost assumptions. These nominal rates for newly issued trust fund securities

reach their ultimate levels by 2028, the end of the short-range period.
Assumptions and Methods

110

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 2018. . . . . 6.7 .5 .6 1.6 2.4 .8

Single years:

2008 . . . . . . . . . . . 5.8 .8 -.4 -.1 3.6 .6

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 2.2 2.3 -.3

2018j. . . . . . . . . . . 3.9 1.1 1.5 2.9 2.9 -.2
111

Economic Assumptions and Methods

Intermediate:

2019 . . . . . . . . . . . 4.1 1.1 1.0 2.8 3.3 1.0

2020 . . . . . . . . . . . 4.5 1.0 .6 2.4 3.5 .7

2021 . . . . . . . . . . . 4.9 1.0 .6 2.3 3.7 .9

2022 . . . . . . . . . . . 5.3 1.0 .6 2.2 4.0 1.1

2023 . . . . . . . . . . . 5.5 .9 .7 2.2 4.3 1.4

2024 . . . . . . . . . . . 5.5 .7 .7 2.3 4.6 1.7

2025 . . . . . . . . . . . 5.5 .6 .6 2.2 4.8 2.0

2026 . . . . . . . . . . . 5.5 .5 .5 2.1 4.9 2.2

2027 . . . . . . . . . . . 5.5 .5 .5 2.1 5.0 2.3

2028 . . . . . . . . . . . 5.5 .5 .5 2.1 5.1 2.4

2030 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2035 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2040 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2045 . . . . . . . . . . . 5.5 .5 .5 2.1 5.1 2.5

2050 . . . . . . . . . . . 5.5 .5 .5 2.1 5.1 2.5

2055 . . . . . . . . . . . 5.5 .5 .5 2.1 5.1 2.5

2060 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2065 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2070 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2075 . . . . . . . . . . . 5.5 .5 .5 2.0 5.1 2.5

2080 . . . . . . . . . . . 5.5 .5 .5 2.1 5.1 2.5

2085 . . . . . . . . . . . 5.5 .5 .5 2.1 5.1 2.5

2090 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

2095 . . . . . . . . . . . 5.5 .4 .4 2.0 5.1 2.5

Low-cost:

2019 . . . . . . . . . . . 3.8 1.2 1.3 3.8 4.2 .5

2020 . . . . . . . . . . . 4.0 1.2 1.0 3.7 4.6 .9

2021 . . . . . . . . . . . 4.2 1.3 1.0 3.4 4.8 1.4

2022 . . . . . . . . . . . 4.5 1.1 .8 2.9 5.1 1.6

2023 . . . . . . . . . . . 4.5 1.0 .9 2.9 5.4 1.9

2024 . . . . . . . . . . . 4.5 .9 .9 2.9 5.6 2.2

2025 . . . . . . . . . . . 4.6 .9 .9 2.9 5.9 2.4

2026 . . . . . . . . . . . 4.6 .7 .7 2.7 6.0 2.7

2027 . . . . . . . . . . . 4.6 .6 .6 2.6 6.1 2.8

2028 . . . . . . . . . . . 4.5 .6 .6 2.6 6.2 2.9

2030 . . . . . . . . . . . 4.5 .5 .5 2.5 6.2 3.0

2035 . . . . . . . . . . . 4.5 .5 .5 2.5 6.2 3.0

2040 . . . . . . . . . . . 4.5 .6 .6 2.6 6.2 3.0

2045 . . . . . . . . . . . 4.5 .8 .7 2.7 6.2 3.0

2050 . . . . . . . . . . . 4.5 .8 .8 2.8 6.2 3.0

2055 . . . . . . . . . . . 4.5 .7 .7 2.7 6.2 3.0

2060 . . . . . . . . . . . 4.5 .6 .7 2.6 6.2 3.0

2065 . . . . . . . . . . . 4.5 .6 .6 2.6 6.2 3.0

2070 . . . . . . . . . . . 4.5 .7 .7 2.7 6.2 3.0

2075 . . . . . . . . . . . 4.5 .8 .8 2.8 6.2 3.0

2080 . . . . . . . . . . . 4.5 .8 .8 2.8 6.2 3.0

2085 . . . . . . . . . . . 4.5 .8 .8 2.8 6.2 3.0

2090 . . . . . . . . . . . 4.5 .7 .7 2.7 6.2 3.0

2095 . . . . . . . . . . . 4.5 .7 .7 2.7 6.2 3.0

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

112

High-cost:

2019 . . . . . . . . . . . 4.3 1.0 0.6 1.7 2.3 1.6

2020 . . . . . . . . . . . 6.1 1.6 -.4 -.3 1.4 .3

2021 . . . . . . . . . . . 7.2 .5 -.6 .9 2.4 -.6

2022 . . . . . . . . . . . 7.0 .3 .5 1.8 3.2 .4

2023 . . . . . . . . . . . 6.8 .3 .5 1.8 3.5 1.2

2024 . . . . . . . . . . . 6.6 .3 .5 1.8 3.7 1.5

2025 . . . . . . . . . . . 6.5 .5 .6 1.9 3.9 1.7

2026 . . . . . . . . . . . 6.5 .7 .6 1.9 4.0 1.9

2027 . . . . . . . . . . . 6.5 .6 .6 1.8 4.0 2.0

2028 . . . . . . . . . . . 6.5 .5 .5 1.7 4.0 2.0

2030 . . . . . . . . . . . 6.5 .3 .3 1.5 4.0 2.0

2035 . . . . . . . . . . . 6.5 .3 .3 1.5 4.0 2.0

2040 . . . . . . . . . . . 6.5 .3 .3 1.5 4.0 2.0

2045 . . . . . . . . . . . 6.5 .3 .2 1.4 4.0 2.0

2050 . . . . . . . . . . . 6.5 .3 .3 1.4 4.0 2.0

2055 . . . . . . . . . . . 6.5 .2 .2 1.4 4.0 2.0

2060 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2065 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2070 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2075 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2080 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2085 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2090 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

2095 . . . . . . . . . . . 6.5 .1 .1 1.3 4.0 2.0

a The Office of the Chief Actuary adjusts the civilian unemployment rates for 2029 and later to the age-sex

distribution of the civilian labor force in 2011. For years through 2028, 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
113

Program Assumptions and Methods

C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS

The Office of the Chief Actuary at the Social Security Administration uses a

set of models to project future income and cost under the OASDI program.

These models rely not only on the demographic and economic assumptions

described in the previous sections, but also on a number of program-specific

assumptions and methods. Values of many program parameters change from

year to year as prescribed by formulas set out in the Social Security Act.

These program parameters affect the level of payroll taxes collected and the

level of benefits paid. The office uses more complex models to project the

numbers of future workers covered under OASDI and the levels of their 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 2028. 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/.
Assumptions and Methods

114

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.
115

Program Assumptions and Methods

Table V.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and 

Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2028

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

Intermediate:

2018 . . . . . . . . . . . g2.8 51,794.15 2.9 g128,400 g17,040 g45,360

2019 . . . . . . . . . . . 1.8 53,863.71 4.0 g132,900 g17,640 g46,920

2020 . . . . . . . . . . . 2.7 56,396.34 4.7 136,800 18,120 48,360

2021 . . . . . . . . . . . 2.6 58,914.00 4.5 142,200 18,840 50,280

2022 . . . . . . . . . . . 2.6 61,399.77 4.2 149,100 19,800 52,560

2023 . . . . . . . . . . . 2.6 63,918.72 4.1 155,700 20,640 54,960

2024 . . . . . . . . . . . 2.6 66,573.32 4.2 162,300 21,480 57,240

2025 . . . . . . . . . . . 2.6 69,374.02 4.2 168,900 22,440 59,640

2026 . . . . . . . . . . . 2.6 72,318.20 4.2 175,800 23,280 62,160

2027 . . . . . . . . . . . 2.6 75,397.14 4.3 183,300 24,360 64,680

2028 . . . . . . . . . . . 2.6 78,425.26 4.0 191,100 25,320 67,440
Assumptions and Methods

116

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 2019, and also shows

projected values through 2028. 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:

2018 . . . . . . . . . . . g2.8 $51,842.68 3.0 g$128,400 g$17,040 g$45,360

2019 . . . . . . . . . . . 2.6 54,589.52 5.3 g132,900 g17,640 g46,920

2020 . . . . . . . . . . . 3.2 58,130.23 6.5 137,100 18,120 48,360

2021 . . . . . . . . . . . 3.2 61,621.98 6.0 144,300 19,080 50,880

2022 . . . . . . . . . . . 3.2 65,003.71 5.5 153,600 20,400 54,240

2023 . . . . . . . . . . . 3.2 68,429.04 5.3 162,900 21,600 57,480

2024 . . . . . . . . . . . 3.2 72,040.30 5.3 171,900 22,800 60,600

2025 . . . . . . . . . . . 3.2 75,890.46 5.3 180,900 24,000 63,840

2026 . . . . . . . . . . . 3.2 79,999.01 5.4 190,200 25,200 67,200

2027 . . . . . . . . . . . 3.2 84,362.57 5.5 200,400 26,640 70,800

2028 . . . . . . . . . . . 3.2 88,796.52 5.3 211,500 28,080 74,640

High-cost:

2018 . . . . . . . . . . . g2.8 51,774.91 2.9 g128,400 g17,040 g45,360

2019 . . . . . . . . . . . 1.2 53,181.27 2.7 g132,900 g17,640 g46,920

2020 . . . . . . . . . . . 2.1 53,756.15 1.1 136,800 18,120 48,360

2021 . . . . . . . . . . . 2.0 55,258.23 2.8 140,400 18,600 49,560

2022 . . . . . . . . . . . 2.0 57,220.89 3.6 141,900 18,840 50,160

2023 . . . . . . . . . . . 2.0 59,231.07 3.5 146,100 19,320 51,600

2024 . . . . . . . . . . . 2.0 61,293.18 3.5 151,200 20,040 53,400

2025 . . . . . . . . . . . 2.0 63,356.81 3.4 156,600 20,760 55,320

2026 . . . . . . . . . . . 2.0 65,432.29 3.3 162,000 21,480 57,240

2027 . . . . . . . . . . . 2.0 67,555.34 3.2 167,400 22,200 59,160

2028 . . . . . . . . . . . 2.0 69,521.87 2.9 172,800 22,920 61,080

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, 1975-2028 (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
117

Program Assumptions and Methods

tor by the portion of the worker’s AIME that falls within the three

respective ranges, and then adds the resulting products together.

 • 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 2019

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

($926)

Second

bend point

($5,583)
Assumptions and Methods

118

 • 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 2019

150% 

272% 

134% 

175% 

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$0 $500 $1,000 $1,500 $2,000 $2,500

Maximum family benefit 

Primary Insurance Amount

Third

bend point

($2,228)

Second

bend point

($1,708)

First

bend point

($1,184)
119

Program Assumptions and Methods

Table V.C2.—Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2028

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

Intermediate:

2020 . . . . . . . . . 953 5,746 1,218 1,758 2,293 1,400 101,700

2021 . . . . . . . . . 991 5,976 1,267 1,829 2,385 1,460 105,600

2022 . . . . . . . . . 1,038 6,257 1,326 1,915 2,497 1,530 110,700

2023 . . . . . . . . . 1,084 6,536 1,386 2,000 2,609 1,600 115,500

2024 . . . . . . . . . 1,130 6,812 1,444 2,084 2,719 1,660 120,600

2025 . . . . . . . . . 1,176 7,092 1,503 2,170 2,830 1,730 125,400

2026 . . . . . . . . . 1,225 7,386 1,566 2,260 2,948 1,800 130,500

2027 . . . . . . . . . 1,277 7,697 1,632 2,355 3,072 1,880 136,200

2028 . . . . . . . . . 1,331 8,023 1,701 2,455 3,202 1,960 141,900
Assumptions and Methods

120

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:

2020 . . . . . . . . . $954 $5,752 $1,219 $1,760 $2,295 $1,400 $101,700

2021 . . . . . . . . . 1,005 6,057 1,284 1,853 2,417 1,480 107,100

2022 . . . . . . . . . 1,070 6,449 1,367 1,973 2,574 1,580 114,000

2023 . . . . . . . . . 1,134 6,837 1,449 2,092 2,728 1,670 120,900

2024 . . . . . . . . . 1,196 7,212 1,529 2,207 2,878 1,760 127,500

2025 . . . . . . . . . 1,260 7,592 1,609 2,323 3,030 1,850 134,400

2026 . . . . . . . . . 1,326 7,993 1,694 2,446 3,190 1,950 141,300

2027 . . . . . . . . . 1,397 8,420 1,785 2,576 3,360 2,060 148,800

2028 . . . . . . . . . 1,472 8,876 1,881 2,716 3,542 2,170 156,900

High-cost:

2020 . . . . . . . . . 953 5,744 1,218 1,758 2,292 1,400 101,700

2021 . . . . . . . . . 979 5,900 1,251 1,805 2,355 1,440 104,400

2022 . . . . . . . . . 989 5,964 1,264 1,825 2,380 1,460 105,600

2023 . . . . . . . . . 1,017 6,131 1,300 1,876 2,447 1,500 108,300

2024 . . . . . . . . . 1,053 6,348 1,346 1,943 2,534 1,550 112,200

2025 . . . . . . . . . 1,090 6,572 1,393 2,011 2,623 1,600 116,100

2026 . . . . . . . . . 1,128 6,800 1,442 2,081 2,714 1,660 120,300

2027 . . . . . . . . . 1,166 7,029 1,490 2,151 2,805 1,720 124,200

2028 . . . . . . . . . 1,204 7,260 1,539 2,221 2,897 1,770 128,400

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 1978-2028 (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
121

Program Assumptions and Methods

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 5.5 percent. After 2028, 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.
Assumptions and Methods

122

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 2093 are 69.7, 69.3, and 68.6 percent for

the low-cost, intermediate, and high-cost assumptions, respectively. For

women age 16 and over, the projected age-adjusted covered-worker rates for

2093 are 67.0, 65.8, and 64.3 percent for the low-cost, intermediate, and

high-cost assumptions, respectively. For men, the intermediate projected rate

for 2093 is slightly lower than the 2017 age-adjusted rate of 69.6 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 2093 is higher than the 2017 age-adjusted rate

of 64.2 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 2019 is $1,360.

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.
123

Program Assumptions and Methods

40 QCs, he or she remains permanently fully insured. A worker is disability

insured if he or she is: (1) a fully insured worker who has accumulated 20

QCs during the 40-quarter period ending with the current quarter, (2) a fully

insured worker aged 24-30 who has accumulated QCs during one-half of the

quarters elapsed after the quarter of attainment of age 21 and up to and

including the current quarter, or (3) a fully insured worker under age 24 who

has accumulated six QCs during the 12-quarter period ending with the 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,
Assumptions and Methods

124

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 increase from its

estimated level of 87.0 for December 31, 2016, to 87.1, 87.8, and 88.7 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 93.7 to 87.3, and the percentage for females increases from

81.5 to 88.4.
125

Program Assumptions and Methods

4. Old-Age and Survivors Insurance Beneficiaries

The Office of the Chief Actuary projects the number of OASI beneficiaries

for each type of benefit separately by the sex of the worker on whose 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.
Assumptions and Methods

126

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.
127

Program Assumptions and Methods

The long-range model projects separately the number of entitled children by

sex of the earner parent. For each age under 18, the model multiplies the 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-
Assumptions and Methods

128

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
129

Program Assumptions and Methods

under age 16 or disabled, and by applying termination rates to the number of

surviving-mother and surviving-father beneficiaries already receiving 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

Intermediate:

2019 . . . . . . . . . . 45,120 2,395 710 3,877 117 1,926 1 54,146

2020 . . . . . . . . . . 46,637 2,297 728 3,853 114 1,941 1 55,571

2025 . . . . . . . . . . 53,990 1,868 808 3,753 107 1,998 1 62,525

2030 . . . . . . . . . . 60,589 1,852 928 3,576 111 2,056 1 69,112

2035 . . . . . . . . . . 64,924 1,837 1,037 3,361 125 2,081 1 73,366

2040 . . . . . . . . . . 67,204 1,741 1,112 3,161 132 2,131 1 75,482
Assumptions and Methods

130

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 . . . . . . . . . . 68,246 1,680 1,109 3,015 129 2,110 1 76,288

2050 . . . . . . . . . . 69,838 1,662 1,132 2,894 124 2,058 1 77,709

2055 . . . . . . . . . . 72,179 1,664 1,162 2,802 119 1,997 1 79,924

2060 . . . . . . . . . . 75,346 1,670 1,193 2,724 115 1,940 1 82,989

2065 . . . . . . . . . . 78,439 1,685 1,203 2,679 114 1,908 1 86,029

2070 . . . . . . . . . . 81,781 1,722 1,235 2,660 113 1,904 1 89,416

2075 . . . . . . . . . . 85,073 1,751 1,277 2,637 111 1,902 1 92,754

2080 . . . . . . . . . . 87,183 1,766 1,293 2,593 108 1,888 1 94,833

2085 . . . . . . . . . . 88,496 1,792 1,298 2,557 105 1,862 1 96,111

2090 . . . . . . . . . . 90,512 1,863 1,325 2,556 103 1,838 1 98,199

2095 . . . . . . . . . . 93,982 1,929 1,377 2,557 101 1,824 1 101,771

Low-cost:

2019 . . . . . . . . . . 45,107 2,395 710 3,876 117 1,927 1 54,133

2020 . . . . . . . . . . 46,606 2,297 729 3,850 115 1,944 1 55,541

2025 . . . . . . . . . . 53,788 1,871 814 3,743 109 2,026 1 62,352

2030 . . . . . . . . . . 59,932 1,840 950 3,606 108 2,170 1 68,607

2035 . . . . . . . . . . 63,664 1,834 1,080 3,423 122 2,289 1 72,413

2040 . . . . . . . . . . 65,291 1,726 1,179 3,248 130 2,438 1 74,013

2045 . . . . . . . . . . 65,768 1,645 1,191 3,117 128 2,483 1 74,334

2050 . . . . . . . . . . 66,886 1,605 1,233 3,003 126 2,474 1 75,328

2055 . . . . . . . . . . 68,897 1,573 1,286 2,909 125 2,457 1 77,248

2060 . . . . . . . . . . 71,766 1,548 1,346 2,820 125 2,454 1 80,060

2065 . . . . . . . . . . 74,578 1,527 1,380 2,759 128 2,495 1 82,870

2070 . . . . . . . . . . 77,593 1,518 1,440 2,723 133 2,576 1 85,984

2075 . . . . . . . . . . 80,469 1,495 1,514 2,683 136 2,654 1 88,953

2080 . . . . . . . . . . 82,166 1,466 1,548 2,630 138 2,704 1 90,652

2085 . . . . . . . . . . 83,314 1,465 1,568 2,608 138 2,732 1 91,827

2090 . . . . . . . . . . 85,981 1,521 1,632 2,643 140 2,767 1 94,687

2095 . . . . . . . . . . 90,842 1,589 1,737 2,694 142 2,821 1 99,827

High-cost:

2019 . . . . . . . . . . 45,134 2,395 709 3,879 117 1,924 1 54,160

2020 . . . . . . . . . . 46,671 2,297 727 3,855 114 1,938 1 55,603

2025 . . . . . . . . . . 54,224 1,865 803 3,765 105 1,970 1 62,732

2030 . . . . . . . . . . 61,495 1,882 911 3,524 113 1,934 1 69,859

2035 . . . . . . . . . . 66,486 1,879 1,000 3,269 124 1,864 1 74,622

2040 . . . . . . . . . . 69,483 1,805 1,046 3,043 127 1,821 1 77,326

2045 . . . . . . . . . . 71,178 1,771 1,025 2,883 120 1,747 1 78,725

2050 . . . . . . . . . . 73,356 1,784 1,028 2,760 112 1,667 1 80,708

2055 . . . . . . . . . . 76,122 1,817 1,031 2,671 104 1,581 1 83,328

2060 . . . . . . . . . . 79,603 1,860 1,031 2,599 96 1,495 1 86,685

2065 . . . . . . . . . . 82,944 1,924 1,018 2,562 90 1,425 1 89,964

2070 . . . . . . . . . . 86,579 2,013 1,024 2,546 85 1,377 1 93,625

2075 . . . . . . . . . . 90,239 2,092 1,039 2,532 80 1,337 1 97,320

2080 . . . . . . . . . . 92,712 2,150 1,039 2,490 75 1,298 1 99,764

2085 . . . . . . . . . . 94,145 2,202 1,031 2,438 70 1,253 1 101,140

2090 . . . . . . . . . . 95,376 2,275 1,031 2,401 65 1,211 1 102,361

2095 . . . . . . . . . . 97,152 2,340 1,043 2,367 62 1,174 1 104,139

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
131

Program Assumptions and Methods

5. Disability Insurance Beneficiaries

The DI Trust Fund pays for benefits to disabled workers who: (1) satisfy the

disability insured requirements, (2) are unable to engage in any substantial

gainful activity due to a medically determinable physical or mental 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 2018. 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.
Assumptions and Methods

132

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 1995, 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 2028), 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 2018, the actual incidence rate (4.1 per thousand)

was below the level projected in last year’s report (4.6 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 2019

through 2022, 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 2028, at the end of the short-range period, age-sexspecific incidence rates reach the ultimate rates assumed for the long-range
133

Program Assumptions and Methods

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 5.2 awards per thousand exposed, which is lower than

in last year’s report by 0.2 awards per thousand exposed. See page 37 for

more information. Figure V.C3 illustrates that the assumed ultimate age-sexadjusted incidence rate of 5.2 is slightly higher than the average rate for the

historical period 1970 through 2018 (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 4.2 and 6.2 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 lower than those in last year’s report by 0.1 and

0.2 awards per thousand exposed, respectively.

