Office of the Chief Actuary 

Social Security AdministraƟon 

Based on the 2023 Trustees Report Intermediate AssumpƟons 

Sඎආආൺඋඒ ඈൿ Pඋඈඏංඌංඈඇඌ ඍඁൺඍ

Wඈඎඅൽ Cඁൺඇ඀ൾ ඍඁൾ Sඈർංൺඅ

Sൾർඎඋංඍඒ Pඋඈ඀උൺආ

Sൾඉඍൾආൻൾඋ 27, 2023 
Office of the Chief Actuary 

Social Security AdministraƟon 

 1 Based on the 2023 Trustees Report Intermediate AssumpƟons 

All esƟmates are based on the intermediate assumpƟons used in the 2023 Trustees Report. 

AddiƟonal details may be found at: hƩp://www.ssa.gov/OACT/solvency/provisions/index.html

A: Cost-of-Living Adjustment 3 

B: Level of Monthly Benefits 5 

C: ReƟrement Age 17 

D: Family Members 20 

E: Payroll Taxes (including maximum taxable) 22 

G: Trust Fund Investment in EquiƟes 30 

H: TaxaƟon of Benefits 32 

F: Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue 27 

B1: PIA Bend Point & Factor Changes, AdjusƟng for InflaƟon 6 

B2: PIA Bend Point & Factor Changes, AdjusƟng for Longevity 6 

B3: PIA Bend Point & Factor Changes, Other Adjustments 7 

B4: ComputaƟon Year Changes 8 

B7: Other Benefit Adjustments 14 

B5: Minimum Benefits 9 

B6: Benefit Increases for Older Beneficiaries 12 

C1: NRA Changes Only 18 

C2: EEA Changes, with or without NRA Changes 18 

E1: Increase Payroll Tax Rate, with No Changes in the Taxable Maximum 23 

E3: Tax a PorƟon of Earnings Above the Current-Law Taxable Maximum 25 

E2: Tax All Earnings Above the Current-Law Taxable Maximum 23 

Category of Change to the Social Security Program: 

Appendix: 

Understanding InteracƟon among Individual Provisions that Would Change the Social Security 

Program 

34 

Summary of Provisions that Would Change the Social Security Program 

IntroducƟon 2 
Office of the Chief Actuary 

Social Security AdministraƟon 

2 Based on the 2023 Trustees Report Intermediate AssumpƟons 

We are pleased to provide this booklet, which contains summaries of provisions that 

would change the Social Security Program, along with the resulƟng financial effects. 

Annual Trustees Reports provide esƟmates of the financial status of Social Security’s OldAge and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds under 

current law. Recent reports have called for informed discussion, creaƟve thinking, and 

Ɵmely legislaƟon to address the expected long-range solvency problem. 

Many policymakers have developed proposals and opƟons to address this long-range 

shorƞall. This booklet provides a broad range of policy opƟons that address Trust Fund 

solvency and other issues related to Social Security benefits and financing. Many of these 

individual provisions were a part of comprehensive proposals intended to restore Trust 

Fund solvency. 

Following a brief descripƟon of each provision, we provide two key indicators of the 

financial effect on the combined OASI and DI Trust Funds. The first, the change in the 75-

year long-range actuarial balance, indicates the financial effect of the provision over the 

enƟre long-range (75-year) period. The second, the change in the annual balance as of 

the 75th year, gives an indicaƟon of the year-by-year expected gain or shorƞall aŌer the 

provision has been in place for a long period of Ɵme. 

Provisions from each category may be combined to form a comprehensive proposal to 

restore Trust Fund solvency. However, it is important to note that individual provisions 

may interact with each other. Therefore, the sum of the shorƞalls restored under the 

individual provisions may be different than the shorƞall restored when the provisions are 

taken together as a whole proposal. We provide specific explanaƟons and examples of 

how individual policy opƟons might interact in the Appendix of this booklet. 

Office of the Chief Actuary 

Social Security AdministraƟon 

September, 2023 

IntroducƟon 
Office of the Chief Actuary 

Social Security AdministraƟon 

3 Based on the 2023 Trustees Report Intermediate AssumpƟons 

An annual cost-of-living adjustment (COLA) applies to benefits aŌer iniƟal eligibility. 

For each provision, we provide an esƟmate of the financial effect on the OASDI 

program over the long-range period (the next 75 years) and for the 75th year. We base 

all esƟmates on the intermediate assumpƟons described in the 2023 Trustees Report. 

A Provisions AffecƟng Cost-of-Living Adjustments 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

A1 1.95 2.47 54% 57%

A2 1.02 1.30 28% 30%

A3 0.62 0.80 17% 18%

A4 0.48 0.63 13% 14%

A5 -0.13 -0.14 -3% -3%

A6 -0.42 -0.56 -12% -13%

A7 1.84 2.33 51% 54%

A8 0.54 0.69 15% 16%

A9 1.31 2.21 36% 51%

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Category A: Cost-of-Living Adjustment (2023 Trustees Report intermediate assumptions)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Starting December 2024, reduce the annual COLA by 1 percentage point.

Starting December 2024, for OASI beneficiaries only (DI beneficiaries 

would only be affected when their benefit converts to OASI at NRA), the 

annual COLA would be based on the chain-weighted version of the CPI-U.

For single/head-of-household/married-filing-separate taxpayers with 

modified adjusted gross income (MAGI) below $108,700 and for joint 

filers with MAGI below $217,400 for December 2025 ($85,000 and 

$170,000 multiplied by estimated CPI-U for 2018-2025), use the chainweighted version of the Consumer Price Index for All Urban Consumers (CCPI-U) to calculate the cost-of-living adjustment (COLA), beginning with 

the December 2025 COLA. For those beneficiaries whose MAGI is above 

these thresholds, provide no COLA. Use prior tax year income data for this 

determination. Use the chain-weighted CPI for the COLA for years prior to 

benefit receipt. Index the eligibility income threshold amounts to the CPIU after December 2025.

Starting December 2024, reduce the annual COLA by 0.5 percentage 

point.

Starting December 2024, compute the COLA using a chained version of 

the consumer price index for wage and salary workers (CPI-W). We 

estimate this new computation will reduce the annual COLA by about 0.3 

percentage point, on average.

Starting December 2026, compute the COLA using a chained version of 

the consumer price index for wage and salary workers (CPI-W). We 

estimate this new computation will reduce the annual COLA by about 0.3 

percentage point, on average. The new COLA will not apply to DI benefits. 

It will apply to OASI benefits, except for those of formerly disabledworkers who converted to retired-worker status.

Starting December 2024, add 1 percentage point to the annual COLA for 

beneficiaries who have lived past a specified age. The specified age is the 

sum of: (1) 65 and (2) the unisex cohort life expectancy at age 65.

Starting December 2025, compute the COLA using the Consumer Price 

Index for the Elderly (CPI-E). We estimate this new computation will 

increase the annual COLA by about 0.2 percentage point, on average.

Starting December 2024, reduce the annual COLA by 1 percentage point, 

but not to less than zero. In cases where the unreduced COLA is less than 

1 percentage point, do not carry over the unused reduction into future 

years.

4

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

5 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions modify the formula used for calculaƟng the basic Social Security 

monthly benefit called the Primary Insurance Amount (PIA). For each provision, we 

provide an esƟmate of the financial effect on the OASDI program over the long-range 

period (the next 75 years) and for the 75th year. We base all esƟmates on the 

intermediate assumpƟons described in the 2023 Trustees Report. 

We group these provisions as follows: 

 B1: PIA bend point and factor changes, adjusƟng for inflaƟon. 

These provisions reduce benefits for some future beneficiaries. 

Future PIA bend points and formula factors change so that the growth 

in benefits from one cohort to the next reflect some degree of 

inflaƟon, rather than growth in average wages as specified in current 

law. 

 B2: PIA bend point and factor changes, adjusƟng for longevity 

These provisions reduce benefits for some future beneficiaries. 

Future PIA formula factors decrease as a result of increased longevity 

(people living longer). 

 B3: PIA bend point and factor changes, other adjustments. 

These provisions specify other changes in future PIA bend points and 

formula factors. 

 B4: ComputaƟon year changes. 

These provisions specify changes to the number of years used in 

determining benefits. 

 B5: Minimum benefits. 

These provisions provide an increase in benefits to targeted 

individuals, generally those with low earnings and full work careers. 

 B6: Benefit increases for older beneficiaries. 

These provisions provide an increase in benefits for beneficiaries who 

have been on the rolls for at least 20 years. 

 B7: Other benefit adjustments. 

B Provisions AffecƟng Level of Monthly Benefits 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B1.1 2.87 7.51 80% 173%

B1.2 1.58 4.16 44% 96%

B1.3 1.35 3.55 37% 82%

B1.4 1.11 2.79 31% 64%

B1.5 0.84 1.89 23% 44%

B2.1 0.57 1.68 16% 39%

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Category B: Level of Monthly Benefits (2023 Trustees Report intermediate assumptions)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Price indexing of PIA factors beginning with those newly eligible for 

OASDI benefits in 2030: Reduce factors so that initial benefits grow by 

inflation rather than by the SSA average wage index.

