Status of the 

Social Security 

and Medicare 

Programs

A SUMMARY OF THE

2024 ANNUAL REPORTS

Social Security and Medicare

Boards of Trustees

2024
The Social Security and Medicare Trustees Reports, as well as

this document, are available at the following addresses:

Social Security (OASDI): www.ssa.gov/OACT/TR/2024/

Medicare (HI and SMI): www.cms.gov/OACT/TR/2024

Summary: www.ssa.gov/OACT/TRSUM/

Other information about Social Security benefits and services is available at

www.ssa.gov or by calling toll-free 1-800-772-1213.

Other information about Medicare benefits and services is available at

www.cms.gov or by calling toll-free 1-800-633-4227.
1

A MESSAGE TO THE PUBLIC . . . . . . . . . . . . . . . . . . . . . .2

INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6

BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7

What are the Trust Funds? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

How are the Social Security and Medicare programs

financed?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Who are the Trustees? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

PROGRAM OPERATIONS IN 2023 . . . . . . . . . . . . . . . . 11

How many people received benefits from the programs? . . . . 11

How large are the asset reserves in the trust funds 

right now? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

How did program income compare to costs in 2023? . . . . . . . 11

What were the sources of program income in 2023?. . . . . . . . 11

What program costs were paid during 2023?. . . . . . . . . . . . . . 13

PROJECTED TRUST FUND OPERATIONS. . . . . . . . . 13

What are the annual income and costs for 

the trust funds? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Do the trust funds have an annual surplus 

or deficit? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

What are the costs and income in relation to GDP? . . . . . . . . 17

How will cost growth change the sources of 

Medicare financing? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

PROJECTED TRUST FUND ADEQUACY . . . . . . . . . . 20

What is the outlook for short-range trust fund 

adequacy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

What is the outlook for long-range trust fund 

adequacy? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

CHANGES REFLECTED IN THE 2024 REPORTS . . . 24

How does this outlook for Social Security compare 

to last year’s? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

How does this outlook for Medicare compare 

to last year’s? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

MESSAGE FROM THE PUBLIC TRUSTEES. . . . . . . . 29

GLOSSARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

TABLE OF CONTENTS
2

A MESSAGE TO THE PUBLIC:

The Trustees of the Social Security and Medicare trust funds report on the 

current and projected financial status of the two programs each year. This 

document summarizes the findings of the 2024 reports. As in prior years, 

we found that the Social Security and Medicare programs both continue 

to face significant financing issues. 

Based on our best estimates, this year’s reports show that:

• The Old-Age and Survivors Insurance (OASI) Trust Fund will be 

able to pay 100 percent of total scheduled benefits until 2033, 

unchanged from last year’s report. At that time, the fund’s reserves 

will become depleted and continuing program income will be sufficient to pay 79 percent of total scheduled benefits.

• The Disability Insurance (DI) Trust Fund is projected to be able to 

pay 100 percent of total scheduled benefits through at least 2098, the 

last year of this report’s projection period. Last year’s report projected that the DI Trust Fund would be able to pay scheduled benefits through at least 2097, the last year of that report’s projection 

period.

• If the OASI Trust Fund and the DI Trust Fund projections are combined, the resulting projected fund (designated OASDI) would be 

able to pay 100 percent of total scheduled benefits until 2035, one 

year later than reported last year. At that time, the projected fund’s 

reserves would become depleted, and continuing total fund income 

would be sufficient to pay 83 percent of scheduled benefits. (The 

two funds could not actually be combined unless there were a 

change in the law, but the combined projection of the two funds is 

frequently used to indicate the overall status of the Social Security 

program.)

• The Hospital Insurance (HI) Trust Fund will be able to pay 

100 percent of total scheduled benefits until 2036, 5 years later than 

reported last year. At that point, that fund’s reserves will become 

depleted and continuing program income will be sufficient to pay 

89 percent of total scheduled benefits. 

• The Supplementary Medical Insurance (SMI) Trust Fund is adequately financed into the indefinite future because, unlike the other 

trust funds, its main financing sources—enrolled beneficiary premiums and the associated federal contributions from the Treasury—are 
3

automatically adjusted each year to cover costs for the upcoming 

year. Although the financing is assured, the rapidly rising SMI costs 

have been placing steadily increasing demands on beneficiaries and 

general taxpayers. 

The projected long-term finances of the combined OASDI fund improved 

this year primarily due to an upward revision to the level of labor productivity over the projection period and a lower assumed disability incidence 

rate. These improvements were partially offset by a decrease in the 

assumed long-term total fertility rate. The revision to labor productivity 

was based on stronger economic growth in 2023 than had been anticipated in last year’s reports. The Trustees lowered the long-term disability 

incidence and fertility rate assumptions based on continued low levels in 

both series.

The projected long-term finances of the HI Trust Fund also improved this 

year relative to last. This improvement was due to several factors, including a policy change correcting for the way medical education expenses 

are accounted for in Medicare Advantage rates starting in 2024, higher 

payroll tax income resulting from the stronger-than-expected economy, 

and actual 2023 expenditures that were lower than projected last year. 

The change in the projected long-term finances of the SMI Trust Fund 

from last year’s report varies over the projection period. For Part B, the 

long-range projections as a percent of GDP are lower than those projected 

last year through 2056 and higher thereafter. This change reflects the 

combined effects of lower projected spending for outpatient hospital and 

home health agency services and revised GDP projections. For Part D, the 

expenditure share of GDP is projected to be higher than last year early in 

the projection period and to continue to vary but become more similar to 

last year’s estimates later in the projection period. These changes largely 

reflect revisions to drug utilization, enrollment, and GDP projections.

Lawmakers have many options for changes that would reduce or eliminate the long-term financing shortfalls. Taking action sooner rather than 

later will allow consideration of a broader range of solutions and provide 

more time to phase in changes so that the public has adequate time to prepare. 
4

By the Trustees:

JANET YELLEN, Secretary of the Treasury,

and Managing Trustee 

of the Trust Funds.

JULIE A. SU, Acting Secretary of Labor,

and Trustee.

XAVIER BECERRA

Secretary of Health and Human Services,

and Trustee.

MARTIN O’MALLEY, Commissioner of Social Security, 

and Trustee.