 1 Projected incidence rates are adjusted upward to account for additional workers who are expected to file

for disability benefits (rather than retirement benefits) in response to reductions in retirement benefits as the

normal retirement age rises.
Assumptions and Methods

134

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-2028).

In the short-range period (through 2028), the projected age-sex-adjusted

death rate (adjusted to the 2000 disabled-worker population) under the intermediate assumptions gradually declines from 25.2 deaths per thousand beneficiaries for 2018 to about 24.3 per thousand for 2028. 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
135

Program Assumptions and Methods

20.2 per thousand beneficiaries for 2018 to 11.4 per thousand beneficiaries

for 2028. The recovery rate has been high in recent years due to an ongoing

administrative effort to work down a backlog of continuing disability

reviews. The rate is expected to decrease as the backlog is reduced. Under

the low-cost and high-cost assumptions, total age-sex-adjusted termination

rates due to death and recovery are roughly 10-15 percent higher or lower,

respectively, than under the intermediate assumptions.

For the long-range period (post-2028), 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 2006 through

2010. 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.

Recovery rates by age, sex, and duration of entitlement reach ultimate levels

in the twentieth year of the projection period (2038) for all three sets of

assumptions. In contrast, 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 25.2 per thousand beneficiaries in

2018, this rate decreases to 18.7, 11.8, and 6.9 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.
Assumptions and Methods

136

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
137

Program Assumptions and Methods

ciaries who reach normal retirement age) divided by the average number of

disabled-worker beneficiaries at all ages in that year. The ratio is constant on

an age-sex-adjusted basis, except for the two periods during which normal

retirement age increases under current law. On a gross basis, however, the

conversion ratio rises and falls with the changing proportion of all 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 8.5 million at the end of 2018, to 12.0 million, 13.8 million, and

14.8 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
Assumptions and Methods

138

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 28

1980. . . . . . . . . . . . 2,856 462 1,359 4,677 28 31

1985. . . . . . . . . . . . 2,653 306 945 3,904 24 26

1990. . . . . . . . . . . . 3,007 266 989 4,261 25 28

1995. . . . . . . . . . . . 4,179 264 1,409 5,852 33 35

2000. . . . . . . . . . . . 5,036 165 1,466 6,667 36 36

2005. . . . . . . . . . . . 6,519 157 1,633 8,309 45 40

2010. . . . . . . . . . . . 8,204 161 1,820 10,185 55 44

2011. . . . . . . . . . . . 8,576 164 1,874 10,614 58 45

2012. . . . . . . . . . . . 8,827 163 1,900 10,890 59 46

2013. . . . . . . . . . . . 8,941 157 1,889 10,987 60 46

2014. . . . . . . . . . . . 8,955 150 1,828 10,932 59 46

2015. . . . . . . . . . . . 8,909 143 1,756 10,808 59 45

2016. . . . . . . . . . . . 8,809 136 1,667 10,612 58 44

2017. . . . . . . . . . . . 8,695 127 1,590 10,412 56 42

2018. . . . . . . . . . . . 8,537 119 1,507 10,164 55 41

Intermediate:

2019. . . . . . . . . . . . 8,465 115 1,474 10,054 54 40

2020. . . . . . . . . . . . 8,370 115 1,447 9,932 54 40

2025. . . . . . . . . . . . 8,597 134 1,437 10,167 54 39

2030. . . . . . . . . . . . 8,734 135 1,563 10,433 54 41

2035. . . . . . . . . . . . 9,078 137 1,774 10,989 55 42

2040. . . . . . . . . . . . 9,557 139 2,011 11,708 56 43

2045. . . . . . . . . . . . 10,246 155 2,135 12,536 59 44

2050. . . . . . . . . . . . 10,719 157 2,204 13,080 61 45

2055. . . . . . . . . . . . 11,142 159 2,247 13,549 61 45

2060. . . . . . . . . . . . 11,331 156 2,279 13,766 61 46

2065. . . . . . . . . . . . 11,630 162 2,334 14,125 62 46

2070. . . . . . . . . . . . 11,899 169 2,423 14,491 62 46

2075. . . . . . . . . . . . 11,986 168 2,518 14,672 62 47

2080. . . . . . . . . . . . 12,288 170 2,594 15,052 62 47

2085. . . . . . . . . . . . 12,857 178 2,651 15,686 62 47

2090. . . . . . . . . . . . 13,518 191 2,706 16,415 64 47

2095. . . . . . . . . . . . 13,829 192 2,769 16,789 64 47
139

Program Assumptions and Methods

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 termiLow-cost:

2019. . . . . . . . . . . . 8,395 115 1,457 9,967 54 40

2020. . . . . . . . . . . . 8,217 114 1,412 9,743 53 39

2025. . . . . . . . . . . . 7,965 131 1,326 9,423 50 36

2030. . . . . . . . . . . . 7,695 117 1,405 9,217 47 35

2035. . . . . . . . . . . . 7,669 112 1,573 9,355 46 35

2040. . . . . . . . . . . . 7,797 106 1,768 9,672 45 35

2045. . . . . . . . . . . . 8,179 113 1,859 10,151 46 35

2050. . . . . . . . . . . . 8,466 111 1,906 10,482 46 35

2055. . . . . . . . . . . . 8,764 110 1,944 10,818 46 35

2060. . . . . . . . . . . . 8,921 107 1,990 11,018 45 35

2065. . . . . . . . . . . . 9,192 108 2,075 11,375 45 35

2070. . . . . . . . . . . . 9,476 112 2,203 11,791 45 36

2075. . . . . . . . . . . . 9,676 111 2,336 12,123 44 36

2080. . . . . . . . . . . . 10,113 113 2,445 12,671 44 36

2085. . . . . . . . . . . . 10,847 122 2,533 13,501 45 36

2090. . . . . . . . . . . . 11,629 133 2,623 14,385 46 36

2095. . . . . . . . . . . . 12,047 134 2,729 14,910 46 36

High-cost:

2019. . . . . . . . . . . . 8,543 116 1,493 10,151 55 41

2020. . . . . . . . . . . . 8,578 116 1,497 10,191 55 41

2025. . . . . . . . . . . . 9,241 135 1,540 10,916 59 43

2030. . . . . . . . . . . . 9,764 157 1,707 11,628 62 46

2035. . . . . . . . . . . . 10,477 169 1,931 12,577 64 49

2040. . . . . . . . . . . . 11,337 181 2,170 13,688 68 51

2045. . . . . . . . . . . . 12,358 206 2,308 14,873 74 54

2050. . . . . . . . . . . . 13,025 214 2,391 15,630 77 55

2055. . . . . . . . . . . . 13,560 221 2,429 16,210 79 56

2060. . . . . . . . . . . . 13,753 219 2,435 16,407 80 57

2065. . . . . . . . . . . . 14,030 228 2,441 16,699 82 57

2070. . . . . . . . . . . . 14,215 239 2,468 16,922 82 58

2075. . . . . . . . . . . . 14,087 235 2,502 16,824 82 58

2080. . . . . . . . . . . . 14,104 234 2,529 16,867 82 58

2085. . . . . . . . . . . . 14,299 239 2,543 17,081 83 58

2090. . . . . . . . . . . . 14,647 249 2,552 17,448 84 59

2095. . . . . . . . . . . . 14,767 251 2,560 17,578 84 59

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
Assumptions and Methods

140

nation rates, which are helpful for understanding the trend in prevalence

rates. Annual incidence and termination rates are not directly comparable or

combinable because their denominators differ.

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), and (3) incidence rates have increased substantially for women

to parity with men. Gross prevalence rates have increased more than age-sexadjusted prevalence rates since the baby-boom generation began to reach

ages 45 through normal retirement age, a time of life when disability incidence rates are relatively high. The Office of the Chief Actuary projects both

gross and age-sex adjusted prevalence rates to grow at a slower pace based

on assumed stabilization in three factors: (1) the age distribution of the general population, (2) the age distribution of the disability insured population,

and (3) incidence rates by age and gender. As these factors gradually stabilize, the declining death termination rate continues to have a small influence

toward higher disability prevalence rates.

 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
141

Program Assumptions and Methods

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 40.9 per thousand disability insured at the end

of 2018 to 47.2 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 36.3 per thousand and increases to 58.8 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

(2019 through 2028), the Office of the Chief Actuary projects incidence and

termination rates for each category of auxiliary beneficiary. After 2028, 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.

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
Assumptions and Methods

142

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

rates; therefore, the self-employment component of taxable payroll for those

years is reduced by multiplying the ratio of the self-employment rate to the

combined employee-employer rate times the taxable self-employment net

earnings. Finally, for 1966 through 1979, employers were exempt from pay-
143

Program Assumptions and Methods

ing their share of payroll tax on their employees’ tips and, for 1980 through

1987, employers paid tax on only part of their employees’ tips. For those

years, the taxable payroll is reduced by half of the amount of tips for which

the employer owed no payroll tax.

The ratio of taxable payroll to covered earnings (the taxable ratio) fell from

88.7 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 83.2 percent for 2017.

For this report, the Trustees assume a level for the taxable ratio at the end of

the short-range period (2028) of 82.5 percent for the intermediate assumptions, 81.0 percent for the high-cost assumptions, and 84.0 percent for the

low-cost assumptions. These are the same assumptions that the Trustees

made for the end of the short-range period (2027) for the 2018 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.1 For projection purposes, the office splits the payroll tax contributions related to wages into amounts paid in the same quarter as incurred and

in the following quarter. Self-employed workers must make estimated tax

payments on their earnings four times during the year and make up any

underestimate on their individual income tax returns. The projection splits

the self-employed tax liabilities by collection quarter to reflect this pattern. 

The projected tax contributions also reflect the method used to ensure that

money transferred to the trust funds is adjusted, over time, to equal the actual

 1 Generally, the higher the amount of liability, the sooner the taxes must be paid. For smaller employers,

payment is due by the middle of the month following when the liability was incurred. Medium-size 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.
Assumptions and Methods

144

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 2019.

 1 Table VI.G1 shows the payroll tax contribution rates for the Hospital Insurance (HI) program.
145

Program Assumptions and Methods

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
Assumptions and Methods

146

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

2016e . . . . . . . . . . . 118,500 12.40 10.03 2.37 12.4000 10.0300 2.3700

2017e . . . . . . . . . . . 127,200 12.40 10.03 2.37 12.4000 10.0300 2.3700

2018e . . . . . . . . . . . 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 and later . . . . f 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 Section 833 of the Bipartisan Budget Act of 2015 reallocated payroll tax rates on a temporary basis. For

earnings in calendar years 2016 through 2018, 0.57 percentage point of the 12.40 percent OASDI payroll tax

rate is reallocated from OASI to DI.

f 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
147

Program Assumptions and Methods

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. The income thresholds used for benefit taxation are, by law, constant in the future, while

income and benefit levels continue to rise. Accordingly, projected ratios of

income from taxation of benefits to the amount of benefits increase gradually. Ultimate tax ratios for OASI and DI benefits used in the projection rely

on estimates from the Office of Tax Analysis in the Department of the Treasury. 

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 2015 initial entitlements 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 long-
Assumptions and Methods

148

range model calculates all scheduled benefits on an annual basis, using the

number of beneficiaries at the beginning and end of the year. Adjustments to

these annual scheduled benefits include retroactive payments to newly

awarded beneficiaries and other amounts not reflected in the regular monthly

scheduled benefits.

Scheduled lump-sum death benefits are estimated as the product of: (1) the

number of lump-sum death payments projected on the basis of the assumed

death rates, the projected fully insured population, and the estimated 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 2019 and subsequent

years. The illustrative benefit amounts in table V.C7 are presented in CPIindexed 2019 dollars—that is, adjusted to 2019 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 2019 and subsequent years

in CPI-indexed 2019 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

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

 1 Actuarial Note 2019.3 has more details on scaled-earnings patterns.

See www.ssa.gov/OACT/NOTES/ran3/.
149

Program Assumptions and Methods

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 1996-2015. 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 $53,864 for 2019). 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 $13,466, $24,239,

and $86,182, respectively, for 2019). 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 $132,900 for 2019).

Table V.C7.—Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, Calendar Years 2019-2095

Benefits in 2019 dollarsa with retirement at normal retirement age

Year attain 

age 65b Age at

retirement

Scaled very

low

earningsc Scaled lowearningsd

Scaled

medium

earningse Scaled highearningsf

Steady

maximum

earningsg

National

Average Wage

Index in 2019

dollarsh

2019 . . . . 66:0 $10,125 $13,243 $21,843 $28,934 $35,355 $53,864

2020 . . . . 66:2 10,451 13,671 22,545 29,867 36,513 54,951

2025 . . . . 67:0 10,917 14,294 23,586 31,212 38,428 59,454

2030 . . . . 67:0 11,807 15,466 25,516 33,757 41,601 63,817

2035 . . . . 67:0 12,672 16,595 27,366 36,220 44,642 67,950

2040 . . . . 67:0 13,497 17,668 29,133 38,560 47,493 72,155

2045 . . . . 67:0 14,327 18,756 30,933 40,947 50,445 76,437

2050 . . . . 67:0 15,183 19,873 32,773 43,384 53,389 81,136

2055 . . . . 67:0 16,119 21,097 34,796 46,051 56,568 86,237

2060 . . . . 67:0 17,129 22,424 36,984 48,949 60,058 91,656

2065 . . . . 67:0 18,208 23,833 39,305 52,024 63,786 97,297

2070 . . . . 67:0 19,327 25,299 41,721 55,221 67,711 103,121

2075 . . . . 67:0 20,486 26,812 44,216 58,527 71,769 109,179

2080 . . . . 67:0 21,688 28,386 46,813 61,963 75,991 115,493

2085 . . . . 67:0 22,942 30,028 49,517 65,543 80,390 122,122

2090 . . . . 67:0 24,258 31,753 52,360 69,308 85,012 129,158

2095 . . . . 67:0 25,657 33,584 55,380 73,302 89,920 136,637

Benefits in 2019 dollarsa with retirement at age 65

2019 . . . . 65:0 9,518 12,451 20,538 27,208 33,134 53,864

2020 . . . . 65:0 9,621 12,598 20,766 27,515 33,539 54,951

2025 . . . . 65:0 9,461 12,378 20,427 27,034 33,043 59,454

2030 . . . . 65:0 10,234 13,398 22,092 29,244 35,789 63,817

2035 . . . . 65:0 10,979 14,375 23,705 31,382 38,423 67,950

2040 . . . . 65:0 11,691 15,302 25,240 33,416 40,878 72,155

2045 . . . . 65:0 12,416 16,253 26,801 35,480 43,425 76,437

2050 . . . . 65:0 13,156 17,220 28,396 37,592 45,958 81,136

2055 . . . . 65:0 13,963 18,281 30,144 39,902 48,692 86,237

2060 . . . . 65:0 14,845 19,429 32,041 42,412 51,700 91,656

2065 . . . . 65:0 15,778 20,651 34,055 45,078 54,912 97,297

2070 . . . . 65:0 16,748 21,920 36,145 47,850 58,296 103,121
Assumptions and Methods

150

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.

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.

2075 . . . . 65:0 $17,749 $23,233 $38,309 $50,714 $61,792 $109,179

2080 . . . . 65:0 18,792 24,597 40,560 53,692 65,428 115,493

2085 . . . . 65:0 19,880 26,020 42,904 56,796 69,217 122,122

2090 . . . . 65:0 21,022 27,513 45,367 60,058 73,195 129,158

2095 . . . . 65:0 22,233 29,099 47,982 63,519 77,422 136,637

a Annual amounts are the total for the 12-month period starting with the month of retirement, adjusted to be

in 2019 dollars by using the CPI indexing series from table VI.G6. b Attains age 65 on January 1 of the year.

c Career-average earnings at about 25 percent of the AWI.

d Career-average earnings at about 45 percent of the AWI.

e Career-average earnings at about 100 percent of the AWI. Such a worker would have career-average earnings at approximately the 56th percentile of all new retired-worker beneficiaries. f Career-average earnings at about 160 percent of the AWI.

g Earnings for each year at or above the contribution and benefit base. h Average Wage Index from table VI.G6, adjusted to be in 2019 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 2019-2095 (Cont.)
151

Program Assumptions and Methods

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.
Appendices

152

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

 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.
153

History of Trust Fund Operations

Law 110-246; and (6) payroll tax revenue forgone under the provisions of

Public Laws 111-147, 111-312, 112-78, and 112-96.

Beginning in 1984, Federal law subjected up to 50 percent of an individual’s

or couple’s OASDI benefits to Federal income taxation under certain 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

 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.
Appendices

154

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 special 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.
155

History of Trust Fund Operations

Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2018

[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
Appendices

156

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

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 and subsequent repayment of loans. The OASI Trust Fund borrowed

$17.5 billion from the DI and HI Trust Funds in 1982 and repaid the 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 1937-2018 (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
157

History of Trust Fund Operations

Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2018

[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
Appendices

158

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

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 and subsequent repayment of loans. The DI Trust Fund loaned $5.1 billion to the

OASI Trust Fund in 1982. The OASI Trust Fund repaid the 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 1957-2018 (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
159

History of Trust Fund Operations

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

Calendar Years 1957-2018

[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
Appendices

160

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 2017

and 2018. The tables show the invested asset reserves by interest rate and

year of maturity. Bonds issued to the trust funds in 2018 had an interest rate

of 2.875 percent, compared with an interest rate of 2.250 percent for bonds

issued in 2017.

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

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 and subsequent repayment of loans. The OASI Trust Fund borrowed $12.4 billion

from the HI Trust Fund in 1982 and repaid the 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 1957-2018 (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
161

History of Trust Fund Operations

Table VI.A4.—OASI Trust Fund Asset Reserves, End of 

Calendar Years 2017 and 2018

[In thousands]

December 31, 2017 December 31, 2018

Obligations sold only to the trust funds (special issue securities): 

Certificates of indebtedness: 

 2.375 percent, 2018 $48,361,532 —

 3.000 percent, 2019 — $52,867,020

Bonds:

 1.375 percent, 2019 6,693,020 —

 1.375 percent, 2020-25 40,158,120 40,158,120

 1.375 percent, 2026 6,693,019 6,693,019

 1.375 percent, 2027 173,240,401 173,240,401

 1.750 percent, 2019 4,908,185 —

 1.750 percent, 2020-25 29,449,110 29,449,110

 1.750 percent, 2026-27 9,816,372 9,816,372

 1.750 percent, 2028 178,148,587 178,148,587

 1.875 percent, 2019 2,320,955 —

 1.875 percent, 2020-27 18,567,648 18,567,648

 1.875 percent, 2028-30 6,962,865 6,962,865

 1.875 percent, 2031 188,111,583 188,111,583

 2.000 percent, 2019 3,655,629 —

 2.000 percent, 2020-25 21,933,768 21,933,768

 2.000 percent, 2026-29 14,622,516 14,622,516

 2.000 percent, 2030 185,790,628 185,790,628

 2.250 percent, 2019 5,582,927 —

 2.250 percent, 2020-25 33,497,562 33,497,562

 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

 2.500 percent, 2019 5,971,787 —

 2.500 percent, 2020-25 35,830,722 35,830,722

 2.500 percent, 2026 166,547,382 166,547,382

 2.875 percent, 2019 7,264,432 —

 2.875 percent, 2020-24 36,322,160 36,322,160

 2.875 percent, 2025 160,575,595 160,575,595

 2.875 percent, 2032 — 1

 2.875 percent, 2033 — 176,889,560

 3.250 percent, 2019 10,628,270 —

 3.250 percent, 2020-23 42,513,080 42,513,080

 3.250 percent, 2024 153,311,163 153,311,163

 3.500 percent, 2018 60,311,343 —

 4.000 percent, 2018 12,075,192 —

 4.000 percent, 2019 12,075,192 —

 4.000 percent, 2020-22 36,225,576 36,225,576

 4.000 percent, 2023 142,682,893 142,682,893

 4.125 percent, 2018 10,516,946 —

 4.125 percent, 2019 10,516,946 —

 4.125 percent, 2020 106,585,700 106,585,700

 4.625 percent, 2018 9,167,663 —
Appendices

162

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.

