THE 2021 ANNUAL REPORT OF THE BOARD OF 

TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS 

INSURANCE AND FEDERAL DISABILITY INSURANCE 

TRUST FUNDS

COMMUNICATION

FROM

THE BOARD OF TRUSTEES, FEDERAL OLD-AGE AND 

SURVIVORS INSURANCE AND FEDERAL DISABILITY 

INSURANCE TRUST FUNDS

TRANSMITTING

THE 2021 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE 

FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL 

DISABILITY INSURANCE TRUST FUNDS
.

CONTENTS

(V)

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. OVERVIEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

A. HIGHLIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

B. TRUST FUND FINANCIAL OPERATIONS IN 2020 . . . . . . . 7

C. ASSUMPTIONS ABOUT THE FUTURE . . . . . . . . . . . . . . . . 9

D. PROJECTIONS OF FUTURE FINANCIAL STATUS . . . . . . . 11

E. CONCLUSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR . . . . . . . . . . 27

A. OPERATIONS OF THE OLD-AGE AND SURVIVORS 

INSURANCE (OASI) AND DISABILITY INSURANCE (DI) 

TRUST FUNDS, IN CALENDAR YEAR 2020 . . . . . . . . . . . . 27

1. OASI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

2. DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

3. OASI and DI Trust Funds, Combined . . . . . . . . . . . . . . . . . . 34

B. SOCIAL SECURITY AMENDMENTS SINCE THE 

2020 REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

IV. ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

A. SHORT-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . 41

1. Operations of the OASI Trust Fund. . . . . . . . . . . . . . . . . . . . 42

2. Operations of the DI Trust Fund . . . . . . . . . . . . . . . . . . . . . . 46

3. Operations of the Combined OASI and DI Trust Funds . . . . . 49

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

Estimates From Last Year’s Report . . . . . . . . . . . . . . . . . . . 51

B. LONG-RANGE ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . 53

1. Annual Income Rates, Cost Rates, and Balances . . . . . . . . . . 54

2. Comparison of Workers to Beneficiaries. . . . . . . . . . . . . . . . 64

3. Trust Fund Ratios and Test of Long-Range 

Close Actuarial Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

4. Summarized Income Rates, Summarized Cost Rates, 

and Actuarial Balances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71

5. Open-Group Unfunded Obligation . . . . . . . . . . . . . . . . . . . . 74

6. Reasons for Change in Actuarial Balance From Last Report . . 76
(VI)

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84

A. DEMOGRAPHIC ASSUMPTIONS AND METHODS . . . . . . . 85

1. Fertility Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

2. Mortality Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87

3. Immigration Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 91

4. Total Population Estimates. . . . . . . . . . . . . . . . . . . . . . . . . . 98

5. Life Expectancy Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . 100

B. ECONOMIC ASSUMPTIONS AND METHODS . . . . . . . . . . . 104

1. Productivity Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 105

2. Price Inflation Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . 105

3. Average Earnings Assumptions . . . . . . . . . . . . . . . . . . . . . . 107

4. Assumed Real Wage Differential . . . . . . . . . . . . . . . . . . . . . 109

5. Labor Force, Employment, and Unemployment Projections . . 112

6. Gross Domestic Product Projections . . . . . . . . . . . . . . . . . . . 115

7. Interest Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS . . . 120

1. Automatically Adjusted Program Parameters. . . . . . . . . . . . . 120

2. Covered Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

3. Insured Population. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129

4. Old-Age and Survivors Insurance Beneficiaries. . . . . . . . . . . 132

5. Disability Insurance Beneficiaries. . . . . . . . . . . . . . . . . . . . . 138

6. Covered and Taxable Earnings, Taxable Payroll, and 

Payroll Tax Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . 148

7. Income From Taxation of Benefits . . . . . . . . . . . . . . . . . . . . 153

8. Average Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154

9. Scheduled Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155

10. Illustrative Scheduled Benefit Amounts . . . . . . . . . . . . . . . . 155

11. Administrative Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . 157

12. Railroad Retirement Financial Interchange . . . . . . . . . . . . . . 158

VI. APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 159

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS. . 159

B. HISTORY OF ACTUARIAL STATUS ESTIMATES . . . . . . . . 170

C. FISCAL YEAR HISTORICAL AND PROJECTED 

TRUST FUND OPERATIONS THROUGH 2030 . . . . . . . . . . . 177

D. LONG-RANGE SENSITIVITY ANALYSIS . . . . . . . . . . . . . . 184

1. Total Fertility Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184

2. Death Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186

3. Immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187

4. Real Wage Differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188

5. Consumer Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190

6. Real Interest Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
(VII)

7. Taxable Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192

8. Disability Incidence Rates . . . . . . . . . . . . . . . . . . . . . . . . . . 194

9. Disability Termination Rates . . . . . . . . . . . . . . . . . . . . . . . . 195

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY . . . . . . 197

1. Background. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

2. Stochastic Methodology. . . . . . . . . . . . . . . . . . . . . . . . . . . . 197

3. Stochastic Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198

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

Intermediate, and High-Cost Alternative Scenarios . . . . . . . . 201

F. INFINITE HORIZON PROJECTIONS . . . . . . . . . . . . . . . . . . 208

G. ESTIMATES FOR OASDI AND HI, SEPARATE AND 

COMBINED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212

1. Estimates as a Percentage of Taxable Payroll. . . . . . . . . . . . . 212

2. Estimates as a Percentage of Gross Domestic Product . . . . . . 218

3. Estimates in Dollars. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223

H. ANALYSIS OF BENEFIT PAYMENTS FROM THE 

OASI TRUST FUND WITH RESPECT TO DISABLED 

BENEFICIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236

I. GLOSSARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240

LIST OF TABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258

LIST OF FIGURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263

INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265

STATEMENT OF ACTUARIAL OPINION . . . . . . . . . . . . . . . 270
THE 2021 ANNUAL REPORT OF THE BOARD OF

TRUSTEES OF THE FEDERAL OLD-AGE AND

SURVIVORS INSURANCE AND FEDERAL DISABILITY

INSURANCE TRUST FUNDS

I. INTRODUCTION

The Old-Age, Survivors, and Disability Insurance (OASDI) program makes

monthly income available to insured workers and their families at retirement,

death, or disability. The OASDI program consists of two parts. Retired workers, their families, and survivors of deceased workers receive monthly benefits under the Old-Age and Survivors Insurance (OASI) program. Disabled

workers and their families receive monthly benefits under the Disability

Insurance (DI) program.

The Social Security Act established the Board of Trustees to oversee the

financial operations of the OASI and DI Trust Funds. The Board is composed of six members. Four members serve by virtue of their positions in the

Federal Government: the Secretary of the Treasury, who is the Managing

Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security. The President appoints and

the Senate confirms the other two members to serve as public representatives. These two positions are currently vacant. The Deputy Commissioner

of the Social Security Administration serves as Secretary of the Board.

The Social Security Act requires that the Board, among other duties, report

annually to the Congress on the actuarial status and financial operations of

the OASI and DI Trust Funds. The 2021 report is the 81st such report. 
Overview

2

II. OVERVIEW

A. HIGHLIGHTS

This section summarizes the report’s major findings.

Readers of this report should note that the data and projections presented

include the Trustees’ best estimates of the effects of the COVID-19 pandemic and the ensuing recession, which were not reflected in last year’s

report.

Employment, earnings, interest rates, and GDP dropped substantially in the

second calendar quarter of 2020 and are assumed to rise gradually thereafter

toward recovery by 2023, with the level of worker productivity and thus

GDP assumed to be permanently lowered by 1 percent. In addition, the pandemic and recession are assumed to lead to elevated mortality rates over the

period 2020 through 2023 and delays in births and immigration in the near

term. Taken together, these data and assumptions cause the reserve depletion

date for the combined OASI and DI Trust Funds under the intermediate

assumptions to change from 2035, shown in the 2020 report, to 2034 for this

report. These changes also result in a small but significant reduction in the

actuarial balance for the OASDI program.

The pandemic and precipitous recession have clearly had significant effects

on the actuarial status of the OASI and DI Trust Funds, and the future course

of the pandemic is still uncertain. The Trustees will continue to monitor

developments and modify the projections in later reports. 

In 2020

At the end of 2020, the OASDI program was providing benefit payments1 to

about 65 million people: 49 million retired workers and dependents of retired

workers, 6 million survivors of deceased workers, and 10 million disabled

workers and dependents of disabled workers. During the year, an estimated

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

taxes on those earnings. The total cost of the program in 2020 was

$1,107 billion. Total income was $1,118 billion, which consisted of

$1,042 billion in non-interest income and $76 billion in interest earnings.

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

$2,897 billion at the beginning of the year to $2,908 billion at the end of the

year. The total cost and asset reserve accumulation shown for 2020 reflect

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

Highlights

the twelve months of benefits scheduled for payment, and exclude the benefits scheduled for payment on January 3, 2021, which were actually paid on

December 31, 2020 as required by the law.1

Short-Range Results (2021-30)

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

projected to be higher than its total income in 2021 and all later years. Social

Security’s cost has exceeded its non-interest income since 2010. 

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

the operations of the OASI and DI Trust Funds are often shown on a combined basis as OASDI. However, by law, the two funds are separate entities

and therefore the combined fund operations and reserves are hypothetical.

The combined reserves are projected to decrease from $2,908 billion at the

beginning of 2021 to $1,336 billion at the end of 2030, the last year of the

short-range period.

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

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

10 years under the intermediate assumptions. However, the ratio of reserves

to annual cost is projected to decline from 253 percent at the beginning of

2021 to 85 percent at the beginning of 2030. Because this ratio falls below

100 percent by the beginning of the 10th projection year, the combined OASI

and DI Trust Funds fail the Trustees’ test of short-range financial adequacy.

Considered separately, the OASI and DI Trust Funds also fail this test. For

last year’s report, the Trustees projected that combined reserves would be

248 percent of annual cost at the beginning of 2021 and 94 percent at the

beginning of 2030. 

Long-Range Results (2021-95)

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

exceed total income in 2021, and the dollar level of the hypothetical combined trust fund reserves declines until reserves become depleted in 2034.

Figure II.D2 shows the implications of reserve depletion for the combined

OASI and DI Trust Funds. Considered separately, the OASI Trust Fund

reserves become depleted in 2033 and the DI Trust Fund reserves become

 1 Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal delivery

date is a Saturday, Sunday, or public legal holiday. The amount of these payments was approximately

$18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect

the 12 months of benefits scheduled for payment each year.
Overview

4

depleted in 2057.1 In last year’s report, the projected reserve depletion years

were 2035 for OASDI, 2034 for OASI, and 2065 for DI. 

For the third year in a row, there has been a significant change in the DI

reserve depletion date because the DI reserve depletion date is very sensitive

to changes in program cash flows, and there is now less revenue projected in

the near term for the DI program than was expected in last year’s report.

Nevertheless, the DI program has continued to have low levels of disability

applications and benefit awards for 2020. Disability applications have

declined substantially since 2010, and the total number of disabled-worker

beneficiaries in current payment status has been falling since 2014. For this

report, disability applications are assumed to rise gradually from current low

levels, resulting in a rise in the age-sex-adjusted disability incidence rate to

an ultimate rate of 5.0 per thousand exposed by the end of the short-range

projection period, the same ultimate rate as was assumed in last year’s report. 

OASDI cost has been increasing much more rapidly than non-interest

income since 2008 and is projected to continue to do so through about 2040.

In this period, the retirement of the baby-boom generation is increasing the

number of beneficiaries much faster than the increase in the number of covered workers, as subsequent lower-birth-rate generations replace the babyboom generation at working ages. Between about 2040 and 2055, OASDI

cost and non-interest income are projected to increase at more similar rates

as the cost rate (the ratio of program cost to taxable payroll) roughly stabilizes, reflecting the return to birth rates above 2 children per woman between

1990 and 2008. Between 2055 and 2078, OASDI cost is projected to grow

significantly faster than income because of the period of historically low

birth rates starting with the recession of 2007-09. From 2078 to 2095, cost is

projected to grow somewhat slower than income, as birth rates return to a

level of 2 children per woman for 2056 and thereafter.

Over the 75-year long-range period 2021-95, the projected OASDI annual

cost rate increases from 14.11 percent of taxable payroll for 2021 to

18.38 percent for 2078, and then decreases to 17.70 percent for 2095. The

projected cost rate for 2095 is 4.34 percent of taxable payroll more than the

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

2095. For last year’s report, the Trustees estimated the OASDI cost for 2095

at 17.97 percent, or 4.55 percent of payroll more than the annual income rate

for that year. Expressed in relation to the projected gross domestic product

 1 If the OASI Trust Fund reserves were to become depleted in 2033 as is currently projected, the operations

of the hypothetical combined OASI and DI Trust Funds would not reflect the aggregated operation of the

OASI Trust Fund and the DI Trust Fund because part of the OASI benefits could not be paid without a

change in the law. Implicitly, the values shown for the hypothetical combined trust funds assume the law

will have been changed to permit the transfer of resources between funds as needed.
5

Highlights

(GDP), OASDI cost rises from 5.1 percent of GDP for 2021 to a peak of

about 6.2 percent for 2077, and then declines to 5.9 percent by 2095.

For the 75-year projection period, the actuarial deficit is 3.54 percent of taxable payroll, increased from 3.21 percent of taxable payroll in last year’s

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

the 75-year period is 3.35 percent of taxable payroll, increased from

3.03 percent of payroll in last year’s report. The open-group unfunded obligation for OASDI over the 75-year period is $19.8 trillion in present value

and is $3.0 trillion more than the measured level of $16.8 trillion a year ago.

The actuarial deficit and unfunded obligation both round to 1.2 percent of

GDP over the 75-year period, increased from 1.1 percent and 1.0 percent,

respectively, in last year’s report.

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

unchanged, the actuarial deficit would have increased to 3.27 percent of taxable payroll, and the unfunded obligation would have risen to about

3.09 percent of taxable payroll and $17.5 trillion in present value due to the

change in the valuation date. These measures increased significantly in this

year’s report due to changes in methodology and near-term interest rates,

described in detail in section IV.B.6 of this report.

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

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

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

amount equivalent to an immediate and permanent payroll tax rate increase

of 3.36 percentage points1 to 15.76 percent; (2) scheduled benefits would

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

reduction of about 21 percent applied to all current and future beneficiaries,

or about 25 percent if the reductions were applied only to those who become

initially eligible for benefits in 2021 or later; or (3) some combination of

these approaches would have to be adopted. 

If substantial actions are deferred for several years, the changes necessary to

maintain Social Security solvency would be concentrated on fewer years and

fewer generations. Significantly larger changes would be necessary if action

is deferred until the combined trust fund reserves become depleted in 2034.

For example, maintaining 75-year solvency with changes that begin in 2034

would require: (1) an increase in revenue by an amount equivalent to a per-

 1 The 3.36 percentage point increase in the payroll tax rate required to achieve 75-year solvency differs

somewhat from the 3.54 percent actuarial deficit. This is primarily because the rate increase required to

achieve 75-year solvency reflects a zero trust fund reserve at the end of the period, whereas the 3.54 percent

actuarial deficit incorporates an ending trust fund reserve equal to one year’s cost. While such an increase in

the payroll tax rate would cause some behavioral changes in earnings and ensuing changes in benefit levels,

such changes are not included in these calculations because they are assumed to have roughly offsetting

effects on OASDI actuarial status over the 75-year long-range period as a whole.
Overview

6

manent 4.20 percentage point payroll tax rate increase to 16.60 percent starting in 2034, (2) a reduction in scheduled benefits by an amount equivalent to

a permanent 26 percent reduction in all benefits starting in 2034, or (3) some

combination of these approaches.

Conclusion

Under the intermediate assumptions, the projected hypothetical combined

OASI and DI Trust Fund asset reserves become depleted and unable to pay

scheduled benefits in full on a timely basis in 2034. At the time of depletion

of these combined reserves, continuing income to the combined trust funds

would be sufficient to pay 78 percent of scheduled benefits. The OASI Trust

Fund reserves are projected to become depleted in 2033, at which time OASI

income would be sufficient to pay 76 percent of OASI scheduled benefits. DI

Trust Fund asset reserves are projected to become depleted in 2057, at which

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

91 percent of DI scheduled benefits. 

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

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

many such policy options are available at 

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

The Trustees recommend that lawmakers address the projected trust fund

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

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

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

needed revenue increases or reductions in scheduled benefits. Social Security

will play a critical role in the lives of 65 million beneficiaries and

176 million covered workers and their families during 2021. With informed

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

can continue to protect future generations.
7

Calendar Year 2020 Operations

B. TRUST FUND FINANCIAL OPERATIONS IN 2020

Table II.B1 shows the income, cost, and asset reserves for the OASI, the DI,

and the combined OASI and DI Trust Funds in calendar year 2020.

Note: Components may not sum to totals because of rounding.

In 2020, net payroll tax contributions accounted for 89.6 percent of total trust

fund income. Net payroll tax contributions consist of taxes paid by employees, employers, and the self-employed on earnings covered by Social Security. These taxes are paid on covered earnings up to a specified maximum

annual amount, which was $137,700 in 2020. Table II.B2 shows the payroll

tax rates for 2020. 

Table II.B1.—Summary of 2020 Trust Fund Financial Operations

[In billions]

OASI DI OASDI

Asset reserves at the end of 2019. . . . . . . . . . . . . . . . . . . . $2,804.3 $93.1 $2,897.4

Total income in 2020a . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a Includes less than $50 million in reimbursements from the General Fund of the Treasury and gifts. See section III.A for details.

968.3 149.7 1,118.1

Net payroll tax contributions . . . . . . . . . . . . . . . . . . . . . 856.0 145.3 1,001.3

Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73.3 2.8 76.1

Taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.0 1.7 40.7

Total cost in 2020b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

b Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal delivery

date is a Saturday, Sunday, or public legal holiday. The amount of these payments was approximately $18.7

billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund. For comparability with the values for

historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12

months of benefits scheduled for payment each year.