6

INTRODUCTION

This summary of the 2024 Trustees Reports describes the outlook for both 

the Social Security and Medicare programs and the projected actuarial 

status of the trust funds that finance them. It presents results based on the 

Trustees’ best estimates of likely future demographic, economic, and program-specific conditions, which are referred to as the intermediate set of 

assumptions in the Trustees Reports.1

Trust fund depletion dates are a common way of tracking the status of the 

trust funds since, if annual income is not sufficient, full scheduled benefits in the law cannot be paid after trust fund asset reserves are depleted. 

Asset reserves are projected to become depleted in 2033 for OASI, the 

same year as in last year’s report, and in 2036 for HI, five years later than 

in last year’s report. Starting at those dates, less than full scheduled benefits would be payable. The DI Trust Fund is projected to be able to pay 

full benefits through the end of the long-range projection period (2098).

Another measure of the status of the trust funds is called the “actuarial 

balance.”2 A negative actuarial balance is called an actuarial deficit and 

represents a shortfall in financing; a positive actuarial balance is called an 

actuarial surplus. OASI and HI have actuarial deficits over the next 

75-year period; the DI Trust Fund has an actuarial surplus.

Table 1 lists the 2024 Trustees Reports’ key findings for each of the separate trust funds established under the law.

1 In addition to the intermediate set of assumptions reflected in this summary, the Trustees Reports 

include results illustrating ranges of uncertainty in measures of trust fund actuarial status. One 

approach develops results under low-cost and high-cost alternative sets of assumptions. A second 

approach conducts an analysis of the sensitivity of the projection to different assumptions by varying 

one assumption parameter at a time. The OASDI report also includes a third approach, using stochastic simulations to produce a probability distribution of future projected outcomes.

2 The actuarial balance for the 75-year valuation period is the difference between the summarized 

income rate and the summarized cost rate as percentages of taxable payroll. When that balance is negative, or is an “actuarial deficit,” projected income over the valuation period plus any trust fund 

reserves at the start of the period are insufficient to pay all program costs over the period and leave an 

adequate “contingency reserve” at the end of the period. For the 2024 reports, the valuation period is 

the 75-year period from 2024 to 2098.
7

It is often useful to consider the findings for the two Social Security trust 

funds (OASI and DI) on a combined basis. The actuarial deficit for Social 

Security as a whole – called OASDI – is 3.50 percent of taxable payroll. If 

these two legally separate trust funds were combined, then the hypothetical OASDI asset reserves would be projected to become depleted in 2035 

and 83 percent of scheduled Social Security benefits would be payable at 

that time, declining to 73 percent by 2098.

BACKGROUND

What are the Trust Funds? 

There are four trust funds into which Social Security and Medicare program income are transferred and in which asset reserves are held. Those 

asset reserves and program income from dedicated financing sources, 

such as the payroll tax, are used to pay the programs’ benefits. Each trust 

fund pays only the types of benefits it is permitted to pay under law. 

These trust funds were established by Congress and are managed by the 

Secretary of the Treasury.

The four trust funds are:

• Old-Age and Survivors Insurance (OASI) Trust Fund

• Disability Insurance (DI) Trust Fund

Table 1: KEY FINDINGS OF THE 2024 TRUSTEES REPORTS

Social Security Medicare

Old-Age and 

Survivors 

Insurance 

(OASI)

Disability 

Insurance 

(DI)

Hospital 

Insurance 

(HI)

Supplementary 

Medical 

Insurance 

(SMI)

Types of benefits paid from 

the trust fund

Retirement and 

survivor benefits

Disability 

benefits

Inpatient 

hospital and 

post-acute care 

(Part A)

Physician and 

outpatient care 

(Part B), and 

prescription 

drugs (Part D)

Full scheduled benefits are 

expected to be payable until 2033

At least 

through 2098 2036 Indefinitely

Percentage of scheduled 

benefits payable at time of 

reserve depletion a79

aThe percent of scheduled benefits payable is projected to decline to 69 percent by 2098.

— b89

bThe percent of scheduled benefits payable is projected to decline to 87 percent by 2048 before gradually 

increasing to 100 percent by 2098.

—

75-year actuarial balance, as

a percent of taxable payroll -3.63 .14 -.35 —
8

• Hospital Insurance (HI) Trust Fund

• Supplementary Medical Insurance (SMI) Trust Fund

The OASI and DI Trust Funds are distinct legal entities and operate independently. The two funds are sometimes considered on a combined basis, 

referred to as OASDI, to illustrate the status of the Social Security program as a whole.

The only disbursements permitted from the funds are benefit payments 

and administrative expenses. The Trustees must invest all excess funds in 

interest-bearing securities backed by the full faith and credit of the United 

States. The Department of the Treasury currently invests all program revenue in special non-marketable U.S. Government securities, which earn 

interest equal to average rates on marketable securities with durations 

defined in law.

The balances in the trust funds represent the accumulated value, including 

interest, of all prior program annual surpluses and deficits.

How are the Social Security and Medicare programs financed? 

Under current law, the ways the programs are financed differ by type of 

benefit. 

OASI and DI Financing

OASI and DI are financed almost exclusively by payroll taxes, income 

tax on Social Security benefits, and interest on trust fund asset reserves.

OASI and DI receive most of their income from payroll taxes. Payroll tax 

contributions consist of taxes paid by employees, employers, and selfemployed workers. Self-employed workers pay the equivalent of the combined employer and employee tax rates.

Federal law establishes payroll taxes for OASI and DI, which apply to 

earnings up to an annual maximum ($168,600 in 2024). The maximum 

usually increases each year as the national average wage increases. 

Table 2: 2024 SOCIAL SECURITY PAYROLL TAX 

CONTRIBUTION RATES

[In percent]

OASI DI

Total

OASDI

Employees . . . . . . . . . . . . . . . 5.30 0.90 6.20

Employers. . . . . . . . . . . . . . . . 5.30 .90 6.20

Self-employed workers. . . . . . 10.60 1.80 12.40
9

Who Pays Income Tax on Their Social Security Benefits?

Social Security beneficiaries with incomes above $25,000 for individuals (or $32,000 for married couples filing jointly) pay income 

taxes on up to 50 percent of their benefits, with the revenues going 

to the OASI and DI Trust Funds. Those with incomes above 

$34,000 (or $44,000 for married couples filing jointly) pay income 

taxes on up to 85 percent of benefits, with the additional revenues 

from taxation of more than the first 50 percent going to the HI 

Trust Fund.