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.

 4.625 percent, 2019 96,068,657 77,990,001

 5.000 percent, 2018 12,454,232 —

 5.000 percent, 2019-21 37,362,696 37,362,696

 5.000 percent, 2022 130,607,701 130,607,701

 5.125 percent, 2018 11,567,866 —

 5.125 percent, 2019 11,567,866 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,820,368,145 2,797,973,953

Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -58,948 -102,175

Total asset reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,820,309,197 2,797,871,778

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. 

Table VI.A5.—DI Trust Fund Asset Reserves, End of Calendar Years 2017 and 2018

[In thousands]

December 31, 2017 December 31, 2018

Obligations sold only to the trust funds (special issue securities):

Certificates of indebtedness: 

 2.375 percent, 2018 $14,830,708 —

 3.000 percent, 2019 — $9,771,433

 3.125 percent, 2019 — 7,340,572

Bonds:

 1.875 percent, 2019 3,011,390 —

 1.875 percent, 2020-22 9,034,170 9,034,170

 2.250 percent, 2019 6,309,802 —

 2.250 percent, 2020 6,309,802 6,309,802

 2.250 percent, 2021 6,309,801 6,309,801

 2.875 percent, 2024-25 — 7,248,238

 2.875 percent, 2026-32 — 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,623,823 97,200,992

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. 

-143,810 -143,908

Total asset reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,480,013 97,057,084

Table VI.A4.—OASI Trust Fund Asset Reserves, End of 

Calendar Years 2017 and 2018 (Cont.)

[In thousands]

December 31, 2017 December 31, 2018
163

History of Actuarial Status

B. HISTORY OF ACTUARIAL STATUS ESTIMATES

This appendix chronicles the history of the 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
Appendices

164

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 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.
165

History of Actuarial Status

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 1982-2019 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 2019.8 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
Appendices

166

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. 
167

History of Actuarial Status

For the 2001 report, increases caused by changes in the demographic starting

values, although partially offset by a decrease produced by the change in the

valuation period, accounted for most of the changes in the 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
Appendices

168

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
169

History of Actuarial Status

period 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.

Section IV.B.6 describes changes affecting the actuarial balance shown for

the 2019 report.
Appendices

170

C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND 

OPERATIONS THROUGH 2028

Tables VI.C1, VI.C2, and VI.C3 contain details of the fiscal year 2018 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 2018 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.
171

Fiscal Year Operations and Projections

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

Table VI.C1.—Operations of the OASI Trust Fund, Fiscal Year 2018

[In millions]

Total asset reserves, September 30, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,820,101

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior years

$708,547

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2,420

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 706,127

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 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 . . . . . . . . . . . . . . . . . . . . . . 214

All other, not subject to withholdinga. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,504

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,718

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,583

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 . . . . . . . . . . . . . . . . . . . . . . . . 81,583

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 822,440

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

833,063

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -37

Payment for costs of vocational rehabilitation services for disabled beneficiaries 8

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833,034

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,769

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,167

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2

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.

-6

Net administrative expenses 3,672

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841,474

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -19,034

Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,801,254

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.

-188

Total asset reserves, September 30, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,801,066
Appendices

172

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

Table VI.C2.—Operations of the DI Trust Fund, Fiscal Year 2018

[In millions]

Total asset reserves, September 30, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $69,444

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior years.

$167,627

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -583

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167,043

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 996

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,225

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. . . . . . . . . . . . . . . . . . . . . . . . 2,227

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170,272

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

143,550

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

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 112

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,642

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 174

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,651

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,759

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,575

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,698

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,401

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.

-259

Total asset reserves, September 30, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,141
173

Fiscal Year Operations and Projections

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 2018

[In millions]

Total asset reserves, September 30, 2017. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,889,545

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior years.

$876,174

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,003

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 873,171

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 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 . . . . . . . . . . . . . . . . . . . . . . 218

All other, not subject to withholdinga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,500

Total income from taxation of benefitsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,718

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83,808

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.

3

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 83,811

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 992,712

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

976,613

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

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 119

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 976,676

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,942

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,818

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

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.

-10

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,430

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 988,049

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,663

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,894,654

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.

-447

Total asset reserves, September 30, 2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,894,208
Appendices

174

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 2014 through 2028. 

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

Table VI.C4.—Operations of the OASI Trust Fund, Fiscal Years 2014-2028

[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:

2014 . $763.3 $642.3 $0.1 $24.6 $96.3 $705.6 $698.2 $3.2 $4.3 $57.6 $2,712.7 376

2015 . 795.3 672.2 .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

d Between -$50 million and $50 million.

34.7 81.6 841.5 833.0 3.7 4.8 -19.0 2,801.1 335

Intermediate:

2019 . 898.6 783.8 d 35.0 79.7 896.0 887.2 3.9 4.9 2.6 2,803.6 313

2020 . 948.6 832.5 d 37.7 78.5 949.4 940.5 3.9 4.9 -0.8 2,802.9 295

2021 . 997.3 878.2 d 41.4 77.8 1,009.7 1,000.8 4.0 4.9 -12.4 2,790.5 278

2022 . 1,045.6 923.5 d 45.2 76.9 1,076.0 1,066.6 4.1 5.2 -30.4 2,760.1 259

2023 . 1,089.4 965.7 d 49.2 74.5 1,146.3 1,136.7 4.3 5.3 -56.9 2,703.2 241

2024 . 1,141.6 1,013.2 d 53.6 74.8 1,221.3 1,211.4 4.4 5.4 -79.7 2,623.6 221

2025 . 1,192.9 1,059.5 d 58.5 75.0 1,299.2 1,289.3 4.5 5.5 -106.3 2,517.2 202

2026 . 1,257.0 1,111.1 d 71.3 74.6 1,381.1 1,370.8 4.7 5.6 -124.1 2,393.1 182

2027 . 1,315.1 1,159.4 d 80.0 75.6 1,467.3 1,456.8 4.8 5.6 -152.2 2,240.9 163

2028 . 1,379.8 1,218.7 d 87.0 74.1 1,560.9 1,550.2 5.0 5.7 -181.1 2,059.9 144

Low-cost:

2019 . 903.4 787.7 d 35.0 80.7 895.8 887.0 3.9 4.9 7.6 2,808.7 313

2020 . 976.1 857.1 d 37.9 81.1 954.2 945.4 3.9 4.9 21.8 2,830.5 294

2021 . 1,047.5 921.7 d 41.8 84.0 1,020.0 1,011.1 4.0 4.9 27.5 2,858.0 278

2022 . 1,118.4 985.6 d 45.9 86.9 1,092.1 1,082.7 4.2 5.2 26.3 2,884.4 262

2023 . 1,187.9 1,047.6 d 50.2 90.1 1,169.3 1,159.6 4.4 5.3 18.6 2,903.0 247

2024 . 1,267.9 1,116.9 d 55.0 96.0 1,252.0 1,242.0 4.6 5.4 15.8 2,918.8 232

2025 . 1,349.9 1,187.0 d 60.2 102.7 1,338.7 1,328.5 4.8 5.5 11.2 2,930.1 218

2026 . 1,448.6 1,264.4 d 73.8 110.3 1,430.6 1,419.9 5.0 5.6 18.0 2,948.0 205

2027 . 1,542.7 1,338.9 d 83.4 120.5 1,528.5 1,517.6 5.3 5.7 14.2 2,962.3 193

2028 . 1,649.3 1,428.3 d 91.2 129.8 1,635.7 1,624.4 5.5 5.7 13.6 2,975.9 181

High-cost:

2019 . 894.9 780.3 d 35.1 79.5 896.4 887.6 3.9 4.9 -1.5 2,799.5 312

2020 . 915.0 801.4 d 37.6 76.0 946.9 938.0 3.9 5.0 -31.9 2,767.6 296

2021 . 930.4 818.6 d 41.1 70.7 1,003.2 994.2 4.0 5.0 -72.8 2,694.8 276

2022 . 958.8 848.5 d 44.7 65.7 1,064.9 1,055.5 4.1 5.3 -106.1 2,588.8 253

2023 . 983.1 873.5 d 48.5 61.1 1,130.1 1,120.5 4.2 5.4 -147.0 2,441.8 229

2024 . 1,013.1 904.2 d 52.6 56.2 1,199.0 1,189.3 4.2 5.5 -185.9 2,255.8 204

2025 . 1,043.9 934.8 d 57.2 51.9 1,270.1 1,260.3 4.3 5.5 -226.2 2,029.7 178

2026 . 1,086.7 970.7 d 69.3 46.7 1,344.1 1,334.1 4.4 5.6 -257.4 1,772.3 151

2027 . 1,122.2 1,002.2 d 77.5 42.5 1,421.3 1,411.2 4.5 5.6 -299.2 1,473.1 125

2028 . 1,160.4 1,041.0 d 83.9 35.6 1,504.6 1,494.3 4.6 5.6 -344.1 1,129.0 98
175

Fiscal Year Operations and Projections

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

Table VI.C5.—Operations of the DI Trust Fund, Fiscal Years 2014-2028a

[Dollar amounts in billions]

a The DI Trust Fund becomes depleted in fiscal year 2025 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:

2014 . $114.1 $109.1 e

e Between -$50 million and $50 million.

$1.0 $4.0 $144.7 $141.3 $2.9 $0.4 -$30.6 $69.9 69

2015 . 118.0 114.2 e 1.0 2.7 146.2 142.9 2.9 .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

Intermediate:

2019 . 150.5 146.3 e 1.2 2.9 148.6 145.6 2.9 .1 1.9 95.0 63

2020 . 146.0 141.4 e 1.7 3.0 150.6 147.6 2.9 .1 -4.6 90.4 63

2021 . 153.9 149.1 e 1.8 3.0 153.6 150.5 3.0 .1 .3 90.8 59

2022 . 161.7 156.8 e 1.9 3.0 157.9 154.6 3.3 .1 3.7 94.5 57

2023 . 169.1 164.0 e 2.0 3.1 163.0 159.5 3.5 .1 6.1 100.6 58

2024 . 177.8 172.1 e 2.2 3.6 169.4 165.6 3.8 e 8.3 108.9 59

2025 . 186.3 179.9 e 2.3 4.0 177.3 173.2 4.1 e 9.0 117.9 61

2026 . 196.1 188.7 e 2.9 4.6 185.7 181.3 4.3 e 10.5 128.4 64

2027 . 205.3 196.9 e 3.2 5.2 194.5 189.9 4.6 e 10.8 139.2 66

2028 . 216.3 206.9 e 3.5 5.9 202.1 197.2 4.9 e 14.2 153.4 69

Low-cost:

2019 . 151.2 147.0 e 1.2 3.0 147.2 144.2 2.9 .1 4.0 97.2 63

2020 . 150.6 145.5 e 1.6 3.4 148.2 145.2 2.9 .1 2.4 99.6 66

2021 . 162.1 156.5 e 1.7 3.8 150.2 147.1 3.0 .1 11.9 111.5 66

2022 . 173.8 167.4 e 1.8 4.6 153.5 150.1 3.3 .1 20.3 131.8 73

2023 . 185.7 177.9 e 1.9 5.8 157.6 154.0 3.6 e 28.0 159.9 84

2024 . 199.4 189.7 e 2.1 7.7 163.0 159.0 3.9 e 36.5 196.4 98

2025 . 213.8 201.6 e 2.2 10.0 169.8 165.6 4.2 e 44.0 240.3 116

2026 . 230.4 214.7 e 2.7 13.0 177.4 172.8 4.6 e 53.0 293.4 135

2027 . 246.9 227.4 e 3.1 16.5 185.5 180.6 4.9 e 61.4 354.8 158

2028 . 266.5 242.5 e 3.3 20.6 192.7 187.4 5.3 e 73.8 428.6 184

High-cost:

2019 . 149.8 145.7 e 1.2 2.9 150.2 147.3 2.9 .1 -.4 92.8 62

2020 . 140.5 136.1 e 1.7 2.7 154.4 151.3 2.9 .1 -13.9 78.9 60

2021 . 143.1 139.0 e 1.8 2.3 158.9 155.7 3.0 .1 -15.7 63.1 50

2022 . 147.6 144.1 e 2.0 1.6 163.8 160.4 3.3 .1 -16.2 46.9 39

2023 . 151.5 148.3 e 2.1 1.1 168.9 165.3 3.5 .1 -17.4 29.6 28

2024 . 156.4 153.6 e 2.2 .6 175.4 171.6 3.7 .1 -19.0 10.6 17

2025 . 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.

158.7 e 2.4 f 183.5 179.6 3.9 .1 f f 6

2026 . f 164.8 e 3.0 f 192.2 188.0 4.1 .1 f ff

2027 . f 170.2 e 3.3 f 201.2 196.8 4.4 e f ff

2028 . f 176.8 e 3.6 f 208.9 204.2 4.6 .1 f ff
Appendices

176

Table VI.C6.—Operations of the Combined OASI and DI Trust Funds,

Fiscal Years 2014-2028

[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:

2014. . $877.4 $751.3 $0.2 $25.7 $100.3 $850.3 $839.6 $6.0 $4.7 $27.1 $2,782.6 324

2015. . 913.3 786.4 .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

d Between -$50 million and $50 million.

35.7 83.8 988.0 976.7 6.4 4.9 4.7 2,894.2 292

Intermediate:

2019. . 1,049.1 930.2 d 36.3 82.6 1,044.6 1,032.9 6.7 5.0 4.5 2,898.7 277

2020. . 1,094.7 973.8 d 39.3 81.5 1,100.0 1,088.1 6.9 5.0 -5.4 2,893.3 264

2021. . 1,151.2 1,027.3 d 43.1 80.8 1,163.3 1,151.3 7.0 5.0 -12.1 2,881.3 249

2022. . 1,207.3 1,080.3 d 47.1 79.9 1,233.9 1,221.2 7.4 5.3 -26.6 2,854.6 234

2023. . 1,258.5 1,129.6 d 51.2 77.6 1,309.3 1,296.1 7.8 5.4 -50.9 2,803.8 218

2024. . 1,319.4 1,185.2 d 55.8 78.4 1,390.7 1,377.0 8.2 5.5 -71.3 2,732.5 202

2025. . 1,379.2 1,239.4 d 60.8 79.0 1,476.5 1,462.4 8.6 5.5 -97.3 2,635.2 185

2026. . 1,453.1 1,299.8 d 74.1 79.2 1,566.8 1,552.1 9.0 5.6 -113.6 2,521.5 168

2027. . 1,520.4 1,356.3 d 83.2 80.9 1,661.8 1,646.7 9.4 5.6 -141.4 2,380.1 152

2028. . 1,596.2 1,425.7 d 90.5 80.0 1,763.0 1,747.5 9.8 5.7 -166.9 2,213.3 135

Low-cost:

2019. . 1,054.6 934.7 d 36.2 83.7 1,042.9 1,031.2 6.7 5.0 11.7 2,905.9 278

2020. . 1,126.6 1,002.7 d 39.5 84.4 1,102.4 1,090.6 6.9 5.0 24.2 2,930.1 264

2021. . 1,209.6 1,078.3 d 43.5 87.8 1,170.1 1,158.1 7.0 4.9 39.4 2,969.5 250

2022. . 1,292.2 1,153.0 d 47.7 91.5 1,245.6 1,232.8 7.5 5.2 46.7 3,016.2 238

2023. . 1,373.5 1,225.5 d 52.1 95.9 1,326.9 1,313.5 8.0 5.3 46.7 3,062.9 227

2024. . 1,467.3 1,306.6 d 57.0 103.7 1,415.0 1,401.0 8.5 5.4 52.3 3,115.2 216

2025. . 1,563.8 1,388.5 d 62.5 112.8 1,508.6 1,494.1 9.0 5.5 55.2 3,170.4 206

2026. . 1,679.0 1,479.1 d 76.5 123.3 1,608.0 1,592.8 9.6 5.6 71.0 3,241.4 197

2027. . 1,789.6 1,566.2 d 86.4 137.0 1,714.0 1,698.2 10.2 5.7 75.6 3,317.1 189

2028. . 1,915.7 1,670.8 d 94.5 150.4 1,828.3 1,811.8 10.7 5.7 87.4 3,404.5 181

High-cost:

2019. . 1,044.7 926.0 d 36.3 82.4 1,046.6 1,034.9 6.7 5.0 -1.9 2,892.3 277

2020. . 1,055.5 937.5 d 39.3 78.7 1,101.3 1,089.4 6.9 5.1 -45.8 2,846.5 263

2021. . 1,073.6 957.6 d 42.9 73.0 1,162.1 1,149.9 7.0 5.1 -88.5 2,758.0 245

2022. . 1,106.5 992.5 d 46.7 67.2 1,228.7 1,216.0 7.3 5.4 -122.3 2,635.7 224

2023. . 1,134.6 1,021.9 d 50.6 62.2 1,299.0 1,285.9 7.7 5.5 -164.3 2,471.4 203

2024. . 1,169.5 1,057.8 d 54.9 56.9 1,374.4 1,361.0 8.0 5.5 -204.9 2,266.4 180

2025. . 1,205.0 1,093.6 d 59.6 51.9 1,453.6 1,439.8 8.3 5.5 -248.6 2,017.8 156

2026. . 1,253.7 1,135.5 d 72.3 45.9 1,536.3 1,522.1 8.6 5.6 -282.6 1,735.2 131

2027. . 1,293.7 1,172.3 d 80.9 40.5 1,622.5 1,608.0 8.9 5.6 -328.8 1,406.4 107

2028. . 1,337.7 1,217.8 d 87.5 32.4 1,713.4 1,698.6 9.2 5.7 -375.8 1,030.6 82
177

Long-Range Sensitivity Analysis

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 1.8, 2.0, and 2.2 children per woman under alternatives III, II, and I,

respectively. The total fertility rate reaches ultimate values in 2024, 2027,

and 2027 under alternatives III, II, and I, respectively.
Appendices

178

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 17.07 to 16.14 percent, as the

assumed ultimate total fertility rate increases from 1.8 to 2.2. 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

-3.22 to -2.37 percent.

During the 25-year period, the very slight increases in the working population resulting from higher fertility (than that experienced in an alternative

scenario) are more than offset by decreases in the female labor force and

increases in the number of child beneficiaries. Therefore, program cost

increases slightly with higher fertility. For the 75-year long-range period,

however, changes in fertility have a relatively greater effect on the labor

force 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 0.21 percent

of taxable payroll.

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

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 2024, 2027,

and 2027 under alternatives III, II, and I, respectively.

b Ultimate total fertility rates used for this analysis are: 1.8 from the alternative III assumptions, 2.0 from the

alternative II assumptions, and 2.2 from the alternative I assumptions. All other assumptions used for this

analysis are from alternative II.

1.8 2.0 2.2

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.99 13.97 13.96

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.86 13.81 13.77

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.26 16.28 16.29

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.55 16.36 16.17

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.07 16.60 16.14

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.71 -1.73 -1.74

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.55 -2.38 -2.22

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.22 -2.78 -2.37

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -5.63 -4.11 -2.82

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
179

Long-Range Sensitivity Analysis

reductions in death rates for the period from 2018 to 2093. 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 0.41 percent,

0.77 percent, and 1.16 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 16.14 percent (for an average

annual death-rate reduction of 0.41 percent over the entire long-range period)

to 16.43 percent (for an average annual death-rate reduction of 1.16 percent

over the entire long-range period). The 75-year cost rate increases from

16.10 to 17.13 percent. The actuarial balance decreases from -1.59 to

-1.89 percent for the 25-year period, and from -2.31 to -3.29 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, reductions 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

Table 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 between 2018 and 2093. The overall age-sex-adjusted death rate decreases from 2018 to

2093 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: 0.41 percent from the alternative I

assumptions, 0.77 percent from the alternative II assumptions, and 1.16 percent from the alternative III

assumptions. All other assumptions used for this analysis are from alternative II.

0.41 percent 0.77 percent 1.16 percent

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.96 13.97 13.99

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.79 13.81 13.83

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.14 16.28 16.43

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.02 16.36 16.73

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.10 16.60 17.13

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.59 -1.73 -1.89

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.06 -2.38 -2.74

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.31 -2.78 -3.29

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -3.12 -4.11 -5.11

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
Appendices

180

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

0.13 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 949,000 persons, 1,265,000 persons, and 1,601,000 persons

over the long-range period under alternatives III, II, and I, respectively. 

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: 949,000 from the alternative III assumptions, 1,265,000 from the alternative II assumptions, and 1,601,000 from the alternative I

assumptions. All other assumptions used for this analysis are from alternative II.