961.0 146.3 1,107.2

Benefit paymentsb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952.4 143.6 1,095.9

Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . 3.7 2.6 6.3

Railroad Retirement financial interchange . . . . . . . . . . 4.8 .1 5.0

Net increase in asset reserves in 2020b . . . . . . . . . . . . . . . 7.4 3.5 10.9

Asset reserves at the end of 2020b . . . . . . . . . . . . . . . . . . . 2,811.7 96.6 2,908.3

Table II.B2.—Payroll Tax Contribution Rates for 2020

[In percent]

OASI DI OASDI

Payroll tax contribution rate for employees. . . . . . . . . . . . . . . . . . . . . . . 5.3 0.9 6.2

Payroll tax contribution rate for employers . . . . . . . . . . . . . . . . . . . . . . . 5.3 .9 6.2

Payroll tax contribution rate for self-employed persons . . . . . . . . . . . . . 10.6 1.8 12.4
Overview

8

Interest earned on invested trust fund asset reserves accounted for

6.8 percent of OASI and DI combined trust fund income in 2020. Revenue

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

accounted for 3.6 percent of OASDI income.

The Department of the Treasury invests all trust fund income in interestbearing securities issued by the U.S. Government. In 2020, the combined

trust fund reserves (the excess of all past income over all past expenditures)

earned interest at an effective annual rate of 2.6 percent. 

Retirement, survivor, and disability benefits accounted for 99.0 percent of

OASI and DI combined trust fund cost in 2020. The expenses for administering the Social Security program were 0.6 percent of total cost. The net payment to the Railroad Retirement Social Security Equivalent Benefit Account

from the combined OASI and DI Trust Funds accounted for 0.5 percent of

total OASDI cost. 

Trust fund reserves provide the basis for paying benefits. Combined trust

fund reserves increased by $10.9 billion during 2020 because income to each

fund, including interest earned on trust fund reserves, exceeded total cost.1

In last year’s report, combined reserves were projected to increase by $4.4

billion in 2020, and then start declining in 2021.2 At the end of 2020, the

combined reserves of the OASI and the DI Trust Funds were $2,908 billion,

or 253 percent of estimated cost2 for 2021. In comparison, the combined

reserves at the end of 2019 were 262 percent of actual cost for 2020.

 1 As noted in footnote b of table II.B1 and elsewhere in this report, asset reserves shown for the end of 2020

reflect the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for

payment on January 3, 2021, which were actually paid on December 31, 2020 as required by the law.

 2 Estimated cost is based on the intermediate set of assumptions.
9

Future Assumptions

C. ASSUMPTIONS ABOUT THE FUTURE

The future income and cost of the OASI and DI Trust Funds will depend on

many factors, including the size and characteristics of the population receiving benefits, the level of monthly benefit amounts, the size of the workforce,

and the level of covered workers’ earnings. These factors will depend in turn

on future birth rates, death rates, immigration, marriage and divorce rates,

retirement-age patterns, disability incidence and termination rates, employment rates, productivity gains, wage increases, inflation, interest rates, and

many other demographic, economic, and program-specific factors.

Table II.C1 presents key demographic, economic, and programmatic

assumptions for three alternative scenarios. The intermediate assumptions

reflect the Trustees’ best estimates of future experience. Therefore, most of

the figures in this overview present outcomes under the intermediate

assumptions only. Any projection of the future is, of course, uncertain. For

this reason, the Trustees also present results under low-cost and high-cost

alternatives to provide a range of possible future experience. The actual

future costs are unlikely to be as extreme as those portrayed by the low-cost

or high-cost projections. A separate section on the uncertainty of the projections, beginning on page 19, highlights the implications of these alternative

scenarios.

The Trustees reexamine the assumptions each year in light of recent experience and new information. This annual review helps to ensure that the Trustees’ assumptions provide the best estimate of future possibilities.
Overview

10

Table II.C1.—Key Assumptionsa and Summary Measures 

for the Long-Range (75-year) Projection Period

Long-range assumptions Intermediate Low-cost High-cost

Demographic:

Average annual total fertility rate (children per woman), for 2031 

through 2095b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.99 2.19 1.69

Average annual percentage reduction in total age-sex-adjusted 

death rates from 2030 to 2095. . . . . . . . . . . . . . . . . . . . . . . . . . .74 .28 1.25

Average annual net lawful permanent resident (LPR) immigration 

(in thousands) for 2031 through 2095. . . . . . . . . . . . . . . . . . . . 788 1,000 595

Average annual net other-than-LPR immigration (in thousands) for 

2031 through 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 461 688 235

Economic:

Average annual percentage change in:

Productivity (total U.S. economy), for 2031 and later . . . . . . . 1.63 1.93 1.33

Average wage in covered employment from 2030 to 2095 . . . 3.55 4.77 2.33

Consumer Price Index (CPI-W), for 2024 and later. . . . . . . . . 2.40 3.00 1.80

Average annual real wage differential (percent) for 2031 

through 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.15 1.77 .53

Unemployment rate (percent, age-sex-adjusted), for 2029 and later 4.5 3.5 5.5

Annual trust fund real interest rate (percent), for 2031 and later. 2.3 2.8 1.8

Programmatic:

Average annual disability incidence rate (per 1,000 exposed, agesex-adjusted) for 2031 through 2095 . . . . . . . . . . . . . . . . . . . . 5.0 4.0 6.0

Average annual disability recovery rate (per 1,000 beneficiaries, 

age-sex-adjusted) for 2031 through 2095 . . . . . . . . . . . . . . . . . 10.4 12.5 8.3

a See chapter V for details, including historical and projected values.

b The ultimate total fertility rates of 2.00 for the intermediate assumptions, 2.20 for the low-cost assumptions, and 1.70 for the high-cost assumptions are fully reached for women of all ages in 2056. The new

cohort-based projection approach adopted for this report assumes that the ultimate rates will be achieved

over the lifetime of women attaining age 14 soon after the start of the projection period, resulting in an

extended transition from current low birth rates to ultimate birth rates. See section V.A.1 for additional

details.
11

Future Financial Status

D. PROJECTIONS OF FUTURE FINANCIAL STATUS

Short-Range Actuarial Estimates

For the short-range period (2021 through 2030), the Trustees measure financial adequacy using trust fund ratios, which compare projected asset reserves

at the beginning of a year to projected program cost for the year. Maintaining

a trust fund ratio of 100 percent or more—that is, reserves at the beginning

of a year at least equal to projected cost for the year—is a good indication

that the trust fund can cover most short-term contingencies. The Trustees'

test of short-range financial adequacy is met if under the intermediate

assumptions (1) the estimated trust fund ratio is at least 100 percent at the

beginning of the period and remains at or above 100 percent throughout the

10-year short-range period (from the beginning of 2021 through the beginning of 2031) or (2) the ratio is initially less than 100 percent, but reaches at

least 100 percent within five years and remains at or above 100 percent

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

trust fund ratio under the intermediate assumptions for the OASI Trust Fund

declines to 85 percent by the beginning of 2030. Therefore, OASI fails the

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

the Trustees’ test of short-range financial adequacy. The Trustees estimate

that the DI trust fund ratio was at 66 percent at the beginning of 2021. The

projected DI trust fund ratio declines to 62 percent at the beginning of 2022,

and then increases to 86 percent by the beginning of 2031. On a combined

basis, OASDI also fails the Trustees’ test of short-range financial adequacy

because the OASDI trust fund ratio declines to 85 percent by the beginning

of 2030. Figure II.D1 shows that the trust fund ratio for the combined OASI

and DI Trust Funds declines steadily after 2010.

For this report, combined reserves are projected to start declining in 2021

and to continue to decline throughout the remainder of the short-range

period. 
Overview

12

Long-Range Actuarial Estimates

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

program over the long-range period (2021 through 2095): (1) annual cashflow measures, including income rates, cost rates, and balances; (2) trust

fund ratios; and (3) summary measures such as actuarial balances and opengroup unfunded obligations. The Trustees express these measures as percentages of taxable payroll, as percentages of gross domestic product (GDP), or

in dollars. The Trustees also present summary measures over the infinite

horizon in appendix F. The infinite horizon values provide an additional

indication of Social Security’s very-long-run financial condition.

The Trustees also apply a test of long-range close actuarial balance each

year. To satisfy the test, a trust fund must meet two conditions: (1) the trust

fund satisfies the test of short-range financial adequacy, and (2) the trust fund

ratio stays above zero throughout the 75-year projection period, such that

benefits would be payable in a timely manner throughout the period. The

OASI, DI, and combined OASI and DI Trust Funds all fail the test of longrange close actuarial balance under the intermediate assumptions.

 Figure II.D1.—Short-Range OASI and DI Combined Trust Fund Ratio

[Asset reserves at beginning of year as a percentage of annual cost for the year, 

under intermediate assumptions]

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Calendar year

Historical Projected

Minimum level for short-range test of financial adequacy
13

Future Financial Status

Annual Income Rates, Cost Rates, and Balances

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

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

(including payable benefits) starting in 2000 and for the full 75-year projection period (2021 through 2095). The figure shows all values as percentages

of taxable payroll. Under the intermediate assumptions, demographic factors

by themselves cause the projected cost rate to rise rapidly for the next two

decades, level off in about 2040 through 2055, rise temporarily between

2055 and 2078, and then decline somewhat by 2095. The projected income

rate is stable at about 13 percent throughout the 75-year period.

Annual OASDI cost has exceeded non-interest income every year beginning

with 2010. The Trustees project that cost will continue to exceed non-interest

income throughout the 75-year valuation period. Beginning in 2021, cost is

projected to exceed total income, and combined OASI and DI Trust Fund

reserves diminish until they become depleted in 2034. After trust fund

reserve depletion, continuing income is sufficient to support expenditures at

a level of 78 percent of program cost for the rest of 2034, declining to

74 percent for 2095. Figure II.D2 depicts OASDI operations as a combined

whole. However, under current law, the differences between scheduled and

payable benefits would begin at different times for the program’s two trust

funds: in 2033 for OASI and in 2057 for DI.
Overview

14

Figure II.D3 shows the estimated number of covered workers per OASDI

beneficiary. Figures II.D2 and II.D3 illustrate the inverse relationship

between cost rates and the number of workers per beneficiary. In particular,

the projected future increase in the cost rate reflects a projected decline in the

number of covered workers per beneficiary. There were about 2.7 workers

for every OASDI beneficiary in 2020. This ratio had been stable, remaining

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

initially due to the economic recession of 2007-09 and the beginning of a

notable demographic shift. This shift causes the ratio of workers to beneficiaries to decline, as workers of lower-birth-rate generations replace workers of

the baby-boom generation. The decline in the ratio slowed substantially

between 2013 and 2019, with the recovery of the economy offsetting the

demographic shift during that period. The demographic shift will continue to

drive this ratio down over about the next 15 years. The ratio of workers to

beneficiaries reaches 2.3 by 2035 when the baby-boom generation will have

largely retired, and will generally decline very gradually thereafter due to

increasing longevity.

 Figure II.D2.—OASDI Income, Cost, and Expenditures as Percentages of Taxable Payroll

[Under intermediate assumptions]

0%

5%

10%

15%

20%

25%

2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Cost: Scheduled and 

payable benefits

Non-interest Income

Payable benefits as percent

of scheduled benefits:

2021-33: 100%

2034: 78%

2095: 74%

Cost: Scheduled but not 

fully payable benefits

Expenditures: Payable benefits = 

income after trust fund depletion in 2034
15

Future Financial Status

Another important way to look at Social Security’s future financial status is

to view its annual cost and non-interest income as a share of U.S. economic

output (GDP). As shown in figure II.D4, Social Security’s cost as a percent

of GDP is projected to grow from 5.1 percent in 2021 to a peak of about

6.2 percent for 2077, and then decline to 5.9 percent by 2095. Social Security’s non-interest income is projected to rise from 4.5 percent of GDP in

2021 to a peak of about 4.8 percent by 2030. Thereafter, non-interest income

as a percent of GDP declines gradually, to about 4.4 percent for 2095,

because the Trustees expect the share of employee compensation provided as

noncovered fringe benefits to increase gradually.

 Figure II.D3.—Number of Covered Workers Per OASDI Beneficiary

[Under intermediate assumptions]

0

1

2

3

4

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

Calendar year

Historical Projected
Overview

16

Trust Fund Ratios

The trust fund ratio is defined as the asset reserves at the beginning of a year

expressed as a percentage of the cost during the year. The trust fund ratio

thus represents the proportion of a year’s cost which could be paid solely

with the reserves at the beginning of the year. Table II.D1 displays the projected maximum trust fund ratios during the long-range period for the OASI,

DI, and combined OASI and DI funds. The table also shows the year of maximum projected trust fund ratio during the long-range projection period

(2021 through 2095) and the year of trust fund asset reserve depletion. Trust

fund ratios for OASI and combined OASI and DI are projected to decline

from their current levels until reserve depletion. For DI, the trust fund ratio is

projected to rise to 116 in 2040, then decline until reserve depletion.

 Figure II.D4.—OASDI Cost and Non-interest Income as a Percentage of GDP

[Under intermediate assumptions]

Table II.D1.—Projected Maximum Trust Fund Ratios During the Long-Range Period

and Trust Fund Reserve Depletion Dates

[Under Intermediate Assumptions]

OASI DI OASDI

Maximum projected trust fund ratio (percent). . . . . . 280 116 253

Year attained. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2021 2040 2021

Projected year of trust fund reserve depletion . . . . . . 2033 2057 2034

0%

2%

4%

6%

8%

10%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Non-interest Income

Historical Projected

Cost
17

Future Financial Status

Summary Measures

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

through the end of the 75-year valuation period. The actuarial balance measure includes the trust fund asset reserves at the beginning of the period, all

cost and income during the valuation period, and the cost of reaching a target

trust fund reserve of one year’s cost by the end of the period. Therefore, the

actuarial balance is essentially the difference between the present values of

income and cost from 1937 through the end of the valuation period. Actuarial balance is expressed as a percentage of the taxable payroll for the 75-year

valuation period. A negative actuarial balance is called an actuarial deficit.

The actuarial deficit represents the average amount of change in income or

cost that is needed throughout the valuation period in order to achieve actuarial balance. 

In this report, the actuarial deficit for the combined OASI and DI Trust

Funds under the intermediate assumptions is 3.54 percent of taxable payroll.

The actuarial deficit was 3.21 percent of payroll in the 2020 report. If the

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

unchanged from last year, the actuarial deficit would have increased to

3.27 percent of payroll solely due to advancing the valuation period by

1 year. The actuarial deficit is 1.2 percent of GDP in this year’s report,

increased from 1.1 percent in last year’s report.

Another way to illustrate the projected financial shortfall of the OASDI program is to examine the cumulative present value of scheduled income less

cost. Figure II.D5 shows the present value of cumulative OASDI income less

cost from the inception of the program through each of the years from 2020

to 2095. A positive value represents the present value of trust fund reserves

at the end of the selected year. A negative value is the unfunded obligation

through the selected year. The asset reserves of the combined trust funds

were $2.9 trillion at the end of 2020. The combined trust fund reserves

decline on a present value basis after 2020, but remain positive through

2033. However, after 2033 this cumulative amount becomes negative, which

means that the combined OASI and DI Trust Funds have a net unfunded

obligation through each year after 2033. Through the end of 2095, the combined funds have a present-value unfunded obligation of $19.8 trillion. If the

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

unchanged from last year, the unfunded obligation would have risen to about

$17.5 trillion due to the change in the valuation date.

This unfunded obligation represents 3.35 percent of taxable payroll

(increased from 3.03 percent in last year’s report) and 1.2 percent of GDP
Overview

18

(increased from 1.0 percent in last year’s report) over the 75-year valuation

period. The unfunded obligation as a share of taxable payroll over the period

(3.35 percent) and the actuarial deficit (3.54 percent) are similar measures,

but differ because the actuarial deficit includes the cost of having an ending

trust fund reserve equal to one year’s cost.

Figures II.D2, II.D4, and II.D5 show that the program’s financial condition is

worsening at the end of the projection period. Negative annual balances and

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

indication of the additional change that will be needed by that time in order

to maintain solvency beyond 75 years. Consideration of summary measures

alone for a 75-year period can lead to incorrect perceptions and to policy prescriptions that do not achieve sustainable solvency.1

Appendix F presents summary measures over the infinite horizon. The

infinite horizon values provide an additional indication of Social Security’s

 1 Sustainable solvency for the financing of the program under a specified set of assumptions has been

achieved when the projected trust fund ratio is positive throughout the 75-year projection period and is either

stable or rising at the end of the period.

 Figure II.D5.—Cumulative Scheduled OASDI Income Less Cost,

From Program Inception Through Years 2020-2095

[Present value as of January 1, 2021, in trillions, under Intermediate Assumptions]

-$20

-$19

-$18

-$17

-$16

-$15

-$14

-$13

-$12

-$11

-$10

-$9

-$8

-$7

-$6

-$5

-$4

-$3

-$2

-$1

$0

$1

$2

$3

2020 2035 2050 2065 2080 2095

Ending year of accumulation

Unfunded 

obligation

(negative)

Trust fund 

reserves

(positive)

2034
19

Future Financial Status

financial condition for the period beginning with the inception of the program and extending indefinitely into the future, but results are subject to

much greater uncertainty. Extending the horizon beyond 75 years increases

the measured unfunded obligation. Through the infinite horizon, the

unfunded obligation, or shortfall, is equivalent to 4.6 percent of future taxable payroll or 1.4 percent of future GDP.

Uncertainty of the Projections

Significant uncertainty surrounds the intermediate assumptions. The Trustees

use several methods to help illustrate that uncertainty.