HI Financing

Medicare HI receives financing from payroll taxes, income tax on Social 

Security benefits, premiums, and interest on trust fund asset reserves.

HI receives most of its income from payroll taxes. Federal law establishes 

the payroll tax rates for HI. 

Unlike OASI and DI, there is no annual maximum on earnings subject to 

the HI payroll tax. There is an additional 0.9 percent HI tax on earnings 

over $200,000 for individual tax return filers and over $250,000 for joint 

tax return filers.

HI also receives income from monthly premiums paid by or on behalf of 

individuals who are voluntarily enrolled in Medicare Part A. 

SMI Financing

Medicare SMI receives financing from Government contributions, premiums paid by enrollees, payments from States, and interest on reserves. For 

SMI, Government contributions, which are set prospectively based on 

projected program costs for the year, represent the largest source of 

income. 

Table 3: 2024 MEDICARE HI PAYROLL TAX CONTRIBUTION RATES

[In percent]

HI

Employees. . . . . . . . . . . . . . . . . . 1.45

Employers . . . . . . . . . . . . . . . . . . 1.45

Self-employed workers . . . . . . . . 2.90
10

Part B and Part D enrollees pay monthly premiums3 that cover most of the 

costs that the Government contributions do not cover. Under current law, 

Part B and Part D premium amounts increase as the estimated costs of 

those programs rise. 

In 2024, the Part B standard monthly premium is $174.70. Individual tax 

return filers whose modified adjusted gross income exceeds $103,000 and 

joint return filers who exceed $206,000 must pay the standard premium 

plus an income-related adjustment amount. In 2024, that additional 

amount ranges from $69.90 to $419.30 per month.

In 2024, the Part D base beneficiary premium is $34.70. However, actual 

premium amounts charged to Part D beneficiaries depend on the specific 

plan they have selected. The actual amount for the basic benefit is projected to average around $33 each month for standard coverage in 2024. 

If Part D enrollees have modified adjusted gross income that exceeds the 

same threshold amounts listed just above for Part B, they must pay an 

income-related adjustment amount. That additional amount ranges from 

$12.90 to $81.00 per month in 2024.

Part D also receives payments from States that reflect the estimated 

amounts they would have paid for prescription drug costs for individuals 

eligible for both Medicare and Medicaid if Medicaid was still the primary 

payer.

Finally, the SMI Trust Fund also receives income from interest on its 

accumulated reserves invested in U.S. Government securities.

Who are the Trustees? 

The Social Security Act established the Social Security and Medicare 

Boards of Trustees to oversee the financial operations of the Social Security and Medicare trust funds. Further, the Social Security Act requires 

that the Boards report annually to the Congress on the financial and actuarial status of the trust funds.

By law, there are six Trustees. Four of them 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 also appoints two other Trustees as public representatives, 

and their appointments are subject to confirmation by the Senate. The 

Public Trustee positions have been vacant since July 2015.

3 The premium for certain low-income beneficiaries is paid on their behalf by Medicaid for Part B 

and by Medicare for Part D.
11

PROGRAM OPERATIONS IN 2023

How many people received benefits from the programs?

At the end of 2023, 58.6 million people received OASI benefits and 

8.5 million received DI benefits. Additionally, 66.7 million people were 

enrolled in Medicare. 

How large are the asset reserves in the trust funds right now?

At the end of 2023, OASI asset reserves were $2,641.5 billion, DI asset 

reserves were $147.0 billion, HI asset reserves were $208.8 billion, and 

SMI asset reserves were $187.9 billion. The OASI and SMI Trust Fund 

asset reserves declined in 2023; DI and HI Trust Fund asset reserves 

increased. 

How did program income compare to costs in 2023?

In 2023, the OASI Trust Fund’s cost of $1,237.3 billion exceeded income 

by $70.4 billion. In contrast, the DI Trust Fund’s income of $183.8 billion 

exceeded cost by $29.0 billion. Combining the experience of the two separate funds, Social Security’s cost exceeded income by $41.4 billion. 

The HI Trust Fund’s income of $415.3 billion exceeded cost by 

$12.2 billion, but the SMI Trust Fund’s income of $609.3 billion fell short 

of cost by $24.7 billion.

What were the sources of program income in 2023? 

Program income received from each source is as follows:

Table 4: TRUST FUND OPERATIONS, 2023

[In billions]

OASI DI HI SMI

Reserves (end of 2022) . . . . . . . . $2,711.9 $118.0 $196.6 $212.6

+ Income during 2023. . . . . . . . . 1,166.9 183.8 415.3 609.3

- Cost during 2023 . . . . . . . . . . . 1,237.3 154.8 403.1 633.9

Net change in reserves . . . . . . -70.4 29.0 12.2 -24.7

Reserves (end of 2023) . . . . . . . . 2,641.5 147.0 208.8 187.9

Note: Totals do not necessarily equal the sums of rounded components.
12

Additional details and the percentage of total program income received by 

source are described below:

• Income from payroll taxes—An estimated 182.8 million people paid 

Social Security payroll taxes in 2023, and 186.7 million people paid 

Medicare payroll taxes. Income from payroll taxes accounted for 

approximately 90 percent, 97 percent, and 88 percent of OASI, DI, 

and HI total income, respectively.

• Income from income tax on Social Security benefits—Income tax on 

Social Security benefits accounted for 4 percent of OASI income, 

1 percent of DI income, and 8 percent of HI income.

• Income from interest on asset reserves—Interest earnings made up 

5 percent of total income to the OASI Trust Fund, 2 percent of total 

income to the DI Trust Fund, 1 percent for the HI Trust Fund, and 

1 percent for the SMI Trust Fund.

• Federal government contributions—Government contributions 

accounted for 72 percent of total SMI income, financed 69 percent of 

SMI Part B and Part D program costs, and were less than 1 percent of 

HI income.

• Income from Medicare premiums—Premiums paid by enrolled beneficiaries accounted for approximately 25 percent of SMI total income 

and 1 percent of HI total income.

• Income from payment from States—State payments covered about 

12 percent of Part D costs, accounting for approximately 3 percent of 

total SMI income.