949,000 1,265,000 1,601,000

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.57 14.55 14.52

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.01 13.97 13.94

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.84 13.81 13.78

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.44 16.28 16.11

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.59 16.36 16.12

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.87 16.60 16.33

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.87 -1.73 -1.59

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.59 -2.38 -2.18

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.03 -2.78 -2.55

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.56 -4.11 -3.72

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2036
181

Long-Range Sensitivity Analysis

For all three periods, when total net immigration increases, the cost rate

decreases. For the 25-year period, the cost rate decreases from 16.44 percent

of taxable payroll (for an average annual total net immigration of 949,000

persons over the entire long-range period) to 16.11 percent (for an average

annual total net immigration of 1,601,000 persons over the entire long-range

period). For the 50-year period, it decreases from 16.59 percent to

16.12 percent, and for the 75-year period, it decreases from 16.87 percent to

16.33 percent. The actuarial balance increases from -1.87 to -1.59 percent for

the 25-year period, from -2.59 to -2.18 percent for the 50-year period, and

from -3.03 to -2.55 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 0.07 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 0.60 percentage point, 1.21 percentage points, and 1.84 percentage

points under alternatives III, II, and I, respectively. In each case, the ultimate

annual increase in the CPI is 2.60 percent (consistent with alternative II).

Therefore, the ultimate percentage increases in average annual wages in covered employment are 3.20, 3.81, and 4.44 percent.

For the 25-year period, the cost rate decreases from 17.07 percent (for a realwage differential of 0.60 percentage point) to 15.49 percent (for a differential

of 1.84 percentage points). For the 50-year period, it decreases from 17.51 to

15.23 percent, and for the 75-year period it decreases from 17.87 to

15.34 percent. The actuarial balance increases from -2.39 to -1.07 percent for

the 25-year period, from -3.37 to -1.41 percent for the 50-year period, and

from -3.88 to -1.70 percent for the 75-year period.
Appendices

182

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.

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 3.20 percent, 2.60 percent, and

2.00 percent under alternatives I, II, and III, respectively.1 In each case, the

ultimate real-wage differential is 1.21 percentage points (consistent with

alternative II), yielding ultimate percentage increases in average annual

wages in covered employment of 4.41, 3.81, and 3.21 percent.

Table VI.D4.—Sensitivity of OASDI Measures to Real-Wage 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 real-wage differentials of 0.60, 1.21, and 1.84 percentage points are the same as in alternatives III, II, and I, respectively. All other assumptions used for this analysis are from alternative II.

3.20-2.60 3.81-2.60 4.44-2.60

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.67 14.55 14.42

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.14 13.97 13.82

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.99 13.81 13.64

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.07 16.28 15.49

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.51 16.36 15.23

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.87 16.60 15.34

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.39 -1.73 -1.07

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.37 -2.38 -1.41

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.88 -2.78 -1.70

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.03 -4.11 -2.42

Year of combined trust fund reserve depletion . . . . . . . . 2033 2035 2038

 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.
183

Long-Range Sensitivity Analysis

For all three periods, the cost rate increases when the assumed rates of

increase in the CPI are smaller. For the 25-year period, the cost rate increases

from 16.18 (for CPI increases of 3.20 percent) to 16.38 percent (for CPI

increases of 2.00 percent). For the 50-year period, it increases from 16.23 to

16.50 percent, and for the 75-year period, it increases from 16.46 to

16.75 percent. The actuarial balance decreases from -1.65 to -1.81 percent

for the 25-year period, from -2.27 to -2.50 percent for the 50-year period,

and from -2.66 to -2.92 percent for the 75-year period.

The time lag between the effects of the CPI changes on taxable payroll and

on scheduled benefits explains these patterns. When the rate of increase in

the CPI is greater and the real-wage differential is constant, then: (1) the

effect on taxable payroll due to a greater rate of increase in average wages

occurs immediately and (2) the effect on benefits due to a larger COLA

occurs with a lag of about 1 year. As a result of these effects, the higher 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.

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 3.20, 2.60, and 2.00 percent are the same as in alternatives I, II, and III,

respectively. The ultimate real-wage differential of 1.21 percentage points is the same as in alternative II. All

other assumptions used for this analysis are also from alternative II.

4.41-3.20 3.81-2.60 3.21-2.00

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.53 14.55 14.57

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.96 13.97 13.99

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 13.81 13.83

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.18 16.28 16.38

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.23 16.36 16.50

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.46 16.60 16.75

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.65 -1.73 -1.81

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.27 -2.38 -2.50

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.66 -2.78 -2.92

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -3.95 -4.11 -4.29

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
Appendices

184

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 2.0 percent, 2.5 percent, and 3.0 percent under alternatives III, II, and I, respectively. In each case, the ultimate annual increase in

the CPI is 2.60 percent, which is consistent with alternative II. Therefore, the

ultimate annual yields are 4.7, 5.2, and 5.7 percent, respectively.

For the 25-year period, the cost rate decreases with increasing real interest

rates from 16.34 percent (for an ultimate real interest rate of 2.0 percent) to

16.21 percent (for an ultimate real interest rate of 3.0 percent). For the

50-year period, it decreases from 16.44 to 16.28 percent and, for the 75-year

period, it decreases from 16.71 to 16.48 percent. The actuarial balance

increases from -1.84 to -1.61 percent for the 25-year period, from -2.53 to

-2.24 percent for the 50-year period, and from -2.97 to -2.60 percent for the

75-year period. Each 0.1-percentage-point increase in the real interest rate

increases the long-range actuarial balance by about 0.04 percent of taxable

payroll.

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: 2.0 percent from the alternative III

assumptions, 2.5 percent from the alternative II assumptions, and 3.0 percent from the alternative I assumptions. All other assumptions used for this analysis are from alternative II.

2.0 percent 2.5 percent 3.0 percent

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.50 14.55 14.60

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.97 14.04

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.74 13.81 13.88

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 16.28 16.21

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.44 16.36 16.28

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.71 16.60 16.48

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.84 -1.73 -1.61

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.53 -2.38 -2.24

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.97 -2.78 -2.60

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.11 -4.11 -4.11

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
185

Long-Range Sensitivity Analysis

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 ($132,900 for 2019). The Trustees assume that the ultimate taxable ratio will be 81.0 percent, 82.5 percent, and 84.0 percent under alternatives III, II, and I, respectively.

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 16.51 percent (for an ultimate taxable ratio of 81.0 percent) to

16.05 percent (for an ultimate taxable ratio of 84.0 percent). For the 50-year

period, it decreases from 16.57 to 16.15 percent and, for the 75-year period,

it decreases from 16.78 to 16.41 percent. The actuarial balance increases

from -1.92 to -1.54 percent for the 25-year period, from -2.57 to

Table VI.D7.—Sensitivity of OASDI Measures to Taxable Ratio Assumptions

[As a percentage of taxable payroll]

Valuation period

Ultimate taxable ratioa 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 ultimate taxable ratios 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: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.58 14.55 14.52

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.00 13.97 13.95

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.83 13.81 13.79

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.51 16.28 16.05

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.57 16.36 16.15

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.78 16.60 16.41

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.92 -1.73 -1.54

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.57 -2.38 -2.20

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.95 -2.78 -2.62

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.23 -4.11 -4.00

Year of combined trust fund reserve depletion . . . . . . . . 2034 2035 2036
Appendices

186

-2.20 percent for the 50-year period, and from -2.95 to -2.62 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 ultimate taxable ratio increases

(improves) the long-range actuarial balance by about 0.11 percent of taxable

payroll.

8. Disability Incidence Rates

Table VI.D8 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions concerning

future disability incidence rates. The Trustees assume that the ultimate agesex-adjusted1 incidence rates will be 4.2, 5.2, and 6.2 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 16.09 percent (for the relatively low rates assumed for

 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 ratesa

based on alternative—

a The ultimate age-sex-adjusted incidence rates used for this analysis are: 4.2 awards per thousand exposed

for the alternative I assumptions, 5.2 awards per thousand exposed for the alternative II assumptions, and 6.2

awards per thousand exposed for the alternative III assumptions. All other assumptions used for this analysis

are from alternative II.

I II III

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.97 13.97 13.98

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.81 13.81 13.81

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.09 16.28 16.46

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.11 16.36 16.60

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.34 16.60 16.84

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.54 -1.73 -1.91

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.14 -2.38 -2.62

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.53 -2.78 -3.03

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -3.82 -4.11 -4.39

Year of combined trust fund reserve depletion . . . . . . . . 2036 2035 2034
187

Long-Range Sensitivity Analysis

alternative I) to 16.46 percent (for the relatively high rates assumed for alternative III). For the 50-year period, it increases from 16.11 to 16.60 percent,

and for the 75-year period, it increases from 16.34 to 16.84 percent. The

actuarial balance decreases from -1.54 to -1.91 percent for the 25-year

period, from -2.14 to -2.62 percent for the 50-year period, and from -2.53 to

-3.03 percent for the 75-year period.

9. Disability Termination Rates

Table VI.D9 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions about future

disability termination rates, including deaths and recoveries up to the age at

which disabled-worker beneficiaries convert to retired-worker status. 

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 25.2 deaths per

thousand disabled-worker beneficiaries in 2018 will decline to 18.9, 12.0,

and 7.1 deaths per thousand in 2093 for alternatives I, II, and III, respectively. These levels are about 25 percent, 52 percent, and 72 percent lower,

respectively, than the level in 2018.

For all three alternatives, ultimate recovery rates by age, sex, and duration

are attained in the twentieth year of the projection period. The ultimate agesex-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.
Appendices

188

For the 25-year period, the cost rate increases with decreasing disability termination rates, from 16.25 percent (for the relatively high termination rates

assumed for alternative I) to 16.30 percent (for the relatively low termination

rates assumed for alternative III). For the 50-year period, it increases from

16.33 to 16.38 percent, and for the 75-year period, it increases from 16.57 to

16.61 percent. The actuarial balance decreases from -1.70 to -1.76 percent

for the 25-year period, from -2.35 to -2.41 percent for the 50-year period,

and from -2.76 to -2.80 percent for the 75-year period.

Table VI.D9.—Sensitivity of OASDI Measures to Disability Termination Assumptions

[As a percentage of taxable payroll]

Valuation period

Disability termination ratesa

based on alternative—

a The age-sex-adjusted death rates in 2093 used for this analysis are: 18.9 deaths per thousand disabledworker beneficiaries for the alternative I assumptions, 12.0 deaths per thousand disabled-worker beneficiaries for the alternative II assumptions, and 7.1 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.

I II III

Summarized income rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.55 14.55 14.55

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.98 13.97 13.97

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.81 13.81 13.81

Summarized cost rate:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.25 16.28 16.30

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.33 16.36 16.38

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.57 16.60 16.61

Actuarial balance:

25-year: 2019-43 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1.70 -1.73 -1.76

50-year: 2019-68 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.35 -2.38 -2.41

75-year: 2019-93 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.76 -2.78 -2.80

Annual balance for 2093 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.11 -4.11 -4.08

Year of combined trust fund reserve depletion . . . . . . . . 2035 2035 2035
189

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 alternative 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 model, based on stochastic modeling techniques, 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 included 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

190

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 12 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 method 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.
191

Stochastic Projections 

3. Stochastic Results

This section illustrates the results for the stochastic simulations of two fundamental measures of actuarial status: the annual cost rates and the trust fund

ratio. The latter measure is highlighted in the Overview 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 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

192

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 2044, and that there is a 50-percent probability of trust fund depletion by the end of 2035 (the median depletion year).

The median 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 2025 ranges from 216 to 145 percent

of annual cost. 

 Figure VI.E1.—Long-Range OASDI Cost Rates From Stochastic Modeling

5%

10%

15%

20%

25%

30%

2019 2034 2049 2064 2079 2094

Projection year

50%

97.5%

2.5%

90%

10%

Income Rate
193

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 97.5th percentile, 50th percentile, and 2.5th 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%

400%

2019 2034 2049 2064 2079 2094

Projection year

50%

97.5%

2.5%

90%

10%
Appendices

194

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 97.5th and 2.5th 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 high-cost to low-cost annual rates

for the stochastic distribution is generally contained slightly within the range

for the high-cost and low-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%

2019 2034 2049 2064 2079 2094

Projection year

Low-Cost

Intermediate

High-Cost

Stochastic 2.5%

Stochastic 50%

Stochastic 97.5%
195

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

196

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

[Asset 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 asset 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%

2019 2034 2049 2064 2079 2094

Projection year

Low-Cost

Intermediate

High-Cost

Stochastic 2.5%

Stochastic 50%

Stochastic 97.5%

Trust fund asset reserves (positive)

Unfunded obligation (negative)
197

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 -2.83 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 $14.2 trillion, about $0.3 trillion larger than the $13.9 trillion

estimate under the intermediate assumptions. The median first projected year

for which cost exceeds non-interest income (as it did in 2010 through 2018),

and remains in excess of non-interest income throughout the remainder of

the long-range period, is 2019. This is the same year as projected under the

intermediate assumptions. The median projected year in which asset 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 17.89 percent of taxable payroll and

6.19 percent of gross domestic product (GDP). The comparable estimates
Appendices

198

under the intermediate assumptions are 17.47 percent of payroll and

6.05 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 2093,

and the first year asset reserves become depleted), the 95-percent stochastic

confidence interval falls within the range defined by the low-cost and highcost 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 . . . . . . -2.78 0.19 -6.60 -2.83 -4.27 -1.63 -5.12 -1.00

Open-group unfunded 

obligation 

(in trillions) . . . . . . . . . $13.9 -$2.1 $28.1 $14.2 $7.2 $25.0 $4.3 $33.3

First projected year cost 

exceeds non-interest 

income and remains

in excess 

through 2093. . . . . . . . 2019 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.

2019 2019 2019 2058 2019 b

b For this percentile, cost does not exceed tax income in 2093.

First year asset reserves 

become depletedc . . . .

c For some stochastic simulations, the first year in which trust fund reserves become depleted does not indicate a permanent depletion of reserves.

2035 d

d Trust fund reserves are not estimated to be depleted within the projection period.

2030 2035 2032 2040 2031 2044

Annual cost in 75th year 

(percent of taxable

payroll) . . . . . . . . . . . . 17.47 12.66 24.73 17.89 14.65 22.36 13.09 25.37

Annual cost in 75th year 

(percent of GDP). . . . . 6.05 4.77 7.86 6.19 5.10 7.68 4.57 8.64
199

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 $43.2 trillion in present value, which is $29.3 trillion

larger than for the 75-year period. The $29.3 trillion increment reflects a significant financing gap projected for OASDI for years after 2093 into perpetuity. Of course, the degree of uncertainty associated with estimates increases

substantially for years further in the future.

The $43.2 trillion infinite horizon open-group unfunded obligation is equivalent to 4.1 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 16.7 percent,1 or with cost reductions equivalent to an immediate and

permanent reduction in benefits for all current and future beneficiaries by

about 25 percent. 

 1 The indicated increase in the payroll tax rate of 4.3 percent is somewhat larger than the 4.1 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

200

Notes:

1. The present values of future taxable payroll for 2019-93 and for 2019 through the infinite horizon are

$531.2 trillion and $1,050.1 trillion, respectively.

2. The present values of GDP for 2019-93 and for 2019 through the infinite horizon are $1,497.0 trillion and

$3,158.3 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 $34.3 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 $1.0 trillion, to

$35.3 trillion. The net effects of changes in assumptions, methods, law, and

starting values increased the infinite horizon unfunded obligation by

$7.8 trillion. The major change affecting the infinite horizon unfunded obligation for this report is the reduction in the ultimate real interest rate from

2.7 percent to 2.5 percent, which provides less discounting of annual shortfalls in the future. The same interest rate change also increased the present

values of future taxable payroll and GDP for this report.

The infinite horizon unfunded obligation expressed as a share of taxable payroll is higher than in last year’s report by 0.1 percentage point. The infinite

horizon unfunded obligation expressed as a share of GDP is higher than in

last year’s report by less than 0.05 percentage point. The infinite horizon

unfunded obligation as a share of both taxable payroll and GDP changed relatively little, because the reduction in the ultimate real interest rate increased

the present value of taxable payroll and of GDP by almost as much as it

increased the present value of the unfunded obligation. See section IV.B.6

for details regarding changes in law, data, methods, and assumptions.

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,

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, 2019; 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 2019. Expressed as a percentage of payroll and GDP for the period 2019 through

the infinite horizon.

$43.2 4.1 1.4

Unfunded obligation through 2093b . . . . . . . . . . . . . . . . . . . . . . . 

b Present value of future cost less future non-interest income through 2093, reduced by the amount of trust

fund reserves at the beginning of 2019. Expressed as a percentage of payroll and GDP for the period 2019

through 2093.

13.9 2.6 .9
201

Infinite Horizon Projections 

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 2019. 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

$35.9 trillion. Table VI.F2 also shows an unfunded obligation of

$35.2 trillion for past and current participants, including past and future General Fund reimbursements. Future participants are scheduled to pay dedicated taxes of $7.9 trillion less into the system than the cost of their

scheduled benefits ($105.2 trillion of dedicated tax income as compared to

$113.1 trillion of cost). The unfunded obligation for all participants through

the infinite horizon thus equals $43.2 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 $43.2 trillion in present value, 4.1 percent of future

taxable payroll, or 1.4 percent of future GDP.
Appendices

202

Notes:

1. The present value of future taxable payroll for 2019 through the infinite horizon is $1,050.1 trillion.

2. The present value of GDP for 2019 through the infinite horizon is $3,158.3 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, 2019; dollar amounts in trillions]

Present

value

Expressed as a 

percentage of future 

payroll and GDP

Taxable

payroll GDP

Present value of past cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62.8 6.0 2.0

Less present value of past dedicated tax income . . . . . . . . . . . . . . . . . . 65.0 6.2 2.1

Plus present value of future cost for current participants . . . . . . . . . . . 73.3 7.0 2.3

Less present value of future dedicated tax income for current 

participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35.2 3.4 1.1

Equals unfunded obligation for past and current participants 

excluding General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 35.9 3.4 1.1

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 . . . . . . . . . . . . . . . . . . . . . 35.2 3.4 1.1

Plus present value of cost for future participants through the infinite 

horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113.1 10.8 3.6

Less present value of dedicated tax income for future participants 

through the infinite horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105.2 10.0 3.3

Equals unfunded obligation for all participants through the infinite 

horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43.2 4.1 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.
203

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 2019 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 25 percent larger than the OASDI

taxable payroll throughout 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

204

Table VI.G2 shows the Trustees’ estimates of annual income rates and cost

rates for the OASDI program and the HI program under the low-cost, intermediate, 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 $132,900 for 2019.

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
205

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 2019 to 2038 under both sets of

assumptions for OASDI and under the intermediate assumptions for HI.

