Session 15A: 

Updates on the Financial 

Status of Social Security 

and Proposals for Change

Presenters: 

Steve Goss, ASA, MAAA

Chief Actuary, Social Security Administration

Karen Glenn, FSA, EA, MAAA

Deputy Chief Actuary, Social Security Administration

October 28, 2022
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2
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3
What is the Legislative Mandate for the Annual 

Reports?

1. Trust fund operations of the past year and the next five 

years

2. Actuarial status of the trust funds

• This means the ability to meet the cost of scheduled benefits with 

scheduled revenue and trust fund reserves

• And the extent to which scheduled revenue would fall short under 

current law, indicating the size of legislative changes that will be needed

4
Why Do These Actuarial Projections Matter? 

• Long-term projections provide information to assess solvency 

and changes needed to eliminate shortfalls

• If trust fund reserves were to become depleted:

• Full scheduled benefits could not be paid timely under current law

• NO pressure on the budget or federal debt

• So Congress must act, as it always has

• Straightforward solutions:

• Add revenue and/or lower cost for OASDI

• Comprehensive changes implemented by 2035

5
Timing of Setting Assumptions

• Assumptions for the 2022 Trustees Reports were set in midFebruary 2022

• Much has changed since then

• Inflation, instability in Europe, etc.

• COVID continues, with relatively high case counts and new 

variants

6
Birth Rates by 

Cohort

Have been rising for 

women born since 

1951. 

Total fertility rate (TFR) 

projected to dip below 

2.0 for women born 

between 1990 and 

2006, based on low 

rates since 2008.

7

Chart 1.4: Historical and Projected Total Fertility Rates by Birth Cohort

https://www.ssa.gov/oact/TR/2022/2022_Long-Range_Demographic_Assumptions.pdf
Mortality 

Experience: 

All Ages

Increased mortality in 

the near term to reflect 

the effects of the 

COVID-19 pandemic.

8

700

750

800

850

900

950

1,000

1,050

1,100

1990 1995 2000 2005 2010 2015 2020 2025

Age-Sex-Adjusted Death Rates (per 100,000)

Total, All Ages

2014TR

2017TR

2020TR

2021TR

2022TR

Actual
POLLING QUESTION #1

When do YOU expect death rates to decline to the levels 

expected prior to the pandemic?

a) 2023

b) 2025

c) 2030

d) Never

9

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Poll: When do YOU expect death rates to decline to 

the levels expected prior to the pandemic?
Ratio of 

Employment to 

Population

Recovered more strongly 

from the brief but steep 

recession than did LFPRs. 

Projected to exceed the level 

seen at the peak of the last 

economic cycle by 2022 for 

women and by 2023 for men.

11

0.45

0.50

0.55

0.60

0.65

0.70

0.75

1981 1991 2001 2011 2021 2031 2041 2051 2061 2071 2081 2091

Ratio of Employment to Population 

(16 and older, age-sex-adjusted to 2011 population)

2021 TR

2022 TR

Age-sex-adjusted

Men (age-adjusted)

Women (age-adjusted)

Historical Projected
Ratio of 

Employment to 

Population vs. 

Quits Rate

Ratio of employment to 

population has recovered 

rapidly since the Trustees 

Report projections were 

developed.

Quits rate indicates a “great 

job churn”, and not a “great 

resignation”.

12

0

0.5

1

1.5

2

2.5

3

3.5

0.5

0.55

0.6

0.65

0.7

2000Q12000Q32001Q12001Q32002Q12002Q32003Q12003Q32004Q12004Q32005Q12005Q32006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q12014Q32015Q12015Q32016Q12016Q32017Q12017Q32018Q12018Q32019Q12019Q32020Q12020Q32021Q12021Q32022Q1

Ratio of U.S. Employment to Population versus Quits Rate

(16 and older, age-sex-adjusted)

Quits Rate

E/Pop 
Higher Potential 

GDP Trajectory in 

2022 TR 

Compared to 

2021 TR

Stronger-than-expected 

recovery from the 2020 

recession led us to reassess 

the likelihood of permanent 

scarring for potential GDP.