Table 5: PROGRAM INCOME, 2023

[In billions]

Source OASI DI HI SMI

Payroll taxes . . . . . . . . . . . . . . . . $1,054.1 $179.0 $367.2 —

Taxes on OASDI benefits . . . . . . 49.8 .9 35.0 —

Interest earnings . . . . . . . . . . . . . 63.0 3.8 5.7 $4.3

Government contributions . . . . . — — 1.2 435.8

Beneficiary premiums. . . . . . . . . — — 4.9 150.1

Payments from States . . . . . . . . . — — — 15.8

Other . . . . . . . . . . . . . . . . . . . . . . a a 1.4 3.2

Total . . . . . . . . . . . . . . . . . . . . . . 1,166.9 183.8 415.3 609.3

aBetween $-50 million and $50 million.

Note: Totals do not necessarily equal the sums of rounded components. 
13

What program costs were paid during 2023? 

The 2023 program costs for each of the trust funds are:

Benefit payments accounted for 99 percent of OASI program costs, 

98 percent of DI program costs, 99 percent of HI costs, and 99 percent of 

SMI costs.

Administrative expenses made up 0.4 percent of OASI program costs, 

1.8 percent of DI program costs, 1.4 percent of HI program costs, and 

0.9 percent of SMI program costs.

PROJECTED TRUST FUND OPERATIONS

Each year, the Trustees project the future cost and income for each of the 

trust funds for the next 75 years. This section provides the short-range 

(10-year) and long-range (75-year) financial projections for the OASI, DI, 

and HI Trust Funds. The SMI Trust Fund is not discussed in this context 

because Federal law sets premium increases and Government contributions so that annual income matches annual costs.

Since 2021, the OASI Trust Fund has been drawing down asset reserves 

to finance benefits and will require increasing amounts of asset redemptions during the next decade. The OASI Trust Fund has a projected 

reserve depletion date of 2033, the same year as in last year’s report. 

The DI Trust Fund is projected to remain solvent throughout the longrange period, as in last year’s report. The DI trust fund ratio increases 

Table 6: PROGRAM COST, 2023

[In billions]

Category OASI DI HI SMI

Benefit payments . . . . . . . . . . . . . . . . . . . $1,227.4 $151.9 $397.5 $628.0

Railroad Retirement financial 

interchangea . . . . . . . . . . . . . . . . . . . . .

aFunds are shifted between the Railroad Retirement program and the Social Security trust funds on an annual basis 

so that each trust fund is in the same financial position it would have been had railroad employment always been 

covered under Social Security.

5.6 .1 — —

Administrative expensesb . . . . . . . . . . . .

bAdministrative expenses include expenses incurred by the Social Security Administration, the Department of 

Health and Human Services, and the Department of the Treasury in administering the programs and the provisions 

of the Internal Revenue Code relating to the collection of contributions.

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

4.4 2.8 5.6 6.0

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,237.3 154.8 403.1 633.9
14

throughout the projection period from 92 percent at the beginning of 2024 

to 858 percent for 2098. 

The Trustees project that the combined OASI and DI Trust Fund reserves 

will continue to decrease in 2024 because total cost ($1,482 billion) is 

expected to exceed total income ($1,382 billion). For OASDI, the Trustees project that total cost will exceed total income in all future years, as it 

has starting in 2021. 

The Trustees project an increase in HI Trust Fund asset reserves in 2024, 

as total income ($442 billion) is expected to exceed total cost 

($417 billion). Small annual surpluses are anticipated through 2029, but 

annual HI deficits are projected to return in 2030 and to persist through 

asset depletion in 2036. The Trustees expect growing deficits through 

about 2045. After 2045, the size of the projected deficits decreases and a 

small HI Trust Fund surplus is projected for 2098. 

The key dates for the OASI, DI, and HI Trust Funds are:4

What are the annual income and costs for the trust funds? 

Because the primary source of income for OASDI and HI is the payroll 

tax, it is useful when assessing the financial outlook to express the programs’ incomes and costs as percentages of taxable payroll.5 Chart A 

illustrates the size of income and cost relative to earnings subject to taxation for each of these programs. In this illustration, interest income is not 

included in OASDI and HI income. Interest income accounts for a smaller 

share of program income as trust fund reserves decline.

4 HI results in this table of the Summary are on a cash rather than the incurred expenditures basis.

Table 7: KEY DATES FOR THE TRUST FUNDS

OASI DI OASDI HI

First year cost exceeds income 

excluding interesta . . . . . . . . . . . . . 

aDates indicate the first year a condition is projected to occur and then persist each year through 2098.

2010 b 2010 e

First year cost exceeds total income 

including interesta . . . . . . . . . . . . . 2021 b

bProjected annual balances remain positive through 2098.

2021 2030

Year asset reserves are depleted. . . . 2033 c

cThe trust fund asset reserves are not projected to become depleted during the 75-year period ending in 2098.

d2035

dIf the legally separate OASI and DI trust funds were combined, the hypothetical combined OASDI asset reserves 

would become depleted in this year.

eCost exceeds income excluding interest in every year during 2030-97. There is a small projected surplus in 2098.

2036

5 A program’s cost rate is the ratio of cost incurred during the year to the taxable payroll for that year. 

The income rate is the ratio of non-interest income incurred during the year to the taxable payroll for 

the year. 
15

The percentages shown in Chart A are comparable within each program, 

but not across programs. This is because the two programs have different 

taxable payrolls. The OASDI payroll tax is imposed on earnings creditable for Social Security purposes up to an annual taxable maximum 

amount ($168,600 in 2024) that ordinarily increases each year with the 

growth in the nationwide average wage. There is no taxable maximum 

amount applied for the HI payroll tax. In addition, larger numbers of Federal, State, and local government employees are covered under the HI 

program. Therefore, HI taxable payroll is about 25 percent larger than 

OASDI payroll on average over the long-range period.

OASDI

Over time, the projected OASDI annual cost rate rises from 14.71 percent 

of taxable payroll in 2024 to 18.60 percent of taxable payroll by 2080. It 

then decreases to 18.12 percent in 2098. 

The projected OASDI income rate is relatively stable at a little above 

13 percent throughout the long-range period.