Under the intermediate assumptions, the OASDI cost rate increases by

26 percent from its current level by 2093, while under the high-cost assumptions, the cost rate increases by 75 percent by 2093. For HI, cost rates

increase by 53 percent and 218 percent from 2019 to 2093 under the intermediate and high-cost assumptions, respectively. Under the low-cost assumptions, the OASDI and HI cost rates decrease from 2019 to 2093 by 7 percent

and 26 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 2049, and are positive thereafter, increasing to 0.17 percent

of payroll for 2056, declining to 0.02 percent for 2071, and then generally

increasing through the remainder of the 75-year projection period. After a

0.01 deficit in 2019, HI annual balances as a percent of payroll are positive

for 2020 through the remainder of the projection period under the low-cost

assumptions.
Appendices

206

Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2019-2095

[As a percentage of taxable payrolla]

Calendar year

OASDI HI

Income

rate

Cost

rateb Balanceb Incomerate

Cost

rate Balance

Intermediate:

2019 . . . . . . . . . . 12.85 13.91 -1.06 3.35 3.47 -0.12

2020 . . . . . . . . . . 12.87 13.94 -1.07 3.37 3.52 -.15

2021 . . . . . . . . . . 12.90 14.09 -1.19 3.39 3.58 -.19

2022 . . . . . . . . . . 12.92 14.23 -1.31 3.40 3.66 -.26

2023 . . . . . . . . . . 12.94 14.40 -1.46 3.42 3.75 -.32

2024 . . . . . . . . . . 12.97 14.59 -1.62 3.44 3.82 -.38

2025 . . . . . . . . . . 12.99 14.79 -1.80 3.46 3.90 -.43

2026 . . . . . . . . . . 13.11 14.99 -1.88 3.55 3.97 -.43

2027 . . . . . . . . . . 13.13 15.19 -2.06 3.57 4.03 -.46

2028 . . . . . . . . . . 13.17 15.43 -2.26 3.60 4.21 -.61

2030 . . . . . . . . . . 13.20 15.81 -2.60 3.64 4.37 -.73

2035 . . . . . . . . . . 13.25 16.40 -3.15 3.73 4.70 -.96

2040 . . . . . . . . . . 13.27 16.62 -3.34 3.81 4.90 -1.09

2045 . . . . . . . . . . 13.27 16.49 -3.22 3.86 4.99 -1.13

2050 . . . . . . . . . . 13.27 16.37 -3.10 3.92 5.02 -1.10

2055 . . . . . . . . . . 13.28 16.41 -3.13 3.99 5.02 -1.03

2060 . . . . . . . . . . 13.30 16.63 -3.33 4.06 5.03 -.97

2065 . . . . . . . . . . 13.32 16.90 -3.58 4.14 5.09 -.96

2070 . . . . . . . . . . 13.34 17.20 -3.86 4.21 5.19 -.98

2075 . . . . . . . . . . 13.36 17.43 -4.07 4.27 5.28 -1.01

2080 . . . . . . . . . . 13.36 17.46 -4.10 4.32 5.33 -1.01

2085 . . . . . . . . . . 13.35 17.36 -4.00 4.35 5.33 -.98

2090 . . . . . . . . . . 13.35 17.36 -4.00 4.39 5.32 -.93

2095 . . . . . . . . . . 13.37 17.58 -4.21 4.43 5.33 -.89

Low-cost:

2019 . . . . . . . . . . 12.77 13.67 -.90 3.34 3.36 -.01

2020 . . . . . . . . . . 12.85 13.53 -.68 3.36 3.31 .05

2021 . . . . . . . . . . 12.86 13.45 -.58 3.37 3.30 .07

2022 . . . . . . . . . . 12.88 13.41 -.53 3.39 3.31 .08

2023 . . . . . . . . . . 12.89 13.40 -.51 3.40 3.32 .08

2024 . . . . . . . . . . 12.92 13.42 -.50 3.42 3.32 .10

2025 . . . . . . . . . . 12.92 13.44 -.52 3.44 3.32 .11

2026 . . . . . . . . . . 13.03 13.48 -.45 3.51 3.32 .19

2027 . . . . . . . . . . 13.05 13.53 -.49 3.53 3.30 .23

2028 . . . . . . . . . . 13.08 13.62 -.54 3.56 3.39 .17

2030 . . . . . . . . . . 13.10 13.78 -.68 3.60 3.38 .22

2035 . . . . . . . . . . 13.12 13.92 -.80 3.70 3.30 .40

2040 . . . . . . . . . . 13.13 13.78 -.65 3.78 3.12 .66

2045 . . . . . . . . . . 13.11 13.37 -.26 3.84 2.87 .97

2050 . . . . . . . . . . 13.10 13.05 .05 3.91 2.66 1.25

2055 . . . . . . . . . . 13.09 12.92 .17 3.98 2.49 1.49

2060 . . . . . . . . . . 13.10 12.96 .14 4.05 2.40 1.66

2065 . . . . . . . . . . 13.11 13.03 .08 4.12 2.38 1.74

2070 . . . . . . . . . . 13.11 13.08 .03 4.18 2.41 1.76

2075 . . . . . . . . . . 13.11 13.06 .05 4.22 2.46 1.77

2080 . . . . . . . . . . 13.10 12.86 .24 4.26 2.48 1.78

2085 . . . . . . . . . . 13.09 12.60 .49 4.28 2.48 1.80

2090 . . . . . . . . . . 13.08 12.54 .54 4.31 2.48 1.84

2095 . . . . . . . . . . 13.10 12.77 .33 4.36 2.50 1.86
207

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:

2019 . . . . . . . . . . 12.93 14.16 -1.23 3.35 3.58 -0.22

2020 . . . . . . . . . . 12.91 14.62 -1.72 3.38 3.75 -.37

2021 . . . . . . . . . . 12.94 15.14 -2.20 3.41 3.90 -.49

2022 . . . . . . . . . . 12.98 15.50 -2.52 3.43 4.05 -.63

2023 . . . . . . . . . . 13.00 15.84 -2.84 3.45 4.23 -.78

2024 . . . . . . . . . . 13.04 16.19 -3.16 3.48 4.39 -.92

2025 . . . . . . . . . . 13.06 16.52 -3.46 3.50 4.57 -1.07

2026 . . . . . . . . . . 13.20 16.85 -3.64 3.59 4.74 -1.15

2027 . . . . . . . . . . 13.23 17.19 -3.96 3.62 4.91 -1.29

2028 . . . . . . . . . . 13.29 17.60 -4.31 3.66 5.23 -1.57

2030 . . . . . . . . . . 13.33 18.20 -4.87 3.70 5.64 -1.94

2035 . . . . . . . . . . 13.40 19.30 -5.90 3.80 6.68 -2.88

2040 . . . . . . . . . . 13.44 20.01 -6.56 3.88 7.67 -3.80

2045 . . . . . . . . . . 13.47 20.38 -6.91 3.94 8.62 -4.68

2050 . . . . . . . . . . 13.49 20.68 -7.19 4.00 9.43 -5.43

2055 . . . . . . . . . . 13.52 21.09 -7.57 4.06 10.03 -5.97

2060 . . . . . . . . . . 13.56 21.64 -8.08 4.13 10.49 -6.36

2065 . . . . . . . . . . 13.60 22.27 -8.67 4.21 10.85 -6.64

2070 . . . . . . . . . . 13.65 22.99 -9.34 4.28 11.08 -6.80

2075 . . . . . . . . . . 13.70 23.68 -9.99 4.36 11.28 -6.92

2080 . . . . . . . . . . 13.73 24.16 -10.43 4.42 11.38 -6.96

2085 . . . . . . . . . . 13.75 24.40 -10.65 4.47 11.39 -6.92

2090 . . . . . . . . . . 13.76 24.58 -10.82 4.52 11.37 -6.85

2095 . . . . . . . . . . 13.78 24.84 -11.06 4.57 11.37 -6.80

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 2019-2095 (Cont.)

[As a percentage of taxable payrolla]

Calendar year

OASDI HI

Income

rate

Cost

rateb Balanceb Incomerate

Cost

rate Balance
Appendices

208

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 and HI programs have 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 2019-2093

[As a percentage of taxable payrollb]

Valuation

period 

OASDI HI

Income

rate

 Cost

ratec Actuarialbalance

Income

rate

 Cost

rate

Actuarial

balance

Intermediate:

25-year:

2019-43 . . . . . . 14.55 16.28 -1.73 3.71 4.51 -0.80

50-year:

2019-68 . . . . . . 13.97 16.36 -2.38 3.84 4.73 -.89

75-year:

2019-93 . . . . . . 13.81 16.60 -2.78 3.97 4.88 -.91

Low-cost:

25-year:

2019-43 . . . . . . 14.31 14.23 .08 3.67 3.38 .29

50-year:

2019-68 . . . . . . 13.74 13.63 .11 3.83 2.97 .86

75-year:

2019-93 . . . . . . 13.55 13.36 .19 3.96 2.81 1.14

High-cost:

25-year:

2019-43 . . . . . . 14.83 18.71 -3.88 3.76 6.07 -2.31

50-year:

2019-68 . . . . . . 14.26 19.76 -5.50 3.90 7.74 -3.84

75-year:

2019-93 . . . . . . 14.13 20.73 -6.60 4.02 8.58 -4.55

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.
209

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 generally

decreases through 2026. After 2026, deficits increase to a peak in 2034 and

then decrease through 2049. The deficit decreases in 2026 in part because of

a one-time upward shift in taxation of benefits income due to the expiration

of the personal income tax provisions in Public Law 115-97, the Tax Cuts

 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

210

and Jobs Act. The annual balances are then positive for 2050 through the

remainder of the projection period. The positive annual balances increase

through 2056, decline through 2071, and then generally increase through

2093. Under the intermediate assumptions, the annual deficits increase

through 2040, decrease through 2051, and then generally increase thereafter.

Under the high-cost assumptions, annual deficits increase throughout the

projection period.

The Trustees project that the HI annual balance as a percentage of GDP will

be negative in 2019, and then positive throughout the rest of the projection

period, under the low-cost assumptions. Under the intermediate and the highcost assumptions, the HI annual balance is negative for all years of the projection period. Under the intermediate assumptions, annual deficits generally

increase through 2046, and then generally decline thereafter. Under the highcost assumptions, annual deficits reach a peak in 2076 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 2038, and then positive and

mostly rising thereafter. Under the intermediate assumptions, the combined

OASDI and HI annual deficits increase from 2019 through 2041, decrease

through 2054, increase through 2078, and then generally decline thereafter,

reaching 1.82 percent of GDP by 2093. Under the high-cost assumptions,

combined annual deficits rise to a peak of 6.31 percent in 2082 and mostly

decrease thereafter.

By 2093, the combined OASDI and HI annual balances as percentages of

GDP range from a positive annual balance of 1.03 percent for the low-cost

assumptions to an annual deficit of 6.27 percent for the high-cost assumptions. Annual balances differ by a much smaller amount for the tenth projection year, 2028, ranging from an annual deficit of 0.12 percent for the lowcost assumptions to an annual deficit of 2.24 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

0.59 percent under the low-cost assumptions to an actuarial deficit of

4.23 percent under the high-cost assumptions. The 25-year summarized actuarial balance varies by a smaller amount, from a positive actuarial balance of

0.16 percent to an actuarial deficit of 2.40 percent. Summarized rates are calculated on a present-value basis. They include the trust fund reserve balances

on January 1, 2019 and the cost of reaching a target trust fund level equal to
211

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 2019-2095

Calendar year

Percentage of GDP GDP in

dollars

(billions)

OASDI HI Combined

Incomea Costb Balanceb Incomea Cost Balance Incomea Costb Balanceb

Intermediate:

2019 . . . . . 4.56 4.93 -0.38 1.49 1.54 -0.05 6.04 6.47 -0.43 $21,485

2020 . . . . . 4.57 4.94 -.38 1.50 1.57 -.07 6.07 6.51 -.45 22,523

2021 . . . . . 4.59 5.01 -.42 1.52 1.60 -.09 6.10 6.61 -.51 23,558

2022 . . . . . 4.62 5.09 -.47 1.53 1.65 -.12 6.15 6.73 -.58 24,616

2023 . . . . . 4.64 5.16 -.52 1.54 1.69 -.15 6.18 6.85 -.67 25,735

2024 . . . . . 4.66 5.25 -.58 1.55 1.73 -.17 6.22 6.97 -.75 26,907

2025 . . . . . 4.68 5.33 -.65 1.57 1.76 -.20 6.25 7.10 -.85 28,109

2026 . . . . . 4.74 5.42 -.68 1.61 1.80 -.19 6.35 7.22 -.87 29,349

2027 . . . . . 4.76 5.50 -.75 1.62 1.83 -.21 6.38 7.34 -.95 30,637

2028 . . . . . 4.78 5.59 -.82 1.64 1.92 -.28 6.41 7.51 -1.10 31,972

2030 . . . . . 4.78 5.72 -.94 1.65 1.98 -.33 6.43 7.70 -1.27 34,800

2035 . . . . . 4.76 5.89 -1.13 1.68 2.12 -.43 6.44 8.01 -1.56 42,963

2040 . . . . . 4.74 5.93 -1.19 1.71 2.19 -.49 6.44 8.12 -1.68 52,965

2045 . . . . . 4.72 5.86 -1.14 1.72 2.23 -.50 6.44 8.09 -1.65 65,548

2050 . . . . . 4.71 5.81 -1.10 1.75 2.24 -.49 6.45 8.04 -1.59 81,297

2055 . . . . . 4.71 5.82 -1.11 1.77 2.23 -.46 6.48 8.05 -1.57 100,694

2060 . . . . . 4.71 5.89 -1.18 1.81 2.23 -.43 6.51 8.12 -1.61 124,381

2065 . . . . . 4.70 5.97 -1.26 1.83 2.26 -.42 6.54 8.22 -1.69 153,328

2070 . . . . . 4.70 6.05 -1.36 1.86 2.29 -.43 6.56 8.35 -1.79 189,023

2075 . . . . . 4.69 6.12 -1.43 1.88 2.33 -.45 6.57 8.44 -1.88 233,480

2080 . . . . . 4.67 6.10 -1.43 1.89 2.34 -.44 6.56 8.44 -1.88 289,008

2085 . . . . . 4.65 6.04 -1.39 1.90 2.33 -.43 6.55 8.37 -1.82 357,936

2090 . . . . . 4.63 6.02 -1.39 1.91 2.32 -.41 6.54 8.34 -1.79 442,655

2095 . . . . . 4.62 6.07 -1.45 1.92 2.31 -.39 6.54 8.38 -1.84 546,331

Summarized rates: c

25-year:

 2019-43 . . 5.22 5.84 -.62 1.67 2.03 -.36 6.89 7.87 -.98

50-year:

 2019-68 . . 4.99 5.84 -.85 1.72 2.12 -.40 6.71 7.96 -1.25

75-year:

 2019-93 . . 4.90 5.89 -.99 1.77 2.17 -.40 6.67 8.06 -1.39

Low-cost:

2019 . . . . . 4.53 4.85 -.32 1.49 1.49 -.01 6.01 6.34 -.33 21,807

2020 . . . . . 4.56 4.80 -.24 1.50 1.48 .02 6.06 6.28 -.22 23,282

2021 . . . . . 4.59 4.80 -.21 1.51 1.48 .03 6.10 6.28 -.17 24,774

2022 . . . . . 4.63 4.82 -.19 1.53 1.49 .03 6.16 6.31 -.16 26,239

2023 . . . . . 4.66 4.85 -.18 1.54 1.50 .04 6.20 6.35 -.15 27,796

2024 . . . . . 4.70 4.88 -.18 1.55 1.50 .04 6.25 6.39 -.14 29,448

2025 . . . . . 4.73 4.91 -.19 1.56 1.51 .05 6.28 6.42 -.14 31,188

2026 . . . . . 4.79 4.95 -.16 1.60 1.51 .09 6.38 6.46 -.08 32,986

2027 . . . . . 4.82 5.00 -.18 1.61 1.51 .10 6.43 6.50 -.08 34,852

2028 . . . . . 4.85 5.05 -.20 1.62 1.55 .08 6.47 6.59 -.12 36,806

2030 . . . . . 4.85 5.10 -.25 1.64 1.54 .10 6.49 6.64 -.15 41,032

2035 . . . . . 4.84 5.14 -.29 1.68 1.50 .18 6.52 6.64 -.11 53,775

2040 . . . . . 4.83 5.07 -.24 1.71 1.41 .30 6.54 6.49 .06 70,485

2045 . . . . . 4.83 4.92 -.10 1.74 1.30 .44 6.57 6.23 .34 93,041

2050 . . . . . 4.83 4.82 .02 1.78 1.21 .57 6.61 6.03 .59 123,297

2055 . . . . . 4.85 4.79 .06 1.82 1.14 .68 6.67 5.92 .74 163,160

2060 . . . . . 4.87 4.82 .05 1.86 1.10 .76 6.73 5.92 .81 215,224

2065 . . . . . 4.89 4.86 .03 1.89 1.09 .80 6.78 5.95 .83 283,386

2070 . . . . . 4.90 4.89 .01 1.92 1.11 .81 6.82 6.00 .82 373,605

2075 . . . . . 4.92 4.90 .02 1.95 1.13 .81 6.86 6.03 .83 494,275

2080 . . . . . 4.92 4.83 .09 1.97 1.14 .82 6.88 5.97 .91 655,836

2085 . . . . . 4.92 4.74 .18 1.98 1.15 .83 6.90 5.88 1.02 870,185

2090 . . . . . 4.93 4.72 .20 2.00 1.15 .85 6.92 5.87 1.05 1,151,359

2095 . . . . . 4.94 4.82 .12 2.02 1.16 .86 6.96 5.98 .98 1,518,880
Appendices

212

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.

Table VI.G5 displays annual ratios of OASDI taxable payroll to GDP. These

ratios facilitate comparisons of trust fund operations expressed as percentLow-cost (Cont.):

Summarized rates: c

25-year:

 2019-43 . . 5.25 5.22 0.03 1.67 1.53 0.13 6.91 6.75 0.16

50-year:

 2019-68 . . 5.07 5.02 .04 1.74 1.35 .39 6.81 6.37 .43

75-year:

 2019-93 . . 5.02 4.95 .07 1.81 1.29 .52 6.83 6.24 .59

High-cost:

2019 . . . . . 4.59 5.03 -.44 1.49 1.59 -.10 6.08 6.61 -.54 21,152

2020 . . . . . 4.59 5.20 -.61 1.50 1.66 -.17 6.08 6.86 -.78 21,450

2021 . . . . . 4.58 5.36 -.78 1.51 1.73 -.22 6.09 7.09 -1.00 21,982

2022 . . . . . 4.59 5.48 -.89 1.53 1.81 -.28 6.11 7.29 -1.17 22,731

2023 . . . . . 4.60 5.60 -1.00 1.54 1.89 -.35 6.14 7.49 -1.35 23,507

2024 . . . . . 4.62 5.74 -1.12 1.56 1.97 -.41 6.18 7.71 -1.53 24,300

2025 . . . . . 4.63 5.86 -1.23 1.58 2.06 -.48 6.21 7.92 -1.71 25,146

2026 . . . . . 4.69 5.98 -1.29 1.62 2.15 -.52 6.31 8.13 -1.82 26,027

2027 . . . . . 4.70 6.11 -1.41 1.64 2.23 -.58 6.35 8.34 -1.99 26,919

2028 . . . . . 4.71 6.24 -1.53 1.66 2.37 -.71 6.37 8.61 -2.24 27,813

2030 . . . . . 4.71 6.43 -1.72 1.67 2.55 -.88 6.38 8.98 -2.60 29,560

2035 . . . . . 4.69 6.75 -2.06 1.70 2.99 -1.29 6.39 9.74 -3.35 34,391

2040 . . . . . 4.66 6.93 -2.27 1.72 3.40 -1.68 6.37 10.33 -3.95 39,884

2045 . . . . . 4.63 7.00 -2.37 1.73 3.79 -2.06 6.36 10.79 -4.43 46,244

2050 . . . . . 4.60 7.06 -2.45 1.75 4.12 -2.37 6.35 11.17 -4.82 53,611

2055 . . . . . 4.59 7.15 -2.57 1.76 4.35 -2.59 6.35 11.51 -5.16 62,053

2060 . . . . . 4.57 7.30 -2.73 1.78 4.53 -2.74 6.36 11.83 -5.47 71,647

2065 . . . . . 4.55 7.46 -2.90 1.80 4.65 -2.85 6.35 12.10 -5.75 82,537

2070 . . . . . 4.53 7.63 -3.10 1.82 4.71 -2.89 6.35 12.34 -5.99 94,955

2075 . . . . . 4.51 7.79 -3.29 1.84 4.75 -2.92 6.34 12.55 -6.20 109,251

2080 . . . . . 4.47 7.87 -3.40 1.85 4.75 -2.91 6.32 12.63 -6.31 125,836

2085 . . . . . 4.44 7.87 -3.44 1.85 4.71 -2.86 6.29 12.58 -6.30 145,048

2090 . . . . . 4.40 7.86 -3.46 1.85 4.66 -2.81 6.25 12.52 -6.27 167,148

2095 . . . . . 4.37 7.87 -3.50 1.86 4.62 -2.76 6.22 12.49 -6.27 192,458

Summarized rates: c

25-year:

 2019-43 . . 5.21 6.58 -1.36 1.68 2.71 -1.03 6.90 9.29 -2.40

50-year:

 2019-68 . . 4.93 6.83 -1.90 1.72 3.42 -1.70 6.65 10.25 -3.60

75-year:

 2019-93 . . 4.82 7.06 -2.25 1.75 3.73 -1.98 6.57 10.80 -4.23

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, 2019 and the cost of reaching a target trust fund level equal to 100 percent of annual cost at the end

of the period.

Table VI.G4.—OASDI and HI Annual and Summarized Income, Cost, and Balance

as a Percentage of GDP, Calendar Years 2019-2095 (Cont.)

Calendar year

Percentage of GDP GDP in

dollars

(billions)

OASDI HI Combined

Incomea Costb Balanceb Incomea Cost Balance Incomea Costb Balanceb
213

OASDI and HI: Percent of GDP

ages of taxable payroll and those expressed as percentages of GDP. HI taxable payroll is about 25 percent larger than the OASDI taxable payroll

throughout 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 2093, the ratio of wages and salaries to employee compensation is

projected to decline at an average annual rate of 0.06 and 0.16 percent for the

intermediate and high-cost assumptions, respectively, and to increase at an

average annual rate of 0.04 percent for the low-cost assumptions.