The trajectory of potential 

GDP for the 2022 TR is very 

close to the trajectory for the 

2020 TR.

13

12,000

14,000

16,000

18,000

20,000

22,000

24,000

26,000

2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031

Potential GDP

(billions of 2012 dollars, intermediate assumptions)

2010 TR

2020 TR

2021 TR

2022 TR

Historical Projected
Disabled Worker Receipt (Application) Rates Have Been 

Dropping Since 1990 at Older Ages, and at All Ages Lately

14

0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020

Receipts per 1,000 exposed

Fiscal year

Male Title II Disabled Worker DDS Receipt Rates

by 5-Year Age Groups per 1,000 exposed

60-64

55-59

50-54

45-49

35-44

25-34

Under 25

0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020

Receipts per 1,000 exposed

Fiscal year

Female Title II Disabled Worker DDS Receipt Rates 

by 5-Year Age Groups per 1,000 exposed

60-64

55-59

50-54

45-49

35-44

25-34

Under 25
Disability 

Incidence Rate 

Remains 

Historically Low

DI disabled worker incidence 

rate rose sharply in the 2008 

recession, and has declined 

since the peak in 2010 to 

extraordinarily low levels in 

2016 through 2021.

What will be the NET effect 

of COVID and post-COVID 

conditions? 

15

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

1990 1995 2000 2005 2010 2015 2020 2025 2030

DI Age-Sex-Adjusted Incidence Rates:

Historical and Intermediate Assumptions for 2012 through 2022 Trustees Report

2012TR

2013TR

2014TR

2015TR

2016TR

2017TR

Average 1990-2021 5.04

Ultimate Assumption 4.80

2018TR

2019TR

2020TR

2021TR

2022TR
Disabled Worker 

Prevalence Rates

Cease declining, and rise to 

level above that before the 

2007-09 recession?

16

DI Disability Prevalence Rates, 1970-2100
Fewer Disabled 

Worker 

Beneficiaries

Fewer now and in near 

term based on recent 

applications and 

incidence rates.

17

6,000

7,000

8,000

9,000

10,000

11,000

2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Calendar Year

Disabled Worker Beneficiaries

In Current Payment Status at End of Year (in thousands)

2008 TR (no recession)

2021 TR

2022 TR
POLLING QUESTION #2

Why has disability experience been so good for Social Security 

over the past decade or so?

a) Changing nature of work

b) Good economy

c) People are just healthier

d) Some combination of the above factors

18

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Poll: Why has disability experience been so good for 

Social Security over the past decade or so?
Age of Starting Social Security Retirement Benefits

Note significant shift in recent years

20

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Male Retired Worker Beneficiaries In Current Payment Status 

as Percent of Insured Population 

(excluding those receiving only some other OASDI benefit)

62.5 63.5 64.5 65.5 66.5 67.5 68.5 69.5 70.5

Recession

Eliminate Earnings 

Test Over NRA

NRA starts

increase 

over 66

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Female Retired Worker Beneficiaries In Current Payment Status 

as Percent of Insured Population 

(excluding those receiving only some other OASDI benefit)

62.5 63.5 64.5 65.5 66.5 67.5 68.5 69.5 70.5

Recession

Eliminate Earnings 

Test Over NRA

Deemed Filing 

applies to all 

Retired Workers
Solvency: OASI+DI 

Trust Fund 

Reserve Depletion 

in 2035 (one year later 

than last year)

Reserve depletion date varied 

from 2029 to 2042 in reports 

over the past 30 years (1993-

2022).

DI Trust Fund: reserves do not 

deplete.

Due largely to continued low 

recent and near-term disability 

applications and awards, and a 

lower assumed ultimate 

disability incidence rate.