Progressive price indexing (30th percentile) of PIA factors beginning 

with individuals newly eligible for OASDI benefits in 2030: Create a new 

bend point at the 30th percentile of the AIME distribution of newly 

retired workers. Maintain current-law benefits for earners at the 30th 

percentile and below. Reduce the 32 and 15 percent factors above the 

30th percentile such that the initial benefit for a worker with AIME equal 

to the taxable maximum grows by inflation rather than the growth in the 

SSA average wage index.

Progressive price indexing (40th percentile) of PIA factors beginning 

with individuals newly eligible for OASDI benefits in 2030: Create a new 

bend point at the 40th percentile of the AIME distribution of newly 

retired workers. Maintain current-law benefits for earners at the 40th 

percentile and below. Reduce the 32 and 15 percent factors above the 

40th percentile such that the initial benefit for a worker with AIME equal 

to the taxable maximum grows by inflation rather than the growth in the 

SSA average wage index.

Progressive price indexing (50th percentile) of PIA factors beginning 

with individuals newly eligible for OASDI benefits in 2030: Create a new 

bend point at the 50th percentile of the AIME distribution of newly 

retired workers. Maintain current-law benefits for earners at the 50th 

percentile and below. Reduce the 32 and 15 percent factors above the 

50th percentile such that the initial benefit for a worker with AIME equal 

to the taxable maximum grows by inflation rather than the growth in the 

SSA average wage index.

Progressive price indexing (60th percentile) of PIA factors beginning 

with individuals newly eligible for OASDI benefits in 2030: Create a new 

bend point at the 60th percentile of the AIME distribution of newly 

retired workers. Maintain current-law benefits for earners at the 60th 

percentile and below. Reduce the 32 and 15 percent factors above the 

60th percentile such that the initial benefit for a worker with AIME equal 

to the taxable maximum grows by inflation rather than the growth in the 

SSA average wage index.

Beginning with those newly eligible for OASI benefits in 2033, multiply the 

PIA factors by the ratio of life expectancy at 67 for 2028 to the life 

expectancy at age 67 for the 4th year prior to the year of benefit 

eligibility. Unisex life expectancies, based on period life tables as 

computed by SSA's Office of the Chief Actuary, are used to determine the 

ratio. Disabled workers are: (a) not affected prior to normal retirement 

age; and (b) subject to a proportional reduction in benefits, based on the 

worker's years of disability, upon conversion to retired-worker beneficiary 

status.

6

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B3.8 1.01 2.35 28% 54%

B3.9 0.10 0.27 3% 6%

B3.10 -0.39 -0.69 -11% -16%

B3.11 -0.25 -0.26 -7% -6%

B3.12 0.20 0.31 6% 7%

B3.13 0.10 0.20 3% 5%

B3.14 0.37 0.55 10% 13%

B3.15 -0.29 -0.43 -8% -10%

Increase the first PIA factor from 90 percent to 93 percent for all 

beneficiaries eligible as of January 2025 and for those newly eligible for 

benefits after 2024.

Use an annualized mini-PIA formula beginning with retired workers newly 

eligible in 2030. For each indexed earnings year, compute an individual 

AIME and an individual PIA. Sum these individual PIAs for the 40 highest 

years of indexed earnings and divide that total amount by 37 to get the 

PIA for this provision. Phase-in over five years, meaning that in 2030, 80 

percent of the benefit would be based on the old 35-year average PIA 

formula and 20 percent on the new mini-PIA formula, shifting by 20 

percentage points each year until 100 percent is based on the new miniPIA formula for those attaining age 62 in 2034. Disabled worker benefits 

are unchanged under this provision.

For retired worker beneficiaries newly eligible in 2030 (excluding disabled 

workers), add a new bend point at the wage-indexed equivalent of the 

50th percentile of the AIME distribution minus $100 (for 2015 eligibility) 

and change the PIA factors to 95/32/15/5. Also move the current-law first 

bend point from the wage-indexed equivalent of $1,115 in 2023 to 

$1,417 in 2023. Phase this provision in over 10 years (2030-2039). The 

phase-in would work on a weighted-average basis: 90% of CL formula + 

10% of proposal formula for 2030, 80% of CL formula + 20% of proposal 

formula for 2031, and so on.

Beginning with those newly eligible for OASDI benefits in 2025, reduce 

the 15 percent PIA factor by 2 percentage points per year so that it 

reaches 5 percent for those newly eligible in 2029 and later.

Increase the 90 percent PIA formula factor to 91 percent for beneficiaries 

newly eligible in 2028, 92 percent for those newly eligible in 2029, ..., 

reaching 95 percent for those newly eligible in 2032 and later.

Beginning with those newly eligible for OASDI benefits in 2030, create a 

new bend point at the 50th percentile of the AIME distribution of newly 

retired workers and gradually reduce all PIA factors except for the 90 

percent factor. By 2063: a) the 32 percent PIA factor below the new bend 

point reduces to 30 percent; b) the 32 percent PIA factor above the new 

bend point reduces to 10 percent; and c) the 15 percent PIA factor 

reduces to 5 percent.

Beginning with those newly eligible for OASDI benefits in 2036, gradually 

reduce the 15 percent PIA factor in each year so that it reaches 10 

percent for those newly eligible in 2065 and later.

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Beginning with those newly eligible for OASDI benefits in 2030, gradually 

increase the first PIA bend point in each year so that it is 15 percent 

higher for those newly eligible in 2044 and later.

7

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B3.16 1.00 1.72 28% 40%

B3.17 -1.49 -1.54 -41% -35%

B4.1 0.27 0.37 8% 9%

B4.2 0.45 0.63 12% 15%

B4.3 0.59 0.87 16% 20%

B4.4 -0.06 -0.06 -2% -1%

B4.5 0.36 0.50 10% 11%

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

For retired and disabled workers, reduce the maximum number of 

dropout years to 4 for workers newly eligible in 2025, to 3 for workers 

newly eligible in 2026, and to 2 for workers newly eligible in 2027 and 

later.

For retired worker and disabled worker beneficiaries becoming initially 

eligible in January 2030 or later, phase in a new benefit formula (from 

2030 to 2039). Replace the existing two primary insurance amount (PIA) 

bend points with three new bend points as follows: (1) 25% AWI/12 from 

2 years prior to initial eligibility; (2) 100% AWI/12 from 2 years prior to 

initial eligibility; and (3) 125% AWI/12 from 2 years prior to initial 

eligibility. The new PIA factors are 95%, 27.5%, 5% and 2%. During the 

phase in, those becoming newly eligible for benefits will receive an 

increasing portion of their benefits based on the new formula, reaching 

100% of the new formula in 2039.

Increase the current-law first bend point by 22 percent and increase the 

90 percent PIA factor to 95 percent for all beneficiaries eligible for 

benefits as of January 2024 and for those newly eligible for benefits after 

2023. This provision will result in an approximate $257 increase in PIA for 

most workers newly eligible for retirement or disability benefits in 2024.

Increase the number of years used to calculate benefits for retirees and 

survivors (but not for disabled workers) from 35 to 38, phased in over the 

years 2024-2028.

Increase the number of years used to calculate benefits for retirees and 

survivors (but not for disabled workers) from 35 to 40, phased in over the 

years 2024-2032.

For the OASI and DI computation of the PIA, gradually reduce the 

maximum number of drop-out years from 5 to 0, phased in over the years 

2025-2033.

Reduce the number of computation years (increase dropout years) for 

parents having a child in care under the age of 6. The parent must have 

no earnings (covered or non-covered) for the year to be eligible for the 

credit. Only one parent can claim the childcare added dropout year for a 

given earnings year. Each parent can earn at most 2 dropout years per 

child, and a maximum of 5 dropout years in total. The years designated as 

childcare years do not have to be the years that could otherwise be 

included in the computation of the average indexed monthly earnings 

(AIME). The provision would be effective for all benefits payable for 

entitlement in January 2025 and later (without regard for when the 

beneficiary became initially eligible).

8

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B5.1 -0.00 -0.00 -0% -0%

B5.2 -0.17 -0.24 -5% -6%

B5.3 -0.25 -0.34 -7% -8%

B5.4 -0.13 -0.20 -3% -5%

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Increase the PIA to a level such that a worker with 30 years of earnings at 

the minimum wage level receives an adjusted PIA equal to 120 percent of 

the Federal poverty level for an aged individual. This provision takes full 

effect for all newly eligible OASDI workers in 2041, and is phased in for 

new eligibles in 2032 through 2040. The percentage increase in PIA is 

lowered proportionately for those with fewer than 30 years of earnings, 

down to no enhancement for workers with 20 or fewer years of earnings. 

(Year-of-work requirements are scaled for disabled workers based on 

their years of potential work from age 22 to benefit eligibility). The 

benefit enhancement percentage is reduced proportionately for workers 

with higher average indexed monthly earnings (AIME), down to no 

enhancement for those with AIME at least twice that of a 35-year steady 

minimum wage earner.