Table VI.G5.—Ratio of OASDI Taxable Payroll to GDP, Calendar Years 2019-2095 

Calendar year Intermediate Low-cost High-cost

2019 . . . . . . . . . . . . . . . . . . . . . . . . . 0.355 0.355 0.355

2020 . . . . . . . . . . . . . . . . . . . . . . . . . .355 .355 .355

2021 . . . . . . . . . . . . . . . . . . . . . . . . . .356 .357 .354

2022 . . . . . . . . . . . . . . . . . . . . . . . . . .357 .360 .353

2023 . . . . . . . . . . . . . . . . . . . . . . . . . .359 .362 .354

2024 . . . . . . . . . . . . . . . . . . . . . . . . . .360 .364 .354

2025 . . . . . . . . . . . . . . . . . . . . . . . . . .361 .366 .355

2026 . . . . . . . . . . . . . . . . . . . . . . . . . .361 .367 .355

2027 . . . . . . . . . . . . . . . . . . . . . . . . . .362 .369 .355

2028 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .371 .355

2030 . . . . . . . . . . . . . . . . . . . . . . . . . .362 .370 .353

2035 . . . . . . . . . . . . . . . . . . . . . . . . . .359 .369 .350

2040 . . . . . . . . . . . . . . . . . . . . . . . . . .357 .368 .346

2045 . . . . . . . . . . . . . . . . . . . . . . . . . .355 .368 .343

2050 . . . . . . . . . . . . . . . . . . . . . . . . . .355 .369 .341

2055 . . . . . . . . . . . . . . . . . . . . . . . . . .354 .371 .339

2060 . . . . . . . . . . . . . . . . . . . . . . . . . .354 .372 .337

2065 . . . . . . . . . . . . . . . . . . . . . . . . . .353 .373 .335

2070 . . . . . . . . . . . . . . . . . . . . . . . . . .352 .374 .332

2075 . . . . . . . . . . . . . . . . . . . . . . . . . .351 .375 .329

2080 . . . . . . . . . . . . . . . . . . . . . . . . . .350 .375 .326

2085 . . . . . . . . . . . . . . . . . . . . . . . . . .348 .376 .323

2090 . . . . . . . . . . . . . . . . . . . . . . . . . .347 .377 .320

2095 . . . . . . . . . . . . . . . . . . . . . . . . . .346 .377 .317
Appendices

214

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 3.2, 2.6, and 2.0 percent for the

low-cost, intermediate, and high-cost sets of assumptions, respectively.

Table VI.G7 provides CPI-indexed dollar values (those adjusted using the

CPI in table VI.G6), which indicate the relative purchasing power of the 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 5.0, 3.8, and 2.6 percent under the

low-cost, intermediate, and high-cost assumptions, respectively, between

2028 and 2093. 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
215

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

216

Table VI.G6.—Selected Economic Variables, Calendar Years 2018-2095

[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:

2018. . . . . . . . 98.21 $51,794.15 $7,262 $20,502 0.9720 0.9857

2019. . . . . . . . 100.00 53,863.71 7,620 21,485 1.0000 1.0143

2020. . . . . . . . 102.63 56,396.34 7,989 22,523 1.0331 1.0431

2021. . . . . . . . 105.30 58,914.00 8,379 23,558 1.0692 1.0724

2022. . . . . . . . 108.04 61,399.77 8,799 24,616 1.1092 1.1021

2023. . . . . . . . 110.85 63,918.72 9,229 25,735 1.1543 1.1327

2024. . . . . . . . 113.73 66,573.32 9,677 26,907 1.2049 1.1648

2025. . . . . . . . 116.68 69,374.02 10,135 28,109 1.2607 1.1991

2026. . . . . . . . 119.72 72,318.20 10,608 29,349 1.3220 1.2360

2027. . . . . . . . 122.83 75,397.14 11,101 30,637 1.3882 1.2764

2028. . . . . . . . 126.02 78,425.26 11,591 31,972 1.4591 1.3204

2030. . . . . . . . 132.66 84,662.22 12,587 34,800 1.6137 1.4248

2035. . . . . . . . 150.83 102,489.49 15,436 42,963 2.0758 1.8085

2040. . . . . . . . 171.48 123,733.59 18,906 52,965 2.6702 2.3263

2045. . . . . . . . 194.97 149,026.69 23,302 65,548 3.4348 2.9924

2050. . . . . . . . 221.67 179,849.99 28,843 81,297 4.4184 3.8493

2055. . . . . . . . 252.02 217,333.50 35,685 100,694 5.6835 4.9515

2060. . . . . . . . 286.53 262,623.84 44,025 124,381 7.3109 6.3693

2065. . . . . . . . 325.77 316,963.19 54,150 153,328 9.4044 8.1931

2070. . . . . . . . 370.38 381,935.36 66,559 189,023 12.0972 10.5391

2075. . . . . . . . 421.10 459,748.85 81,944 233,480 15.5611 13.5569

2080. . . . . . . . 478.76 552,934.51 101,017 289,008 20.0169 17.4388

2085. . . . . . . . 544.32 664,737.33 124,578 357,936 25.7486 22.4323

2090. . . . . . . . 618.86 799,309.08 153,496 442,655 33.1215 28.8556

2095. . . . . . . . 703.60 961,385.84 188,790 546,331 42.6055 37.1181

Low-cost:

2018. . . . . . . . 97.66 51,842.68 7,268 20,517 .9720 .9857

2019. . . . . . . . 100.00 54,589.52 7,736 21,807 1.0000 1.0145

2020. . . . . . . . 103.23 58,130.23 8,260 23,282 1.0420 1.0444

2021. . . . . . . . 106.54 61,621.98 8,835 24,774 1.0907 1.0758

2022. . . . . . . . 109.95 65,003.71 9,433 26,239 1.1438 1.1089

2023. . . . . . . . 113.47 68,429.04 10,057 27,796 1.2023 1.1445

2024. . . . . . . . 117.10 72,040.30 10,713 29,448 1.2676 1.1835

2025. . . . . . . . 120.84 75,890.46 11,403 31,188 1.3402 1.2267

2026. . . . . . . . 124.71 79,999.01 12,118 32,986 1.4200 1.2748

2027. . . . . . . . 128.70 84,362.57 12,868 34,852 1.5070 1.3288

2028. . . . . . . . 132.82 88,796.52 13,639 36,806 1.6008 1.3893

2030. . . . . . . . 141.46 98,170.95 15,192 41,032 1.8083 1.5330

2035. . . . . . . . 165.59 126,117.08 19,849 53,775 2.4538 2.0540

2040. . . . . . . . 193.83 161,366.55 25,949 70,485 3.3299 2.7873

2045. . . . . . . . 226.89 205,782.68 34,259 93,041 4.5187 3.7824

2050. . . . . . . . 265.59 263,208.08 45,520 123,297 6.1320 5.1328

2055. . . . . . . . 310.90 337,375.59 60,464 163,160 8.3212 6.9653

2060. . . . . . . . 363.93 432,505.17 80,058 215,224 11.2920 9.4520

2065. . . . . . . . 426.00 553,676.86 105,722 283,386 15.3234 12.8265

2070. . . . . . . . 498.67 707,474.36 139,719 373,605 20.7941 17.4058

2075. . . . . . . . 583.73 902,928.45 185,267 494,275 28.2179 23.6199

2080. . . . . . . . 683.29 1,151,407.63 246,211 655,836 38.2921 32.0525

2085. . . . . . . . 799.85 1,467,816.54 327,140 870,185 51.9630 43.4957

2090. . . . . . . . 936.28 1,871,567.68 433,656 1,151,359 70.5145 59.0244

2095. . . . . . . . 1095.98 2,386,543.23 573,141 1,518,880 95.6893 80.0969
217

OASDI and HI: Estimates in Dollars

Table VI.G7 shows the operations of the combined OASI and DI Trust Funds

in CPI-indexed 2019 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 low-cost, intermediate, and high-cost sets of assumptions.

High-cost:

2018. . . . . . . . 98.74 $51,774.91 $7,259 $20,485 0.9720 0.9857

2019. . . . . . . . 100.00 53,181.27 7,507 21,152 1.0000 1.0141

2020. . . . . . . . 102.02 53,756.15 7,622 21,450 1.0236 1.0419

2021. . . . . . . . 104.06 55,258.23 7,785 21,982 1.0376 1.0691

2022. . . . . . . . 106.14 57,220.89 8,035 22,731 1.0627 1.0956

2023. . . . . . . . 108.27 59,231.07 8,313 23,507 1.0971 1.1219

2024. . . . . . . . 110.43 61,293.18 8,606 24,300 1.1357 1.1486

2025. . . . . . . . 112.64 63,356.81 8,920 25,146 1.1782 1.1758

2026. . . . . . . . 114.89 65,432.29 9,243 26,027 1.2242 1.2040

2027. . . . . . . . 117.19 67,555.34 9,567 26,919 1.2731 1.2333

2028. . . . . . . . 119.53 69,521.87 9,865 27,813 1.3245 1.2635

2030. . . . . . . . 124.36 73,276.90 10,448 29,560 1.4337 1.3288

2035. . . . . . . . 137.31 83,566.28 12,031 34,391 1.7477 1.6025

2040. . . . . . . . 151.60 95,162.62 13,811 39,884 2.1304 1.9534

2045. . . . . . . . 167.38 108,223.12 15,882 46,244 2.5970 2.3812

2050. . . . . . . . 184.80 123,189.65 18,293 53,611 3.1657 2.9027

2055. . . . . . . . 204.03 140,293.38 21,051 62,053 3.8590 3.5384

2060. . . . . . . . 225.27 159,734.03 24,157 71,647 4.7041 4.3133

2065. . . . . . . . 248.71 181,663.13 27,627 82,537 5.7343 5.2579

2070. . . . . . . . 274.60 206,322.83 31,523 94,955 6.9900 6.4093

2075. . . . . . . . 303.18 234,124.79 35,952 109,251 8.5208 7.8129

2080. . . . . . . . 334.74 265,463.17 41,007 125,836 10.3868 9.5239

2085. . . . . . . . 369.58 300,872.52 46,800 145,048 12.6615 11.6096

2090. . . . . . . . 408.04 341,102.29 53,429 167,148 15.4343 14.1520

2095. . . . . . . . 450.51 386,879.11 60,976 192,458 18.8143 17.2512

a CPI-W indexed to calendar year 2019.

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 2018-2095 (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

218

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

Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2019 Dollars,a Calendar Years 2019-2095

[In billions]

a CPI-indexed 2019 dollars equal current dollars adjusted by the CPI indexing series in table VI.G6.

Calendar year

Non-interest

income

Interest

income

Total

income Costb

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.

Asset

reserves at

end of yearb

Intermediate:

2019 . . . . . . . . . . . . . $979.0 $82.0 $1,061.0 $1,060.0 $2,895.9

2020 . . . . . . . . . . . . . 1,001.9 79.1 1,081.0 1,085.2 2,817.4

2021 . . . . . . . . . . . . . 1,026.2 75.8 1,102.0 1,120.9 2,727.1

2022 . . . . . . . . . . . . . 1,052.3 72.4 1,124.7 1,158.9 2,623.8

2023 . . . . . . . . . . . . . 1,077.3 70.3 1,147.6 1,198.7 2,506.2

2024 . . . . . . . . . . . . . 1,103.5 69.2 1,172.7 1,241.2 2,374.3

2025 . . . . . . . . . . . . . 1,127.8 67.8 1,195.6 1,284.1 2,225.6

2026 . . . . . . . . . . . . . 1,161.8 66.9 1,228.7 1,328.0 2,069.9

2027 . . . . . . . . . . . . . 1,186.9 65.6 1,252.4 1,373.0 1,896.9

2028 . . . . . . . . . . . . . 1,211.6 62.9 1,274.5 1,419.3 1,704.0

2030c . . . . . . . . . . . .

c The combined OASI and DI Trust Funds become depleted in 2035 under the intermediate assumptions and in 2030 under the high-cost assumptions, so estimates for later years are not shown.

1,252.8 57.5 1,310.2 1,499.5 1,267.2

Low-cost: 

2019 . . . . . . . . . . . . . 987.8 83.7 1,071.4 1,057.6 2,908.8

2020 . . . . . . . . . . . . . 1,028.0 83.7 1,111.7 1,082.7 2,846.6

2021 . . . . . . . . . . . . . 1,066.8 83.6 1,150.4 1,115.1 2,793.6

2022 . . . . . . . . . . . . . 1,105.2 84.6 1,189.8 1,150.6 2,746.2

2023 . . . . . . . . . . . . . 1,142.7 87.8 1,230.5 1,187.8 2,703.7

2024 . . . . . . . . . . . . . 1,181.6 92.3 1,273.9 1,227.7 2,666.1

2025 . . . . . . . . . . . . . 1,219.5 97.5 1,317.0 1,268.2 2,632.3

2026 . . . . . . . . . . . . . 1,266.5 104.3 1,370.8 1,309.9 2,611.6

2027 . . . . . . . . . . . . . 1,304.4 111.5 1,415.8 1,353.2 2,593.2

2028 . . . . . . . . . . . . . 1,342.8 118.4 1,461.3 1,398.4 2,575.6

2030 . . . . . . . . . . . . . 1,406.7 133.0 1,539.8 1,479.7 2,537.9

2035 . . . . . . . . . . . . . 1,573.2 149.7 1,722.9 1,669.0 2,438.8

2040 . . . . . . . . . . . . . 1,757.3 143.3 1,900.6 1,844.3 2,331.0

2045 . . . . . . . . . . . . . 1,979.3 145.3 2,124.6 2,018.8 2,384.1

2050 . . . . . . . . . . . . . 2,244.3 164.5 2,408.8 2,236.2 2,724.5

2055 . . . . . . . . . . . . . 2,546.3 199.3 2,745.5 2,512.9 3,316.9

2060 . . . . . . . . . . . . . 2,881.8 243.2 3,125.0 2,852.0 4,048.8

2065 . . . . . . . . . . . . . 3,252.7 291.5 3,544.3 3,233.0 4,849.8

2070 . . . . . . . . . . . . . 3,673.8 344.1 4,017.9 3,666.1 5,720.8

2075 . . . . . . . . . . . . . 4,161.8 403.7 4,565.6 4,146.1 6,718.6

2080 . . . . . . . . . . . . . 4,721.0 484.3 5,205.3 4,635.5 8,099.6

2085 . . . . . . . . . . . . . 5,351.9 610.1 5,961.9 5,152.8 10,265.5

2090 . . . . . . . . . . . . . 6,058.7 786.9 6,845.5 5,809.1 13,258.1

2095 . . . . . . . . . . . . . 6,848.2 987.4 7,835.7 6,676.7 16,584.7

High-cost:

2019 . . . . . . . . . . . . . 970.4 80.7 1,051.2 1,063.0 2,883.1

2020 . . . . . . . . . . . . . 964.1 74.4 1,038.5 1,092.5 2,771.9

2021 . . . . . . . . . . . . . 968.0 67.2 1,035.3 1,132.3 2,620.5

2022 . . . . . . . . . . . . . 982.7 60.7 1,043.4 1,173.5 2,439.0

2023 . . . . . . . . . . . . . 998.4 54.8 1,053.2 1,216.4 2,228.0

2024 . . . . . . . . . . . . . 1,016.1 49.4 1,065.6 1,262.1 1,987.7

2025 . . . . . . . . . . . . . 1,034.2 43.6 1,077.8 1,308.4 1,718.2

2026 . . . . . . . . . . . . . 1,062.3 37.7 1,100.0 1,355.5 1,428.9

2027 . . . . . . . . . . . . . 1,080.4 31.2 1,111.6 1,403.5 1,109.0

2028c . . . . . . . . . . . . 1,096.7 22.8 1,119.5 1,452.6 754.1
219

OASDI and HI: Estimates in Dollars

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 2019 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 2020 through the end of the projection period. In

2019, total income slightly exceeds annual cost. For 2020 through 2034 (the

year preceding the year of trust fund reserve depletion), annual cost is covered by drawing down combined trust fund reserves.

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 low-cost, intermediate, and high-cost sets of demographic and economic assumptions to facilitate independent analysis.

 Figure VI.G1.—Estimated OASDI Income and Cost in CPI-indexed 2019 Dollars,

Based on Intermediate Assumptions

[In billions]

$80

$280

$480

$680

$880

$1,080

$1,280

$1,480

$1,680

2015 2020 2025 2030 2035 2040

Calendar year

Cost

Total income

Non-interest income
Appendices

220

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

Table VI.G8.—Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2019-2095

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costa

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.

Asset

reserves at

end of yeara

Intermediate:

2019 . . . . . . . . . . . . . $979.0 $82.0 $1,061.0 $1,060.0 $2,895.9

2020 . . . . . . . . . . . . . 1,028.2 81.2 1,109.4 1,113.7 2,891.6

2021 . . . . . . . . . . . . . 1,080.5 79.8 1,160.4 1,180.3 2,871.6

2022 . . . . . . . . . . . . . 1,136.8 78.2 1,215.1 1,252.0 2,834.7

2023 . . . . . . . . . . . . . 1,194.1 77.9 1,272.0 1,328.7 2,778.0

2024 . . . . . . . . . . . . . 1,255.0 78.7 1,333.7 1,411.5 2,700.2

2025 . . . . . . . . . . . . . 1,316.0 79.1 1,395.1 1,498.4 2,596.9

2026 . . . . . . . . . . . . . 1,390.8 80.1 1,470.9 1,589.9 2,478.0

2027 . . . . . . . . . . . . . 1,457.8 80.6 1,538.4 1,686.4 2,330.0

2028 . . . . . . . . . . . . . 1,526.9 79.2 1,606.2 1,788.6 2,147.5

2030b . . . . . . . . . . . .

b The combined OASI and DI Trust Funds become depleted in 2035 under the intermediate assumptions and in 2030 under the high-cost assumptions, so estimates for later years are not shown.

1,662.0 76.2 1,738.2 1,989.3 1,681.2

Low-cost:

2019 . . . . . . . . . . . . . 987.8 83.7 1,071.4 1,057.6 2,908.8

2020 . . . . . . . . . . . . . 1,061.3 86.4 1,147.7 1,117.8 2,938.7

2021 . . . . . . . . . . . . . 1,136.5 89.0 1,225.6 1,188.1 2,976.2

2022 . . . . . . . . . . . . . 1,215.1 93.1 1,308.2 1,265.0 3,019.4

2023 . . . . . . . . . . . . . 1,296.6 99.6 1,396.2 1,347.8 3,067.8

2024 . . . . . . . . . . . . . 1,383.7 108.1 1,491.7 1,437.6 3,122.0

2025 . . . . . . . . . . . . . 1,473.7 117.8 1,591.5 1,532.5 3,181.0

2026 . . . . . . . . . . . . . 1,579.5 130.0 1,709.5 1,633.5 3,256.9

2027 . . . . . . . . . . . . . 1,678.7 143.4 1,822.2 1,741.6 3,337.5

2028 . . . . . . . . . . . . . 1,783.6 157.3 1,940.9 1,857.4 3,421.0

2030 . . . . . . . . . . . . . 1,989.9 188.2 2,178.1 2,093.1 3,590.1

2035 . . . . . . . . . . . . . 2,605.0 247.8 2,852.9 2,763.6 4,038.3

2040 . . . . . . . . . . . . . 3,406.1 277.8 3,683.8 3,574.8 4,518.1

2045 . . . . . . . . . . . . . 4,490.8 329.8 4,820.6 4,580.5 5,409.2

2050 . . . . . . . . . . . . . 5,960.8 436.8 6,397.7 5,939.3 7,236.2

2055 . . . . . . . . . . . . . 7,916.2 619.5 8,535.7 7,812.6 10,312.1

2060 . . . . . . . . . . . . . 10,487.5 885.2 11,372.7 10,379.0 14,734.5

2065 . . . . . . . . . . . . . 13,856.7 1,242.0 15,098.7 13,772.6 20,660.3

2070 . . . . . . . . . . . . . 18,320.0 1,716.1 20,036.1 18,281.8 28,527.7

2075 . . . . . . . . . . . . . 24,293.8 2,356.8 26,650.5 24,202.1 39,217.9

2080 . . . . . . . . . . . . . 32,258.1 3,309.1 35,567.2 31,673.9 55,343.8

2085 . . . . . . . . . . . . . 42,806.5 4,879.8 47,686.3 41,214.1 82,108.2

2090 . . . . . . . . . . . . . 56,725.8 7,367.2 64,093.1 54,389.4 124,132.6

2095 . . . . . . . . . . . . . 75,055.4 10,822.2 85,877.6 73,175.3 181,765.0

High-cost:

2019 . . . . . . . . . . . . . 970.4 80.7 1,051.2 1,063.0 2,883.1

2020 . . . . . . . . . . . . . 983.6 75.9 1,059.5 1,114.6 2,828.0

2021 . . . . . . . . . . . . . 1,007.4 70.0 1,077.3 1,178.3 2,727.0

2022 . . . . . . . . . . . . . 1,043.1 64.4 1,107.5 1,245.6 2,588.8

2023 . . . . . . . . . . . . . 1,081.0 59.3 1,140.3 1,316.9 2,412.1

2024 . . . . . . . . . . . . . 1,122.1 54.6 1,176.7 1,393.8 2,195.1

2025 . . . . . . . . . . . . . 1,164.9 49.1 1,214.0 1,473.8 1,935.3

2026 . . . . . . . . . . . . . 1,220.5 43.3 1,263.8 1,557.4 1,641.8

2027 . . . . . . . . . . . . . 1,266.1 36.6 1,302.7 1,644.8 1,299.6

2028b . . . . . . . . . . . . 1,310.9 27.2 1,338.1 1,736.3 901.4
221

OASDI and HI: Estimates in Dollars

Table VI.G9 presents values in CPI-indexed 2019 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 low-cost, intermediate, 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

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.