A first approach uses alternative scenarios reflecting low-cost (alternative I)

and high-cost (alternative III) sets of assumptions. Figure II.D6 shows the

projected trust fund ratios for the combined OASI and DI Trust Funds under

the intermediate, low-cost, and high-cost assumptions. The figure indicates

that the combined trust funds are projected to become depleted in 2034 under

the intermediate alternative and in 2031 under the high-cost alternative.

Under the low-cost alternative, trust fund reserves are projected to become

depleted in 2061, but the trust funds would have sufficient income by the end

of 2092 to permit full payment of scheduled benefits thereafter and also to

pay in arrears the temporary shortfalls between 2061 and 2092. The low-cost

alternative includes a higher ultimate total fertility rate, slower improvement

in mortality, a higher real wage differential, a higher ultimate real interest

rate, a higher ultimate annual change in the CPI, and a lower unemployment

rate. The high-cost alternative, in contrast, includes a lower ultimate total fertility rate, more rapid improvement in mortality, a lower real wage differential, a lower ultimate real interest rate, a lower ultimate annual change in the

CPI, and a higher unemployment rate. These alternatives are not intended to

suggest that all parameters would be likely to differ from the intermediate

values in the specified directions, but are intended to illustrate the effect of

clearly defined scenarios that are, on balance, very favorable or unfavorable

for the program’s financial status. Actual future costs are unlikely to be as

extreme as those portrayed by the low-cost or high-cost projections. The

method for constructing the low-cost and high-cost projections does not lend

itself to estimating the probability that actual experience will lie within or

outside the range they define.
Overview

20

Appendix D of this report presents long-range sensitivity analysis for the

OASDI program. By varying one parameter at a time, sensitivity analysis

provides a second approach for illustrating the uncertainty surrounding projections into the future.

A third approach uses 5,000 independently generated stochastic simulations

that reflect randomly assigned annual values for most of the key parameters.

These simulations produce a distribution of projected outcomes and corresponding probabilities that future outcomes will fall within or outside a given

range. The results of the stochastic simulations, discussed in more detail in

appendix E, suggest that trust fund reserve depletion (the point at which

reserves are insufficient to pay scheduled benefits in full and on time) is very

likely before mid-century. In particular, figure II.D7 suggests that based on

these stochastic simulations, trust fund reserves will become depleted

between 2031 and 2041 with 95-percent confidence. In last year’s report, this

range was between 2031 and 2042.

The stochastic results suggest that trust fund ratios as high as the low-cost

alternative are very unlikely. However, the relationship between the stochastic results and the low-cost and high-cost alternatives has changed as the

 Figure II.D6.—Long-Range OASI and DI Combined Trust Fund Ratios Under 

Alternative Scenarios

[Asset reserves as a percentage of annual cost]

0%

100%

200%

300%

400%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Historical Projected

III II

I
21

Future Financial Status

methodology for the stochastic simulations was further developed. As noted

in appendix E, this year’s report contains improvements and refinements and

has expanded the indicated range of uncertainty.

Changes From Last Year’s Report

The projected long-range OASDI actuarial deficit increased from

3.21 percent of taxable payroll for last year’s report to 3.54 percent of taxable payroll for this year’s report. The change in the 75-year projection

period alone would have increased the actuarial deficit to 3.27 percent.

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

increase the actuarial deficit by an additional 0.27 percent of taxable payroll.

For a detailed description of the specific changes identified in table II.D2,

see section IV.B.6.

 Figure II.D7.—Long-Range OASI and DI Combined Trust Fund Ratios 

From Stochastic Modeling

0%

100%

200%

300%

2021 2031 2041 2051 2061 2071 2081 2091

Calendar year

50%

97.5%

2.5%

90%

10%
Overview

22

Note: Components may not sum to totals because of rounding.

Figure II.D8 compares this year’s projections of annual balances (non-interest income minus cost) to those in last year’s report. The annual balances in

this year’s report are lower (more negative) in years from 2021 through

2090, and then higher for 2091 through 2095. The differences in annual balances fluctuate somewhat in the early 2020s during the recovery from the

recession, are small in the late 2020s, generally grow until the late 2050s,

and then decline thereafter and change sign in 2090. For this year’s report,

the annual balance improves from 2021 to 2022, due to the assumed path of

recovery from the COVID-19 pandemic and the ensuing recession, which

were not reflected in last year’s report. The trends later in the projection are

mainly due to the changes made this year to fertility methodology and

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

lower, on average, by 0.23 percentage point.

Table II.D2.—Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions

[As a percentage of taxable payroll]

Item OASI DI OASDI

Shown in last year’s report:

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 1.85 13.85

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 1.92 17.06

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21

Changes in actuarial balance due to changes in:

Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . -.01 .00 -.01

Valuation perioda . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a The change in the 75-year valuation period from last year’s report to this report means that the 75-year

actuarial balance now includes the relatively large negative annual balance for 2095. This change in the valuation period results in a larger long-range actuarial deficit. The actuarial deficit includes the trust fund

reserve at the beginning of the projection period.

-.05 -.01 -.06

Demographic data and assumptions. . . . . . . . . . . . . . .06 .01 .07

Economic data and assumptions. . . . . . . . . . . . . . . . . .00 .00 .00

Disability data and assumptions. . . . . . . . . . . . . . . . . .00 .00 .00

Methods and programmatic data . . . . . . . . . . . . . . . . -.32 -.01 -.33

Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.32 -.01 -.32

Shown in this report:

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.39 1.92 17.31
23

Future Financial Status

 Figure II.D8.—OASDI Annual Balances: 2020 and 2021 Trustees Reports

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

-6%

-4%

-2%

0%

2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

2020 Report

2021 Report
Overview

24

E. CONCLUSION

The data and projections presented in this report include the Trustees’ best

estimates of the effects of the COVID-19 pandemic and the ensuing recession, which were not reflected in last year’s report. The precipitous effects on

the population and economy beginning in the second quarter of 2020, along

with the many related changes made to near-term demographic and economic assumptions, combined to change the OASDI reserve depletion date

from 2035 to 2034. The pandemic and recession have clearly had significant

effects on the actuarial status of the OASI and DI Trust Funds, and the future

course of the pandemic is still uncertain. The Trustees will continue to monitor the development of the pandemic and adjust their projections accordingly

in future reports.

Under current law, the projected cost of Social Security increases faster than

projected income through about 2040 primarily because the ratio of workers

paying taxes to beneficiaries receiving benefits will decline as the babyboom generation retires and is replaced at working ages with subsequent

lower birth-rate generations. While the effects of the aging baby boom and

subsequent lower birth rates will have largely stabilized between about 2040

and 2055, annual cost is projected to grow significantly faster than income

between 2055 and 2078 due to the period of historically low birth rates starting with the recession of 2007-2009. Between 2078 and 2095, cost is projected to grow somewhat slower than income, reflecting a return to a stable

ultimate birth rate of 2 children per woman for 2056 and thereafter. Based on

the Trustees’ intermediate assumptions, Social Security’s cost exceeds total

income beginning in 2021 and throughout the remainder of the 75-year projection period. 

The OASI Trust Fund and the DI Trust Fund are projected to have sufficient

reserves to pay full benefits on time until 2033 and 2057, respectively. Legislative action will be needed to prevent reserve depletion in those years. In the

absence of such legislation, continuing income to the trust funds at the time

of reserve depletion would be sufficient to pay 76 percent of OASI benefits

and 91 percent of DI benefits. 

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

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

depleted in 2034. (Full payment of benefits until depletion of the hypothetical combined reserves in 2034 implicitly assumes that the law will have been

changed to permit the transfer of funds between OASI and DI as needed.) At

that time, projected continuing income to the combined trust funds equals
25

Conclusion

about 78 percent of the program cost. By 2095, continuing income equals

about 74 percent of the program cost.

The 75-year actuarial deficit for the combined trust funds under the intermediate assumptions is 3.54 percent of taxable payroll, increased from the

3.21 percent deficit in last year’s report. To illustrate the magnitude of the

deficit, consider that for the combined OASI and DI Trust Funds to remain

fully solvent throughout the 75-year projection period: (1) revenue would

have to be increased by an amount equivalent to an immediate and permanent payroll tax rate increase of 3.36 percentage points to 15.76 percent;

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

an immediate and permanent reduction of about 21 percent applied to all current and future beneficiaries, or about 25 percent if the reductions were

applied only to those who become initially eligible for benefits in 2021 or

later; or (3) some combination of these approaches would have to be

adopted. If actions are deferred for several years, the changes necessary to

maintain Social Security solvency become concentrated on fewer years and

fewer generations.

If lawmakers design legislative solutions only to eliminate the overall actuarial deficit without consideration of year-by-year financing, then a substantial

financial imbalance could remain at the end of the period, and the long-range

sustainability of program financing could still be in doubt. Sustainable solvency for the financing of the program under a specified set of assumptions

is achieved when the projected trust fund ratio is positive throughout the

long-range period and is either stable or rising at the end of the period. Making changes now that achieve sustainable solvency could avoid the need for

later legislative changes.

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

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

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

provisions/. Broadly speaking, the approaches that lawmakers can take

include increasing revenue from workers and employers by raising the tax

rate or the maximum level of taxable earnings, or by dedicating revenue

from other sources; lowering benefits for some or all beneficiaries by changing certain program parameters; or a combination of these approaches. There

are countless variations on these options, including those that vary the timing, magnitude, and other specifics of the changes under consideration.

The Trustees recommend that lawmakers address the projected trust fund

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

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

26

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

needed revenue increases or reductions in scheduled benefits. Social Security

will play a critical role in the lives of 65 million beneficiaries and

176 million covered workers and their families during 2021. With informed

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

can continue to protect future generations.

For further information related to the contents of this report, see the following websites:

 • www.ssa.gov/OACT/tr/2021/

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

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

 • https://home.treasury.gov/policy-issues/economic-policy/social-securityand-medicare-trustee-reports
27

Calendar Year 2020 Operations

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR

A. OPERATIONS OF THE OLD-AGE AND SURVIVORS 

INSURANCE (OASI) AND DISABILITY INSURANCE (DI) TRUST 

FUNDS, IN CALENDAR YEAR 2020

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

DI Trust Funds1 during calendar year 2020. Chapter IV provides projections

for calendar years 2021 through 2095.

1. OASI Trust Fund

Table III.A1 presents a statement of the income and cost of the Federal OldAge and Survivors Insurance Trust Fund in calendar year 2020, and of the

asset reserves in the fund at the beginning and end of the calendar year. As

shown in this table, total trust fund income in 2020 amounted to

$968.3 billion, while cost totaled $961.0 billion, an increase in trust fund

reserves during 2020 of $7.4 billion.2

Total income during calendar year 2020 included $859.2 billion in payroll

tax contributions. These contributions include initial appropriations of payroll taxes, made on an estimated basis, and adjustments to appropriations for

prior years to reflect actual tax income. The OASI fund paid the General

Fund $3.3 billion for the estimated amount of employee payroll-tax refunds,

partially offsetting these gross contributions. Employees who work for more

than one employer during a year and pay contributions on total earnings in

excess of the contribution and benefit base are eligible for such refunds. Net

payroll tax contributions were therefore $856.0 billion in 2020.

Net reimbursements from the General Fund of the Treasury amounted to

$3 million in 2020. As shown in the table, almost all of that amount came

from adjustments to prior year reimbursements based on Public Law 111-

312, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Public Law 112-78, the Temporary Payroll Tax Cut Continuation Act of 2011, and Public Law 112-96, the Middle Class Tax Relief

and Job Creation Act of 2012. These acts specified General Fund reimbursement for temporary reductions in employee and self-employment payroll

taxes for earnings in 2011 and 2012.

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

 2 In order to provide values that are comparable with other years, the cost shown for 2020 and the asset

reserves shown for the end of 2020 reflect the 12 months of benefits scheduled for payment in 2020 and thus

exclude the benefits scheduled for payments on January 3, 2021, which were actually paid on December 31,

2020, as required by the law.
Financial Operations and Legislative Changes

28

Income to the OASI Trust Fund based on the taxation of OASI benefits

amounted to $39.0 billion in 2020. As first required by the 1983 Social Security Amendments, this income comes from two separate sources: (1) Federal

income taxation on up to 50 percent of an individual’s or couple’s OASI benefits under certain circumstances, and (2) a tax withheld from the benefits

paid to certain nonresident alien beneficiaries. For the direct Federal income

tax portion, Treasury transfers estimated amounts to the OASI Trust Fund in

advance at the beginning of each calendar quarter. Treasury makes subsequent adjustments based on the actual amounts shown on annual income tax

records. There were no such adjustments made in 2020. The amount of

income from direct Federal income taxation on OASI benefits constituted

approximately 99 percent of income from benefit taxation. The remaining

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

from the benefits paid to nonresident aliens.

In 2020, the OASI Trust Fund earned $73.3 billion in net interest, which consisted of: (1) interest earned on the investments held by the trust fund,

(2) interest on adjustments in the allocation of administrative expenses

between the trust fund and the General Fund account for the Supplemental

Security Income program, (3) interest arising from the revised allocation of

administrative expenses among the trust funds, and (4) interest on certain

reimbursements to the trust fund.

The remaining income, about $182 thousand, consisted of gifts received

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

the trust funds.
29

Calendar Year 2020 Operations

Note: Components may not sum to totals because of rounding.

Table III.A1.—Operations of the OASI Trust Fund, Calendar Year 2020

[In millions]

Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,804,322

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior calendar years.

$859,244

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,265

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 855,979

Reimbursements from the General Fund:

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

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

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

b Between -$0.5 and $0.5 million.

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

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 238

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,794

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,032

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,333

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and

the General Fund account for the Supplemental Security Income program, (2) interest arising from the revised

allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the

trust fund.

2

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 73,334

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 968,348

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

e Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal payment

delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accelerated basis was approximately $18.7 billion. For comparability with the values for historical years and the

projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.

952,388

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -39

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 13

Net benefit paymentsd e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952,362

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,844

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,258

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 499

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8

Miscellaneous reimbursements from the General Fund f. . . . . . . . . . . . . . . . . . . . .

f Reimbursements for costs incurred in performing certain legislatively mandated activities not directly

related to administering the OASI program.

-2

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,748

Total coste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 960,954

Net increase in asset reservese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,394

Total invested assetse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,793,146

Undisbursed balances g . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

g Primarily consists of benefit payments designated to be paid on January 3, 2021 that were actually paid on

December 31, 2020, as well as a relatively small extension of credit by the Department of Treasury representing securities to be redeemed within the first few days of the following year.

18,570

Total asset reserves, December 31, 2020e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,716
Financial Operations and Legislative Changes

30

Of the $961.0 billion in total OASI cost in 2020, $952.4 billion was for net

benefit payments, including recovered overpayments,1 reimbursements from

the General Fund for unnegotiated checks, and the reimbursable costs of

vocational rehabilitation services.2 Net benefit payments increased by

5.5 percent from calendar year 2019 to calendar year 2020. This increase is

due primarily to: (1) an increase in the average number of beneficiaries

during the year and (2) an increase in the average monthly benefit amount.

The increase in the average benefit amount in 2020 was due in part to the

automatic cost-of-living benefit increase of 1.6 percent which became effective for December 2019 under the automatic-adjustment provisions in section

215(i) of the Social Security Act. In addition, new beneficiaries tend to have

higher monthly benefit amounts than previous beneficiary cohorts, because

their initial benefits are based on average wages, which tend to rise faster

than the cost of living.

The Railroad Retirement Act requires an annual financial interchange

between the Railroad Retirement program and the OASDI program. The purpose of the interchange is to put the OASI and DI Trust Funds in the same

financial position in which they would have been had railroad employment

always been covered directly by Social Security. The Railroad Retirement

Board and the Social Security Administration calculated an interchange of

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

Benefit Account for June 2020.

The remaining $3.7 billion of cost for the OASI Trust Fund was for net

administrative expenses. The Social Security Administration charges administrative expenses incurred to administer the OASI program directly to the

trust fund on an estimated basis. Periodically, as actual expenses are

recorded, adjustments are made to the allocations of administrative expenses

for prior periods. These adjustments affect the OASI Trust Fund, the

DI Trust Fund, the Hospital Insurance (HI) Trust Fund, the Supplementary

Medical Insurance (SMI) Trust Fund, and the General Fund account for the

Supplemental Security Income program, and include appropriate interest

adjustments. As described earlier, the trust fund accounting records such

interest adjustments under investment income.

 1 As noted in footnote e of table III.A1 and elsewhere in this report, benefit payments shown for 2020 reflect

the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for payment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.

 2 Vocational rehabilitation services under the OASI program are furnished to disabled widow(er) beneficiaries and to those children of retired or deceased workers who receive benefits based on disabilities that

began before age 22. The trust funds reimburse the providers of such services only in those cases where the

services contributed to the successful rehabilitation of the beneficiary.
31

Calendar Year 2020 Operations

For 2020, the cost incurred by the Social Security Administration to administer the OASI program was 87 percent of OASI net administrative expenses.

The Social Security Administration charged such costs to the trust fund in

the amount of $3.3 billion in 2020. In addition, the Department of the Treasury charged the trust fund $0.5 billion in 2020 for services provided in

administering the OASI program. A relatively small offset to administrative

expenses of $8 million in 2020 represents income from miscellaneous

receipts due to the trust fund, which may include refunds, penalties, fees, and

other receipts.

Finally, the General Fund of the Treasury makes net reimbursements for

administrative costs incurred by the Social Security Administration in performing certain legislatively mandated activities that are not directly related

to paying OASI benefits. These reimbursements include $1 million in costs

associated with union activities related to administering the OASI program

and $1 million in costs of providing information to participants in certain

pension plans in 2020. These miscellaneous reimbursements totaled

$2 million in 2020.

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

year 2020 totaled $2,811.7 billion, consisting of $2,793.1 billion in U.S.