 Chart A–OASDI and HI Income and Cost as Percentages 

of Their Respective Taxable Payrolls

0%

5%

10%

15%

20%

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Ż Historical Projected Ź

OASDI Cost

OASDI Income

HI Cost

HI Income
16

HI

Over time, the projected HI annual cost rate rises from 3.30 percent of 

taxable payroll in 2024 to 4.50 percent of taxable payroll in 2045. The 

increase during this period is mostly attributable to rising per beneficiary 

spending and the impact of demographic shifts—notably, the aging of the 

baby boom population. After 2045, subsequent demographic shifts reduce 

the growth in cost rates. Projected HI expenditures rise to 4.69 percent of 

taxable payroll in 2080, then decline to 4.51 percent of taxable payroll in 

2098.

The projected HI income rate rises gradually from 3.43 percent in 2024 to 

4.52 percent in 2098. The increase in the HI income rate is primarily due 

to the higher payroll tax rates for high earners that began in 2013. An 

increasing fraction of all earnings will be subject to the higher tax rate 

over time because the thresholds are not indexed. By 2098, an estimated 

80 percent of workers would pay the higher rate.

Do the trust funds have an annual surplus or deficit? 

The difference between the annual income rate and annual cost rate of the 

trust funds is known as the annual balance. This is calculated for each 

year in the projection period. When annual costs exceed annual income, a 

trust fund has an annual deficit. When annual income exceeds annual 

costs, a trust fund has an annual surplus.

OASDI

The annual deficit ($41.4 billion) in 2023 for the OASDI trust funds was 

1.13 percent of taxable payroll. Projected annual deficits for the OASDI 

program gradually increase from 1.68 percent of taxable payroll in 2024 

to 5.08 percent in 2080, and then decline to 4.64 percent of taxable payroll in 2098. 

Compared to the 2023 report, the 2024 report shows smaller expected 

annual deficits through 2077, but larger thereafter. For the full 75-year 

projection period, the average annual deficit as a percentage of taxable 

payroll is about 0.13 percentage point lower than shown in the 2023 

report.

HI

In 2023, the HI Trust Fund experienced a small annual cash surplus 

($12.2 billion) of 0.10 percent of taxable payroll. The Trustees project 

small annual surpluses in 2024 through 2029. Deficits are expected to 

return beginning in 2030, requiring redemption of trust fund assets until 

the trust fund’s depletion in 2036.

The HI cost rate increases more rapidly than the income rate for most 

years through about 2044. The projected annual deficits expressed as a 
17

share of taxable payroll increase from 0.07 percent in 2029 to a high of 

0.60 percent in 2044 and then gradually decrease and become a surplus of 

0.01 percent by the end of the projection period. The convergence of 

growth rates for income and costs reflects the continuing effects of slower 

payment rate updates, assumed decelerating growth in the volume and 

intensity of services, and the increasing portion of earnings that are subjected to the additional 0.9-percent payroll tax. The percentage of expenditures covered by non-interest income is projected to decrease from 

89 percent in 2036 to 87 percent in 2048 and then to increase to about 

100 percent by the end of the projection period. 

What are the costs and income in relation to GDP?

To better understand the size of these projected costs, one can compare 

them to gross domestic product (GDP), the most frequently used measure 

of the total output of the U.S. economy. This comparison tells us how 

much of the nation’s total economic output is needed to finance these programs.

In 2024, Medicare’s annual cost is about 74 percent of Social Security’s 

annual cost. Medicare’s cost will nearly equal that of Social Security by 

2045. By 2084, Medicare cost is expected to equal or exceed that of 

Social Security through 2098.

The costs of both programs will grow faster than GDP through the mid2030s primarily due to the rapid aging of the U.S. population, and gener-

 Chart B–Social Security and Medicare Costs as a Percentage of GDP

0%

2%

4%

6%

8%

10%

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Ż Historical Projected Ź

HI + SMI

OASI + DI
18

ally continue to increase thereafter at a slower rate through 2076. This is 

because the number of beneficiaries rises rapidly as baby boomers retire 

and also because the persistently lower birth rates since the baby boom 

cause slower growth of employment and GDP.

Social Security (OASI and DI)

The Trustees project that Social Security’s annual cost will increase from 

5.2 percent of GDP in 2024 to about 6.4 percent in 2078. It then generally 

declines to 6.1 percent by 2098. The 75-year actuarial deficit equals 

1.2 percent of GDP through 2098, the same as reported last year.

Medicare (HI and SMI) 

Medicare’s costs under current law rise steadily from their current level of 

3.8 percent of GDP in 2023 to 5.8 percent in 2048. Costs then rise more 

slowly before leveling off at around 6.2 percent in the final 25 years of the 

projection period.

SMI spending is expected to be 2.4 percent of GDP in 2024, grow to 

4.0 percent by 2056, and further increase to 4.3 percent by 2098.

Social Security and Medicare, combined

The combined cost of the Social Security and Medicare programs is about 

9.0 percent of GDP in 2024. The Trustees project the combined cost of 

the programs will grow to 11.1 percent of GDP by 2035 and to 

12.3 percent by 2098, with most of the increase attributable to Medicare. 

Under current law, the projected costs for the OASI, DI, and HI programs 

as shown in the charts and described in this summary assume that the full 

benefits set out in law will continue to be paid. These programs are not 

allowed to pay any benefits beyond what is available from annual income 

and trust fund reserves, and they cannot borrow money. Therefore, after 

the trust fund asset reserves become depleted, and in the absence of additional legislation, the cost of benefits that would be paid is lower than 

shown in this summary. 

How will cost growth change the sources of Medicare financing?

Although Government contributions and beneficiary premiums already 

account for much of the income for the Medicare trust funds, they finance 

a growing share of overall Medicare costs. 

Chart C shows scheduled cost and non-interest revenue sources under 

current law for HI and SMI combined as a percentage of GDP. The total 

cost line is the same as displayed in Chart B and shows that the Trustees 

project Medicare cost to rise to 6.2 percent of GDP by 2098.
19

Projected revenue from payroll taxes and income taxes on OASDI benefits financing the HI Trust Fund increases from 1.5 percent of GDP in 

2024 to 1.9 percent in 2098 under current law. 