 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

222

Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2019 Dollars,a Calendar Years 2019-2095

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costb Balanceb

Noninterest

income Cost Balance

Noninterest

income Costb Balanceb

Intermediate:

2019 . . . . . $979 $1,060 -$81 $319 $331 -$12 $1,298 $1,391 -$93

2020 . . . . . 1,002 1,085 -83 329 344 -15 1,331 1,429 -98

2021 . . . . . 1,026 1,121 -95 339 358 -19 1,365 1,479 -114

2022 . . . . . 1,052 1,159 -107 349 375 -27 1,401 1,534 -133

2023 . . . . . 1,077 1,199 -121 358 392 -34 1,435 1,591 -155

2024 . . . . . 1,103 1,241 -138 368 408 -40 1,471 1,649 -178

2025 . . . . . 1,128 1,284 -156 378 425 -47 1,506 1,709 -204

2026 . . . . . 1,162 1,328 -166 394 442 -47 1,556 1,770 -214

2027 . . . . . 1,187 1,373 -186 405 457 -52 1,592 1,830 -238

2028 . . . . . 1,212 1,419 -208 415 486 -71 1,627 1,905 -278

2030 . . . . . 1,253 1,500 -247 434 520 -86 1,687 2,020 -333

2035 . . . . . 1,356 1,678 -322 480 603 -123 1,836 2,281 -445

2040 . . . . . 1,463 1,832 -368 527 677 -151 1,990 2,509 -519

2045 . . . . . 1,586 1,971 -384 580 748 -169 2,166 2,719 -553

2050 . . . . . 1,727 2,130 -403 641 820 -179 2,367 2,950 -582

2055 . . . . . 1,880 2,324 -443 709 891 -182 2,589 3,215 -626

2060 . . . . . 2,043 2,555 -512 784 970 -186 2,827 3,525 -698

2065 . . . . . 2,214 2,809 -595 863 1,062 -199 3,077 3,871 -795

2070 . . . . . 2,397 3,090 -693 949 1,170 -221 3,346 4,260 -915

2075 . . . . . 2,599 3,392 -793 1,043 1,290 -247 3,642 4,682 -1,040

2080 . . . . . 2,819 3,685 -866 1,144 1,412 -268 3,963 5,096 -1,133

2085 . . . . . 3,056 3,972 -916 1,251 1,532 -281 4,308 5,504 -1,197

2090 . . . . . 3,312 4,305 -993 1,367 1,658 -290 4,680 5,963 -1,283

2095 . . . . . 3,587 4,717 -1,130 1,494 1,794 -300 5,081 6,511 -1,430

Low-cost:

2019 . . . . . 988 1,058 -70 324 325 -1 1,312 1,383 -71

2020 . . . . . 1,028 1,083 -55 338 333 5 1,366 1,416 -49

2021 . . . . . 1,067 1,115 -48 352 344 8 1,419 1,459 -41

2022 . . . . . 1,105 1,151 -45 364 356 8 1,469 1,507 -37

2023 . . . . . 1,143 1,188 -45 376 367 9 1,519 1,555 -36

2024 . . . . . 1,182 1,228 -46 389 378 11 1,571 1,606 -35

2025 . . . . . 1,220 1,268 -49 402 389 13 1,622 1,657 -35

2026 . . . . . 1,267 1,310 -43 422 399 23 1,689 1,709 -20

2027 . . . . . 1,304 1,353 -49 436 408 28 1,740 1,761 -21

2028 . . . . . 1,343 1,398 -56 450 428 21 1,792 1,827 -34

2030 . . . . . 1,407 1,480 -73 476 447 29 1,883 1,927 -44

2035 . . . . . 1,573 1,669 -96 546 487 59 2,119 2,156 -37

2040 . . . . . 1,757 1,844 -87 623 514 109 2,380 2,358 22

2045 . . . . . 1,979 2,019 -40 714 534 180 2,694 2,553 140

2050 . . . . . 2,244 2,236 8 825 561 264 3,069 2,797 272

2055 . . . . . 2,546 2,513 33 953 596 357 3,500 3,109 390

2060 . . . . . 2,882 2,852 30 1,098 649 449 3,979 3,501 479

2065 . . . . . 3,253 3,233 20 1,258 725 532 4,511 3,958 552

2070 . . . . . 3,674 3,666 8 1,439 832 608 5,113 4,498 615

2075 . . . . . 4,162 4,146 16 1,649 959 690 5,810 5,105 706

2080 . . . . . 4,721 4,635 85 1,886 1,098 788 6,607 5,734 873

2085 . . . . . 5,352 5,153 199 2,154 1,247 906 7,505 6,400 1,105

2090 . . . . . 6,059 5,809 250 2,457 1,410 1,047 8,516 7,219 1,296

2095 . . . . . 6,848 6,677 172 2,803 1,610 1,193 9,652 8,287 1,365
223

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 lowcost, intermediate, and high-cost sets of assumptions.

High-cost:

2019 . . . . . $970 $1,063 -$93 $315 $336 -$21 $1,285 $1,399 -$114

2020 . . . . . 964 1,093 -128 315 350 -35 1,279 1,442 -163

2021 . . . . . 968 1,132 -164 319 365 -46 1,287 1,497 -211

2022 . . . . . 983 1,174 -191 327 387 -60 1,310 1,560 -251

2023 . . . . . 998 1,216 -218 335 410 -75 1,333 1,627 -293

2024 . . . . . 1,016 1,262 -246 343 434 -91 1,359 1,696 -337

2025 . . . . . 1,034 1,308 -274 352 460 -107 1,386 1,768 -382

2026 . . . . . 1,062 1,356 -293 368 486 -118 1,430 1,842 -411

2027 . . . . . 1,080 1,404 -323 377 511 -134 1,458 1,915 -457

2028 . . . . . 1,097 1,453 -356 386 552 -166 1,483 2,004 -522

2030 . . . . . 1,120 1,529 -409 398 606 -208 1,517 2,135 -617

2035 . . . . . 1,174 1,691 -517 426 748 -323 1,600 2,439 -840

2040 . . . . . 1,225 1,823 -598 452 894 -442 1,677 2,717 -1,040

2045 . . . . . 1,278 1,934 -656 478 1,047 -568 1,756 2,981 -1,224

2050 . . . . . 1,335 2,047 -711 506 1,195 -688 1,842 3,241 -1,400

2055 . . . . . 1,395 2,176 -781 536 1,324 -788 1,931 3,500 -1,569

2060 . . . . . 1,454 2,321 -867 567 1,440 -873 2,021 3,761 -1,740

2065 . . . . . 1,511 2,474 -963 598 1,542 -944 2,109 4,016 -1,907

2070 . . . . . 1,567 2,639 -1,072 629 1,629 -1,000 2,196 4,268 -2,072

2075 . . . . . 1,624 2,808 -1,184 662 1,713 -1,051 2,286 4,521 -2,235

2080 . . . . . 1,682 2,960 -1,278 694 1,787 -1,093 2,376 4,746 -2,370

2085 . . . . . 1,741 3,090 -1,349 726 1,848 -1,122 2,467 4,938 -2,471

2090 . . . . . 1,802 3,218 -1,417 759 1,909 -1,150 2,560 5,127 -2,567

2095 . . . . . 1,865 3,362 -1,497 793 1,974 -1,180 2,658 5,335 -2,677

a CPI-indexed 2019 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 2019 Dollars,a Calendar Years 2019-2095 (Cont.)

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costb Balanceb

Noninterest

income Cost Balance

Noninterest

income Costb Balanceb
Appendices

224

Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2019-2095

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costa Balancea

Noninterest

income Cost Balance

Noninterest

income Costa Balancea

Intermediate:

2019 . . . . . $979 $1,060 -$81 $319 $331 -$12 $1,298 $1,391 -$93

2020 . . . . . 1,028 1,114 -86 338 353 -15 1,366 1,467 -101

2021 . . . . . 1,081 1,180 -100 357 377 -20 1,438 1,558 -120

2022 . . . . . 1,137 1,252 -115 377 405 -29 1,513 1,657 -144

2023 . . . . . 1,194 1,329 -135 397 434 -38 1,591 1,763 -172

2024 . . . . . 1,255 1,412 -157 418 464 -46 1,673 1,876 -203

2025 . . . . . 1,316 1,498 -182 441 496 -55 1,757 1,994 -238

2026 . . . . . 1,391 1,590 -199 472 529 -57 1,863 2,119 -256

2027 . . . . . 1,458 1,686 -229 498 562 -64 1,955 2,248 -293

2028 . . . . . 1,527 1,789 -262 523 612 -89 2,050 2,401 -351

2030 . . . . . 1,662 1,989 -327 575 690 -115 2,237 2,679 -442

2035 . . . . . 2,045 2,531 -486 723 909 -186 2,769 3,441 -672

2040 . . . . . 2,509 3,141 -632 903 1,161 -258 3,413 4,303 -890

2045 . . . . . 3,092 3,842 -750 1,130 1,459 -329 4,222 5,301 -1,079

2050 . . . . . 3,827 4,721 -893 1,420 1,817 -397 5,248 6,538 -1,291

2055 . . . . . 4,738 5,856 -1,118 1,787 2,246 -459 6,525 8,102 -1,577

2060 . . . . . 5,854 7,320 -1,467 2,245 2,780 -534 8,099 10,100 -2,001

2065 . . . . . 7,211 9,150 -1,938 2,811 3,461 -650 10,022 12,611 -2,588

2070 . . . . . 8,878 11,445 -2,567 3,514 4,334 -820 12,392 15,779 -3,387

2075 . . . . . 10,944 14,283 -3,339 4,391 5,431 -1,040 15,336 19,714 -4,378

2080 . . . . . 13,496 17,641 -4,144 5,475 6,758 -1,282 18,972 24,398 -5,427

2085 . . . . . 16,637 21,621 -4,985 6,810 8,339 -1,528 23,447 29,960 -6,513

2090 . . . . . 20,498 26,642 -6,144 8,462 10,259 -1,797 28,960 36,901 -7,941

2095 . . . . . 25,239 33,187 -7,948 10,512 12,623 -2,111 35,751 45,809 -10,059

Low-cost:

2019 . . . . . 988 1,058 -70 324 325 -1 1,312 1,383 -71

2020 . . . . . 1,061 1,118 -56 349 344 5 1,410 1,461 -51

2021 . . . . . 1,137 1,188 -52 375 367 8 1,511 1,555 -43

2022 . . . . . 1,215 1,265 -50 400 391 9 1,616 1,656 -41

2023 . . . . . 1,297 1,348 -51 427 417 10 1,724 1,765 -41

2024 . . . . . 1,384 1,438 -54 456 443 13 1,839 1,880 -41

2025 . . . . . 1,474 1,533 -59 486 470 16 1,960 2,003 -43

2026 . . . . . 1,579 1,634 -54 527 498 29 2,106 2,131 -25

2027 . . . . . 1,679 1,742 -63 561 525 36 2,240 2,267 -27

2028 . . . . . 1,784 1,857 -74 597 569 28 2,381 2,426 -46

2030 . . . . . 1,990 2,093 -103 674 632 41 2,663 2,725 -62

2035 . . . . . 2,605 2,764 -159 903 806 97 3,508 3,569 -61

2040 . . . . . 3,406 3,575 -169 1,207 996 210 4,613 4,571 42

2045 . . . . . 4,491 4,581 -90 1,621 1,212 408 6,112 5,793 318

2050 . . . . . 5,961 5,939 22 2,191 1,489 702 8,152 7,429 723

2055 . . . . . 7,916 7,813 104 2,964 1,854 1,109 10,880 9,667 1,213

2060 . . . . . 10,488 10,379 108 3,995 2,361 1,634 14,482 12,740 1,742

2065 . . . . . 13,857 13,773 84 5,358 3,090 2,268 19,215 16,863 2,352

2070 . . . . . 18,320 18,282 38 7,178 4,147 3,031 25,498 22,429 3,069

2075 . . . . . 24,294 24,202 92 9,623 5,596 4,027 33,917 29,798 4,119

2080 . . . . . 32,258 31,674 584 12,887 7,505 5,382 45,145 39,179 5,967

2085 . . . . . 42,807 41,214 1,592 17,225 9,976 7,249 60,031 51,190 8,841

2090 . . . . . 56,726 54,389 2,336 23,003 13,202 9,801 79,729 67,591 12,138

2095 . . . . . 75,055 73,175 1,880 30,724 17,645 13,079 105,779 90,820 14,959
225

OASDI and HI: Estimates in Dollars

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

High-cost:

2019 . . . . . $970 $1,063 -$93 $315 $336 -$21 $1,285 $1,399 -$114

2020 . . . . . 984 1,115 -131 321 357 -36 1,305 1,472 -167

2021 . . . . . 1,007 1,178 -171 332 380 -48 1,339 1,558 -219

2022 . . . . . 1,043 1,246 -203 347 410 -63 1,390 1,656 -266

2023 . . . . . 1,081 1,317 -236 363 444 -81 1,444 1,761 -317

2024 . . . . . 1,122 1,394 -272 379 479 -100 1,501 1,873 -372

2025 . . . . . 1,165 1,474 -309 397 518 -121 1,562 1,991 -430

2026 . . . . . 1,221 1,557 -337 423 558 -136 1,643 2,116 -472

2027 . . . . . 1,266 1,645 -379 442 599 -157 1,708 2,244 -536

2028 . . . . . 1,311 1,736 -425 461 660 -198 1,772 2,396 -624

2030 . . . . . 1,392 1,901 -509 495 753 -259 1,887 2,655 -768

2035 . . . . . 1,612 2,322 -710 584 1,027 -443 2,196 3,350 -1,153

2040 . . . . . 1,857 2,763 -907 685 1,355 -671 2,542 4,119 -1,577

2045 . . . . . 2,139 3,237 -1,098 801 1,752 -952 2,940 4,989 -2,049

2050 . . . . . 2,468 3,782 -1,315 936 2,208 -1,272 3,404 5,990 -2,586

2055 . . . . . 2,846 4,439 -1,593 1,094 2,702 -1,608 3,940 7,141 -3,201

2060 . . . . . 3,276 5,229 -1,953 1,278 3,244 -1,966 4,553 8,473 -3,919

2065 . . . . . 3,758 6,153 -2,395 1,487 3,836 -2,348 5,245 9,989 -4,744

2070 . . . . . 4,303 7,247 -2,944 1,728 4,473 -2,745 6,031 11,720 -5,689

2075 . . . . . 4,924 8,515 -3,590 2,006 5,193 -3,187 6,930 13,708 -6,778

2080 . . . . . 5,631 9,907 -4,277 2,323 5,980 -3,657 7,953 15,888 -7,934

2085 . . . . . 6,434 11,420 -4,986 2,683 6,831 -4,148 9,117 18,251 -9,134

2090 . . . . . 7,352 13,133 -5,781 3,096 7,788 -4,692 10,448 20,921 -10,473

2095 . . . . . 8,401 15,144 -6,743 3,573 8,891 -5,318 11,974 24,035 -12,061

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 2019-2095 (Cont.)

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costa Balancea

Noninterest

income Cost Balance

Noninterest

income Costa Balancea
Appendices

226

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 2018, the OASI Trust Fund was providing monthly benefit payments to about 1,139,000 people because of their disabilities or the disabilities of children. This total includes approximately 24,000 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 2018, the OASI Trust Fund paid

a total of $11,898 million to the people described above. Table VI.H1 shows

OASI scheduled benefits for disability for selected calendar years during

1960 through 2018 and estimates for 2019 through 2028 based on the intermediate set of assumptions.
227

OASI Benefits for the Disabled

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 8,858 7,848 1,008

2011 . . . . . . . . . 1,020 899 121 9,136 8,085 1,050

2012 . . . . . . . . . 1,045 920 125 9,698 8,595 1,102

2013 . . . . . . . . . 1,065 939 126 9,953 8,840 1,109

2014 . . . . . . . . . 1,079 954 125 10,326 9,217 1,108

2015 . . . . . . . . . 1,096 972 124 10,736 9,624 1,109

2016 . . . . . . . . . 1,109 988 121 11,025 9,933 1,087

2017 . . . . . . . . . 1,124 1,006 117 11,355 10,288 1,061

2018 . . . . . . . . . 1,139 1,027 112 11,898 10,860 1,031

Estimates under the intermediate assumptions:

2019 . . . . . . . . . 1,154 1,046 108 12,450 11,429 1,014

2020 . . . . . . . . . 1,169 1,065 103 12,916 11,915 993

2021 . . . . . . . . . 1,184 1,084 100 13,503 12,509 985

2022 . . . . . . . . . 1,199 1,103 96 14,107 13,119 979

2023 . . . . . . . . . 1,215 1,121 93 14,720 13,740 970

2024 . . . . . . . . . 1,231 1,140 91 15,385 14,400 974

2025 . . . . . . . . . 1,247 1,158 89 16,089 15,101 977

2026 . . . . . . . . . 1,263 1,176 87 16,842 15,839 992

2027 . . . . . . . . . 1,279 1,193 86 17,634 16,617 1,006

2028 . . . . . . . . . 1,295 1,209 85 18,457 17,415 1,030
Appendices

228

Under the intermediate assumptions, estimated total scheduled benefits paid

from the OASI Trust Fund with respect to disabled beneficiaries will

increase from $12,450 million in calendar year 2019 to $18,457 million in

calendar year 2028.

In calendar year 2018, benefit payments (including payments for vocational

rehabilitation services) with respect to disabled persons from the OASI Trust

Fund and from the DI Trust Fund (including payments from the DI fund to

all children and spouses of disabled-worker beneficiaries) totaled

$155,658 million. Of this amount, $11,898 million, or 7.6 percent, represented payments from the OASI Trust Fund. Table VI.H2 contains these and

similar figures for selected calendar years during 1960 through 2018 and

estimates for calendar years 2019 through 2028.
229

OASI Benefits for the Disabled

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 . . . . . . . . . 133,103 124,245 8,858 6.7

2011 . . . . . . . . . 138,115 128,979 9,136 6.6

2012 . . . . . . . . . 146,623 136,925 9,698 6.6

2013 . . . . . . . . . 150,108 140,155 9,953 6.6

2014 . . . . . . . . . 152,031 141,705 10,326 6.8

2015 . . . . . . . . . 154,124 143,388 10,736 7.0

2016 . . . . . . . . . 153,824 142,800 11,025 7.2

2017 . . . . . . . . . 154,181 142,826 11,355 7.4

2018 . . . . . . . . . 155,658 143,760 11,898 7.6

Estimates under the intermediate assumptions:

2019 . . . . . . . . . 159,397 146,947 12,450 7.8

2020 . . . . . . . . . 160,740 147,824 12,916 8.0

2021 . . . . . . . . . 164,979 151,476 13,503 8.2

2022 . . . . . . . . . 169,903 155,797 14,107 8.3

2023 . . . . . . . . . 175,572 160,852 14,720 8.4

2024 . . . . . . . . . 182,832 167,448 15,385 8.4

2025 . . . . . . . . . 191,183 175,094 16,089 8.4

2026 . . . . . . . . . 200,189 183,347 16,842 8.4

2027 . . . . . . . . . 209,582 191,947 17,634 8.4

2028 . . . . . . . . . 217,518 199,061 18,457 8.5
Appendices

230

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. 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.

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.
231

Glossary

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

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.
Appendices

232

Benefit award. See “Award.”

Benefit conversion. See “Disability conversion.”

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.
233

Glossary

Covered employment. All employment for which earnings are creditable

for Social Security purposes. The program covers almost all employment.

Some exceptions are:

 • State and local government employees whose employer has not elected

to be covered under Social Security and who are participating in an

employer-provided pension plan.

 • Current Federal civilian workers hired before 1984 who have not

elected to be covered.

 • Self-employed workers earning less than $400 in a calendar year.

Covered worker. A person who has earnings creditable for Social Security

purposes based on services for wages in covered employment or income

from covered self-employment.

CPI-indexed dollars. Amounts adjusted by the CPI to the value of the dollar

in a particular year.

Creditable earnings. Wages or self-employment earnings posted to a

worker’s earnings record. Such earnings determine eligibility for benefits

and the amount of benefits on that worker’s record. The contribution and

benefit base is the maximum amount of creditable earnings for each worker

in a calendar year.

Current-cost financing. See “Pay-as-you-go financing.”

Current dollars. Amounts expressed in nominal dollars with no adjustment

for inflation.