Government obligations and cash totaling $18.6 billion that would have been

invested at the end of the year except for the advance payment of benefits

scheduled for payment on January 3, 2021.1 The effective annual rate of

interest earned by the reserves in the OASI Trust Fund during calendar year

2020 was 2.6 percent, somewhat lower than the 2.8 percent earned during

calendar year 2019. Table VI.A4, presented in appendix A, shows a detailed

listing of OASI Trust Fund holdings by type of security, interest rate, and

year of maturity at the end of calendar years 2019 and 2020.

By law, the Department of the Treasury must invest trust fund reserves in

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

States Government. The securities currently held by the OASI Trust Fund are

entirely special issue securities sold by the Treasury only to the trust funds.

These special issues are of two types: short-term certificates of indebtedness

and longer-term bonds. Daily trust fund tax income is invested in the shortterm certificates of indebtedness which mature on the next June 30 following

the date of issue. The trust fund normally acquires long-term special-issue

bonds when special issue securities of either type mature on June 30 and

 1 As noted in footnote e of table III.A1 and elsewhere in this report, benefit payments shown for 2020 reflect

the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for payment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.
Financial Operations and Legislative Changes

32

must be reinvested. The amount of long-term bonds acquired on June 30 is

equal to the amount of special issue securities maturing (including accrued

interest earnings), plus tax income for that day, less amounts required to meet

cost on that day.

Section 201(d) of the Social Security Act provides that the obligations issued

for purchase by the OASI and DI Trust Funds shall have maturities fixed

with due regard for the needs of the funds. The usual practice has been to

reinvest the maturing special issue securities, as of each June 30, so that the

value of the total portfolio of special issue securities maturing in each of the

next 15 years are approximately equal. However, as of June 2020, the Trustees most recent projection indicated that the reserves in the OASI Trust Fund

would become depleted within 15 years. Therefore, the Department of the

Treasury, in consultation with the Chief Actuary of the Social Security

Administration, selected the amounts and maturity dates of the OASI special-issue bonds purchased on June 30, 2020, so that the maturity dates of the

total portfolio of special issue securities would be spread evenly to the extent

possible over the 14-year period 2021 through 2034. The bonds purchased on

that date have an interest rate of 0.750 percent, reflecting the average market

yield, as of the last business day of the prior month, on all of the outstanding

marketable U.S. obligations that are due or callable more than 4 years in the

future. Table III.A7 shows additional details on the investment transactions

during 2020, including the amounts of bonds purchased on June 30, 2020.

2. DI Trust Fund

Table III.A2 presents a statement of the income and cost of the Federal Disability Insurance Trust Fund in calendar year 2020, and of the asset reserves

in the fund at the beginning and end of the calendar year.

Line entries in the DI statement are similar to those in the OASI statement.

The explanations of the OASI entries generally apply to DI as well.

Of the $149.7 billion in total income, $145.3 billion was net payroll tax contributions. 

Of the $146.3 billion of total cost, $143.6 billion was net benefit payments.1

The total level of net benefit payments in 2020 decreased by 1.1 percent

from total net benefit payments paid in 2019, largely due to a decrease in the

total amount of retroactive payments paid to newly awarded beneficiaries, as

well as a decrease in the average number of total current beneficiaries, partially offset by an increase in average benefit levels. DI non-interest income,

and total income, exceeded total cost in 2020.

 1 As noted in footnote e of table III.A2 and elsewhere in this report, benefit payments shown for 2020 reflect

the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for payment on January 3, 2021, which were actually paid on December 31, 2020, as required by the law.
33

Calendar Year 2020 Operations

Note: Components may not sum to totals because of rounding.

Table III.A2.—Operations of the DI Trust Fund, Calendar Year 2020

[In millions]

Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $93,083

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior calendar years.

145,846

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

subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -553

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,293

Reimbursements from the General Fund:

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

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

b Between -$0.5 and $0.5 million.

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

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . b

Income based on taxation of benefit payments:

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

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,700

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,704

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,745

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and

the General Fund account for the Supplemental Security Income program, (2) interest arising from the

revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the trust fund.

5

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 2,750

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149,748

Cost:

Benefit payments:

Monthly benefitsd e. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

d Includes net reductions for the recovery of overpayments.

e Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal payment

delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accelerated basis was approximately $6.1 billion. For comparability with the values for historical years and the

projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.

143,487

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -21

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 95

Net benefit paymentsd e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,561

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,453

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Miscellaneous reimbursements from the General Fundf . . . . . . . . . . . . . . . . . . . . .

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

administering the DI program.

-1

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,555

Total coste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,260

Net increase in asset reservese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,488

Total invested assetse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,703

Undisbursed balancesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

g Primarily consists of benefit payments designated to be paid on January 3, 2021 that were actually paid on

December 31, 2020, as well as a relatively small extension of credit by the Department of Treasury representing securities to be redeemed within the first few days of the following year.

5,867

Total asset reserves, December 31, 2020e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96,570
Financial Operations and Legislative Changes

34

During 2020, the reserves in the DI Trust Fund increased by $3.5 billion,

from $93.1 billion at the end of 2019 to $96.6 billion at the end of 2020. This

$96.6 billion consisted of $90.7 billion in U.S. Government obligations and

cash totaling $5.9 billion that would have been invested at the end of the year

except for the advance payment of benefits scheduled for payment on January 3, 2021.1 The effective annual rate of interest earned by the asset

reserves in the DI Trust Fund during calendar year 2020 was 2.9 percent,

somewhat lower than the 3.1 percent earned during calendar year 2019.

Table VI.A5 shows a detailed listing of DI Trust Fund holdings by type of

security, interest rate, and year of maturity at the end of calendar years 2019

and 2020.

Section 201(d) of the Social Security Act provides that the Treasury securities issued for purchase by the OASI and DI Trust Funds shall have maturities fixed with due regard for the needs of the funds. Each year, bond

purchases for each trust fund are made on June 30, taking into account the

projected reserve depletion date in the most recently issued Trustees Report.

The usual practice has been to reinvest the maturing special issue securities,

as of each June 30, so that the values of the securities maturing in each of the

next 15 years are approximately equal. Accordingly, the Department of the

Treasury, in consultation with the Chief Actuary of the Social Security

Administration, selected the amounts and maturity dates of the DI specialissue bonds purchased on June 30, 2020, so that the maturity dates of the

total portfolio of special issue securities would be evenly spread to the extent

possible over the 15-year period 2021-35. The bonds purchased have an

interest rate of 0.750 percent, reflecting the average market yield, as of the

last business day of the prior month, on the outstanding marketable U.S.

obligations that are due or callable more than 4 years in the future. Table

III.A7 shows details on investment transactions during 2020.

3. OASI and DI Trust Funds, Combined

Table III.A3 presents a statement of the operations of the OASI and DI Trust

Funds on a hypothetical combined basis.2 The entries in this table represent

the sums of the corresponding values from tables III.A1 and III.A2. The two

preceding subsections that cover OASI and DI provide a description of the

nature of these income and cost transactions.

 1 As noted in footnote e of table III.A2 and elsewhere in this report, benefit payments and asset reserves

shown for 2020 reflect the 12 months of benefits scheduled for payment in 2020 and thus exclude the benefits scheduled for payment on January 3, 2021, which were actually paid on December 31, 2020, as required

by the law.

 2 The OASI and DI Trust Funds are distinct legal entities which operate independently. To illustrate the

actuarial status of the program as a whole, the fund operations are often combined on a hypothetical basis.
35

Calendar Year 2020 Operations

Note: Components may not sum to totals because of rounding.

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

Calendar Year 2020

[In millions]

Total asset reserves, December 31, 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,897,405

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior calendar years.

$1,005,090

Payments from the General Fund of the Treasury for payroll tax contributions subject to refunda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3,817

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,001,272

Reimbursements from the General Fund:

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

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

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

b Between -$0.5 and $0.5 million.

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

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 242

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,494

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,736

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76,078

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust funds and

the General Fund account for the Supplemental Security Income program, (2) interest arising from the revised

allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the

trust funds.

7

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 76,085

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,118,096

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

e Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal payment

delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accelerated basis was approximately $24.8 billion. For comparability with the values for historical years and the

projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.

1,095,875

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -60

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 108

Net benefit paymentsd e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,095,924

Financial interchange with the Railroad Retirement “Social Security Equivalent 

Benefit Account” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,988

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,711

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -8

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Miscellaneous reimbursements from the General Fundf . . . . . . . . . . . . . . . . . . . . .

f Reimbursements for costs incurred in performing certain legislatively mandated activities not directly related

to administering the OASI and DI programs.

-4

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,303

Total coste. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,107,214

Net increase in asset reservese . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,881

Total invested assetse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,883,849

Undisbursed balancesg . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

g Primarily consists of benefit payments designated to be paid on January 3, 2021 that were actually paid on

December 31, 2020, as well as a relatively small extension of credit by the Department of Treasury representing securities to be redeemed within the first few days of the following year.

24,437

Total asset reserves, December 31, 2020e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,908,286
Financial Operations and Legislative Changes

36

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

year 2020 from the intermediate projections in the 2016 through 2020 Trustees Reports to the corresponding actual amounts for 2020.

Note: Components may not sum to totals because of rounding.

A number of factors contribute to differences between estimates and subsequent actual amounts, including: (1) actual values for key demographic, economic, and other variables that differ from earlier assumed levels; and

(2) legislation that was enacted or other administrative initiatives that were

finalized after the Trustees completed their estimates.

At the end of calendar year 2020, the OASDI program was providing

monthly benefits to about 64.9 million people. The OASI Trust Fund was

providing benefits to about 55.2 million people and the DI Trust Fund was

providing benefits to about 9.6 million people. The number of people receivTable III.A4.—Comparison of Actual Calendar Year 2020 Trust Fund Operations

With Estimates Made in Prior Reports, Based on Intermediate Assumptionsa

[Amounts in billions]

a Percentage differences are calculated prior to rounding.

Total income b

b “Actual” income for 2020 reflects adjustments to payroll tax contributions for prior calendar years (see

appendix A for description of these adjustments). “Estimated” income also includes such adjustments, but on

an estimated basis.

Total costc

c Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal payment

delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an accelerated basis was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust Fund.

For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.

Amount

Difference

from actual

(percent) Amount

Difference

from actual

(percent)

OASI Trust Fund:

Estimate in 2016 report . . . . . . . . . . . . . . $1,017.1 5.0 $1,001.8 4.2

Estimate in 2017 report . . . . . . . . . . . . . . 1,014.2 4.7 987.8 2.8

Estimate in 2018 report . . . . . . . . . . . . . . 964.4 -.4 971.9 1.1

Estimate in 2019 report . . . . . . . . . . . . . . 961.3 -.7 962.9 .2

Estimate in 2020 report . . . . . . . . . . . . . . 967.0 -.1 962.8 .2

Actual amount . . . . . . . . . . . . . . . . . . . . . 968.3 — 961.0 —

DI Trust Fund:

Estimate in 2016 report . . . . . . . . . . . . . . 154.2 2.9 172.7 18.1

Estimate in 2017 report . . . . . . . . . . . . . . 155.1 3.6 164.7 12.6

Estimate in 2018 report . . . . . . . . . . . . . . 148.1 -1.1 157.2 7.5

Estimate in 2019 report . . . . . . . . . . . . . . 148.1 -1.1 150.9 3.1

Estimate in 2020 report . . . . . . . . . . . . . . 149.4 -.2 149.2 2.0

Actual amount . . . . . . . . . . . . . . . . . . . . . 149.7 — 146.3 —

OASI and DI Trust Funds, combined:

Estimate in 2016 report . . . . . . . . . . . . . . 1,171.3 4.8 1,174.5 6.1

Estimate in 2017 report . . . . . . . . . . . . . . 1,169.3 4.6 1,152.5 4.1

Estimate in 2018 report . . . . . . . . . . . . . . 1,112.5 -.5 1,129.2 2.0

Estimate in 2019 report . . . . . . . . . . . . . . 1,109.4 -.8 1,113.7 .6

Estimate in 2020 report . . . . . . . . . . . . . . 1,116.4 -.2 1,112.0 .4

Actual amount . . . . . . . . . . . . . . . . . . . . . 1,118.1 — 1,107.2 —
37

Calendar Year 2020 Operations

ing benefits from the OASI Trust Fund grew by 2.0 percent while the number of people receiving DI benefits fell by 3.1 percent during calendar year

2020. These changes are in large part due to the gradual aging of the population, with the earliest cohorts of the baby-boom generation now moving

above normal retirement age, where DI benefits are no longer applicable.

Table III.A5 shows the estimated distributions of benefit payments in calendar years 2019 and 2020, by type of beneficiary, for each trust fund separately.

Note: Benefits are monthly benefits and lump-sum death payments. Components may not sum to totals

because of rounding.

Net administrative expenses of the OASI and DI Trust Funds in calendar

year 2020 totaled $6.3 billion, equal to 0.6 percent each of total cost and total

income. Table III.A6 shows corresponding percentages for each trust fund

separately and for OASDI as a whole for the last 5 years.

Table III.A5.—Distribution of Benefit Paymentsa by Type of Beneficiary or Payment, 

Calendar Years 2019 and 2020

[Amounts in millions]

a Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal payment

delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an

accelerated basis was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust

Fund. For comparability with the values for historical years and the projections in this report, all trust fund

operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.

Calendar year 2019 Calendar year 2020

Amount

Percentage

of total Amount

Percentage

of total

Total OASDI benefit payments . . . . . . . . . . $1,047,882 100.0 $1,095,875 100.0

OASI benefit payments . . . . . . . . . . . . . . 902,833 86.2 952,388 86.9

DI benefit payments . . . . . . . . . . . . . . . . . 145,049 13.8 143,487 13.1

OASI benefit payments, total. . . . . . . . . . . . 902,833 100.0 952,388 100.0

Monthly benefits:

Retired workers and auxiliaries . . . . . . 777,258 86.1 823,868 86.5

Retired workers . . . . . . . . . . . . . . . . 737,809 81.7 783,504 82.3

Spouses . . . . . . . . . . . . . . . . . . . . . . . 33,323 3.7 34,023 3.6

Children . . . . . . . . . . . . . . . . . . . . . . 6,127 .7 6,341 .7

Survivors of deceased workers. . . . . . . 125,369 13.9 128,294 13.5

Aged widows and widowers. . . . . . . 100,190 11.1 102,669 10.8

Disabled widows and widowers . . . . 2,362 .3 2,330 .2

Parents . . . . . . . . . . . . . . . . . . . . . . . 20 b

b Less than 0.05 percent.

19 b

Children . . . . . . . . . . . . . . . . . . . . . . 21,310 2.4 21,795 2.3

Widowed mothers and fathers 

caring for child beneficiaries . . . . 1,488 .2 1,480 .2

Lump-sum death payments . . . . . . . . . . . 206 b 226 b

DI benefit payments, total . . . . . . . . . . . . . . 145,049 100.0 143,487 100.0

Disabled workers . . . . . . . . . . . . . . . . . 136,512 94.1 135,204 94.2

Spouses. . . . . . . . . . . . . . . . . . . . . . . . . 532 .4 509 .4

Children . . . . . . . . . . . . . . . . . . . . . . . . 8,004 5.5 7,774 5.4
Financial Operations and Legislative Changes

38

The acquisition and redemption of securities during calendar year 2020

changed the invested reserves of the OASI and DI Trust Funds. Table III.A7

presents investment transactions for each fund separately and combined.

Note: Investments are shown at par value. Components may not sum to totals because of rounding.

Table III.A6.—Administrative Expenses as a Percentage of Total Income and 

of Total Cost, Calendar Years 2016-2020

Calendar year 

OASI Trust Fund DI Trust Fund

OASI and DI

Trust Funds,

combined

Total

income

Total

cost

Total

income

Total

cost

Total

income

Total

cost

2016 . . . . . . . . . . . 0.4 0.4 1.7 1.9 0.7 0.7

2017 . . . . . . . . . . . .4 .5 1.6 1.9 .6 .7

2018 . . . . . . . . . . . .5 .4 1.7 1.9 .7 .7

2019 . . . . . . . . . . . .4 .4 1.9 1.8 .6 .6

2020 . . . . . . . . . . . .4 .4 1.7 1.7 .6 .6

Table III.A7.—Trust Fund Investment Transactions, Calendar Year 2020

[In millions]

OASI

Trust Fund

DI

Trust Fund

OASI and DI

Trust Funds,

combined

Invested asset reserves, 

December 31, 2019a . . . . . . . . . . . . . . . . . .

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

tables VI.A4 and VI.A5 for details.

$2,804,355 $93,138 $2,897,493

Acquisitions:

Special issue securities:

Certificates of indebtedness . . . . . . . . . . . 911,246 147,305 1,058,551

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

b Purchased on June 30, 2020. The interest rate on these purchases was 0.750 percent.

194,108 11,513 205,621

Total acquisitions . . . . . . . . . . . . . . . . . . . 1,105,354 158,817 1,264,172

Redemptions:

Special issue securities:

Certificates of indebtednessc . . . . . . . . . .

c Benefit payments which were scheduled to be paid on January 3, 2021 were actually paid on December 31,

2020 as required by the statutory provision for early delivery of benefit payments when the normal payment

delivery date is a Saturday, Sunday, or legal public holiday. The amount of these payments made on an

accelerated basis was approximately $18.7 billion for the OASI Trust Fund and $6.1 billion for the DI Trust

Fund. For comparability with the values for historical years and the projections in this report, all trust fund

operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year.

933,736 153,487 1,087,223

Bondsc . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,828 7,764 190,592

Total redemptionsc . . . . . . . . . . . . . . . . . . 1,116,563 161,251 1,277,815

Net increase in invested asset reserves . . . . . . -11,209 -2,434 -13,643

Invested asset reserves, 

December 31, 2020a . . . . . . . . . . . . . . . . . . 2,793,146 90,703 2,883,849
39

Social Security Amendments Since the 2020 Report

B. SOCIAL SECURITY AMENDMENTS SINCE THE 2020 REPORT

Since the Trustees submitted the 2020 report to Congress, there has been one

change in policy that is estimated to have a significant financial effect on the

OASDI program.

