Preserving and Enhancing Social 

Security for All

Morning Keynote 

2023 Harkin Retirement Security Symposium

STEVE GOSS, CHIEF ACTUARY, SOCIAL SECURITY ADMINISTRATION

SEPTEMBER 13, 2023
Why Do We Have Social Security?

• Need for universal protection against loss of income for 

workers and their families—from “old-age,” disability, and 

death. 

• Personal savings, assistance from family, and employer 

pensions are not adequate

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So, a “Three Legged Stool” with Social 

Security as the “Floor of Protection”

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Employer-Based Pension Participation by Less than Half of 

Workers; DB Plans with Life Annuities Have Been Almost 

Entirely Replaced by DC Plans

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Question: How Much Should Social Security Provide? 

What Share of Pre-Retirement Earnings to “Replace”?

• Note, “career-average CPI-indexed earnings” are not the 

appropriate basis

o The standard of living generally increases through time

o Career-average wage-indexed earnings approximate late career earnings 

(Actuarial Note 155, 2014)

o This is also the basis for actually determining Social Security benefit levels

• In total, financial planners suggest about 75% of late career 

earnings level

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So How Much Do Social Security Scheduled Benefits “Replace” 

for Retirement at Age 65, the Average Age for Starting Benefits?

More for low paid workers: less ability to save and less likelihood of employer pension

• 68% for Very Low earners—at 25% of the national average wage (AWI) 

level, which is roughly minimum wage

• 49% for Low earners—at 45% of the AWI

• 37% for Medium earners—at the AWI (about $66,000 per year)

• 30% for High earners—at 160% of the AWI

• 24% for steady “Maximum” earners—at about 240% of the AWI

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Note Under Current Law, Full Scheduled 

Benefits Will Not Be Payable in the Future

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The Current Financial/Actuarial Status of the OASDI Trust Funds:

Cost Is Rising as Percent of Payroll from 2010 to 2035; Birth Rates 

Combined trust fund reserves projected to become depleted in 2034; 2033-35 for last 12 years

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But Wait—After the 1983 Amendments, the 1983 Trustees 

Report Projected Reserve Depletion in the Mid-2050’s...

• Lower birth rates were anticipated, and mortality 

projections were extremely accurate

• But over 80% of worsening since 1983 was unanticipated 

economic experience

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Earnings “Dispersion” 

Between 1983 and 

2000 Lowered the 

Percent of Earnings 

Taxable from 90% to 

82.5%

Overall, average earnings 

increased more than 

expected, butut real 

growth was 62% for the 

top 6% of workers, while 

only 17% for lower 94% 

of workers

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The Reduced Share of Earnings Subject to Payroll Tax Explains Most of the 

Increase in Cost as Percent of Payroll, Compared to the Projection in 1983

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But the depth of the 

2007-09 recession 

and slow recovery 

reduced expected 

trust fund 

accumulation 

through 2019
So by 2034, We Need to Increase Revenue by OneThird or Reduce Scheduled Benefits by One-Fourth 

• Lower scheduled benefits—reduce future cost to less than 6% of 

GDP

o Increase NRA? Consider less increase for long-career workers at low-pay 

levels, similar to Simpson/Bowles 2010

o Chain-weighted CPI for COLA? Arguably “more accurate” for those with 

discretion to shift consumption across goods and services that are not 

substitutes for one another

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So by 2034, We Need to Increase Revenue by OneThird or Reduce Scheduled Benefits by One-Fourth 

• Increase scheduled revenue—increase future revenue to more than 

4.5% of GDP

o Raise or eliminate the taxable maximum on income from employment, or 

raise the 12.4% tax rate

 Could provide some exemption for workers with dependent children

 Help defray cost of child care and even increase birth rate

o Take advantage of returns on investments

 Invest trust fund reserves as suggested by Kerrey/Simpson 1995 proposal and Ball in 1994-

96 Advisory Council 

 Or tax investment returns as in the 2010 ACA and in many proposals since

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A Final Note on Federal Debt

• OASDI and HI trust funds have no borrowing authority and so cannot contribute 

to debt

• Because all reserves are invested in Treasury securities, trust fund investments 

can only lower the amount Treasury needs to borrow from the public, even if 

just temporarily

• In addition, under current law there is no provision for the General Fund to 

make up any shortfall 

o And there never has been!

• Thus, be careful about the budget-scoring convention that presumes this 

change in law

o Social Security cannot both be forced to reduce benefits at reserve depletion, and at the 

same time, increase federal debt with Treasury borrowing to cover shortfall

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Thank You!!

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