Beginning for those newly eligible in 2024, reconfigure the special 

minimum benefit: (a) A year of coverage is defined as a year in which 4 

quarters of coverage are earned. (b) At implementation, set the PIA for 30 

years of coverage equal to 125 percent of the monthly poverty level 

(about $1,416 in 2022). For those with under 30 years of coverage, the 

PIA per year of coverage over 10 years is $1,416/20 = $70.80. (c) Index 

the initial PIA per year of coverage by wage growth for successive cohorts.

Beginning for those newly eligible in 2024, reconfigure the special 

minimum benefit: (a) A year of coverage is defined to be either a year in 

which 4 quarters of coverage are earned or a child is in care. Childcare 

years are granted to parents who have a child under 5, with a limit of 8 

such years. (b) At implementation, set the PIA for 30 years of coverage 

equal to 125 percent of the monthly poverty level (about $1,416 in 2022). 

For those with under 30 years of coverage, the PIA per year of coverage 

over 10 years is $1,416/20 = $70.80. (c) Index the initial PIA per year of 

coverage by wage growth for successive cohorts.

Beginning for those newly eligible in 2030, reconfigure the special 

minimum benefit: (a) A year of coverage is defined as a year in which 4 

quarters of coverage are earned. (b) At implementation, set the PIA for 30 

years of coverage equal to 125 percent of the monthly poverty level 

(about $1,416 in 2022). For those with under 30 years of coverage, the 

PIA per year of coverage over 10 years is $1,416/20 = $70.80. (c) From 

2022 to the year of implementation, 2030, index the PIA per year of 

coverage using the chain-CPI index. Then, for later years, index the PIA 

per year of coverage by wage growth for successive cohorts. (d) Scale 

work requirements for disabled workers, based on the number of years of 

non-disabled potential work.

9

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B5.5 -0.00 -0.01 -0% -0%

B5.6 -0.09 -0.13 -3% -3%

B5.7 -0.02 -0.01 -1% -0%

Beginning for those newly eligible in 2025, reconfigure the special 

minimum benefit: (a) A year of coverage is defined as a year in which 

either 20 percent of the old law maximum is earned or a child is in care. 

Childcare years are granted to parents who have a child under 6, with a 

limit of 8 such years. (b) At implementation, set the PIA for 30 years of 

coverage equal to 133 percent of the Census monthly poverty level 

(about $1,556 in 2022). For those with under 30 years of coverage, the 

PIA per year of coverage over 19 years is $1,556/11 = $141.40. (c) Index 

the initial PIA per year of coverage by wage growth for successive cohorts. 

(d) Scale work requirements for disabled workers, based on the number 

of years of non-disabled potential work.

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Beginning for those newly eligible in 2024, reconfigure the special 

minimum benefit: (a) A year of coverage is defined to be either a year in 

which 4 quarters of coverage are earned or a child is in care. Childcare 

years are granted to parents who have a child under 6, with a limit of 5 

such years. (b) At implementation, set the PIA for 30 years of coverage 

equal to 100 percent of the monthly poverty level (about $1,215 in 2023). 

For those with under 30 years of coverage, the PIA per year of coverage 

over 10 years is $1,215/20 = $60.75. (c) From 2023 to the year of 

implementation, 2024, index the PIA per year of coverage using the CPI 

index. Then, for later years, index the PIA per year of coverage by wage 

growth for successive cohorts. (d) Scale work requirements for disabled 

workers, based on the number of years of non-disabled potential work.

Beginning for those newly eligible in 2026, reconfigure the special 

minimum benefit: (a) The number of years of work (YOWs) is determined 

as total quarters of coverage divided by 4, ignoring any fraction. Childcare 

years are granted to parents who have a child under 6, with a limit of 5 

such years. (b) At implementation, set the PIA for 30+ YOWs equal to 100 

percent of the monthly HHS poverty level for the year prior to eligibility. 

For workers between 11 and 29 YOWs, reduce the special minimum by 3 

1/3 percentage points per YOW so that at 29 YOWs the minimum would 

be 96 2/3% of poverty, ..., down to 11 YOWs at 36 2/3% of poverty. No 

minimum for 10 or fewer YOWs.

10

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B5.8 -0.21 -0.24 -6% -6%

B5.9 -0.23 -0.36 -6% -8%

Beginning in 2028, create a Basic Minimum Benefit (BMB) within Social 

Security (i.e., the cost of the BMB would be charged as a cost to the OASI 

Trust Fund), with the following specifications: (1) Eligibility for the BMB 

would be limited to OASI beneficiaries who have attained normal 

retirement age (NRA) or above. OASI beneficiaries under NRA would not 

be eligible for the BMB. (2) The BMB would be calculated on a household 

basis and split equally between members of the household. In the case of 

a married couple, both spouses would need to claim any Social Security 

benefits for which they are eligible before they could receive the BMB. If 

both spouses have claimed and one is NRA or above and the other has 

not yet attained NRA, only the half of the BMB for the spouse over NRA 

would be payable. (3) The BMB amount for single beneficiaries would be 

equal to either: 1) the BMB base ($604 in 2015) - 0.70 * current monthly 

OASI benefit (not including any BMB), if positive; or 2) zero. (4) The BMB 

amount for married beneficiaries would be equal to either: 1) the BMB 

base ($906 in 2015) - 0.70 * total household monthly OASI benefits (not 

including any BMB), if positive; or 2) zero. (5) The BMB bases for singles 

and couples would be updated annually for changes in the average wage 

index (AWI). (6) Single filers with Adjusted Gross Income (AGI) over 

$30,000 and joint filers with AGI (including taxable SS benefits) over 

$45,000 would be subject to clawback of the BMB through the income tax 

system. Any BMB would be reduced by one dollar for every dollar of 

income above the thresholds. (Thresholds, in 2015 dollars, would be 

indexed to chained CPI-U.) Clawbacks would be credited back to the OASI 

Trust Fund.

Beginning for those newly eligible in 2025, reconfigure the special 

minimum benefit: (a) A year of coverage is defined as a year in which 4 

quarters of coverage are earned. (b) At implementation, set the PIA for 40 

years of coverage equal to 125 percent of the monthly Aged Federal 

poverty level (about $1,462 in 2022). For those with 20 or fewer years of 

coverage, phase up linearly from 0 percent of the poverty level for 10 

years of coverage to 100 percent of the poverty level. For those having 

between 20 and 40 years of coverage, phase up linearly from 100 percent 

of the poverty level at 20 years of coverage to 125% of the poverty level 

for 40 or more years of coverage. (c) For newly eligible workers in 2025 

and 2026, index the applicable poverty level using the CPI index, to the 

year prior to eligibility. Then, for newly eligible workers in 2027 and later, 

index the PIA per year of coverage by wage growth for successive cohorts. 

(d) Disabled workers have a somewhat similar minimum benefit, with 

work requirements scaled based on the number of years of non-disabled 

potential work.

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

11

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B5.10 -0.37 -0.63 -10% -14%

B5.11 -0.10 -0.14 -3% -3%

B6.1 -0.13 -0.17 -4% -4%

B6.2 -0.13 -0.17 -4% -4%

B6.3 -0.16 -0.20 -4% -5%

Provide a 5 percent increase to the monthly benefit amount (MBA) of any 

beneficiary who is 85 or older at the beginning of 2024 or who reaches 

their 85th birthday after the beginning of 2024.

Provide the same dollar amount increase to the monthly benefit amount 

(MBA) of any beneficiary who is 85 or older at the beginning of 2024 or 

who reaches their 85th birthday after the beginning of 2024. The dollar 

amount of increase equals 5 percent of the average retired-worker MBA 

in the prior year.

Provide an increase in the benefit level of any beneficiary who is 85 or 

older at the beginning of 2025 or who reaches their 85th birthday after 

the beginning of 2025. Increase the beneficiary's PIA based on an amount 

equal to the average retired-worker PIA at the end of 2024, or at the end 

of the year age 80 if later. Increase the beneficiary's PIA by 5 percent of 

this amount for those older than 85 at the beginning of 2025 and by 5 

percent of this amount at age 85 for others, phased in at 1 percent per 

year for ages 81-85.

Reconfigure the special minimum benefit, phased in for retired and 

disabled workers newly eligible from 2030 through 2039: (a) A year of 

work (YOW) coverage is equal to earnings at or above $10,875 in 2023 

(reflecting a full-time worker earning the federal minimum wage), 

adjusted thereafter for wage growth. (b) At implementation, set the 

minimum PIA at zero percent of AWI for those with 10 or fewer YOWs to 

15 percent of AWI for those with 15 YOWs, increasing linearly so that it 

reaches 19 percent for 19 YOWs. Then the minimum PIA would jump up 

to 25 percent of AWI for those with 20 YOWs, increasing linearly so that it 

equals 35 percent of AWI for those with 35 or more YOWs. (c) Use the 

AWI for two years prior to the year of initial eligibility in the minimum PIA 

calculation with COLA increase after the year of initial eligibility. (d) Scale 

the YOW requirements for disabled workers, based on the number of 

years of non-disabled potential work.