The estimates presented in last year’s report reflected the assumption that the

Deferred Action for Childhood Arrivals (DACA) policy would be phased

out, consistent with the Department of Homeland Security’s September 5,

2017 rescission of the 2012 DACA policy directive. This year’s report incorporates the effects of two developments during 2020 and early 2021. First,

pursuant to a United States District Court order, the US Citizenship and

Immigration Services resumed accepting first-time applications and renewal

requests for participation in the DACA program, effective December 7,

2020. Second, on January 20, 2021, President Biden issued a memorandum

directing the Secretary of Homeland Security to take appropriate action, in

consultation with the Attorney General, to preserve and fortify DACA consistent with applicable law. This policy change to resume and maintain the

DACA program is estimated to have a small but significant positive financial

effect on the OASDI program over the short-range projection period and a

small but significant negative financial effect over the long-range projection

period. Sections IV.A.4 and IV.B.6 of this report provide further description

of the magnitude of effects on the financial status of the OASDI program.

This report also incorporates the effect of two changes in law that are estimated to have negligible financial effects over the short-range and longrange projection periods:

 • The ALS Disability Insurance Access Act of 2019, Public Law 116-

250, was enacted on December 22, 2020. This law eliminates the fivemonth waiting period for disability insurance benefits for individuals

with amyotrophic lateral sclerosis (ALS). Public Law 117-3 was

enacted on March 23, 2021 to make a technical correction to the eligibility criteria specified in Public Law 116-250.

 • The American Rescue Plan Act of 2021, Public Law 117-2, was enacted

on March 11, 2021. Section 9674 of the bill requires third party platforms (such as eBay) to provide Forms 1099 to merchants who have at

least $600 in transactions for the provision of goods or services. This

section is expected to have a small effect on the reporting of selfemployment income that might otherwise have been unreported.

Finally, in response to the COVID-19 pandemic and ensuing recession, several laws, presidential actions, and other guidance during calendar year 2020
Financial Operations and Legislative Changes

40

authorized the reduction or deferral of employer and employee payroll tax

under certain limited circumstances. In all such cases, there was no reduction

or delay in the payroll tax revenue received by the OASI and DI Trust Funds.
41

Short-Range Estimates

IV. ACTUARIAL ESTIMATES

This chapter presents actuarial estimates of the future financial condition of

the Social Security program. These estimates show the income, cost, and

asset reserves or unfunded obligation of the OASI and DI Trust Funds: (1) in

dollars over the 10-year short-range period; and (2) as a percentage of taxable payroll, as a percentage of gross domestic product, and in present-value

dollars over the 75-year long-range period. In addition, the chapter discusses

a variety of measures of the adequacy of current program financing. This

report distinguishes between: (1) the cost (obligations) of the program, which

includes all past and future benefits scheduled under current law; and

(2) expenditures, which include actual payments for the past plus only the

portion of projected program cost that would be payable with the financing

provisions in current law.

This chapter presents the estimates and measures of trust fund financial adequacy for the short-range period (2021 through 2030) first, followed by estimates and measures of actuarial status for the long-range period

(2021 through 2095). Summary measures are also provided for trust fund

status over the infinite horizon. As described in chapter II of this report, these

estimates depend upon a broad set of demographic, economic, and programmatic factors. This chapter presents estimates under three sets of assumptions

to show a wide range of possible outcomes, because assumptions related to

these factors are subject to uncertainty. The intermediate set of assumptions,

designated as alternative II, reflects the Trustees’ best estimate of future

experience; the low-cost alternative I is significantly more optimistic and the

high-cost alternative III is significantly more pessimistic for the trust funds’

future financial outlook. The tables of this report show the intermediate estimates first, followed by the low-cost and high-cost estimates. Chapter V

describes these three sets of assumptions, along with the actuarial methods

used to produce the estimates. Appendix D and appendix E present two additional methods to illustrate the uncertainty of the projections. Appendix D

presents sensitivity analyses of the effects of variation in individual factors

and appendix E presents probability distributions generated by a stochastic

model.

A. SHORT-RANGE ESTIMATES

The Trustees consider the trust funds to be solvent at any point in time if the

funds can pay scheduled benefits in full on a timely basis. A standard measure for assessing solvency is the “trust fund ratio,” which is the reserves in a

fund at the beginning of a year (not including advance tax transfers)

expressed as a percentage of the cost during the year. A positive trust fund

ratio indicates that the trust fund was solvent at the end of the prior year. The
Actuarial Estimates

42

trust fund ratio represents the proportion of a year’s cost which the reserves

available at the beginning of that year can cover. The Trustees assume that a

trust fund ratio of 100 percent of annual program cost provides a reasonable

“contingency reserve.” Maintaining a reasonable contingency reserve is

important because the trust funds do not have borrowing authority. After

reserves are depleted, the trust funds would be unable to pay scheduled benefits in full on a timely basis if annual revenue were less than annual cost.

Unexpected events, such as severe economic recessions, can quickly diminish reserves. In such cases, a reasonable contingency reserve can maintain

the ability to pay scheduled benefits while giving lawmakers time to address

possible changes to the program.

The test of short-range financial adequacy applies to the OASI and DI Trust

Funds individually and combined on a hypothetical basis.1 If the estimated

trust fund ratio is at least 100 percent at the beginning of the projection

period, the test requires that it remain at or above 100 percent throughout the

10-year period. If the ratio is initially less than 100 percent, then it must

reach at least 100 percent within 5 years (without reserve depletion at any

time during this period) and then remain at or above 100 percent throughout

the remainder of the 10-year period. This test is applied using the estimates

based on the intermediate assumptions. If either trust fund fails this test, then

program solvency in the next 10 years is in question, and lawmakers should

take prompt action to improve short-range financial adequacy.

1. Operations of the OASI Trust Fund

This subsection presents projections, based on the assumptions described in

chapter V, of the operations and financial status of the OASI Trust Fund for

the period 2021 through 2030. These estimates assume that there are no further changes in the statutory provisions and regulations under which the

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

report indicated in section III.B.2

Estimates of the OASI Trust Fund operations presented in table IV.A1 indicate that the asset reserves of the OASI Trust Fund are projected to decrease

in years 2021 through 2030 under all three sets of assumptions. Trust fund

ratios are similarly projected to decline throughout the 10-year projection

period under all three sets of assumptions. Based on the intermediate

assumptions, the reserves of the OASI Trust Fund drop below 100 percent of

annual cost during 2029, to a trust fund ratio of 85 at the beginning of 2030.

 1 The OASI and DI Trust Funds are distinct legal entities which operate independently. To illustrate the

actuarial status of the program as a whole, the fund operations are often combined on a hypothetical basis.

 2 The estimates shown in this subsection reflect 12 months of scheduled benefits in each year of the shortrange projection period. In practice, the actual payment dates have at times shifted over calendar year

boundaries as a result of the statutory requirement for early delivery of benefit payments when the normal

check delivery date is a Saturday, Sunday, or legal public holiday.
43

Short-Range Estimates

Consequently, the OASI Trust Fund fails the test of short-range financial

adequacy. See figure IV.A1 for an illustration of these results.

Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2016-2030a

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

Historical data:

2016 . . $797.5 $678.8 $0.1 $31.6 $87.0 $776.4 $768.6 $3.5 $4.3 $21.1 $2,801.3 358

2017 . . 825.6 706.5 f 35.9 83.2 806.7 798.7 3.7 4.3 19.0 2,820.3 347

2018 . . 831.0 715.9 f 34.5 80.7 853.5 844.9 3.8 4.8 -22.4 2,797.9 330

2019 . . 917.9 805.1 f 34.9 77.9 911.4 902.8 3.7 4.9 6.5 2,804.3 307

2020 . . 968.3 856.0 f 39.0 73.3 961.0 952.4 3.7 4.8 7.4 2,811.7 292

Intermediate:

2021 . . 930.1 828.5 f 34.1 67.5 1,005.4 996.2 4.1 5.1 -75.3 2,736.4 280

2022 . . 1,013.9 908.6 f 43.6 61.7 1,072.5 1,062.9 4.0 5.6 -58.6 2,677.8 255

2023 . . 1,056.5 952.3 f 47.1 57.1 1,139.6 1,130.0 4.1 5.5 -83.1 2,594.8 235

2024 . . 1,100.9 996.4 f 51.1 53.4 1,211.9 1,202.1 4.2 5.6 -111.0 2,483.7 214

2025 . . 1,146.0 1,039.3 f 55.7 51.0 1,287.8 1,277.8 4.4 5.6 -141.8 2,341.9 193

2026 . . 1,203.8 1,083.3 f 69.5 51.0 1,367.0 1,356.8 4.5 5.8 -163.3 2,178.6 171

2027 . . 1,254.1 1,127.1 f 75.5 51.5 1,450.4 1,440.0 4.6 5.8 -196.3 1,982.3 150

2028 . . 1,306.0 1,174.5 f 81.6 49.9 1,540.4 1,529.8 4.7 5.8 -234.4 1,747.9 129

2029 . . 1,357.0 1,223.1 f 88.0 45.9 1,633.2 1,622.5 4.9 5.9 -276.2 1,471.7 107

2030 . . 1,407.0 1,271.9 f 94.9 40.1 1,728.7 1,717.8 5.0 6.0 -321.8 1,149.9 85

Low-cost:

2021 . . 944.3 842.7 f 34.1 67.6 1,005.0 995.8 4.1 5.1 -60.6 2,751.1 280

2022 . . 1,063.4 956.8 f 43.7 62.9 1,075.5 1,066.0 4.0 5.5 -12.2 2,738.9 256

2023 . . 1,114.2 1,006.9 f 47.5 59.8 1,148.4 1,138.9 4.1 5.4 -34.2 2,704.7 238

2024 . . 1,184.2 1,073.5 f 51.7 59.0 1,227.3 1,217.4 4.3 5.5 -43.1 2,661.6 220

2025 . . 1,254.3 1,137.2 f 56.6 60.5 1,310.4 1,300.3 4.5 5.6 -56.1 2,605.5 203

2026 . . 1,338.2 1,203.0 f 71.0 64.2 1,397.8 1,387.3 4.7 5.8 -59.6 2,545.9 186

2027 . . 1,417.7 1,271.1 f 77.6 69.0 1,490.5 1,479.8 4.9 5.8 -72.8 2,473.1 171

2028 . . 1,502.0 1,345.1 f 84.3 72.7 1,591.2 1,580.2 5.1 5.9 -89.1 2,384.0 155

2029 . . 1,588.8 1,422.4 f 91.4 75.0 1,696.3 1,685.0 5.3 5.9 -107.6 2,276.4 141

2030 . . 1,677.5 1,501.9 f 99.2 76.4 1,805.9 1,794.3 5.5 6.0 -128.4 2,148.1 126
Actuarial Estimates

44

High-cost:

2021 . . $914.6 $813.2 f $34.1 $67.3 $1,005.8 $996.6 $4.1 $5.1 -$91.2 $2,720.5 280

2022 . . 949.2 845.8 f 43.3 60.1 1,066.6 1,056.9 4.0 5.6 -117.3 2,603.2 255

2023 . . 972.4 872.0 f 46.5 53.8 1,125.8 1,116.1 4.1 5.5 -153.4 2,449.8 231

2024 . . 1,001.6 902.7 f 50.2 48.7 1,191.8 1,182.0 4.1 5.6 -190.1 2,259.7 206

2025 . . 1,033.4 934.8 f 54.5 44.1 1,260.7 1,250.9 4.2 5.7 -227.3 2,032.3 179

2026 . . 1,074.9 966.8 f 67.7 40.4 1,332.6 1,322.6 4.3 5.7 -257.6 1,774.7 153

2027 . . 1,107.4 998.2 f 73.3 36.0 1,407.6 1,397.5 4.3 5.7 -300.1 1,474.5 126

2028 . . 1,138.3 1,030.0 f 78.8 29.4 1,488.2 1,478.0 4.4 5.7 -349.9 1,124.6 99

2029 . . 1,164.3 1,058.3 f 84.6 21.4 1,570.3 1,560.1 4.5 5.8 -406.0 718.6 72

2030 . . 1,188.1 1,084.6 f 90.8 12.7 1,654.1 1,643.7 4.5 5.8 -465.9 252.7 43

a Appendix A presents a detailed description of the components of income and cost, along with complete historical

values.

b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly scheduled

in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as required by the statutory

provision for early benefit payments when the normal delivery date is on a weekend or holiday. Such shifts in payments across calendar years have occurred in the past, including in 2016, and will occur periodically in the future

whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on trust fund operations over

time, all trust fund operations in each year reflect the 12 months of benefits that are regularly scheduled for payment

in that year. 

c Includes reimbursements from the General Fund of the Treasury to the OASI Trust Fund for: (1) the cost of payroll

tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21; (2) the cost

in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and 112-96.

d Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the law.

e The “Trust fund ratio” column represents reserves at the beginning of a year (which are identical to reserves at the

end of the prior year shown in the “Amount at end of year” column) as a percentage of cost for the year. The trust

fund ratio at the beginning of 2031 is projected to be 63 percent for the intermediate, 112 percent for the low-cost,

and 15 percent for the high-cost assumptions.

f Between -$50 million and $50 million.

Note: Components may not sum to totals because of rounding.

Table IV.A1.—Operations of the OASI Trust Fund, Calendar Years 2016-2030a (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
45

Short-Range Estimates

The estimated income shown in table IV.A1 increases annually after 2021

under each set of assumptions throughout the short-range projection period.

The estimated increases in income result primarily from the projected

increases in OASDI taxable payroll. Employment increases in years 2021

through 2030 for all three alternatives, with the exception of small decreases

in covered employment in 2021 and 2022 for the high-cost alternative: the

number of covered workers increases under alternatives I, II, and III from

175 million during calendar year 2020 to about 190 million, 185 million, and

181 million, respectively, in 2030.1 The total annual amount of taxable payroll increases in years 2021 through 2030 for each alternative, with the

exception of a small decrease in 2022 for the high-cost alternative. Total taxable payroll increases from $7,705 billion in 2020 to $14,205 billion,

$12,021 billion, and $10,245 billion in 2030, on the basis of alternatives I, II,

and III, respectively.2 These increases in taxable payroll are due primarily to:

(1) projected increases in employment levels as the working-age population

increases; (2) trend increases in average earnings in covered employment

(reflecting both real growth and price inflation); (3) increases in the contribu-

 Figure IV.A1.—Short-Range OASI and DI Trust Fund Ratios

[Asset reserves as a percentage of annual cost]

 1 See table IV.B3.

 2 See table VI.G6.

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

500%

2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Calendar year

DI

OASI

Historical Projected

Minimumlevelfor "short-range financial adequacy"

I

II

III

I

II

III
Actuarial Estimates

46

tion and benefit base under the automatic-adjustment provisions; and

(4) growth in employment and average earnings.

Interest earnings contribute to the overall projected level of trust fund

income during this period. Interest income declines generally at a slow rate

under the intermediate assumptions and much faster under the high-cost

assumptions, and increases generally under the low-cost assumptions, due to

the net effects of changes in reserve levels and the patterns of projected interest rates. Under the intermediate assumptions, interest also declines as a

share of total OASI Trust Fund income reaching 3 percent of total trust fund

income for 2030, as compared to 8 percent for 2020.

Rising OASI cost from 2020 through 2030 reflects automatic benefit

increases as well as the upward trend in the number of beneficiaries and in

the average monthly earnings underlying benefits. The steady growth in the

number of OASI beneficiaries in the past and the expected future growth

result both from the increase in the aged population and from the increase in

the proportion of the population that is insured for benefits.

The Treasury invests OASI income in financial securities, generally special

public-debt obligations of the U.S. Government. The revenue used to make

these purchases flows to the General Fund of the Treasury. The trust fund

earns interest on these securities, and the Treasury invests the proceeds from

maturing securities in new securities if not immediately needed to pay program costs. Program expenditures require the redemption of trust fund securities, generally prior to maturity, to cover the payments made by the General

Fund of the Treasury on behalf of the trust fund.

2. Operations of the DI Trust Fund

Table IV.A2 shows the projected operations and financial status of the DI

Trust Fund during calendar years 2021 through 2030 under the three sets of

assumptions, together with values for actual experience during 2016 through

2020. Non-interest income for DI was much lower in 2019 and 2020 than in

2016 through 2018, due to the temporary payroll tax rate reallocation from

OASI to DI in 2016 through 2018. For 2020, non-interest income was higher

than DI cost. Non-interest income generally increases throughout the shortrange projection period under each alternative, with the exception of a small

decrease in 2021 under all three sets of assumptions, due to most of the same

factors described previously for the OASI Trust Fund beginning on page 45.