During the same period, projected Government contributions to the SMI 

Trust Fund increase more rapidly from 1.7 percent of GDP in 2024 to 

3.1 percent in 2098. Beneficiary premiums increase from 0.6 percent of 

GDP to 1.2 percent. Therefore, the share of total non-interest Medicare 

income from taxes declines from 39 percent to 30 percent, while the Government contributions share rises from 44 percent to 50 percent and the 

share of premiums rises from 15 percent to 19 percent. 

Medicare’s distribution of financing changes in large part because the 

Trustees project that costs for Part B and especially Part D increase at a 

faster rate than for Part A. The projected annual HI financial deficits 

beyond 2035 are about 0.3 percent of GDP through 2053, and they gradually decline and become a small surplus in 2098. There is no provision 

under current law to finance projected long-range HI deficits.

 Chart C–Medicare Cost and Non-Interest Income by Source

as a Percentage of GDP

0%

1%

2%

3%

4%

5%

6%

7%

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Ż Historical Projected Ź Total Cost

Deficit

Government

Contributions

State Payments

& Drug Fees

Premiums

Tax on OASDI 

Benefits

Payroll 

Taxes
20

The Implications of High Levels of General Fund Transfer 

Funding for Medicare

The law requires the Trustees to determine each year whether the 

proportion of annual Medicare costs funded by certain statutorily 

defined financing sources, primarily Government contributions to 

SMI, is expected to exceed 45 percent in any of the next 7 fiscal 

years. Further, two consecutive determinations trigger a “Medicare 

funding warning,” which requires that the President submit to Congress proposed legislation to respond to the warning within 15 days 

after submitting the budget (for FY 2026 due to this year’s warning). The law then requires Congress to consider the legislation on 

an expedited basis.

The Trustees have determined Medicare funding from Government 

contributions is expected to exceed 45 percent of total costs in fiscal year 2027. This is the eighth consecutive report the Trustees 

made such a determination and the seventh consecutive year that a 

Medicare funding warning has been issued.

PROJECTED TRUST FUND ADEQUACY

The 2024 reports project that the OASI and HI Trust Funds’ asset reserves 

are insufficient to pay full scheduled benefits throughout the 75-year projection period. The DI Trust Fund is projected to have sufficient income 

to pay full scheduled benefits throughout the long-range period. The SMI 

Trust Fund is adequately financed into the indefinite future because current law provides financing from Government contributions and beneficiary premiums each year to meet the next year’s expected costs.

Chart D shows the trust fund ratios for the OASI, DI, and HI Trust Funds 

throughout the 75-year projection period. The “trust fund ratio” is the 

value of trust fund asset reserves at the start of a year expressed as a percentage of the projected costs for the ensuing year. 

A trust fund ratio of 100 percent or more, or a ratio that is expected to 

reach 100 percent within 5 years and remain at or above 100 percent 

through the short-range period, indicates that the fund’s reserves are adequate in the short-range. That level of projected reserves for any year suggests that even if cost exceeds income, the trust fund reserves combined 

with annual tax revenues would be sufficient to pay full benefits for several years.
21

The financial outlook for the OASI and HI Trust Funds depends on a 

number of demographic and economic assumptions. Nevertheless, the 

actuarial deficit in both OASI and HI is large enough that averting trust 

fund depletion under current-law financing is extremely unlikely.

 Chart D–OASI, DI, and HI Trust Fund Ratios

[Asset reserves as a percentage of annual cost]

Table 8: ADEQUACY OF THE TRUST FUNDS

OASI DI OASDI HI

Year asset reserves are 

depleted. . . . . . . . . . . . . . . . . 2033 a

aThe trust fund reserves are not projected to become depleted during the 75-year period ending in 2098. 

The trust fund ratio is projected to be 858 percent in 2098.

b2035

bIf the OASI and DI trust funds were combined, hypothetically, the year the combined asset reserves 

would become depleted. 

2036

Percent of scheduled benefits able to be paid:

At the time of reserve 

depletion . . . . . . . . . . . . . 79 a 83 89

For 2098 . . . . . . . . . . . . . 69 a100 73 c100

cThe percent of scheduled benefits payable is projected to decline to 87 percent by 2044 before gradually 

increasing to 100 percent by 2098.

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Calendar year

Ż Historical Projected Ź

OASI

DI

HI
22

Table 8 summarizes the projected years of asset reserve depletion for the 

OASI, DI, and HI Trust Funds, as well as the expected percent of scheduled benefits that could be paid from program income at the time of asset 

reserve depletion and at the end of the 75-year projection period.

What is the outlook for short-range trust fund adequacy?

For the 75-year projection period, the short-range accounts for the first 

10 years, which is 2024 through 2033 for the 2024 reports. The shortrange adequacy of the OASI, DI, and HI Trust Funds is measured using 

the trust fund ratio.

The Trustees apply a less stringent annual “contingency reserve” test to 

SMI asset reserves. The financing for each part of SMI is considered adequate if it is sufficient to fund all services provided, including benefits and 

administrative expenses, through a given period (generally, through the 

end of the current calendar year). 

To account for the possibility that cost increases under either part of SMI 

will be higher than expected, the trust fund accounts need assets that are 

adequate to cover a reasonable degree of variation between actual and 

projected costs. For the SMI Trust Fund, the Trustees consider the adequacy for Part B and Part D separately.

The outlook of the trust funds over the short-range period is as follows:

• The OASI Trust Fund is not adequately financed throughout the 

short-range period and has not been since 2019. Its trust fund ratio is 

projected to decline from 200 percent at the beginning of 2024 to 

95 percent at the beginning of 2029.

• The DI Trust Fund is projected to be adequately financed throughout 

the short-range period. Its trust fund ratio is projected to increase 

from 92 percent at the beginning of 2024 to 104 percent by the beginning of 2025 and continues increasing for the remainder of the shortrange period.

• The HI Trust Fund is not adequately financed throughout the shortrange period and has not been since 2003. Its trust fund ratio is 

50 percent at the beginning of 2024 and is not projected to attain 

100 percent within the following 5 years. 

• For SMI Part B, the Trustees estimate that the financing established 

through December 2024 will be sufficient to cover benefits and 

administrative costs incurred through the current calendar year and 

that assets will be adequate to cover potential variations in costs as a 

result of new legislation or cost growth factors that exceed expectations. 