Beginning for those newly eligible in 2024, reconfigure the special 

minimum benefit: (a) The number of years of work (YOWs) is determined 

as total quarters of coverage divided by 4, ignoring any fraction. Childcare 

years are granted to parents who have a child under 6, with a limit of 5 

such years. (b) For beneficiaries becoming newly eligible in 2024, set the 

initial special minimum benefit for 30+ YOWs equal to 100 percent of the 

monthly HHS poverty level for 2023. For beneficiaries becoming newly 

eligible after 2024, the initial special minimum benefit is indexed by the 

AWI. For workers between 11 and 29 YOWs, reduce the special minimum 

by 3 1/3 percentage points per YOW so that at 29 YOWs the minimum 

would be 96 2/3% of poverty, ..., down to 11 YOWs at 36 2/3% of poverty. 

No minimum for 10 or fewer YOWs.

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

12

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B6.4 -0.18 -0.23 -5% -5%

B6.5 -0.27 -0.33 -8% -8%

B6.6 -0.23 -0.31 -6% -7%

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Starting in 2024, provide a 5 percent uniform benefit increase 24 years 

after initial benefit eligibility. Phase in the benefit increase at 1 percent 

per year from the 20th through 24th years after eligibility. For disabled 

workers, the eligibility age is the initial entitlement year to the benefit. 

The benefit increase is equal to 5 percent of the PIA of a worker assumed 

to have career-average earnings equal to SSA's average wage index. 

Auxiliary beneficiaries receive benefit enhancement based on the PIA of 

the governing worker.

Starting in 2026, provide a 5 percent uniform PIA increase 20 years after 

benefit eligibility. Phase in the PIA increase at 1 percent per year from the 

16th through 20th years after eligibility. The full PIA increase is equal to 5 

percent of the PIA of a worker assumed to have career-average earnings 

equal to the SSA average wage index. Auxiliary beneficiaries receive 

benefit enhancement based on the PIA of the governing worker.

Starting in 2030, provide a uniform PIA increase in the 24th year of 

benefit eligibility. Phase in the PIA increase at 0.5 percent per year from 

the 15th through the 24th years of eligibility. The full PIA increase is equal 

to 5 percent of the average retired worker PIA in December of the 14th 

year of benefit eligibility. A similar additional PIA increase applies in the 

43rd year of benefit eligibility (age 104), phased in from the 34th through 

the 43rd years of eligibility. For those past the 15th year of eligibility in 

2029 (over age 76 for retirees), phase in the PIA enhancement over 10 

years starting in 2030. Auxiliary beneficiaries receive benefit 

enhancement based on the PIA of the governing worker.

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

13

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B6.7 -0.06 -0.08 -2% -2%

B6.8 -0.29 -0.36 -8% -8%

B7.2 0.63 0.84 17% 19%

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Starting in January 2030, provide an addition to monthly benefits for all 

beneficiaries who have been eligible for at least 20 years, with the 

following specifications: (1) Augment benefits (not the PIA) for those of 

qualifying age and eligibility duration with a MAGI below about $29,400 if 

single and $58,800 if married. MAGI is set to equal the IRMAA definition 

(AGI plus tax-exempt interest income). Index these thresholds after 2030 

by the increase in the C-CPI-U; (2) The full additional amount is applicable 

for those born 1963 and later, once 24 years elapse from initial eligibility. 

The basic additional amount is calculated as 5 percent of the PIA for a 

hypothetical worker with earnings equal to the AWI each year; (3) For 

those born prior to 1963, the full additional amount is multiplied by the 

number of years they have been affected by the C-CPI-U, divided by 24; 

(4) Beneficiaries will receive 20 percent of their additional amount in their 

20th year after initial eligibility, 40 percent in their 21st year after initial 

eligibility,..., and 100 percent of their additional amount in their 24th and 

later years after benefit eligibility; (5) Retired and disabled worker 

beneficiaries, dually entitled spouse beneficiaries, and all survivor 

beneficiaries received their addition as described above. Spousal 

beneficiaries (aged or with child in care) and child beneficiaries of a living 

retired or disabled worker receive 50 percent of the additional amount 

described above. Other beneficiary types (such as parents of deceased 

workers) will receive the percentage of the flat benefit that equals the 

percentage of the insured worker's PIA that they receive; (6) The AWI 

used is for the second year prior to the beneficiary's initial eligibility year, 

with applicable COLAs applied up to the age when the addition is 

received; and (7) The additional amount is added to the monthly benefit 

after reductions for early claiming or increases for delayed claiming have 

been applied.

Starting in 2025, provide an additional monthly benefit equal to 1/12th of 

2 percent of the AWI for the second prior year. This additional benefit 

would be available to those meeting any of the following four 

requirements: (a) Social Security beneficiaries who have attained age 82; 

(b) Social Security beneficiaries who have attained NRA and have both 

AIME at or below the first PIA bend point ($1,115 for 2023 initial 

eligibility) and at least 11 years of coverage as used for Windfall 

Elimination Provision purposes (earnings above $29,700 for 2023); (c) 

Individuals who have received Social Security benefits and/or SSI 

payments for at least 240 distinct months after attaining age 19; or (d) SSI 

recipients who have attained the Social Security NRA. This additional 

benefit would be paid out of the applicable Social Security OASI or DI 

Trust Fund for any month in which the individual is in receipt of a Social 

Security benefit; it would be paid out of the General Fund of the Treasury 

for any month in which the individual is in receipt of an SSI monthly 

payment but not a Social Security monthly benefit.

Reduce benefits by 5 percent for those newly eligible for benefits in 2024 

and later.

14

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B7.3 -0.23 -0.31 -6% -7%

B7.5 -0.81 -0.83 -22% -19%

B7.7 0.54 0.73 15% 17%

B7.8 0.08 0.12 2% 3%

B7.9 -0.00 -0.27 -0% -6%

B7.10 0.05 0.08 1% 2%

B7.11 0.02 0.12 1% 3%

B7.12 -0.00 0.00 -0% 0%

B7.13 -0.10 -0.11 -3% -3%

Category B: Level of Monthly Benefits (continued)

Replace the Windfall Elimination Provision (WEP) and Government 

Pension Offset (GPO) with a revised reduction for most OASI benefits 

based on all earnings, beginning with beneficiaries newly eligible in 2030.

Beginning for newly eligible retired workers and spouses in 2030, all 

claimants who are married would receive a specified joint-and-survivor 

annuity benefit (i.e., surviving spouses would receive 75 percent of the 

decedents' benefits, in addition to their own) that would be payable if 

both were still alive. Initial benefits would be actuarially adjusted to keep 

the expected value of benefits equivalent to what would otherwise be 

current law.

Replace the current-law WEP with a new calculation for most OASI and DI 

benefits based on covered and non-covered earnings, phased in for 

beneficiaries becoming newly eligible in 2030 through 2039. For this new 

approach, compute a PIA based on all past earnings (covered and noncovered), and multiply by the non-covered earnings ratio. This ratio is 

equal to the current-law concept of the average indexed monthly 

earnings computed without non-covered earnings divided by a modified 

average indexed monthly earnings that includes both covered and noncovered earnings in agency records.

Beginning in January 2026, eliminate the retirement earnings test for all 

beneficiaries under normal retirement age, including retired workers, 

aged spouses, aged widow(er)s, young spouses with a child in care, young 

surviving spouses with a child in care, and children.

Provide an option to split the 8-percent delayed retirement credit (DRC) 

to offer a lump sum benefit at initial entitlement equal to 2 percent of the 

8 percent DRC earned, and a 6 percent DRC on subsequent monthly 

benefits, effective for workers newly entitled to retired worker benefits in 

2026 and later. Widows are held harmless from the lump-sum decision.

Eliminate the DI 5-month waiting period for disabled workers and 

disabled surviving spouses, and eliminate the 24-month Medicare (HI) 

waiting period for individuals who have become entitled to Social Security 

disability benefits. Effective with 2024 applications.

Give credit to parents with a child under 6 for earnings for up to five 

years. The earnings credited for a childcare year equal one half of the SSA 

average wage index (about $33,074 in 2023). The credits are available for 

all past years to newly eligible retired-worker and disabled-worker 

beneficiaries starting in 2024. The 5 years are chosen to yield the largest 

increase in AIME.

Increase benefits by 5 percent for all beneficiaries as of the beginning of 

2024 and for those newly eligible for benefits after the beginning of 2024.

Reduce individual Social Security benefits if modified adjusted gross 

income, or MAGI (AGI less taxable Social Security benefits plus nontaxable 

interest income) is above $60,000 for single taxpayers or $120,000 for 

taxpayers filing jointly. This provision is effective for individuals newly 

eligible for benefits in 2028 or later. The percentage reduction increases 

linearly up to 50 percent for single/joint filers with MAGI of 

$180,000/$360,000 or above. Index the MAGI thresholds for years after 

2028, based on changes in the SSA average wage index.