Currently insured status. A worker acquires currently insured status 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
Appendices

234

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 acquires disability insured status if he

or she is: (1) a fully insured worker who has accumulated 20 quarters of coverage during the 40-quarter period ending with the current quarter, (2) a fully

insured worker aged 24-30 who has accumulated quarters of coverage during

one-half of the quarters elapsed after the quarter of attainment of age 21 and

up to and including the current quarter, or (3) a fully insured worker under

age 24 who has accumulated six quarters of coverage during the 12-quarter

period ending with the current quarter.

Disability prevalence rate. The proportion of persons insured for disability

benefits who are disabled-worker beneficiaries in current-payment status.

Disability termination rate. The proportion of disabled-worker 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-
235

Glossary

son is entitled. Some benefits are calculated independently with the larger

benefit being paid or the smaller benefit being paid plus the excess amount of

the larger one.

Earnings. Unless otherwise qualified, all wages from employment and net

earnings from self-employment, whether or not they are taxable or covered.

Earnings test. The provision requiring the withholding of benefits if 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 2019 began October 1, 2018, and will end September

30, 2019.

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-
Appendices

236

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 acquires fully insured status 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.”
237

Glossary

Immigration. See “Lawful permanent resident (LPR) immigration” and

“Other-than-LPR immigration.”

Income. Income for a given year is the sum of tax revenue on a cash basis

(payroll tax contributions and income from the taxation of scheduled 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.
Appendices

238

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 next 75 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
239

Glossary

pay and other cash payments. Military personnel do not pay payroll taxes on

these credits. Noncontributory wage credits of $160 were provided for each

month of active military service from September 16, 1940, through 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.
Appendices

240

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 of 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.
241

Glossary

Automatic benefit increases are applied beginning with the year of eligibility.

See table V.C2 for historical and assumed future bend points and table V.C1

for historical and assumed future benefit increases.

Quarter of coverage. Basic unit of measurement for determining insured

status. In 2019, a worker receives one quarter of coverage (up to a total of

four) for each $1,360 of annual covered earnings. For years after 1978, the

amount of earnings required for a quarter of coverage 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 “Asset 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 next 10 years. The Trustees prepare short-range actuarial

estimates for this period because of the test of short-range financial adequacy. The Social Security Act requires estimates for 5 years; the Trustees
Appendices

242

prepare estimates for an additional 5 years to help clarify trends which 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 authorized 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;
243

Glossary

Federal regulations specify a lower SGA amount for non-blind individuals.

Both SGA amounts increase with increases in the national average wage

index.

Summarized balance. The difference between the summarized income rate

and the summarized cost rate, expressed as a percentage of GDP. The 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-
Appendices

244

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 ratios stay 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 projection period, then it must remain at or above 100 percent throughout

the 10-year projection period;
245

Glossary

 • If the ratio is initially less than 100 percent, then it must reach at least

100 percent within 5 years (without asset 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
Appendices

246

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.

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

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
247

Glossary

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.

Year of depletion. The year in which a trust fund becomes unable to pay

benefits when due because the fund’s asset reserves have been used up.
List of Tables

248

LIST OF TABLE

II. OVERVIEW

II.B1 Summary of 2018 Trust Fund Financial Operations . . . . . . . . 6

II.B2 Payroll Tax Contribution Rates for 2018 . . . . . . . . . . . . . . . . 7

II.C1 Key Assumptions and Summary Measures 

for the Long-Range (75-year) Projection Period . . . . . . . . . . . 8

II.D1 Projected Maximum Trust Fund Ratios During the Long-Range 

Period and Trust Fund Reserve Depletion Dates. . . . . . . . . . . 14

II.D2 Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 20

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR

III.A1 Operations of the OASI Trust Fund, Calendar Year 2018 . . . . 26

III.A2 Operations of the DI Trust Fund, Calendar Year 2018 . . . . . . . 30

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

Calendar Year 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

III.A4 Comparison of Actual Calendar Year 2018 Trust Fund 

Operations With Estimates Made in Prior Reports, Based on 

Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 33

III.A5 Distribution of Benefit Payments by Type of Beneficiary or 

Payment, Calendar Years 2017 and 2018 . . . . . . . . . . . . . . . . 34

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

of Total Cost, Calendar Years 2014-2018 . . . . . . . . . . . . . . . . 35

III.A7 Trust Fund Investment Transactions, Calendar Year 2018 . . . . 35

IV. ACTUARIAL ESTIMATES

IV.A1 Operations of the OASI Trust Fund, Calendar Years 2014-2028 40

IV.A2 Operations of the DI Trust Fund, Calendar Years 2014-2028 . . 44

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

Calendar Years 2014-2028 . . . . . . . . . . . . . . . . . . . . . . . . . . 46

IV.A4 Reasons for Change in Trust Fund (Unfunded Obligation) Ratios 

at the Beginning of the Tenth Year of Projection Under 

Intermediate Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . 49

IV.B1 Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 53

IV.B2 Components of Annual Income Rates, 

Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 58
List of Tables

249

IV.B3 Covered Workers and Beneficiaries, 

Calendar Years 1945-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 60

IV.B4 Trust Fund Ratios, Calendar Years 2019-2095 . . . . . . . . . . . . 65

IV.B5 Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2019-2093 . . . . . . . . . . . . . . . . . . . . . . . . . . 69

IV.B6 Components of 75-Year Actuarial Balance 

and Unfunded Obligation Under Intermediate Assumptions . . 72

IV.B7 Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 73

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

V.A1 Fertility and Mortality Assumptions, 

Calendar Years 1940-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 84

V.A2 Immigration Assumptions, Calendar Years 1940-2095 . . . . . . 89

V.A3 Social Security Area Population on July 1 and 

Dependency Ratios, Calendar Years 1945-2095 . . . . . . . . . . . 92

V.A4 Period Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

V.A5 Cohort Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

V.B1 Principal Economic Assumptions . . . . . . . . . . . . . . . . . . . . . 104

V.B2 Additional Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . 110

V.C1 Cost-of-Living Benefit Increases, Average Wage Index, 

Contribution and Benefit Bases, and Retirement Earnings Test 

Exempt Amounts, 1975-2028 . . . . . . . . . . . . . . . . . . . . . . . . 115

V.C2 Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2028 . . . . . . . . . . . . . . . . . . . . . . . . . . 119

V.C3 Legislated Changes in Normal Retirement Age and Delayed 

Retirement Credits for Persons Attaining Age 62 in 

Each Year 1986 and Later . . . . . . . . . . . . . . . . . . . . . . . . . . . 121

V.C4 OASI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1945-2095 . . . . . . . . . . . . . . . . 129

V.C5 DI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1960-2095 . . . . . . . . . . . . . . . . 138

V.C6 Contribution and Benefit Base and 

Payroll Tax Contribution Rates . . . . . . . . . . . . . . . . . . . . . . 145

V.C7 Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, 

Calendar Years 2019-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 149
List of Tables

250

VI. APPENDICES

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS

VI.A1 Operations of the OASI Trust Fund, 

Calendar Years 1937-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 155

VI.A2 Operations of the DI Trust Fund, 

Calendar Years 1957-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 157

VI.A3 Operations of the Combined OASI and DI Trust Funds,

Calendar Years 1957-2018 . . . . . . . . . . . . . . . . . . . . . . . . . . 159

VI.A4 OASI Trust Fund Asset Reserves, End of 

Calendar Years 2017 and 2018 . . . . . . . . . . . . . . . . . . . . . . . 161

VI.A5 DI Trust Fund Asset Reserves, End of 

Calendar Years 2017 and 2018 . . . . . . . . . . . . . . . . . . . . . . . 162

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 1982-2019 under Intermediate Assumptions . . . . . . . . . . . 165

C. FISCAL YEAR HISTORICAL AND PROJECTED 

TRUST FUND OPERATIONS THROUGH 2028

VI.C1 Operations of the OASI Trust Fund, Fiscal Year 2018 . . . . . . . 171

VI.C2 Operations of the DI Trust Fund, Fiscal Year 2018 . . . . . . . . . 172

VI.C3 Operations of the Combined OASI and DI Trust Funds, 

Fiscal Year 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173

VI.C4 Operations of the OASI Trust Fund, Fiscal Years 2014-2028 . . 174

VI.C5 Operations of the DI Trust Fund, Fiscal Years 2014-2028 . . . . 175

VI.C6 Operations of the Combined OASI and DI Trust Funds,

Fiscal Years 2014-2028 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176

D. LONG-RANGE SENSITIVITY ANALYSIS

VI.D1 Sensitivity of OASDI Measures to Fertility Assumptions . . . . 178

VI.D2 Sensitivity of OASDI Measures to Death-Rate Assumptions . . 179

VI.D3 Sensitivity of OASDI Measures to 

Total Net Immigration Assumptions . . . . . . . . . . . . . . . . . . . 180

VI.D4 Sensitivity of OASDI Measures to Real-Wage Assumptions . . 182

VI.D5 Sensitivity of OASDI Measures to 

CPI-Increase Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 183

VI.D6 Sensitivity of OASDI Measures to 

Real-Interest Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 184

VI.D7 Sensitivity of OASDI Measures to 

Taxable Ratio Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . 185
List of Tables

251

VI.D8 Sensitivity of OASDI Measures to 

Disability Incidence Assumptions . . . . . . . . . . . . . . . . . . . . . 186

VI.D9 Sensitivity of OASDI Measures to 

Disability Termination Assumptions . . . . . . . . . . . . . . . . . . . 188

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY

VI.E1 Long-Range Estimates Relating to the Actuarial Status of

the Combined OASDI Program. . . . . . . . . . . . . . . . . . . . . . . 198

F. INFINITE HORIZON PROJECTIONS

VI.F1 Unfunded OASDI Obligations Through the Infinite Horizon and 

the 75-Year Projection Period, 

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 200

VI.F2 Present Values Through the Infinite Horizon 

for Various Categories of Program Participants, 

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 202

G. ESTIMATES FOR OASDI AND HI, 

SEPARATE AND COMBINED

VI.G1 Payroll Tax Contribution Rates for 

the OASDI and HI Programs . . . . . . . . . . . . . . . . . . . . . . . . 204

VI.G2 OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2019-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 206

VI.G3 Summarized OASDI and HI Income Rates and Cost Rates for 

Valuation Periods, Calendar Years 2019-2093 . . . . . . . . . . . . 208

VI.G4 OASDI and HI Annual and Summarized Income, Cost, and 

Balance as a Percentage of GDP, 

Calendar Years 2019-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 211

VI.G5 Ratio of OASDI Taxable Payroll to GDP, 

Calendar Years 2019-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 213

VI.G6 Selected Economic Variables, Calendar Years 2018-2095 . . . . 216

VI.G7 Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2019 Dollars, Calendar Years 2019-2095 . . . . 218

VI.G8 Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2019-2095 . . . . . . . . . . . . 220

VI.G9 OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2019 Dollars, 

Calendar Years 2019-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 222

VI.G10 OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2019-2095. . . . . . 224
List of Tables

252

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 . . . . . . . . . . . . . . . . . 227

VI.H2 Scheduled Benefit Payments Under the OASDI Program

With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 229
List of Figures

253

LIST OF FIGURES

II. OVERVIEW

II.D1 Short-Range OASI and DI Combined Trust Fund Ratio . . . . . 10

II.D2 OASDI Income, Cost, and Expenditures as 

Percentages of Taxable Payroll . . . . . . . . . . . . . . . . . . . . . . . 12

II.D3 Number of Covered Workers Per OASDI Beneficiary. . . . . . . 13

II.D4 OASDI Cost and Non-interest Income as 

a Percentage of GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

II.D5 Cumulative Scheduled OASDI Income Less Cost,

From Program Inception Through Years 2018-2093 . . . . . . . . 16

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

Under Alternative Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . 18

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

From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 19

II.D8 OASDI Annual Balances: 2018 and 2019 Trustees Reports. . . 21

IV. ACTUARIAL ESTIMATES

IV.A1 Short-Range OASI and DI Trust Fund Ratios. . . . . . . . . . . . . 42

IV.B1 Long-Range OASI and DI Annual Income Rates 

and Cost Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57

IV.B2 Number of OASDI Beneficiaries Per 100 Covered Workers . . 62

IV.B3 Long-Range OASI and DI Trust Fund Ratios . . . . . . . . . . . . . 66

IV.B4 OASDI Annual Balances: 2018 and 2019 Trustees Reports. . . 78

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

V.C1 Primary-Insurance-Amount Formula for 

Those Newly Eligible in 2019. . . . . . . . . . . . . . . . . . . . . . . . 117

V.C2 OASI Maximum-Family-Benefit Formula for 

Those Newly Eligible in 2019. . . . . . . . . . . . . . . . . . . . . . . . 118

V.C3 DI Disability Incidence Rates, 1970-2095 . . . . . . . . . . . . . . . 134

V.C4 DI Disability Termination Rates, 1970-2095 . . . . . . . . . . . . . 136

V.C5 Comparison of DI Disability Incidence Rates, 

Termination Rates and Conversion Ratios 

Under Intermediate Assumptions, 1970-2095 . . . . . . . . . . . . . 137

V.C6 DI Disability Prevalence Rates, 1970-2095 . . . . . . . . . . . . . . 140
List of Figures

254

VI. APPENDICES

VI.E1 Long-Range OASDI Cost Rates From Stochastic Modeling . . 192

VI.E2 Long-Range OASDI Trust Fund Ratios 

From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 193

VI.E3 OASDI Cost Rates: Comparison of Stochastic to Low-Cost, 

Intermediate, and High-Cost Alternatives . . . . . . . . . . . . . . . 194

VI.E4 OASDI Trust Fund (Unfunded Obligation) Ratios: 

Comparison of Stochastic to Low-Cost, Intermediate, 

and High-Cost Alternatives. . . . . . . . . . . . . . . . . . . . . . . . . . 196

VI.G1 Estimated OASDI Income and Cost in CPI-indexed 

2019 Dollars, Based on Intermediate Assumptions . . . . . . . . . 219
255

Index

INDEX

A

Actuarial balance 10, 15, 50, 163, 177

Actuarial deficit 4, 15, 22, 68, 208

Actuarial estimates, LR 50

Actuarial estimates, SR 39

Adjusted program amounts 113

Administrative expenses 6, 34, 51, 150, 154, 171, 209, 217

Advance tax transfers 39, 63, 156

Amendments 36

Annual balance 20, 50, 73

Asset reserves 2, 6, 9, 28, 171, 184, 203

Assumptions 9, 79, 97, 113, 163, 177, 204, 209, 214, 226

Automatic cost-of-living benefit increase 43, 98, 113

Auxiliary benefits 123

Average benefits 147

Average earnings assumptions 100

Average indexed monthly earnings (AIME) 116

Average wage index 113, 214

Award 125

B

Baby-boom generation 3, 22, 51, 60, 106, 132

Bend points 116

Beneficiaries, DI 131

Beneficiary 12, 43, 60, 79, 114, 166, 178, 209, 217, 226

Beneficiary, OASI 125

Benefit payments 6, 51, 147, 154, 171

Benefit termination 8

Best estimate 8, 37, 79

Board of Trustees 37, 97, 152

C

Constant dollars 219

Consumer Price Index 98, 182, 214, 231

Contribution and benefit base 42, 100, 114, 231

Contributions 6, 152, 171, 203, 209, 217, 230

Cost 2, 6, 28, 46

Cost rate 4, 51, 203

Cost-of-living adjustment 113

Covered earnings 6, 113, 213

Covered employment 8, 42, 100, 121, 152, 181

Covered worker 62, 179

Creditable earnings 233

Current dollars 214
Index

256

Current-payment status 45, 136, 137, 138, 231

D

Deemed wage credit 51

Delayed retirement credit 120

Demographic assumptions 8, 20, 37, 80, 106, 113, 163, 215, 230

Deterministic model 189, 198

DI beneficiaries 131

Disability 152, 180, 226

Disability conversion ratio 136

Disability incidence rate 79, 131, 134, 180, 186, 230

Disability Insurance Trust Fund 232

Disability prevalence rate 138, 140

Disability termination rate 187

Disabled-worker benefit 134, 234

Disbursements 37

E

Earnings 2, 6, 51, 100, 114, 152, 164, 203, 213, 214, 230

Earnings test 101, 114, 231

Economic assumptions 8, 20, 37, 48, 97, 106, 113, 163, 215, 230

Excess wages 51, 214

Expenditures 37, 235

F

Federal Insurance Contributions Act 203, 240

Fertility assumptions 80

Financial interchange 6, 150, 154

Fiscal year 156, 170

Full advance funding 235

G

General Fund of the Treasury 41, 43, 45, 47, 156, 158, 160, 174, 175, 176,

230

General fund reimbursement 236

Gross domestic product 4, 10, 57, 79, 98, 108, 209

Gross domestic product projections 108

H

High-cost assumptions 8, 17, 37, 52, 79, 97, 135, 177, 197, 204, 210, 214,

230

Hospital Insurance program 144, 203, 238

Hospital Insurance Trust Fund 209

I

Immigration 8, 79, 85, 180, 189, 230, 237
257

Index

Immigration assumptions 85

Income rate 4, 11, 51, 203

Infinite horizon 10

Inflation 8, 79, 98, 214, 230

Inflation assumptions 98

Insured population 8, 122

Insured status 118

Interest 109, 153, 163, 171, 205, 230

Interest rate 79, 163, 184, 230

Interest rate projections 109

Interest rates 8

Interfund borrowing 156, 237

Intermediate assumptions 8, 37, 43, 52, 79, 134, 177, 205, 210, 214, 218,

219, 220, 226, 230

L

Labor force projections 105

Lawful Permanent Resident (LPR) immigration 85

Legal immigration 237, 238

Life expectancy 4, 22, 79, 94, 105, 238

Life expectancy estimates 93

Long range 10, 50, 80, 125, 163, 203, 209

Low-cost assumptions 8, 17, 37, 52, 79, 97, 135, 177, 197, 204, 214, 230

Lump-sum death payment 148

M

Medicare 81, 238

Military service 51, 152, 156, 158, 160

N

National average wage index 214

Normal retirement age 114, 131, 148, 233

O

OASI beneficiaries 125

Old-Age and Survivors Insurance Trust Fund 152, 232

Old-law base 118

Other immigration 239

Other-than-LPR immigration 85

P

Par value 154

Partial advance funding 240

Pay-as-you-go financing 163

Payroll taxes 2, 113, 141, 166, 199, 203, 217

Population estimates 91
Index

258

Population in the Social Security area 42, 62, 91, 121, 180

Present value 163

Primary insurance amount (PIA) 116

Productivity assumptions 98

Q

Quarters of coverage 122

R

Railroad Retirement 51, 67, 118, 150, 154, 171, 172, 173, 203, 209, 217,

232

Reallocation of tax rates 241

Real-wage differential 103, 181

Retired-worker benefit 125, 179, 226

Retirement age 114, 148, 233

Retirement earnings test 100, 114

Retirement eligibility age 180

S

Scenario-based model 241

Scheduled benefits 183, 209, 217, 228, 241

Self-employment 51, 99, 204, 240

Self-Employment Contributions Act 240, 241

Sensitivity analysis 177

Short range 9, 39, 125

Social Security Act 113, 153, 214, 226, 232

Social Security amendments 36

Solvency 242

Special public-debt obligation 112, 153, 184

Stochastic projections 189

Substantial gainful activity 131, 234

Summarized balance 210

Summarized income and cost rates 67, 163, 177, 207, 230

Supplemental Security Income 171

Supplementary Medical Insurance program 203, 238

Survivor benefit 2, 7, 128, 231

Sustainable solvency 63, 64

T

Taxable earnings 42, 62, 114, 164, 231

Taxable payroll 4, 22, 51, 99, 122, 163, 178, 203, 209, 214, 232

Taxable ratio 185

Taxable self-employment income 243

Taxable wages 146, 204, 244

Taxation of benefits 6, 146, 209, 217, 237
259

Index

Taxes 6, 113, 204

Termination 79

Termination rate 8, 125, 187, 230

Test of long-range close actuarial balance 50, 63, 65

Test of short-range financial adequacy 3, 9, 10, 39, 40, 65, 66, 241, 244

Total fertility rate 80, 177

Trust fund financial operations 6, 24, 39, 152

Trust fund ratio 9, 39, 50, 63, 156, 174, 246

Trust fund reserves 39

U

Unemployment projections 105

Unfunded obligation 4, 10, 15, 17, 50, 70, 71, 200, 201, 239, 246, 247

Unnegotiated check 171

V

Valuation period 15, 48, 50, 163, 177, 207, 230

Vocational rehabilitation 51, 154, 172, 209, 217, 228, 232

Y

Year of depletion 11, 14, 50, 65
260

STATEMENT OF ACTUARIAL OPINION

It is my opinion that, with the important caveat 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.

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

which trust fund asset 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 43 of this report directs the reader to an appendix 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 law, under which

benefits cannot be paid in full on a timely basis after 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, $13.9 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.
261

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 current

or deferred earmarked resources for the specific program financed from the

trust fund. 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.

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 asset 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