DI cost grows steadily throughout the period under each alternative, with the

exception of small decreases in 2021 for the intermediate and low-cost

assumptions. Under the intermediate assumptions, DI reserves decrease in

2021 and then increase through 2030. Under the low-cost assumptions, DI

reserves increase through 2030. Under the high-cost assumptions, DI

reserves decline until depletion in the fourth quarter of 2027. 
47

Short-Range Estimates

Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2016-2030a

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

Historical data:

2016 . . . $160.0 $157.4 f $1.2 $1.4 $145.9 $142.8 $2.8 $0.4 $14.1 $46.3 22

2017 . . . 171.0 167.1 f 2.0 1.9 145.8 142.8 2.8 .2 25.1 71.5 32

2018 . . . 172.3 169.2 f .5 2.6 146.8 143.7 2.9 .2 25.6 97.1 49

2019 . . . 143.9 139.4 f 1.6 2.9 147.9 145.1 2.7 .1 -4.0 93.1 66

2020 . . . 149.7 145.3 f 1.7 2.8 146.3 143.6 2.6 .1 3.5 96.6 64

Intermediate:

2021 . . . 143.7 140.7 f .4 2.6 145.7 142.8 2.8 .2 -2.0 94.5 66

2022 . . . 158.2 154.3 f 1.5 2.4 153.6 150.6 2.9 .1 4.7 99.2 62

2023 . . . 165.6 161.7 f 1.7 2.3 159.9 157.0 2.8 .1 5.7 104.9 62

2024 . . . 173.3 169.2 f 1.8 2.4 166.0 163.0 3.0 .1 7.3 112.2 63

2025 . . . 181.0 176.5 f 1.9 2.6 171.9 168.8 3.1 .1 9.1 121.3 65

2026 . . . 189.3 184.0 f 2.3 3.1 179.5 176.2 3.3 .1 9.8 131.1 68

2027 . . . 197.5 191.4 f 2.5 3.6 187.4 183.8 3.5 .1 10.2 141.3 70

2028 . . . 206.5 199.5 f 2.6 4.4 193.8 190.0 3.6 .1 12.7 154.0 73

2029 . . . 215.7 207.7 f 2.8 5.2 200.5 196.6 3.8 .1 15.1 169.1 77

2030 . . . 225.1 216.0 f 3.0 6.2 207.7 203.6 4.0 .1 17.4 186.5 81

Low-cost:

2021 . . . 146.1 143.1 f .4 2.6 144.9 142.0 2.8 .2 1.2 97.8 67

2022 . . . 166.7 162.5 f 1.5 2.7 150.9 147.9 2.9 .1 15.8 113.5 65

2023 . . . 175.5 171.0 f 1.6 2.9 155.8 152.9 2.8 .1 19.7 133.3 73

2024 . . . 187.7 182.3 f 1.7 3.7 160.3 157.2 3.0 f 27.4 160.7 83

2025 . . . 200.0 193.1 f 1.8 5.1 164.4 161.2 3.2 f 35.6 196.2 98

2026 . . . 213.6 204.3 f 2.2 7.2 169.9 166.5 3.4 f 43.7 239.9 115

2027 . . . 228.2 215.9 f 2.3 10.1 175.7 172.1 3.6 .1 52.5 292.5 137

2028 . . . 244.6 228.4 f 2.5 13.8 180.2 176.3 3.8 .1 64.5 356.9 162

2029 . . . 262.3 241.5 f 2.6 18.2 185.2 181.2 4.0 .1 77.1 434.0 193

2030 . . . 281.1 255.0 f 2.7 23.4 191.0 186.7 4.2 .1 90.1 524.1 227
Actuarial Estimates

48

For the future, DI cost is projected to increase in part due to increases in

average benefit levels resulting from: (1) automatic benefit increases and

(2) projected increases in the amounts of average monthly earnings on which

benefits are based. Future changes in DI cost also reflect changes in the number of DI beneficiaries in current-payment status. In 2020, the number of DI

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

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

through the end of 2026 to a level slightly below 10 million, which it remains

near through the rest of the short-range projection period. The rate of

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

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

High-cost:

2021 . . .$141.0 $138.1 f $0.4 $2.6 $146.3 $143.3 $2.8 $0.2 -$5.2 $91.4 66

2022 . . . 147.3 143.6 f 1.6 2.1 155.8 152.8 2.9 .1 -8.4 82.9 59

2023 . . . 151.5 148.1 f 1.7 1.7 163.6 160.7 2.8 .1 -12.2 70.7 51

2024 . . . 156.5 153.3 f 1.8 1.4 171.9 168.8 2.9 .1 -15.3 55.4 41

2025 . . . 161.8 158.7 f 2.0 1.1 179.1 175.9 3.1 .1 -17.3 38.1 31

2026 . . . 167.2 164.2 f 2.5 .6 188.6 185.3 3.2 .1 -21.4 16.7 20

2027 . . . g 169.5 f 2.6 g 198.3 194.8 3.4 .1 g g 8

2028 . . . g 174.9 f 2.8 g 206.2 202.6 3.5 .1 g gg

2029 . . . g 179.7 f 3.0 g 214.3 210.5 3.7 .1 g gg

2030 . . . g 184.2 f 3.2 g 222.5 218.5 3.8 .1 g gg

a The DI Trust Fund reserves become depleted in the fourth quarter of 2027 under the high-cost assumptions.

For any period during which reserves would be depleted, scheduled benefits could not be paid in full on a timely

basis, income from taxing benefits would be less than would apply to scheduled benefits, and interest on trust

fund reserves would be negligible. Appendix A presents a detailed description of the components of income and

cost, along with complete historical values.

b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as required by

the statutory provision for early benefit payments when the normal delivery date is on a weekend or holiday.

Such shifts in payments across calendar years have occurred in the past, including in 2016, and will occur periodically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on

trust fund operations over time, all trust fund operations in each year reflect the 12 months of benefits that are

regularly scheduled for payment in that year. 

c Includes reimbursements from the General Fund of the Treasury to the DI Trust Fund for: (1) the cost of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21; (2)

the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public

Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-

78, and 112-96.

d Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

e The “Trust fund ratio” column represents reserves at the beginning of a year (which are identical to reserves at

the end of the prior year shown in the “Amount at end of year” column) as a percentage of cost for the year. The

trust fund ratio at the beginning of 2031 is projected to be 86 percent for the intermediate and 265 percent for

the low-cost assumptions.

f Between -$50 million and $50 million.

g While the fund is depleted, values under current law would reflect permissible expenditures only, which would

be less than the cost of scheduled benefits shown in this table.

Note: Components may not sum to totals because of rounding.

Table IV.A2.—Operations of the DI Trust Fund, Calendar Years 2016-2030a (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation of

benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
49

Short-Range Estimates

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

section V.C.5 for further details.

At the beginning of calendar year 2021, the reserves of the DI Trust Fund represented 66 percent of estimated annual cost. Under the intermediate assumptions, DI trust fund reserves decrease in 2021 and then increase throughout the

rest of the short-range projection period. The trust fund ratio drops to 62 percent of annual cost at the beginning of 2022, then increases throughout the rest

of the short-range projection period, reaching 84 percent of annual cost at the

beginning of 2030.

Because the reserves of the DI Trust Fund at the beginning of 2021 were less

than the estimated annual cost for 2021, and are projected to remain below

annual cost throughout the short-range period under the intermediate assumptions, the DI Trust Fund fails the Trustees’ test of short-range financial adequacy.

3. Operations of the Combined OASI and DI Trust Funds

Table IV.A3 shows the projected operations and status of the combined OASI

and DI Trust Funds for calendar years 2021 through 2030 under the three alternatives, together with actual experience in 2016 through 2020. Income and cost

for the OASI Trust Fund represent over 80 percent of the corresponding

amounts for the combined OASI and DI Trust Funds. Therefore, based on the

relative strength of the OASI Trust Fund over the next 10 years, the combined

OASI and DI Trust Funds would have sufficient financial resources to pay all

scheduled benefits through the end of the short-range period, although it is

important to note that under current law, one trust fund cannot share financial

resources with another trust fund. However, the combined OASI and DI Trust

Funds do not satisfy the test of short-range financial adequacy because trust

fund reserves drop below 100 percent of annual cost during 2029, to a trust

fund ratio of 85 percent at the beginning of 2030. 

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

Calendar Years 2016-2030a

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation

of benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

Historical data:

2016 . . $957.5 $836.2 $0.1 $32.8 $88.4 $922.3 $911.4 $6.2 $4.7 $35.2 $2,847.7 305

2017 . . 996.6 873.6 f 37.9 85.1 952.5 941.5 6.5 4.5 44.1 2,891.8 299

2018 . . 1,003.4 885.1 f 35.0 83.3 1,000.2 988.6 6.7 4.9 3.1 2,894.9 289

2019 . . 1,061.8 944.5 f 36.5 80.8 1,059.3 1,047.9 6.4 4.9 2.5 2,897.4 273

2020 . . 1,118.1 1,001.3 f 40.7 76.1 1,107.2 1,095.9 6.3 5.0 10.9 2,908.3 262
Actuarial Estimates

50

Intermediate:

2021 . . $1,073.8 $969.2 f $34.5 $70.1 $1,151.0 $1,139.0 $6.8 $5.2 -$77.3 $2,831.0 253

2022 . . 1,172.1 1,062.9 f 45.1 64.1 1,226.1 1,213.5 6.9 5.7 -53.9 2,777.1 231

2023 . . 1,222.1 1,114.0 f 48.8 59.3 1,299.5 1,287.0 7.0 5.5 -77.4 2,699.7 214

2024 . . 1,274.2 1,165.6 f 52.9 55.8 1,378.0 1,365.1 7.2 5.6 -103.7 2,595.9 196

2025 . . 1,327.0 1,215.8 f 57.5 53.6 1,459.7 1,446.5 7.5 5.7 -132.7 2,463.2 178

2026 . . 1,393.1 1,267.3 f 71.8 54.0 1,546.6 1,533.0 7.8 5.8 -153.5 2,309.8 159

2027 . . 1,451.6 1,318.5 f 78.0 55.1 1,637.8 1,623.9 8.1 5.8 -186.2 2,123.6 141

2028 . . 1,512.5 1,374.0 f 84.2 54.2 1,734.2 1,719.9 8.4 5.9 -221.7 1,901.9 122

2029 . . 1,572.7 1,430.8 f 90.8 51.1 1,833.8 1,819.1 8.7 6.0 -261.1 1,640.8 104

2030 . . 1,632.1 1,487.9 f 97.9 46.3 1,936.5 1,921.4 9.0 6.1 -304.4 1,336.4 85

Low-cost:

2021 . . 1,090.4 985.8 f 34.4 70.2 1,149.9 1,137.8 6.8 5.2 -59.4 2,848.9 253

2022 . . 1,230.1 1,119.3 f 45.2 65.6 1,226.4 1,213.9 6.9 5.7 3.6 2,852.5 232

2023 . . 1,289.7 1,177.9 f 49.1 62.8 1,304.2 1,291.8 7.0 5.5 -14.5 2,838.0 219

2024 . . 1,371.9 1,255.8 f 53.5 62.6 1,387.6 1,374.7 7.3 5.6 -15.7 2,822.3 205

2025 . . 1,454.3 1,330.3 f 58.4 65.5 1,474.8 1,461.5 7.7 5.7 -20.6 2,801.7 191

2026 . . 1,551.9 1,407.3 f 73.2 71.3 1,567.7 1,553.8 8.1 5.8 -15.9 2,785.8 179

2027 . . 1,645.9 1,487.0 f 79.9 79.0 1,666.2 1,651.8 8.5 5.8 -20.2 2,765.6 167

2028 . . 1,746.6 1,573.5 f 86.7 86.4 1,771.3 1,756.5 8.9 5.9 -24.7 2,740.9 156

2029 . . 1,851.1 1,663.9 f 94.0 93.2 1,881.5 1,866.2 9.3 6.0 -30.5 2,710.4 146

2030 . . 1,958.7 1,757.0 f 101.9 99.8 1,996.9 1,981.0 9.7 6.1 -38.2 2,672.2 136

High-cost:

2021 . . 1,055.6 951.3 f 34.5 69.8 1,152.0 1,140.0 6.8 5.2 -96.4 2,811.9 252

2022 . . 1,096.5 989.4 f 44.9 62.2 1,222.3 1,209.7 6.9 5.7 -125.8 2,686.1 230

2023 . . 1,123.9 1,020.1 f 48.2 55.5 1,289.4 1,276.8 6.9 5.6 -165.5 2,520.6 208

2024 . . 1,158.1 1,055.9 f 52.1 50.1 1,363.6 1,350.8 7.1 5.7 -205.5 2,315.1 185

2025 . . 1,195.2 1,093.5 f 56.5 45.2 1,439.8 1,426.8 7.3 5.7 -244.7 2,070.4 161

2026 . . 1,242.2 1,130.9 f 70.2 41.0 1,521.2 1,507.9 7.5 5.8 -279.1 1,791.4 136

2027 . . 1,279.6 1,167.7 f 75.9 36.1 1,605.8 1,592.3 7.7 5.8 -326.2 1,465.2 112

2028 . . 1,315.2 1,204.9 f 81.7 28.6 1,694.4 1,680.6 7.9 5.8 -379.2 1,085.9 86

2029 . . 1,345.1 1,238.1 f 87.6 19.4 1,784.6 1,770.6 8.1 5.9 -439.5 646.4 61

2030 . . 1,372.3 1,268.8 f 94.0 9.5 1,876.5 1,862.2 8.3 5.9 -504.3 142.2 34

a Appendix A presents a detailed description of the components of income and cost, along with complete historical

values.

b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as required by the

statutory provision for early benefit payments when the normal delivery date is on a weekend or holiday. Such

shifts in payments across calendar years have occurred in the past, including in 2016, and will occur periodically in

the future whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on trust fund operations over time, all trust fund operations in each year reflect the 12 months of benefits that are regularly scheduled

for payment in that year. 

c Includes reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds for: (1) the cost

of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21;

(2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public Law 110-

246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and 112-

96.

d Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the law.

e The “Trust fund ratio” column represents reserves at the beginning of a year (which are identical to reserves at

the end of the prior year shown in the “Amount at end of year” column) as a percentage of cost for the year. The

trust fund ratio at the beginning of 2031 is projected to be 66 percent for the intermediate, 127 percent for the lowcost, and 7 percent for the high-cost assumptions.

f Between -$50 million and $50 million.

Note: Components may not sum to totals because of rounding.

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

Calendar Years 2016-2030a (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Costb Asset Reservesb

Total

Net payroll tax

contributions

GF

reimbursementsc

Taxation

of benefitsd Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
51

Short-Range Estimates

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

From Last Year’s Report

Table IV.A4 presents an analysis of the factors underlying the changes in the

intermediate estimates over the short-range projection period for the OASI,

DI, and the combined funds from last year’s report to this report.

In the 2020 report under the intermediate assumptions, the trust fund ratio for

OASI reached 115 percent at the beginning of 2029—the tenth projection

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

from 2020 through 2029 to 2021 through 2030, lowered the estimated trust

fund ratio for the tenth year by 21 percentage points, to 94 percent. All other

changes to reflect modifications in law and regulations since last year’s

report, the most recent data, adjustments to the assumptions for future years,

and changes in projection methods combined for a net decrease in the ratio

for the tenth projection year of 9 percentage points. Therefore, the total

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

this year’s report is a reduction of 30 percentage points to 85 percent.

The changes in policy for the Deferred Actions for Childhood Arrivals program discussed in III.B, which affect the Social Security program in the first

ten years primarily by increasing payroll tax income, increased the tenth year

OASI trust fund ratio by 1 percentage point. Changes in demographic

assumptions over the short-range period, primarily increased mortality due to

the COVID-19 pandemic, increased the projected tenth year trust fund ratio

for OASI by 6 percentage points. Several changes in economic data and

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

of 6 percentage points by the beginning of 2030. Incorporating recent programmatic data and assumptions, including actual average benefits and beneficiary counts for 2020 and lower estimated near-term revenue from taxation

of benefits income, resulted in a decrease of 8 percentage points in the tenth

year OASI trust fund ratio. Finally, retired worker modeling was improved to

better reflect age at initial entitlement, decreasing the tenth year trust fund

ratio by 1 percentage point in this report.

Table IV.A4 also shows corresponding estimates of the factors underlying

the changes in the financial projections for the DI Trust Fund and for the

combined OASI and DI Trust Funds. The 6-percentage-point decrease in the

DI trust fund ratio from the beginning of 2029 in last year’s report to the

beginning of 2030 in this year’s report is the net effect of increases and

decreases from the factors described above for the OASI Trust Fund, the

largest of which was the decrease caused by changes in economic data and

assumptions.
Actuarial Estimates

52

Note: Components may not sum to totals because of rounding.

Table IV.A4.—Reasons for Change in Trust Fund (Unfunded Obligation) Ratios 

at the Beginning of the Tenth Year of Projection Under Intermediate Assumptions

[In percent]

Item

OASI

Trust Fund

DI

Trust Fund

OASI and DI

Trust Funds,

combined

Trust fund ratio shown in last year’s report for calendar year 2029 . 115 87 112

Change in trust fund ratio due to changes in: 

Legislation and regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1

Valuation period. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -21 6 -18

Demographic data and assumptions. . . . . . . . . . . . . . . . . . . . . . . 6 a

a Between -0.5 and 0.5 percent.

5

Economic data and assumptions . . . . . . . . . . . . . . . . . . . . . . . . . -6 -9 -7

Programmatic data and assumptions . . . . . . . . . . . . . . . . . . . . . . -8 -4 -8

Projection methods and data . . . . . . . . . . . . . . . . . . . . . . . . . . . . -1 a -1

Total change in trust fund ratio -30 -6 -27

Trust fund ratio shown in this report for calendar year 2030. . . . . . . 85 81 85
53

Long-Range Estimates

B. LONG-RANGE ESTIMATES

The Trustees use three types of financial measures to assess the actuarial status of the Social Security trust funds under the financing approach specified

in current law: (1) annual cash-flow measures, including income rates, cost

rates, and balances; (2) trust fund ratios; and (3) summary measures such as

actuarial balances and unfunded obligations.

The difference between the annual income rate and annual cost rate, both

expressed as percentages of taxable payroll, is the annual balance. The level

and trend of the annual balances at the end of the 75-year projection period

are factors that the Trustees use to assess the financial condition of the program.

The trust fund ratio for a year is the proportion of the year’s projected cost

that could be paid with fund reserves available at the beginning of the year.

Critical factors considered by the Trustees in assessing actuarial status

include: (1) the level and year of maximum trust fund ratio, (2) the year of

depletion of the fund reserves and the percent of scheduled benefits that is

still payable after reserves are depleted, and (3) the stability of the trust fund

ratio at the end of the long-range period. 