21

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

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

Calendar Year

Social Security Trust Fund Ratios

Assets as a Percent of Annual Cost

Trustees Report Intermediate Projections

2022 TR DI

2021 TR DI

2022 TR OASI

2021 TR OASI

2022 TR OASDI

2021 TR OASDI

Historical Projected

Tax Rate

Reallocation
OASDI Annual 

Cost and NonInterest Income 

as Percent of 

Taxable Payroll

Persistent negative annual 

cash-flow balance starting in 

2010.

80 percent of scheduled 

benefits still payable at trust 

fund reserve depletion.

Annual deficit in 2096: 4.25 

percent of payroll: 0.09 

percent smaller than last 

year

22

0%

5%

10%

15%

20%

25%

2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar Year

OASDI Non-Interest Income, Cost and Expenditures 

as Percentages of Taxable Payroll

Cost: Scheduled and 

payable benefits

Cost: Scheduled but not 

fully payable benefits

Non-interest Income Expenditures: Payable benefits = income 

after trust fund depletion in 2035

Payable benefits as percent 

of scheduled benefits:

2022-34: 100%

2035: 80%

2096: 74%

Historical Projected
SUSTAINABILITY: 

Cost as percent 

of GDP

Rises from a 4.2 percent 

average in 1990-2008, to a 

peak of about 6.2 percent 

for 2077, and then declines 

to 5.9 percent by 2096.

23

0%

1%

2%

3%

4%

5%

6%

7%

8%

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

Calendar Year

OASDI Cost and Non-Interest Income as a Percentage of GDP

Historical Projected

Cost

Non-interest Income
The Common Driving Force Is Aging: 

Change in Age Distribution Mainly due to Drop in Birth Rates

24

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Percent of Population at Ages 25+

Age Distribution of the Population Age 25+, 1940 to 2100 (2022 TR)

25-44

45-64

65-84

85+

Boomers 

become 

25-44

Boomers 

become 

45-64

Boomers 

become 

65-84

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Aged Dependency Ratio 2022 TR

Population 65+/(20-64) 

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964

Historical Projected
Primary Reasons for OASDI Cost Rising Faster than Revenue 

Change in age distribution; drop in birth rates and dispersion of earnings

25

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

1940 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100

Aged Dependency Ratio 2022 TR

Population 65+/(20-64) 

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964

Historical Projected
POLLING QUESTION #3

Assuming the law related to the taxable maximum doesn’t 

change, what do you expect the share of earnings above the 

maximum to do over the next 10 years?

a) Increase (more disparity—the rich get richer)

b) Stay about the same

c) Decrease (less disparity)

26

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Poll: Assuming the law related to the taxable 

maximum doesn’t change, what do you expect the 

share of earnings above the maximum to do over 

the next 10 years?
Changes in OASDI Actuarial Balance in 2022 Report

• Valuation Period - 0.06 percent

• Legislation (1-year delay in resuming approval of new DACA applications) 0.00 percent

• Demographic data, assumptions and methods - 0.04 percent

• Lower recent birth data and lower assumed near-term total fertility rate

• Immigration and other data updates

• Economic data, assumptions and methods +0.13 percent

• Higher near-term real interest rates

• Higher level of productivity and GDP

• Disability data, assumptions and methods +0.07 percent

• New data, near-term disability assumptions and lower ultimate disability incidence rate

• Disability incidence rate assumptions incorporated into labor force/employment model

• Other new data and methods improvements +0.01 percent

• Higher level of revenue from taxation of benefits

Net Changes for All Reasons +0.12 percent

28
Economic Changes Since February 2022, When 

Assumptions Were Set for the 2022 TR 

•Inflation: December 2022 COLA will likely be around 9 percent, 

versus 3.8 percent assumed

•But average wage increase in 2021 is also well above the assumed 

level, at 8.9 percent

• Employment has remained strong

• Likely little net effect on program financial condition unless there 

is a recession 

•Note that Social Security benefits increase by average wages 

across generations, but only by COLA (CPI) after eligibility

29
POLLING QUESTION #4

Do you think there will be a recession starting within the next 

year?