• For SMI Part D, the Trustees estimate the financing established for 

Part D, together with the flexible appropriation authority, would be 

sufficient to cover benefits and administrative costs incurred through 
23

2024. The Centers for Medicare & Medicaid Services calculate Part 

D premiums paid by enrollees based on the plan bids such that Part D 

revenues annually cover estimated costs. This flexible appropriation 

authority established by lawmakers for Part D allows additional 

financing through Government contributions if costs are higher than 

anticipated.

What is the outlook for long-range trust fund adequacy?

The long-range period is a 75-year valuation period, which is 2024-98 for 

the 2024 reports.

The long-range adequacy of the OASI, DI, and HI Trust Funds is measured using the actuarial balance.6 The actuarial balance captures how 

expected income for the 75-year projection period compares to the 

expected costs for the same period, as a percentage of taxable payroll.

A negative actuarial balance (a deficit) indicates that estimated income is 

insufficient to meet estimated trust fund obligations for all or part of the 

75-year period. A positive actuarial balance (a surplus) indicates that estimated income is more than sufficient to meet all obligations. 

A projected negative actuarial balance represents the average amount of 

change in income or cost that is needed over the 75-year period in order to 

achieve an actuarial balance of zero. An actuarial balance of zero indicates that costs can be met for the 75-year period with existing asset 

reserves and expected income, leaving asset reserves at the end of the 

period equal to the following year’s cost.

The long-range actuarial balances for the OASI, DI, and HI Trust Funds 

are:

• The OASI Trust Fund has a projected long-range actuarial deficit 

equal to 3.63 percent of taxable payroll, compared to 3.62 percent in 

the 2023 report. 

6 The actuarial balance is not relevant for the SMI Trust Fund, because Federal law sets premium 

increases and Government contributions at the levels necessary to bring the SMI Trust Fund into 

annual balance.

Table 9: LONG-RANGE ACTUARIAL BALANCE OF THE 

OASI, DI, AND HI TRUST FUNDS

[Percent of taxable payroll]

OASI DI OASDI HI

Actuarial

balance . . . . . . . . . . . . . . . . . -3.63 0.14 -3.50 -0.35
24

• The DI Trust Fund has a projected long-range actuarial surplus equal 

to 0.14 percent of taxable payroll, compared to 0.01 percent in the 

2023 report. The DI Trust Fund is in actuarial balance for the 75-year 

period. 

• The combined OASDI trust funds now have a projected long-range 

actuarial deficit equal to 3.50 percent of taxable payroll, compared to 

3.61 percent in the 2023 report. The actuarial deficit decreased in this 

year’s report primarily due to changes in economic factors and the 

lower assumed ultimate disability incidence rate. Those positive 

effects are partially offset by the lower assumed ultimate total fertility rate.

• Medicare’s HI Trust Fund now has a long-range actuarial deficit 

equal to 0.35 percent of taxable payroll, compared to 0.62 in the 

2023 report. Several factors contributed to the change in the actuarial 

balance, most notably changes to private health plan assumptions 

(primarily a policy change to exclude medical education expenses 

associated with Medical Advantage (MA) enrollees from the fee-forservice per capita costs used in the development of MA spending), 

lower-than-estimated 2023 HI expenditures, and higher-than-estimated 2023 payroll tax income. These improvements are partially 

offset by changes to economic and demographic assumptions.

A one-time, uniform increase in the payroll tax rate for all years starting 

in 2024 would be sufficient to achieve an actuarial balance of zero for the 

OASI and HI trust funds. Nonetheless, the relatively large variation in 

annual deficits implies that this approach would result in large annual surpluses early in the 75-year projection period but increasing annual deficits 

in later years. Sustainable solvency beyond the 75-year period would 

require larger payroll tax rate increases and/or benefit reductions than 

those needed on average for this report’s long-range period (2024-98).

CHANGES REFLECTED IN THE 2024 REPORTS

How does this outlook for Social Security compare to last year’s? 

This year’s report indicates that the expected year of depletion of asset 

reserves in the OASI Trust Fund is 2033, unchanged from last year.

Table 10: EXPECTED YEARS OF SOCIAL SECURITY TRUST FUND 

ASSET RESERVE DEPLETION

2024 Report 2023 Report Change

OASI. . . . . . . . . . . . . . . . . . . 2033 2033 None

DI . . . . . . . . . . . . . . . . . . . . . a

aThe trust fund reserves are not projected to become depleted during the 75-year period.

a N/A
25

The DI Trust Fund is again projected to be able to pay full benefits 

through the end of the 75-year projection period. If these two legally separate trust funds were combined, then OASDI trust fund asset reserves 

hypothetically would be projected to be depleted in 2035, one year later 

than in the 2023 report.

The actuarial balance for the combined OASDI trust funds improved in 

the 2024 report by 0.11 percentage point.

The change in the actuarial balance reflects the combined effects of 

changes in data and assumptions, changes in methods, and advancing the 

valuation period by one year. 

The following changes had the largest effects on the actuarial deficit:

• Updates to recent economic data and near-term assumptions about 

economic performance significantly improved the long-range actuarial balance. These changes include a higher assumed level of labor 

Table 11: CHANGE IN THE OASDI 75-YEAR ACTUARIAL BALANCE 

SINCE THE 2023 REPORT, BASED ON INTERMEDIATE 

ASSUMPTIONS

[As a percentage of taxable payroll]

Item OASI DI OASDI

Shown in the 2023 report:

Actuarial balance. . . . . . . . . . . . . . . . . . . . . . . . -3.62 0.01 -3.61

Changes in actuarial balance due to changes in:

Legislation / Regulation. . . . . . . . . . . . . . . . . aa a

Valuation period. . . . . . . . . . . . . . . . . . . . . . . -.05 -.01 -.06

Demographic data and assumptions . . . . . . . . -.16 -.01 -.16

Economic data and assumptions . . . . . . . . . . . .11 .02 .13

Disability data and assumptions . . . . . . . . . . . .01 .11 .12

Methods and programmatic data. . . . . . . . . . . .07 .01 .08

Total change in actuarial balance. . . . . . . . . . . . -.02 .13 .11

Shown in the 2024 report:

Actuarial balance. . . . . . . . . . . . . . . . . . . . . . . . -3.63 .14 -3.50

a Between -0.005 and 0.005 of taxable payroll.