Solvency at any point in time requires that sufficient financial resources are

available to pay all scheduled benefits at that time. Solvency is generally

indicated by a positive trust fund ratio. “Sustainable solvency” for the financing of the program under a specified set of assumptions is achieved when the

projected trust fund ratio is positive throughout the 75-year projection period

and is either stable or rising at the end of the period.

The Trustees summarize the total income and cost over valuation periods that

extend through 75 years and over the infinite horizon.1 This section presents

several summarized measures, including the actuarial balance and the opengroup unfunded obligation. The actuarial balance indicates the size of any

surplus or shortfall as a percentage of the taxable payroll over the period.

The open-group unfunded obligation indicates the size of any shortfall in

present-value dollars.

This section also includes additional information that the Trustees use to

assess the financial status of the Social Security program, including: (1) a

comparison of the number of beneficiaries to the number of covered workers,

(2) the test of long-range close actuarial balance, and (3) the reasons for the

change in the actuarial balance from the last report.

 1 See appendix F.
Actuarial Estimates

54

1. Annual Income Rates, Cost Rates, and Balances

The concepts of income rate and cost rate, expressed as percentages of taxable payroll, are important in the consideration of the long-range actuarial

status of the trust funds. The annual income rate is the ratio of all non-interest income to the OASDI taxable payroll for the year. Non-interest income

includes payroll taxes, taxes on scheduled benefits, and any General Fund

transfers or reimbursements. The OASDI taxable payroll consists of the total

earnings subject to OASDI taxes with some relatively small adjustments.1

The annual cost rate is the ratio of the cost of the program to the taxable payroll for the year. The cost includes scheduled benefits, administrative

expenses, net interchange with the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries. For

any year, the annual income rate minus the annual cost rate is the annual

“balance” for the year.

Table IV.B1 presents a comparison of the estimated annual income rates and

cost rates by trust fund and alternative. Table IV.B2 shows the separate components of the annual income rates.

Under the intermediate assumptions, the Trustees project that the OASI

income rate will decrease from 11.62 percent of payroll for 2020 to

10.58 percent of payroll for 2021. The income rate in 2020 is relatively high

because the numerator (credited payroll tax contributions in 2020) is based

on estimates that did not anticipate the COVID-19 pandemic and ensuing

recession, while the denominator (2020 taxable payroll) does reflect the

actual lower-than-expected experience. The income rate then decreases in

2021 because of a negative adjustment to payroll tax contributions made in

June 2021 reflecting the excess amounts credited in 2020. The OASI income

rate rises to 11.11 percent in 2022 and then generally gradually rises thereafter, reaching 11.52 percent of taxable payroll for 2095. Income from taxation

of benefits causes this gradual increase in the OASI income rate for two main

reasons: (1) total scheduled benefits are rising faster than payroll; and (2) the

ratio of total income tax on benefits to total benefits increases over time for

reasons discussed in detail on page 154.

 1 Adjustments include adding deemed wage credits based on military service for 1983-2001 and reflecting

the lower effective tax rates (as compared to the combined employee-employer rate) that apply to multipleemployer “excess wages.” Lower rates also applied to net earnings from self-employment before 1984 and

to income from tips before 1988.
55

Long-Range Estimates

The OASI cost rate declines from 12.47 percent of payroll for 2020 to

12.33 percent for 20211 due primarily to a relatively large increase in taxable

payroll in 2021, with 2020 taxable payroll being lower than expected

because of the COVID-19 pandemic and ensuing recession. From 2021 to

2038, the OASI cost rate rises rapidly because the retirement of the babyboom generation will continue to increase the number of beneficiaries much

faster than the number of workers increases, as subsequent lower-birth-rate

generations replace the baby-boom generation at working ages. From 2041

to 2046, the cost rate declines because the aging baby-boom generation is

gradually replaced at retirement ages by the lower-birth-rate generations that

followed. The OASI cost rate then rises from 15.10 percent in 2046 to

16.45 percent in 2078, largely because of the period of reduced birth rates

starting with the recession of 2007-09, and then declines to 15.70 percent in

2095.

Projections of income rates under the low-cost and high-cost sets of assumptions are similar to those projected for the intermediate assumptions, because

income rates are largely a reflection of the payroll tax rates specified in the

law, with the changes from taxation of benefits noted above. In contrast,

OASI cost rates for the low-cost and high-cost assumptions are significantly

different from those projected for the intermediate assumptions. For the lowcost assumptions, the OASI cost rate generally rises from 12.03 percent in

2021 until it peaks in 2034 at 12.87 percent of payroll. The cost rate then

declines to 12.02 percent for 2055, rises to 12.11 percent for 2068, and then

mostly declines to 10.97 percent in 2095, at which point the income rate

reaches 11.23 percent. For the high-cost assumptions, the OASI cost rate

rises through 2087 and then declines gradually through 2095. The cost rate

rises relatively rapidly through about 2038 because of the aging of the babyboom generation. The OASI cost rate reaches 24.67 percent of payroll for

2095, at which point the income rate reaches 12.06 percent.

The pattern of the projected OASI annual balance is important in the analysis

of the financial condition of the program. Under the intermediate assumptions, the annual balance is negative throughout the projection period. The

annual deficit increases significantly in 2021 because of the adjustment for

lower-than-expected payroll tax revenue in 2020 mentioned earlier. After

2022, the annual deficit mostly rises to 3.72 percent for 2041. It then declines

 1 Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly

scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as

required by the statutory provision for early benefit payments when the normal delivery date is on a weekend or holiday. Such shifts in payments across calendar years have occurred in the past and will occur periodically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent perspective on

trust fund operations over time, all trust fund operations in each year reflect the 12 months of benefits that

are regularly scheduled for payment in that year.
Actuarial Estimates

56

to 3.65 percent of payroll for 2046, rises to 4.89 percent for 2078, and

declines thereafter, reaching 4.18 percent of taxable payroll for 2095.

Under the low-cost assumptions, the OASI annual deficit decreases from

1.54 percent of payroll for 2021 to 0.84 percent in 2022, and then rises to

1.58 percent of payroll for 2034. After 2034, the annual deficit declines to

0.74 percent of payroll for 2055, and rises to 0.81 percent for 2067. After

2067, the OASI annual balance generally improves, turning positive in 2088,

and reaching 0.26 percent of payroll for 2095. Under the high-cost assumptions, the OASI annual deficit rises from 1.97 percent for 2021 to

12.87 percent for 2087, then declines relatively modestly to 12.62 percent for

2095.
57

Long-Range Estimates

Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095

[As a percentage of taxable payroll]

Calendar 

year

OASI DI OASDI

Income

ratea Costrateb Balanceb Incomeratea Costrateb Balanceb Incomeratea Costrateb Balanceb

Historical data:

1990. . . . . 11.47 9.65 1.82 1.18 1.09 0.10 12.65 10.74 1.91

1995. . . . . 10.65 10.23 .42 1.87 1.44 .43 12.52 11.67 .85

2000. . . . . 10.85 8.98 1.87 1.78 1.42 .36 12.62 10.40 2.23

2005. . . . . 10.96 9.31 1.65 1.84 1.85 -.02 12.80 11.16 1.63

2010. . . . . 10.75 11.06 -.30 1.79 2.41 -.62 12.54 13.47 -.92

2011 . . . . . 10.83 11.04 -.21 1.80 2.42 -.62 12.63 13.46 -.83

2012. . . . . 11.05 11.35 -.30 1.81 2.47 -.66 12.85 13.82 -.96

2013. . . . . 10.96 11.53 -.57 1.81 2.43 -.63 12.77 13.97 -1.20

2014. . . . . 10.95 11.59 -.64 1.81 2.35 -.55 12.76 13.95 -1.19

2015. . . . . 11.02 11.64 -.62 1.81 2.27 -.47 12.83 13.92 -1.09

2016. . . . . 10.70 11.70 -.99 2.39 2.20 .19 13.09 13.90 -.80

2017. . . . . 10.64 11.56 -.92 2.42 2.09 .33 13.06 13.65 -.59

2018. . . . . 10.28 11.69 -1.41 2.32 2.01 .31 12.60 13.70 -1.10

2019. . . . . 10.98 11.91 -.93 1.84 1.93 -.09 12.82 13.84 -1.02

2020. . . . . 11.62 12.47 -.86 1.91 1.90 .01 13.52 14.37 -.85

Intermediate:

2021. . . . . 10.58 12.33 -1.75 1.73 1.79 -.06 12.31 14.11 -1.81

2022. . . . . 11.11 12.51 -1.40 1.82 1.79 .03 12.93 14.30 -1.38

2023. . . . . 11.10 12.65 -1.56 1.81 1.78 .04 12.91 14.43 -1.52

2024. . . . . 11.13 12.87 -1.75 1.82 1.76 .05 12.94 14.64 -1.69

2025. . . . . 11.14 13.11 -1.96 1.82 1.75 .07 12.96 14.86 -1.90

2026. . . . . 11.26 13.35 -2.09 1.82 1.75 .07 13.08 15.10 -2.03

2027. . . . . 11.28 13.61 -2.32 1.82 1.76 .06 13.10 15.36 -2.26

2028. . . . . 11.32 13.88 -2.56 1.82 1.75 .08 13.14 15.62 -2.49

2029. . . . . 11.35 14.14 -2.79 1.82 1.74 .09 13.17 15.87 -2.70

2030. . . . . 11.37 14.38 -3.01 1.82 1.73 .09 13.19 16.11 -2.92

2035. . . . . 11.42 14.98 -3.56 1.82 1.76 .06 13.24 16.74 -3.49

2040. . . . . 11.44 15.15 -3.70 1.83 1.83 c 13.27 16.98 -3.71

2045. . . . . 11.45 15.11 -3.66 1.83 1.94 -.11 13.28 17.05 -3.77

2050. . . . . 11.46 15.14 -3.68 1.83 2.00 -.17 13.29 17.14 -3.85

2055. . . . . 11.47 15.27 -3.79 1.83 2.03 -.19 13.31 17.29 -3.99

2060. . . . . 11.50 15.55 -4.06 1.83 2.00 -.16 13.33 17.55 -4.22

2065. . . . . 11.52 15.82 -4.31 1.83 1.98 -.15 13.35 17.80 -4.45

2070. . . . . 11.54 16.09 -4.56 1.83 1.98 -.14 13.37 18.07 -4.70

2075. . . . . 11.56 16.37 -4.82 1.83 1.94 -.11 13.39 18.32 -4.93

2080. . . . . 11.56 16.43 -4.87 1.83 1.92 -.09 13.40 18.35 -4.96

2085. . . . . 11.55 16.22 -4.67 1.83 1.92 -.08 13.38 18.14 -4.75

2090. . . . . 11.53 15.84 -4.31 1.83 1.98 -.14 13.36 17.81 -4.45

2095. . . . . 11.52 15.70 -4.18 1.84 2.00 -.17 13.36 17.70 -4.34

First year balance becomes

negative and remains negative

throughout the 75-year

projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2040 . . . . . . . . . . . . . . . . 2010
Actuarial Estimates

58

Low-cost:

2021. . . . . 10.50 12.03 -1.54 1.72 1.74 -0.02 12.22 13.77 -1.55

2022. . . . . 11.17 12.01 -.84 1.83 1.69 .15 13.00 13.69 -.69

2023. . . . . 11.07 12.06 -.99 1.81 1.64 .18 12.88 13.70 -.81

2024. . . . . 11.08 12.09 -1.01 1.81 1.58 .23 12.89 13.66 -.77

2025. . . . . 11.10 12.18 -1.08 1.81 1.53 .28 12.91 13.71 -.80

2026. . . . . 11.20 12.29 -1.09 1.81 1.49 .32 13.01 13.78 -.77

2027. . . . . 11.21 12.39 -1.18 1.81 1.46 .35 13.02 13.85 -.83

2028. . . . . 11.24 12.51 -1.27 1.82 1.42 .40 13.05 13.93 -.87

2029. . . . . 11.26 12.62 -1.36 1.82 1.38 .44 13.07 13.99 -.92

2030. . . . . 11.27 12.71 -1.44 1.81 1.34 .47 13.09 14.06 -.97

2035. . . . . 11.30 12.86 -1.56 1.82 1.29 .53 13.12 14.15 -1.04

2040. . . . . 11.30 12.70 -1.40 1.82 1.30 .51 13.12 14.00 -.88

2045. . . . . 11.29 12.35 -1.06 1.82 1.35 .47 13.11 13.71 -.60

2050. . . . . 11.28 12.12 -.84 1.82 1.37 .45 13.10 13.49 -.38

2055. . . . . 11.28 12.02 -.74 1.82 1.37 .45 13.10 13.39 -.28

2060. . . . . 11.29 12.08 -.79 1.82 1.33 .49 13.11 13.41 -.30

2065. . . . . 11.30 12.11 -.81 1.82 1.32 .50 13.12 13.42 -.31

2070. . . . . 11.30 12.11 -.81 1.82 1.31 .52 13.12 13.42 -.30

2075. . . . . 11.30 12.09 -.79 1.82 1.28 .54 13.12 13.37 -.25

2080. . . . . 11.29 11.87 -.58 1.82 1.27 .55 13.11 13.13 -.03

2085. . . . . 11.26 11.45 -.19 1.82 1.28 .54 13.08 12.73 .35

2090. . . . . 11.24 11.03 .20 1.82 1.33 .49 13.06 12.36 .70

2095. . . . . 11.23 10.97 .26 1.82 1.34 .48 13.06 12.32 .74

First year balance becomes

negative and remains negative

throughout the 75-year 

projection period . . . . . . . . . . . d . . . . . . . . . . . . . . . . d . . . . . . . . . . . . . . . . d

High-cost:

2021. . . . . 10.56 12.53 -1.97 1.73 1.82 -.10 12.28 14.36 -2.07

2022. . . . . 11.19 13.42 -2.23 1.83 1.96 -.13 13.01 15.38 -2.37

2023. . . . . 11.14 13.65 -2.51 1.82 1.98 -.17 12.96 15.64 -2.68

2024. . . . . 11.18 13.98 -2.80 1.82 2.02 -.20 13.00 16.00 -3.00

2025. . . . . 11.20 14.27 -3.07 1.82 2.03 -.21 13.01 16.29 -3.28

2026. . . . . 11.33 14.59 -3.26 1.82 2.07 -.24 13.15 16.66 -3.50

2027. . . . . 11.36 14.92 -3.56 1.82 2.10 -.28 13.18 17.02 -3.84

2028. . . . . 11.40 15.30 -3.90 1.83 2.12 -.29 13.23 17.42 -4.19

2029. . . . . 11.44 15.72 -4.28 1.83 2.14 -.32 13.27 17.86 -4.59

2030. . . . . 11.47 16.15 -4.67 1.83 2.17 -.34 13.30 18.32 -5.01

Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 (Cont.)

[As a percentage of taxable payroll]

Calendar 

year

OASI DI OASDI

Income

ratea Costrateb Balanceb Incomeratea Costrateb Balanceb Incomeratea Costrateb Balanceb
59

Long-Range Estimates

Notes:

1. The income rate excludes interest income.

2. Revisions of taxable payroll may change some historical values.

3. Components may not sum to totals because of rounding.

Under the intermediate assumptions, the projected DI cost rate declines from

1.90 percent for 2020 to 1.79 percent for 2021 due primarily to a relatively

large increase in taxable payroll for 2021, with 2020 taxable payroll being

lower than expected because of the COVID-19 pandemic and ensuing recession. After 2022, the cost rate generally declines more gradually to 1.73 percent for 2031. Then the DI cost rate increases gradually to 2.03 percent for

2055. Thereafter, the cost rate remains relatively stable, decreasing slowly to

1.91 percent for 2083, and then increasing to 2.00 percent for 2095. Except

for the decline in payroll tax contributions in 2021 from the adjustment

reflecting lower-than-expected 2020 payroll tax contributions, the projected

DI income rate is relatively stable throughout the projection period, reaching

1.84 percent for 2095. The annual balance is negative in 2021 and turns positive in 2022, reaching a peak of 0.10 percent of payroll for 2031. The annual

balance then declines and becomes negative in 2040. After 2040, the DI

annual deficit increases to 0.19 percent in 2055, generally decreases to

0.08 percent in 2083, and then increases to 0.17 percent of payroll for 2095.

High-cost (Cont.):

2035. . . . . 11.55 17.33 -5.78 1.83 2.34 -0.50 13.39 19.67 -6.28

2040. . . . . 11.61 18.07 -6.47 1.84 2.49 -.65 13.44 20.56 -7.12

2045. . . . . 11.65 18.68 -7.03 1.84 2.69 -.85 13.49 21.38 -7.88

2050. . . . . 11.70 19.34 -7.65 1.84 2.83 -.98 13.54 22.17 -8.63

2055. . . . . 11.74 20.04 -8.30 1.85 2.92 -1.07 13.59 22.96 -9.37

2060. . . . . 11.80 20.87 -9.07 1.85 2.91 -1.07 13.65 23.78 -10.13

2065. . . . . 11.85 21.68 -9.83 1.85 2.92 -1.07 13.70 24.61 -10.90

2070. . . . . 11.91 22.58 -10.66 1.85 2.93 -1.08 13.76 25.51 -11.75

2075. . . . . 11.98 23.59 -11.61 1.85 2.89 -1.04 13.83 26.48 -12.65

2080. . . . . 12.03 24.42 -12.39 1.85 2.83 -.98 13.88 27.25 -13.37

2085. . . . . 12.06 24.88 -12.82 1.85 2.77 -.92 13.91 27.66 -13.74

2090. . . . . 12.06 24.83 -12.76 1.85 2.82 -.97 13.91 27.64 -13.73

2095. . . . . 12.06 24.67 -12.62 1.85 2.86 -1.01 13.91 27.54 -13.63

First year balance becomes

negative and remains negative

throughout the 75-year

projection period . . . . . . . . . . . 2010 . . . . . . . . . . . . . . . . 2021 . . . . . . . . . . . . . . . . 2010

a Income rates include certain reimbursements from the General Fund of the Treasury.

b Benefit payments scheduled to be paid on January 3 are actually paid on December 31 as required by the

statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for

payment each year.

c Between -0.005 and 0 percent of taxable payroll.

d The annual balance is projected to be negative for a temporary period and return to positive levels before

the end of the projection period.