a) No

b) Yes—a small one

c) Yes—a big one

30

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Poll: Do you think there will be a recession starting 

within the next year?
ADEQUACY: Retired Worker Benefit Replacement 

Rates, Scheduled and Payable under Current Law

32
• Historically, Congress has waited until reserve depletion is imminent 

• Difficult to lower benefits or raise taxes until necessary

• Enacting sooner allows more options, more gradual phase in, and more 

advance notice

• Best example: 17-year delay in implementing NRA increase in 1983 

amendments

• OASDI reserve depletion now projected for 2035

• One year sooner due to COVID-19

• The date has varied between 2029 and 2042 over the past 30 years

Timing for Changes

33
How to Eliminate the Social Security Long-Term 

Actuarial Deficit

• Make choices addressing OASDI shortfall 2035-2096:

• Raise scheduled revenue after 2034 by about one-third

• Reduce scheduled benefits after 2034 by about one-fourth

• Or some combination of the two

34
Ways to Lower Cost

• Lower benefits for retirees – not disabled

• Increase normal retirement age (lowers OASI cost, but increases DI cost)

• Can exempt long-career low earners

• Lower benefits mainly for high earners

• Reduce PIA above some level

• Often combined with increasing PIA below some level, subject to work 

year requirements

35
Ways to Lower Cost (continued)

• Lower benefits mainly for the oldest old

• Reduce the COLA by using the chain-weighted CPI-U

• Some say instead increase the COLA by using the CPI-E (based on 

purchase of consumers over age 62)

• Increase the number of years used in the calculation 

(currently 35)

• Especially hurts those who haven’t been in the workforce for more than 

35 years 

36
Ways to Increase Revenue

• Raise tax rate on all earners

• Increasing rate immediately from current 12.4 percent to about 15.7

percent is projected to eliminate the long-range shortfall

• Raise tax on highest earners

• Increase taxable maximum amount ($147,000 in 2022) or remove it 

completely

• Some tax on all earnings above the maximum

37
Ways to Increase Revenue (continued)

• Tax employer group health insurance premiums

• Affects only middle class if taxable maximum remains the same

• Tax certain investment income

• Consistent with ACA approach?

• Or potentially a wealth tax?

• Maintain larger trust fund reserves

• Could do this by investing some portion of reserves in equities

• Added interest/yield can lower needed taxes

38
POLLING QUESTION #5

What’s your favorite option to improve Social Security’s 

solvency?

a) Reduce the COLA

b) Raise the normal retirement age

c) Raise the taxable maximum amount

d) Increase the payroll tax rate for high earners

e) None of these—I just want to improve benefit adequacy

39
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Poll: What’s your favorite option to improve Social 

Security’s solvency?

Please navigate to https://impact22.cnf.io 
Recent Notable Proposals Scored

Senator Bernie Sanders, Rep. Peter DeFazio—June 9, 2022

• Significant provisions:

• Increase benefits for everyone; improve the minimum benefit

• Use the CPI-E rather than the CPI-W

• Increase taxes on those earning above $250,000, with no benefit credit

• Add taxes on investment income

• Making these changes would lead to 75-year solvency

• See https://www.ssa.gov/OACT/solvency/SandersDeFazio_20220609.pdf

41
Recent Notable Proposals Scored

Rep. John Larson and others—October 26, 2021

• Significant benefit provisions are all temporary—only apply 

for years 2022-26:

• Increase benefits for everyone; improve the minimum benefit

• Use the CPI-E rather than the CPI-W

• Add credits for caregiving years

• The revenue provision is permanent—increase taxes on 

those earning above $400,000, with small benefit credit

• Making these changes would extend solvency about 4 years

• See https://www.ssa.gov/OACT/solvency/JLarson_20211026.pdf

42
For More Information About Social Security Go To 

http://www.ssa.gov/oact/

There you will find:

• The 2022 and all prior OASDI Trustees Reports

• Detailed single-year tables for recent reports

• Our estimates for comprehensive proposals and individual provisions

• Actuarial notes; including replacement rates

• Actuarial studies; including stochastic

• Extensive databases

• Congressional testimonies

• Presentations by OCACT employees

43
Questions?