Note: Totals do not necessarily equal the sums of components due to rounding. A negative actuarial balance is a deficit.
26

productivity over the projection period and increased OASDI-covered employment.

• The 75-year valuation period advanced from 2023-97 to 2024-98, 

which adds a high-deficit year (2098) into the calculation. Future annual 

balances are now discounted to January 1, 2024 rather than January 1, 

2023. 

• The ultimate disability incidence rate was lowered for this year’s 

report from 4.8 to 4.5 per thousand exposed. In addition, recent disability data and changes to the near-term disability incidence 

assumptions have been incorporated. 

• The ultimate total fertility rate (TFR) was lowered from 2.0 children 

per woman to 1.9 children per woman, and the year the ultimate TFR 

is reached was changed from 2056 to 2040. This change decreases 

the actuarial balance, partially offsetting the effects of factors that 

improve the balance. 

How does this outlook for Medicare compare to last year’s?

The expected year of depletion of the asset reserves in the HI Trust Fund 

has improved since the 2023 reports.

The Trustees project that Medicare expenditures will increase in future 

years at a faster pace than either aggregate workers’ earnings or the economy overall. The actuarial status for the HI Trust Fund has improved in 

the 2024 report, with a 0.27 percentage point increase in the actuarial balance.

Table 12: EXPECTED YEAR OF HI TRUST FUND ASSET RESERVE 

DEPLETION

2024 Report 2023 Report Change

HI . . . . . . . . . . . . . . . . . . . . . 2036 2031 5 years later
27

Several factors contributed to the decreased actuarial deficit. The following changes had the largest effects on the decline:

• There was a change in private health plan assumptions and payment 

policy that removes indirect medical education and direct graduate 

medical education costs for services associated with Medical Advantage (MA) enrollees from the fee-for-service per capita costs used to 

calculate MA spending. 

• The projection base was updated to reflect that 2023 incurred HI 

expenditures were lower than previously estimated for inpatient hospital and home health agency services.

• HI income is projected to be higher than last year’s estimates 

because both the number of covered workers and average wages are 

projected to be higher. 

Table 13: CHANGE IN THE HI 75-YEAR ACTUARIAL BALANCE 

SINCE THE 2023 REPORT, BASED ON INTERMEDIATE 

ASSUMPTIONS

[As a percentage of taxable payroll]

Item HI

Shown in the 2023 report:

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -0.62

Changes in actuarial balance due to changes in:

Valuation period . . . . . . . . . . . . . . . . . . . . . . . . . . . . .00

Base estimate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Private health plan assumptions . . . . . . . . . . . . . . . . . .24

Hospital utilization assumptions. . . . . . . . . . . . . . . . . .00

Other provider assumptions . . . . . . . . . . . . . . . . . . . . .00

Other economic and demographic assumptions . . . . . -.11

Total change in actuarial balance. . . . . . . . . . . . . . . . . . .27

Shown in the 2024 report:

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -.35

Note: Totals do not necessarily equal the sums of components due to rounding. A negative 

actuarial balance is a deficit.
28

Projected Part B costs as a share of GDP are lower than the estimates in 

the 2023 report through 2056 and higher thereafter due to lower projected 

spending for outpatient hospital and home health agency services and 

updated GDP projections. They continue to increase at a faster rate than 

GDP.

The Board estimates that Part D outlays will increase from 0.5 percent of 

GDP in 2023 to about 0.7 percent by 2098. Although the expenditure 

share of GDP in 2098 is similar to the share in last year’s report, the share 

varies over the projection period, reflecting (i) several years of faster drug 

spending growth, resulting from higher projected utilization estimates, 

followed by a period of slightly slower drug spending growth; (ii) higher 

enrollment; and (iii) updated GDP throughout the projection period.

CONCLUSION

The 2024 Trustees Reports indicate a need for substantial changes to 

address Social Security’s and Medicare’s financial challenges. 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 their expectations and behavior. 

Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled 

benefits. With informed discussion, creative thinking, and timely legislative action, Social Security and Medicare can continue to protect future 

generations.
29

MESSAGE FROM THE PUBLIC TRUSTEES

Because the two Public Trustee positions are currently vacant, there is no 

Message from the Public Trustees for inclusion in the Summary of the 

2024 Annual Reports.
30

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.

Assumptions. Values related to future trends in key factors that affect the

trust funds and are selected by the Trustees for purposes of projecting the

future status of 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, disability incidence rates, and disability termination rates.

Contingency reserve. Funds included in the SMI Part B Trust Fund

account to serve as a cushion in case actual expenditures are higher than

those projected at the time financing was established.Because the financing is set prospectively, actual experience may be different from the estimates used in setting the financing.

Cost rate. The ratio of cost incurred during the year to the taxable payroll

for the year.

Depletion. The point at which asset reserves in a trust fund are insufficient to pay scheduled benefits in full and on time.

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.

Income rate. The ratio of non-interest income incurred during the year to

the taxable payroll for the year.

Labor productivity. The total dollar value of all goods and services produced in the U.S. (i.e., the Gross Domestic Product or GDP) divided by

hours worked by all workers.

Long-range period. The first 75 projection years. The Trustees make

long-range actuarial estimates for this period because it covers approximately the maximum remaining lifetime for virtually all current Social

Security participants.
31

Present value. The equivalent value, at the present time, of a stream of

values (either income or cost, past or future). Present values are widely

used 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

in the Trustees Reports use the effective yield on trust fund asset reserves.

Short-range period. The first 10 projection years.

Summarized cost rate. The ratio, expressed as a percentage, of (1) the

sum of the present value of the cost during the valuation 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 valuation period. The

targeted trust fund level is 100 percent of annual cost.

Summarized income rate. The ratio, expressed as a percentage, of (1)

the sum of the trust fund reserve at the beginning of the valuation period

plus the present value of non-interest income during the valuation period

to (2) the present value of the taxable payroll (or GDP) for the valuation

period.

Taxable payroll. A weighted sum of taxable wages and taxable selfemployment income. When multiplied by the combined employeeemployer 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.

Trust fund ratio. A measure of trust fund adequacy equal to the proportion of a year’s cost that could be paid solely with the asset reserves at the

beginning of the year.

Valuation period. A period of years which is considered as a unit for purposes of calculating the financial status of a trust fund.
.
.

2024