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

15

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

B7.14 -0.13 -0.12 -3% -3%

Category B: Level of Monthly Benefits (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Eliminate completely the Windfall Elimination Provision (WEP) and 

Government Pension Offset (GPO), effective 2024.

16

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

17 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions modify: 

 the normal reƟrement age (NRA), the age at which 

individuals can reƟre and receive their full Primary Insurance 

Amount (PIA); or 

 the earliest eligibility age (EEA), the age at which individuals 

can first begin receiving reƟrement benefits, currently age 

62; or 

 both of the above. 

For each provision, we provide an esƟmate of the financial effect on the OASDI 

program over the long-range period (the next 75 years) and for the 75th year. We 

base all esƟmates on the intermediate assumpƟons described in the 2023 Trustees 

Report. 

We group these provisions as follows: 

 C1: NRA changes only; 

 C2: EEA changes, with or without NRA changes. 

C Provisions AffecƟng ReƟrement Age 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

C1.1 0.43 0.69 12% 16%

C1.2 0.53 0.69 15% 16%

C1.3 0.68 1.73 19% 40%

C1.4 1.33 2.47 37% 57%

C1.6 0.64 1.31 18% 30%

C1.7 1.01 1.32 28% 30%

C2.1 -0.10 -0.43 -3% -10%

C2.2 0.65 1.52 18% 35%

C2.3 0.49 1.17 14% 27%

C2.4 Starting for those age 62 in 2024, increase both the normal retirement 0.89 1.80 25% 41%

age (NRA) and the earliest eligibility age (EEA) by 36/47 of a month per 

year until the NRA and EEA reach 70 and 65 respectively. For each year, 

the computed NRA and EEA round down to the next lower full month.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Increase the normal retirement age (NRA) 2 months per year for those 

age 62 starting in 2024 and ending in 2035 (NRA reaches 69 for those age 

62 in 2035). Thereafter, increase the NRA 1 month every 2 years.

Starting with those age 62 in 2024, increase the normal retirement age 

(NRA) 1 month every 2 years until the NRA reaches 69. Also increase the 

age up to which the delayed retirement credit may be earned at the same 

rate (from 70 to 72). No change to earliest eligibility age.

Increase the normal retirement age (NRA) 3 months per year for those 

age 62 starting in 2024 and ending in 2031 (NRA reaches 69 for those age 

62 in 2031). Increase the age up to which delayed retirement credits may 

be earned from 70 to 72 on the same schedule. Increase the widow(er) 

NRA in the same manner. The earliest eligibility age (EEA) for worker's 

and widow(er)'s benefit is unchanged.

Increase the earliest eligibility age (EEA) by 2 months per year for those 

age 62 starting in 2025 and ending in 2042 (EEA reaches 65 for those age 

62 in 2042).

Starting for those age 62 in 2024, index the normal retirement age (NRA) 

to maintain a constant ratio of expected retirement years (life expectancy 

at NRA) to potential work years (NRA minus 20). We assume the NRA will 

increase 1 month every 2 years. Also, raise the earliest eligibility age (EEA) 

for retired-workers, aged widow(er)s, and disabled widow(er)s by the 

same amount as the NRA starting for those attaining 62 in 2024.

Starting for those age 62 in 2024, index the normal retirement age (NRA) 

to maintain a constant ratio of expected retirement years (life expectancy 

at NRA) to potential work years (NRA minus 20). We assume the NRA will 

increase 1 month every 2 years. Also, increase the earliest eligibility age 

(EEA) by the same amount as the NRA starting for those age 62 in 2024 so 

as to maintain a 5 year difference between the two ages. Include a 

hardship exemption with no EEA/NRA change for a worker with 25 years 

of earnings (with 4 quarters of coverage each), and average indexed 

monthly earnings (AIME) less than 250 percent of the poverty level (wageindexed from 2013). The hardship exemption is phased out for those with 

AIME above 400 percent of the poverty level.

Category C: Retirement Age (2023 Trustees Report intermediate assumptions)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Starting with those age 62 in 2024, increase the normal retirement age 

(NRA) 1 month every 2 years until the NRA reaches 68.

Increase the normal retirement age (NRA) 2 months per year for those 

age 62 starting in 2024 and ending in 2029 (NRA reaches 68 for those age 

62 in 2029).

Starting for those age 62 in 2024, index the normal retirement age (NRA) 

to maintain a constant ratio of expected retirement years (life expectancy 

at NRA) to potential work years (NRA minus 20). We assume the NRA will 

increase 1 month every 2 years.

18

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

C2.5 1.62 2.76 45% 63%

C2.6 0.91 1.08 25% 25%

C2.7 0.87 1.08 24% 25%

C2.8 0.40 0.70 11% 16%

Category C: Retirement Age (continued)

Increase the normal retirement age (NRA) 3 months per year for those 

age 62 starting in 2024 and ending in 2035 (NRA reaches 70 for those age 

62 in 2035). Thereafter, index the NRA to maintain a constant ratio of 

expected retirement years (life expectancy at NRA) to potential work 

years (NRA minus 20). We assume the NRA will increase 1 month every 2 

years. Also, increase the earliest eligibility age (EEA) from 62 to 64 at the 

same time the NRA increases from 67 to 69; that is, for those attaining 

age 62 in 2024 through 2031. Keep EEA at 64 thereafter.

Increase the normal retirement age (NRA) and the earliest eligibility age 

(EEA) for those age 62 in 2024-2025 to 68 and 63, respectively, and then 

by 3 months per year in 2026-2029 to 69 and 64, respectively.

Increase the normal retirement age (NRA) and the earliest eligibility age 

(EEA) for those age 62 starting in 2024 by 3 months per year until EEA 

reaches 64 in 2031 and NRA reaches 69 in 2031.

Starting in 2026, convert all disabled-worker beneficiaries to retiredworker status upon attainment of their earliest eligibility age (EEA) rather 

than their normal retirement age (NRA). After conversion, apply the early 

retirement reduction for retirement at EEA (currently 30 percent for 

those age 62 in 2026) phased in over 40 years.

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

19

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

20 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions modify the specific benefit amounts received by widow(er)s, spouses, 

and/or children based on a worker's Social Security account. For each provision, we 

provide an esƟmate of the financial effect on the OASDI program over the long-range 

period (the next 75 years) and for the 75th year. We base all esƟmates on the 

intermediate assumpƟons described in the 2023 Trustees Report. 

D Provisions AffecƟng Family Member Benefits 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

D1 -0.05 -0.05 -1% -1%

D2 0.09 0.13 3% 3%

D3 -0.01 -0.01 -0% -0%

D4 -0.10 -0.10 -3% -2%

D5 0.08 0.15 2% 4%

D6 0.07 0.12 2% 3%

D7 0.01 0.01 0% 0%

D8 -0.07 -0.07 -2% -2%

D9 -0.03 -0.03 -1% -1%

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Beginning in 2024, continue benefits for children of disabled or deceased 

workers until age 22 if the child is in high school, college or vocational 

school.

The current spouse benefit is based on 50 percent of the PIA of the other 

spouse. Reduce this percent each year by 1 percentage point beginning 

with newly eligible spouses in 2024, until the percent reaches 33 in 2040.

Allow divorced aged spouses and divorced surviving spouses married 5 to 

9 years to get benefits based on the former spouse's account. Divorced 

aged and surviving spouses would receive 50% of the applicable currentlaw PIA percentage if married 5 years, 60% of the applicable PIA 

percentage if married 6 years, ..., 90% of the applicable PIA percentage if 

married 9 years. This benefit would be available to divorced spouses on 

the rolls at the beginning of 2025 and those becoming eligible after 2024.

Establish an alternative benefit for a surviving spouse. For the surviving 

spouse, the alternative benefit would equal 75 percent of the sum of the 

survivor's own worker benefit and the deceased worker's PIA (including 

any actuarial reductions or delayed retirement credits). If the deceased 

worker died before becoming entitled, use the age 62 actuarial reduction 

if deceased before age 62, or the applicable actuarial reduction/DRC for 

entitlement at the age of death if deceased after 62. The alternative 

benefit would not exceed the PIA of a hypothetical earner who earns the 

SSA average wage index (AWI) every year, and who becomes eligible for 

retired-worker benefits in the same year in which the deceased worker 

became entitled to worker benefits or died (if before entitlement). The 

alternative benefit would be paid only if more than the current-law 

benefit. This benefit would be available to surviving spouses on the rolls 

at the beginning of 2025 and those becoming eligible after 2024.

Limit the spousal benefit to that received by the spouse of the 75th 

percentile career-average worker, beginning with retired workers newly 

eligible in 2030. For future cohorts, this limit would be indexed for 

inflation annually using chain weighted CPI-U. The provision affects 

divorced spouses and young spouses (retired workers) but not spouses of 

disabled workers.

Category D: Family Members (2023 Trustees Report intermediate assumptions)

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

For spouses and children of retired and disabled workers becoming newly 

eligible beginning in 2030 and phased in for 2030 through 2039, limit 

their auxiliary benefit to one-half of the PIA for a hypothetical worker 

with earnings equal to the national average wage index (AWI) each year.

Beginning in January 2026, require full time school enrollment as a 

condition of eligibility for child benefits at age 15 up to 18.

Beginning in 2024, continue benefits for children of disabled, retired, or 

deceased workers until age 26 if the child is in high school, college or 

vocational school.

Provide for pro-rata benefit payment for the month of death of a 

beneficiary, rather than no payment for month of death. For situations 

where an auxiliary beneficiary is changed from one type of benefit to 

another upon the death of the worker, benefits for the month of the 

worker's death would be determined on a pro-rata basis. This provision 

would apply for deaths in 2024 or later.

21

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

22 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions modify: (1) the current-law OASDI payroll tax rate of 12.4 percent 

(6.2 percent each for employees and employers); or (2) the contribuƟon and benefit 

base (taxable maximum), which limits the amount of earnings subject to payroll tax 

and credited for benefit computaƟon. For each provision, we provide an esƟmate of 

the financial effect on the OASDI program over the long-range period (the next 75 

years) and for the 75th year. We base all esƟmates on the intermediate 

assumpƟons described in the 2023 Trustees Report. 

We group these provisions as follows: 

 E1: Increase payroll tax rate, with no changes in the taxable 

maximum. 

 E2: Tax all earnings above the current-law taxable maximum. 

 E3: Tax a porƟon of earnings above the current-law taxable 

maximum. 

E Provisions AffecƟng Payroll Taxes 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E1.1 3.70 3.81 102% 88%

E1.2 4.49 7.51 125% 173%

E1.4 1.50 2.01 41% 46%

E1.8 0.55 0.61 15% 14%

E1.9 1.79 2.41 50% 56%

E1.10 0.89 1.01 25% 23%

E2.1 2.54 2.60 70% 60%

E2.2 1.97 1.60 55% 37%

E2.4 2.37 2.49 66% 57%

E2.5 2.47 2.60 68% 60%

E2.11 2.25 2.27 62% 52%

Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 

2024 and later.

Increase the payroll tax rate (currently 12.4 percent) to 16.2 percent in 

2034-2063, and to 20.0 percent in years 2064 and later.

Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage 

point each year from 2029-2048, until the rate reaches 14.4 percent in 

2048 and later.

Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage 

point each year from 2026-2031, until the rate reaches 13.0 percent for 

2031 and later.

Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage 

point each year from 2027-2050, until the rate reaches 14.8 percent in 

2050 and later.

Increase the payroll tax rate by 0.1 percentage point per year for 2025 

through 2034 so that it equals 13.4 percent for 2034 and later. The 

increase would be split evenly between the employer and employee 

share, and would be split between OASI and DI in proportion to currently 

scheduled payroll tax rates.

Category E: Payroll Taxes (including maximum taxable) (2023 Trustees Report intermediate assumptions)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Eliminate the taxable maximum in years 2024 and later, and apply full 

12.4 percent payroll tax rate to all earnings. Do not provide benefit credit 

for earnings above the current-law taxable maximum.

Eliminate the taxable maximum in years 2024 and later, and apply full 

12.4 percent payroll tax rate to all earnings. Provide benefit credit for 

earnings above the current-law taxable maximum.

Eliminate the taxable maximum for years 2030 and later (phased in 2024-

2030), and apply full 12.4 percent payroll tax rate to all earnings. Provide 

benefit credit for earnings above the current-law taxable maximum that 

are subject to the payroll tax, using a secondary PIA formula. This 

secondary PIA formula involves: (1) an AIME+ derived from annual 

earnings from each year after 2023 that were in excess of that year's 

current-law taxable maximum; (2) a new bend point equal to $9,360 in 

2024, indexed by wages after 2024; and (3) formula factors of 3 percent 

and 0.25 percent below and above the new bend point, respectively.

Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 

2024, and tax all earnings once the current-law taxable maximum exceeds 

$250,000. Do not provide benefit credit for additional earnings taxed.

Eliminate the taxable maximum in years 2029 and later. Phase in 

elimination by taxing all earnings above the current-law taxable maximum 

at: 2.48 percent in 2025, 4.96 percent in 2026, and so on, up to 12.40 

percent in 2029. Provide benefit credit for earnings above the current-law 

taxable maximum that are subject to the payroll tax, using a secondary 

PIA formula. This secondary PIA formula involves: (1) an AIME+ derived 

from annual earnings from each year after 2024 that were in excess of 

that year's current-law taxable maximum; and (2) a formula factor of 5 

percent on this newly computed AIME+.

23

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E2.12 2.05 2.22 57% 51%

E2.13 2.18 2.47 60% 57%

E2.14 2.37 2.47 66% 57%

E2.15 2.28 2.40 63% 55%

E2.16 2.33 2.40 65% 55%

E2.17 2.26 2.60 63% 60%

Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 

starting in 2025, and tax all earnings once the current-law taxable 

maximum exceeds $400,000. Provide benefit credit for earnings above 

the current-law taxable maximum that are subject to the payroll tax, 

using a secondary PIA formula. This secondary PIA formula involves: (1) an 

AIME+ derived from annual earnings from each year after 2024 that were 

in excess of that year's current-law taxable maximum; and (2) a formula 

factor of 2 percent on this newly computed AIME+.

Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 

starting in 2025, and tax all earnings once the current-law taxable 

maximum exceeds $250,000. Provide benefit credit for earnings above 

the current-law taxable maximum that are subject to the payroll tax, 

using a secondary PIA formula. This secondary PIA formula involves: (1) an 

AIME+ derived from annual earnings from each year after 2024 that were 

in excess of that year's current-law taxable maximum; and (2) a formula 

factor of 2 percent on this newly computed AIME+.

Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000 

starting in 2025, and tax all earnings once the current-law taxable 

maximum exceeds $300,000. Provide benefit credit for earnings above 

the current-law taxable maximum that are subject to the payroll tax, 

using a secondary PIA formula. This secondary PIA formula involves: (1) an 

AIME+ derived from annual earnings from each year after 2024 that were 

in excess of that year's current-law taxable maximum; and (2) a formula 

factor of 3 percent on this newly computed AIME+.

Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 

starting in 2024, and tax all earnings once the current-law taxable 

maximum exceeds $250,000. Increase the computed level of the SSA 

average wage index for years after 2023 by amounts ranging from 0.6 

percent for 2024 to 0.9 percent for 2034 and later. Provide benefit credit 

for earnings above the current-law taxable maximum that are subject to 

the payroll tax, using a secondary PIA formula. This secondary PIA formula 

involves: (1) an AIME+ derived from annual earnings from each year after 

2023 that were in excess of that year's current-law taxable maximum; and 

(2) a formula factor of 2 percent on this newly computed AIME+.

Apply 12.4 percent payroll tax rate on earnings above $400,000 starting in 

2024 and tax all earnings once the current-law taxable maximum exceeds 

$400,000. Do not provide benefit credit for additional earnings taxed.

Eliminate the taxable maximum in years 2035 and later. Phase in 

elimination by taxing all earnings above the current-law taxable maximum 

at: 1.24 percent in 2026, 2.48 percent in 2027, and so on, up to 12.40 

percent in 2035. Provide benefit credit for earnings above the current-law 

taxable maximum. Create a new bend point at the current-law taxable 

maximum with a 3 percent formula factor applying above the new bend 

point.

Category E: Payroll Taxes (including maximum taxable) (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

24

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E2.18 2.16 2.47 60% 57%

E3.1 0.69 0.40 19% 9%

E3.2 1.07 1.18 30% 27%

E3.5 0.59 0.45 16% 10%

E3.6 0.83 1.18 23% 27%

E3.7 0.66 0.76 18% 18%

E3.8 0.19 0.14 5% 3%

E3.9 0.26 0.30 7% 7%

E3.10 0.14 0.10 4% 2%

E3.11 0.19 0.22 5% 5%

Apply the combined OASDI payroll tax rate on covered earnings above 

$400,000 paid in 2025 and later, and tax all covered earnings once the 

current-law taxable maximum exceeds $400,000. Increase the computed 

level of the AWI for years after 2024 by amounts ranging from 0.5 

percent for 2025 to 0.9 percent for 2047 and later. Credit the additional 

earnings taxed for benefit purposes by: (a) calculating a second average 

indexed monthly earnings (AIME+) reflecting only earnings taxed above 

the current-law taxable maximum, (b) applying a 1 percent factor on this 

newly computed AIME+ to develop a second component of the PIA, and 

(c) adding this second component to the current-law PIA.

Category E: Payroll Taxes (including maximum taxable) (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $200,000 in 2017 (about $348,300 in 2031), 

with the threshold wage-indexed after 2031. Do not provide benefit 

credit for additional earnings taxed.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $300,000 in 2017 (about $522,300 in 2031), 

with the threshold wage-indexed after 2031. Provide proportional benefit 

credit for additional earnings taxed, based on the payroll tax rate applied 

to the additional earnings divided by the full 12.4 percent payroll tax rate.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $300,000 in 2017 (about $522,300 in 2031), 

with the threshold wage-indexed after 2031. Do not provide benefit 

credit for additional earnings taxed.

Increase the taxable maximum such that 90 percent of earnings would be 

subject to the payroll tax (phased in 2024-2033). Provide benefit credit 

for earnings up to the revised taxable maximum.

Increase the taxable maximum such that 90 percent of earnings would be 

subject to the payroll tax (phased in 2024-2033). Do not provide benefit 

credit for additional earnings taxed.

Increase the taxable maximum each year by an additional 2 percent 

beginning in 2024 until taxable earnings equal 90 percent of covered 

earnings. Provide benefit credit for earnings up to the revised taxable 

maximum.

Increase the taxable maximum each year by an additional 2 percent 

beginning in 2026 until taxable earnings equal 90 percent of covered 

earnings. Do not provide benefit credit for additional earnings taxed.

Increase the taxable maximum by an additional 2 percent per year 

beginning in 2025 until taxable earnings equal 90 percent of covered 

earnings. Provide benefit credit for earnings up to the revised taxable 

maximum. Create a new bend point equal to the current-law taxable 

maximum with a 5 percent formula factor applying above the new bend 

point.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $200,000 in 2017 (about $348,300 in 2031), 

with the threshold wage-indexed after 2031. Provide proportional benefit 

credit for additional earnings taxed, based on the payroll tax rate applied 

to the additional earnings divided by the full 12.4 percent payroll tax rate.

25

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

E3.12 0.11 0.08 3% 2%

E3.13 0.16 0.18 4% 4%

E3.14 1.46 1.19 40% 27%

E3.15 1.37 1.13 38% 26%

E3.16 0.32 0.33 9% 8%

E3.17 0.98 1.18 27% 27%

E3.18 0.55 0.48 15% 11%

E3.19 1.02 1.05 28% 24%

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $400,000 in 2017 (about $696,600 in 2031), 

with the threshold wage-indexed after 2031. Provide proportional benefit 

credit for additional earnings taxed, based on the payroll tax rate applied 

to the additional earnings divided by the full 12.4 percent payroll tax rate.

Beginning in 2031, apply 2 percent payroll tax rate on earnings over the 

wage-indexed equivalent of $400,000 in 2017 (about $696,600 in 2031), 

with the threshold wage-indexed after 2031. Do not provide benefit 

credit for additional earnings taxed.

Eliminate the taxable maximum for the employer payroll tax (6.2 percent) 

beginning in 2024. For the employee payroll tax (6.2 percent) and for 

benefit credit purposes, beginning in 2024, increase the taxable maximum 

by an additional 2 percent per year until taxable earnings equal 90 

percent of covered earnings.

Category E: Payroll Taxes (including maximum taxable) (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Increase the taxable maximum such that 90 percent of earnings are 

subject to the payroll tax (phased in 2024-2033). In addition, apply a tax 

rate of 6.2 percent for earnings above the revised taxable maximum 

(phased in from 2024-2033). Provide benefit credit for earnings taxed up 

to the revised taxable maximum.

Beginning in 2025, apply 4 percent payroll tax rate on earnings above the 

wage-indexed equivalent of $400,000 in 2015 (about $589,500 in 2025), 

with the threshold wage-indexed after 2025. Provide benefit credit for 

additional earnings taxed, using a secondary PIA formula. This secondary 

PIA formula involves: (1) an AIME+ derived from annual earnings taxed 

only between 2015 wage-indexed equivalents of $400,000 and $500,000, 

or about $589,500 and $736,800 in 2025 (with thresholds wage-indexed 

after 2025); and (2) a formula factor of 2 percent on this newly computed 

AIME+.

Beginning in 2025, increase the taxable maximum by twice the rate of 

increase in the national Average Wage Index, but never by less than 3 

percent. Provide benefit credit for earnings up to the revised taxable 

maximum levels.

Increase the taxable maximum linearly over 4 years to $279,900 for 2028. 

After 2028, index the taxable maximum to AWI plus 0.5 percentage point. 

Apply benefit credit on additional earnings taxed.

Increase the taxable maximum such that 90 percent of earnings would be 

subject to the payroll tax (phased in linearly from 2025-2030). Provide 

benefit credit for additional earnings taxed, using a secondary PIA 

formula. This secondary PIA formula involves: (1) an AIME+ derived from 

additional annual earnings taxed over the current-law taxable maximum; 

and (2) a formula factor of 2.5 percent on this newly computed AIME+.

26

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

27 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions expand or reduce the categories of workers or the amount of earnings 

covered under the Social Security system, or add other sources of revenue that would 

be dedicated to OASDI. For each provision, we provide an esƟmate of the financial 

effect on the OASDI program over the long-range period (the next 75 years) and the 

75th year. We base all esƟmates on the intermediate assumpƟons described in the 

2023 Trustees Report. 

Provisions AffecƟng Coverage of Employment or F Earnings, or Inclusion of Other Sources of Revenue 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

F1 0.14 -0.16 4% -4%

F2 -0.79 -1.00 -22% -23%

F3 1.13 0.77 31% 18%

F4 0.33 0.22 9% 5%

F6 0.67 0.80 19% 18%

F7 0.61 0.77 17% 18%

F8 0.93 1.01 26% 23%

F9 1.31 1.57 36% 36%

F10 1.79 2.22 50% 51%

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Starting in 2024, cover newly hired State and local government 

employees.

Starting in 2024, exempt individuals with more than 180 quarters of 

coverage from the OASDI payroll tax. Earnings exempted from OASDI 

payroll tax would not be used in computing benefits.

Expand covered earnings to include employer and employee premiums 

for employer-sponsored group health insurance (ESI). Starting in 2027, 

phase out the OASDI payroll tax exclusion for ESI premiums. Set an 

exclusion level at the 75th percentile of premium distribution in 2027, 

with amounts above that subject to the payroll tax. Reduce the exclusion 

level each year by 10 percent of the 2027 exclusion level until fully 

Expand covered earnings to include contributions to voluntary salary 

reduction plans (such as Cafeteria 125 plans and Flexible Spending 

Accounts). Starting in 2024, subject these contributions to the OASDI 

payroll tax, making the payroll tax treatment of these contributions like 

401(k) contributions.

Apply a separate 6.2 percent tax on investment income as defined in the 

Affordable Care Act (ACA), with unindexed thresholds as in the ACA 

($200,000 for single filer, $250,000 for married filing jointly), starting in 

2025. Proceeds go to the OASI and DI Trust Funds.

Category F: Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue 

(2023 Trustees Report intermediate assumptions)

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

For the estate tax, gift tax, and generation skipping transfer (GST) tax, 

return the respective exemption thresholds and tax rates to 2009 levels 

($3.5 million threshold for estate tax with a top 45% tax rate) for deaths 

after 2023 and gifts made after 2023, with those levels not indexed in 

future years. All proceeds from the estate tax, gift tax, and GST tax would 

go to the OASI and DI Trust Funds.

For active S-corporation officers and limited partners, apply a 16.2 

percent tax on investment income as defined in the ACA, with unindexed 

thresholds as in the ACA ($200,000 single filer, $250,000 for married filing 

joint), starting in 2024. Proceeds go to the OASDI Trust Funds for tax 

attributable to 12.4 percent of the total 16.2 percent tax rate.

Apply a separate 12.4 percent tax on investment income as defined in the 

Affordable Care Act (ACA), with unindexed thresholds as in the ACA 

($200,000 single filer, $250,000 for married filing joint), starting in 2025. 

Proceeds go to the OASDI Trust Funds.

Expand the tax on net investment income (NII) as defined in the 

Affordable Care Act (ACA) to cover earnings from active S corporation 

holders and active limited partners. Apply a 12.4-percent tax on this 

expanded definition of NII, payable to the OASI and DI Trust Funds with 

specified thresholds, effective for 2024 and later. The unindexed 

thresholds for this provision are $400,000 for a single filer and $500,000 

for a married couple filing jointly. The NII tax would apply to the lesser of 

NII and the excess of modified adjusted income (MAGI) above the 

unindexed thresholds.

28

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

F11 Apply a separate 12.4-percent tax on net investment income (NII), as 1.20 1.53 33% 35%

defined in the Affordable Care Act (ACA), payable to the OASI and DI Trust 

Funds with an unindexed threshold of $400,000, effective 2025 and later. 

The NII tax would apply to the lesser of NII and the excess of modified 

adjusted income (MAGI) above the unindexed threshold of $400,000. This 

single threshold would apply regardless of tax filing status.

Category F: Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue (continued)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

29

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

30 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions invest a porƟon of the Social Security Trust funds in marketable 

securiƟes (e.g., equiƟes, corporate bonds), rather than in special-issue government 

bonds as under current law. For each provision, we provide an esƟmate of the financial 

effect on the OASDI program over the long-range period (the next 75 years) and for the 

75th year. We base all esƟmates on the intermediate assumpƟons described in the 

2023 Trustees Report. 

The selecƟons G3, G5, and G7 provide a low-yield or risk-adjusted perspecƟve where 

equity yields equal the average real yield on long-term Treasury bonds. Thus, these 

selecƟons have no effect on the actuarial balance of the OASDI program. Some 

analysts believe the higher expected return for equiƟes should not be included in 

valuaƟons because the tendency for higher average returns is compensaƟon for the 

higher volaƟlity in equiƟes. The low-yield or risk-adjusted assumpƟon reflects this 

perspecƟve. 

Provisions AffecƟng Trust Fund Investment in G Marketable SecuriƟes 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

G1 0.47* 0.00 * 0%

G2 0.35* 0.00 * 0%

G3 0.00* 0.00 * 0%

G4 0.19* 0.00 * 0%

G5 0.00* 0.00 * 0%

G6 0.30* 0.00 * 0%

G7 0.00* 0.00 * 0%

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Invest 40 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2024-2038), assuming an ultimate 5.8 percent annual real rate 

of return on equities.

Invest 40 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2024-2038), assuming an ultimate 4.8 percent annual real rate 

of return on equities.

Invest 40 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2024-2038), assuming an ultimate 2.3 percent annual real rate 

of return on equities. Thus, the ultimate rate of return on equities is the 

same as that assumed for Trust Fund bonds.

Invest 15 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2024-2033), assuming an ultimate 5.8 percent annual real rate 

of return on equities.

Invest 15 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2024-2033), assuming an ultimate 2.3 percent annual real rate 

of return on equities. Thus, the ultimate rate of return on equities is the 

same as that assumed for Trust Fund bonds.

Category G: Trust Fund Investment in Equities (2023 Trustees Report intermediate assumptions)

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

Invest 25 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2026-2035), assuming an ultimate 5.8 percent annual real rate 

of return on equities.

Invest 25 percent of the OASI and DI Trust Fund reserves in equities 

(phased in 2026-2035), assuming an ultimate 2.3 percent annual real rate 

of return on equities. Thus, the ultimate rate of return on equities is the 

same as that assumed for Trust Fund bonds.

* A change in the investment of trust fund reserves to include some equities affects the size of all summarized measures because increased 

"present-value" discounting reduces the weight on values for more distant future years. As a result, the magnitude of the current-law 

actuarial balance and the summarized effects of most proposals is reduced. Therefore, the size of the change in the long-range actuarial 

balance indicated here cannot be interpreted directly as a reduction in the shortfall. The actual reduction in the shortfall from equity 

investment depends on the amount of reserves that are available for investment throughout the period. For example, if provisions to change 

revenue or scheduled benefits resulted in a purely pay-as-you-go system (reserves just above zero throughout the period), then investment in 

equities would have no effect on the actuarial balance.

31

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

32 Based on the 2023 Trustees Report Intermediate AssumpƟons 

These provisions revise the current rules for subjecƟng Social Security benefits to 

personal income tax. For each provision, we provide an esƟmate of the financial effect 

on the OASDI program over the long-range period (the next 75 years) and for the 75th 

year. We base all esƟmates on the intermediate assumpƟons described in the 2023 

Trustees Report. 

H Provisions AffecƟng TaxaƟon of Benefits 
Long-range 

actuarial 

balance

Annual 

balance in 

75th year

Long-range 

actuarial 

balance

Annual 

balance in 

75th year

H2 0.20 0.16 5% 4%

H4 -0.09 -0.01 -3% -0%

H5 0.01 0.01 0% 0%

H6 -0.58 -1.04 -16% -24%

H7 -0.15 -0.01 -4% -0%

Beginning in 2030, for single/head-of-household/married-filing-separate 

taxpayers with MAGI of $250,000 or more and joint filers with MAGI of 

$500,000 or more, include up to the remaining 15 percent of Social 

Security benefits in taxable income (increased from up to 85 percent of 

benefits taxable under current law). In subsequent years, update these 

thresholds for growth in wages (AWI). Revenue from this provision would 

be credited to the Social Security trust funds. Current law taxation of up 

to 85 percent of Social Security benefits would remain unchanged.

Eliminate federal income taxation of OASDI benefits that is credited to the 

OASI and DI Trust Funds for 2054 and later. Phase out OASDI taxation of 

benefits by increasing relevant income thresholds from 2045 through 

2053 as follows, for single/joint tax filers: (a) 2045 = $32,500/$65,000; (b) 

2046 = $40,000/$80,000; (c) 2047 = $47,500/$95,000; (d) 2048 = 

$55,000/$110,000; (e) 2049 = $62,500/$125,000; (f) 2050 = 

$70,000/$140,000; (g) 2051 = $77,500/$155,000; (h) 2052 = 

$85,000/$170,000; and (i) 2053 = $92,500/$185,000. Taxation of 

benefits revenues for the Hospital Insurance (HI) Trust Fund would be 

maintained at the same level as if the current-law computation applied.

Replace the current-law thresholds for federal income taxation of OASDI 

benefits with a single set of thresholds at $50,000 for single filers and 

$100,000 for joint filers for taxation of up to 85 percent of OASDI 

benefits, effective for tax year 2025. These thresholds would be fixed and 

not indexed to price inflation or average wage increase. Reallocate a 

portion of revenue from taxation of OASDI benefits to the HI Trust Fund 

such that the HI Trust Fund would be in the same position as if the 

current-law computation (in the absence of this provision) applied. The 

net amount of revenue from taxing OASDI benefits, after the allocation to 

HI, would be allocated to the combined Social Security Trust Fund.

Category H: Taxation of Benefits (2023 Trustees Report intermediate assumptions)

Current law shortfall in long-range actuarial balance is 3.61 percent of payroll and in annual balance for the 75th year is 4.35 percent of payroll.

Starting in 2024, tax Social Security benefits in a manner similar to private 

pension income. Phase out the lower-income thresholds during 2024-

2043.

Increase the threshold for taxation of OASDI benefits to $50,000 for single 

filers and $100,000 for joint filers starting in 2025. Taxation of benefits 

revenues transferred to the Hospital Insurance (HI) Trust Fund would be 

the same as if the current-law computation applied.

Description of proposed provisions

Change from current law

(percent of payroll)

Shortfall eliminated

33

Office of the Chief Actuary

Social Security Administration

Based on the 2023 Trustees Report Intermediate Assumptions
Office of the Chief Actuary 

Social Security AdministraƟon 

 34 Based on the 2023 Trustees Report Intermediate AssumpƟons 

One summary measure that is frequently used as an indicator of whether or not a 

proposal achieves solvency is the 75-year actuarial balance. When the actuarial balance 

is zero or posiƟve, financing for the program is considered to be adequate for the 75-year 

period as a whole. Therefore, the first goal is to have the improvement in the actuarial 

balance under the proposal equal or exceed the actuarial deficit under current law. One 

might aƩempt to meet this goal by adding together the changes in actuarial balance 

indicated for each provision included in a proposal. However, due to the interacƟon 

among various provisions, the sum of the changes in the actuarial balance oŌen exceeds 

the change in the actuarial balance for the proposal as a whole because the change in the 

actuarial balance for each provision is measured individually against current law. When 

several provisions that improve the actuarial balance are combined, the measured 

incremental effect of any single provision is oŌen smaller than the effect on that 

provision measured individually against current law. 

For example, consider the following two provisions. We will assume that each increase 

described in the two provisions applies to those newly eligible for reƟred worker benefits 

with the same effecƟve date. 

 Provision 1: Increase the early reƟrement age (EEA) an addiƟonal three years; 

the EEA would increase to age 65. Specifically, all program parameters that 

are linked to the EEA would also increase. This would include expanding the 

benefit computaƟon period (the number of years used to calculate benefits) as 

the EEA increases. 

 Provision 2: Increase the number of years used to calculate benefits for 

reƟrees from 35 to 38. 

If each of these proposals were measured against current law, the sum of the individual 

financial effects would be different than the overall effect when the provisions are 

combined together. Under provision 1, the number of years used to calculate benefits 

increases from 35 to 38 because the number of calculaƟon years increases by one year 

when the EEA increases one year. But under provision 2, the number of years would also 

increase to 38. Thus, in this case, inclusion of provision 2 adds no addiƟonal savings to 

the amount esƟmated for provision 1 alone. 

It should be noted that further analysis is required in order to determine whether a 

proposal is expected to achieve solvency throughout the 75-year period or to achieve 

sustainable solvency. In order to achieve 75-year solvency, the projected assets in the 

trust funds must be posiƟve throughout the 75-year period. In order to achieve 

sustainable solvency, the proposal must achieve solvency throughout the 75-year period, 

and the projected trust fund assets must be stable or rising as a percentage of annual 

program cost at the end of the period. 

Understanding InteracƟon among Individual Provisions 

that Would Change the Social Security Program