Table IV.B1.—Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 (Cont.)

[As a percentage of taxable payroll]

Calendar 

year

OASI DI OASDI

Income

ratea Costrateb Balanceb Incomeratea Costrateb Balanceb Incomeratea Costrateb Balanceb
Actuarial Estimates

60

Under the low-cost assumptions, the projected DI cost rate declines from

1.74 percent of payroll for 2021 to 1.29 percent for 2037, and increases to

1.37 percent for 2052. The cost rate then declines through 2081 and increases

slowly thereafter, reaching 1.34 percent for 2095. The annual balance is negative for 2021 and positive throughout the remainder of the long-range

period. Under the high-cost assumptions, the DI cost rate rises from

1.82 percent of payroll in 2021 to 2.93 percent in 2056 and fluctuates thereafter, reaching 2.86 percent for 2095. The annual balance is negative

throughout the projection period, with annual deficits rising from

0.10 percent of payroll for 2021 to 1.08 percent in 2056, and attaining

1.01 percent for 2095.

Figure IV.B1 shows the patterns of the historical and projected OASI and DI

annual cost rates. The patterns in projected OASI and DI cost rates are

described earlier in this chapter. Historical annual OASI cost rates shifted

upward starting in 2008 and have remained at relatively high levels since

then, primarily due to the retirement of the baby-boom generation. Historical

annual DI cost rates rose substantially between 1990 and 2010 in large part

due to: (1) aging of the working population as the baby-boom generation

moved from ages 25-44 in 1990, where disability prevalence is low, to ages

45-64 in 2010, where disability prevalence is much higher; (2) a substantial

increase in the percentage of women insured for DI benefits as a result of

increased and more consistent rates of employment; and (3) increased disability incidence rates for women to a level similar to those for men by 2010.

As of 2010, these three factors have largely stabilized. Other factors that are

not yet fully understood, including the changing nature of work, have caused

age-sex-adjusted incidence rates and cost rates to decline from 2010 to 2020.

Figure IV.B1 shows only the income rates for alternative II because the variation in income rates by alternative is very small. Income rates generally

increase slowly for each of the alternatives over the long-range period. Taxation of benefits, which is a small portion of income, is the main source of the

increases in the income rate and the variation among the alternatives.

Table IV.B1 shows the annual balances for OASI, DI, and OASDI. The pattern of the annual balances is important to the analysis of the financial condition of the Social Security program as a whole. As seen in figure IV.B1, the

magnitude of each of the positive balances is the distance between the appropriate cost-rate curve and the income-rate curve above it. The magnitude of

each of the deficits is the distance between the appropriate cost-rate curve

and the income-rate curve below it. Annual balances follow closely the pattern of annual cost rates after 1990 because the payroll tax rate does not

change for the OASDI program, with only small variations in the allocation

between DI and OASI except for changes due to the 1994 and the

2016 through 2018 payroll tax rate reallocations. 
61

Long-Range Estimates

In the future, the costs of OASI, DI, and the combined OASDI programs as a

percentage of taxable payroll are unlikely to fall outside the range encompassed by alternatives I and III because alternatives I and III define a wide

range of demographic and economic conditions.

Long-range OASDI cost and income are most often expressed as percentages

of taxable payroll. However, the Trustees also present cost and income as

shares of gross domestic product (GDP), the value of goods and services produced during the year in the United States. Under alternative II, the Trustees

project OASDI cost to increase from about 5.1 percent of GDP for 2021 to

about 6.0 percent for 2039. After 2039, OASDI cost as a percentage of GDP

declines slightly through 2051, increases to a peak of 6.2 percent for 2077,

and thereafter decreases slowly, reaching about 5.9 percent by 2095. Appendix G presents full estimates of income and cost relative to GDP. 

Table IV.B2 contains historical and projected annual income rates and their

components by trust fund and alternative. The annual income rates consist of

the scheduled payroll tax rates, the rates of income from taxation of scheduled benefits, and the rates of income from General Fund reimbursements.

Projected income from taxation of benefits increases over time for reasons

discussed on page 154. 

 Figure IV.B1.—Long-Range OASI and DI Annual Income Rates and Cost Rates

[As a percentage of taxable payroll]

0%

5%

10%

15%

20%

25%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

Alternative II Income rates

OASI Cost rates

DI Cost rates

Historical Projected

OASI

DI III

II

I

II

I

III
Actuarial Estimates

62

Table IV.B2.—Components of Annual Income Rates, Calendar Years 1990-2095

[As a percentage of taxable payroll]

Calendar

year

OASI DI OASDI

Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc

Historical data:

1990 . . 11.29 0.21 -0.03 11.47 1.21 0.01 -0.03 1.18 12.50 0.21 -0.06 12.65

1995 . . 10.46 .19 -.01 10.65 1.87 .01 -.01 1.87 12.33 .20 -.01 12.52

2000 . . 10.56 .29 d 10.85 1.78 .02 -.02 1.78 12.34 .31 -.02 12.62

2005 . . 10.68 .29 -.01 10.96 1.81 .02 d 1.84 12.49 .31 -.01 12.80

2010 . . 10.30 .42 .04 10.75 1.75 .04 .01 1.79 12.05 .45 .05 12.54

2011 . . 8.82 .41 1.61 10.83 1.50 .03 .27 1.80 10.32 .44 1.88 12.63

2012 . . 8.86 .47 1.72 11.05 1.51 .01 .29 1.81 10.37 .48 2.01 12.85

2013 . . 10.54 .35 .07 10.96 1.79 .01 .01 1.81 12.33 .36 .08 12.77

2014 . . 10.49 .45 .01 10.95 1.78 .03 d 1.81 12.27 .48 .01 12.76

2015 . . 10.54 .47 d 11.02 1.79 .02 d 1.81 12.33 .49 .01 12.83

2016 . . 10.23 .48 d 10.70 2.37 .02 d 2.39 12.60 .49 d 13.09

2017 . . 10.12 .51 d 10.64 2.39 .03 d 2.42 12.52 .54 d 13.06

2018 . . 9.80 .47 d 10.28 2.32 .01 d 2.32 12.12 .48 d 12.60

2019 . . 10.52 .46 d 10.98 1.82 .02 d 1.84 12.34 .48 d 12.82

2020 . . 11.11 .51 d 11.62 1.89 .02 d 1.91 12.99 .53 d 13.52

Intermediate:

2021 . . 10.16 .42 d 10.58 1.73 d d 1.73 11.88 .42 d 12.31

2022 . . 10.60 .51 d 11.11 1.80 .02 d 1.82 12.40 .53 d 12.93

2023 . . 10.58 .52 d 11.10 1.80 .02 d 1.81 12.37 .54 d 12.91

2024 . . 10.58 .54 d 11.13 1.80 .02 d 1.82 12.38 .56 d 12.94

2025 . . 10.58 .57 d 11.14 1.80 .02 d 1.82 12.37 .59 d 12.96

2026 . . 10.58 .68 d 11.26 1.80 .02 d 1.82 12.38 .70 d 13.08

2027 . . 10.57 .71 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10

2028 . . 10.58 .74 d 11.32 1.80 .02 d 1.82 12.38 .76 d 13.14

2029 . . 10.59 .76 d 11.35 1.80 .02 d 1.82 12.38 .79 d 13.17

2030 . . 10.58 .79 d 11.37 1.80 .02 d 1.82 12.38 .81 d 13.19

2035 . . 10.58 .84 d 11.42 1.80 .03 d 1.82 12.38 .87 d 13.24

2040 . . 10.58 .86 d 11.44 1.80 .03 d 1.83 12.38 .89 d 13.27

2045 . . 10.58 .87 d 11.45 1.80 .03 d 1.83 12.38 .90 d 13.28

2050 . . 10.58 .88 d 11.46 1.80 .03 d 1.83 12.38 .91 d 13.29

2055 . . 10.58 .89 d 11.47 1.80 .04 d 1.83 12.38 .93 d 13.31

2060 . . 10.58 .91 d 11.50 1.80 .04 d 1.83 12.38 .95 d 13.33

2065 . . 10.58 .94 d 11.52 1.80 .04 d 1.83 12.38 .97 d 13.35

2070 . . 10.58 .95 d 11.54 1.80 .04 d 1.83 12.38 .99 d 13.37

2075 . . 10.58 .97 d 11.56 1.80 .04 d 1.83 12.38 1.01 d 13.39

2080 . . 10.58 .98 d 11.56 1.80 .04 d 1.83 12.38 1.02 d 13.40

2085 . . 10.58 .97 d 11.55 1.80 .04 d 1.83 12.38 1.01 d 13.38

2090 . . 10.58 .95 d 11.53 1.80 .04 d 1.83 12.38 .99 d 13.36

2095 . . 10.58 .94 d 11.52 1.80 .04 d 1.84 12.38 .98 d 13.36

Low-cost:

2021 . . 10.09 .41 d 10.50 1.71 d d 1.72 11.80 .41 d 12.22

2022 . . 10.68 .49 d 11.17 1.81 .02 d 1.83 12.50 .50 d 13.00

2023 . . 10.57 .50 d 11.07 1.80 .02 d 1.81 12.37 .52 d 12.88

2024 . . 10.57 .51 d 11.08 1.80 .02 d 1.81 12.37 .53 d 12.89

2025 . . 10.57 .53 d 11.10 1.79 .02 d 1.81 12.37 .54 d 12.91

2026 . . 10.57 .62 d 11.20 1.80 .02 d 1.81 12.37 .64 d 13.01

2027 . . 10.57 .64 d 11.21 1.79 .02 d 1.81 12.36 .66 d 13.02

2028 . . 10.57 .66 d 11.24 1.80 .02 d 1.82 12.37 .68 d 13.05

2029 . . 10.58 .68 d 11.26 1.80 .02 d 1.82 12.38 .70 d 13.07

2030 . . 10.57 .70 d 11.27 1.80 .02 d 1.81 12.37 .72 d 13.09
63

Long-Range Estimates

Note: Components may not sum to totals because of rounding.

Low-cost (Cont.):

2035 . . 10.58 0.72 d 11.30 1.80 0.02 d 1.82 12.37 0.74 d 13.12

2040 . . 10.58 .73 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12

2045 . . 10.57 .72 d 11.29 1.80 .02 d 1.82 12.37 .74 d 13.11

2050 . . 10.57 .71 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10

2055 . . 10.57 .71 d 11.28 1.80 .02 d 1.82 12.37 .73 d 13.10

2060 . . 10.57 .72 d 11.29 1.80 .02 d 1.82 12.37 .74 d 13.11

2065 . . 10.57 .72 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12

2070 . . 10.57 .72 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12

2075 . . 10.57 .72 d 11.30 1.80 .02 d 1.82 12.37 .75 d 13.12

2080 . . 10.57 .71 d 11.29 1.80 .02 d 1.82 12.37 .74 d 13.11

2085 . . 10.57 .69 d 11.26 1.80 .03 d 1.82 12.37 .71 d 13.08

2090 . . 10.57 .66 d 11.24 1.80 .03 d 1.82 12.37 .69 d 13.06

2095 . . 10.57 .66 d 11.23 1.80 .03 d 1.82 12.37 .69 d 13.06

High-cost:

2021 . . 10.13 .42 d 10.56 1.72 d d 1.73 11.85 .43 d 12.28

2022 . . 10.64 .55 d 11.19 1.81 .02 d 1.83 12.45 .56 d 13.01

2023 . . 10.57 .56 d 11.14 1.80 .02 d 1.82 12.37 .59 d 12.96

2024 . . 10.59 .59 d 11.18 1.80 .02 d 1.82 12.39 .61 d 13.00

2025 . . 10.58 .62 d 11.20 1.80 .02 d 1.82 12.38 .64 d 13.01

2026 . . 10.58 .74 d 11.33 1.80 .03 d 1.82 12.38 .77 d 13.15

2027 . . 10.58 .78 d 11.36 1.80 .03 d 1.82 12.38 .80 d 13.18

2028 . . 10.59 .81 d 11.40 1.80 .03 d 1.83 12.39 .84 d 13.23

2029 . . 10.59 .85 d 11.44 1.80 .03 d 1.83 12.39 .88 d 13.27

2030 . . 10.59 .89 d 11.47 1.80 .03 d 1.83 12.38 .92 d 13.30

2035 . . 10.59 .97 d 11.55 1.80 .04 d 1.83 12.38 1.00 d 13.39

2040 . . 10.59 1.02 d 11.61 1.80 .04 d 1.84 12.39 1.06 d 13.44

2045 . . 10.59 1.06 d 11.65 1.80 .04 d 1.84 12.39 1.11 d 13.49

2050 . . 10.59 1.11 d 11.70 1.80 .05 d 1.84 12.39 1.16 d 13.54

2055 . . 10.59 1.16 d 11.74 1.80 .05 d 1.85 12.39 1.21 d 13.59

2060 . . 10.59 1.21 d 11.80 1.80 .05 d 1.85 12.39 1.26 d 13.65

2065 . . 10.59 1.27 d 11.85 1.80 .05 d 1.85 12.39 1.32 d 13.70

2070 . . 10.59 1.32 d 11.91 1.80 .05 d 1.85 12.39 1.38 d 13.76

2075 . . 10.59 1.39 d 11.98 1.80 .05 d 1.85 12.39 1.44 d 13.83

2080 . . 10.59 1.44 d 12.03 1.80 .05 d 1.85 12.39 1.49 d 13.88

2085 . . 10.59 1.47 d 12.06 1.80 .05 d 1.85 12.39 1.53 d 13.91

2090 . . 10.59 1.47 d 12.06 1.80 .05 d 1.85 12.39 1.53 d 13.91

2095 . . 10.59 1.47 d 12.06 1.80 .05 d 1.85 12.39 1.52 d 13.91

a Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

b Includes payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and

112-96, and other miscellaneous reimbursements.

c Values exclude interest income.

d Between 0 and 0.005 percent of taxable payroll.

Table IV.B2.—Components of Annual Income Rates, Calendar Years 1990-2095 (Cont.)

[As a percentage of taxable payroll]

Calendar

year

OASI DI OASDI

Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc Payroll

tax

Taxation

of

benefitsa

General

Fund

Reimbursementsb Totalc
Actuarial Estimates

64

2. Comparison of Workers to Beneficiaries

Under the intermediate assumptions, the Trustees project that the OASDI

cost rate will rise rapidly between 2021 and 2038, primarily because the

number of beneficiaries rises much more rapidly than the number of covered

workers as the baby-boom generation retires. The ratio of OASDI beneficiaries to workers is dominated by the OASI program because all workers eventually die or retire, but only a relatively small minority become disabled. The

trends described below are primarily due to demographic changes and thus

affect the DI program roughly 20 years earlier than the OASI and OASDI

programs. The baby-boom generation had lower fertility rates than their parents, and the Trustees expect that lower fertility rates will persist for all

future generations; therefore, the ratio of OASDI beneficiaries to workers

will rise rapidly and reach a permanently higher level after all of the babyboom generation has retired. Due to increasing longevity, the ratio of beneficiaries to workers will generally rise slowly thereafter. Table IV.B3 provides

a comparison of the numbers of covered workers and beneficiaries.

Table IV.B3.—Covered Workers and Beneficiaries, Calendar Years 1945-2095

Calendar year

Covered

workersa

(in thousands)

Beneficiariesb (in thousands) Covered

workers per

OASDI

beneficiary

OASDI

beneficiaries

per 100

covered

OASI DI OASDI workers c

Historical data:

1945 . . . . . . . . . 46,390 1,106 - 1,106 41.9 2

1950 . . . . . . . . . 48,280 2,930 - 2,930 16.5 6

1955 . . . . . . . . . 65,066 7,564 - 7,564 8.6 12

1960 . . . . . . . . . 72,371 13,740 522 14,262 5.1 20

1965 . . . . . . . . . 80,539 18,509 1,648 20,157 4.0 25

1970 . . . . . . . . . 92,963 22,618 2,568 25,186 3.7 27

1975 . . . . . . . . . 100,193 26,998 4,125 31,123 3.2 31

1980 . . . . . . . . . 112,651 30,384 4,734 35,117 3.2 31

1985 . . . . . . . . . 120,441 32,763 3,874 36,636 3.3 30

1990 . . . . . . . . . 133,008 35,255 4,204 39,459 3.4 30

1995 . . . . . . . . . 140,804 37,364 5,731 43,096 3.3 31

2000 . . . . . . . . . 154,713 38,556 6,606 45,162 3.4 29

2005 . . . . . . . . . 159,045 39,961 8,172 48,133 3.3 30

2010 . . . . . . . . . 157,079 43,440 9,958 53,398 2.9 34

2011 . . . . . . . . . 158,622 44,388 10,428 54,816 2.9 35

2012 . . . . . . . . . 160,783 45,377 10,799 56,176 2.9 35

2013 . . . . . . . . . 163,092 46,517 10,954 57,471 2.8 35

2014 . . . . . . . . . 165,484 47,603 10,971 58,574 2.8 35

2015 . . . . . . . . . 168,218 48,663 10,881 59,543 2.8 35

2016 . . . . . . . . . 170,738 49,811 10,728 60,539 2.8 35

2017 . . . . . . . . . 172,966 50,962 10,517 61,480 2.8 36

2018 . . . . . . . . . 175,440 52,168 10,296 62,464 2.8 36

2019 . . . . . . . . . 176,847 53,508 10,063 63,570 2.8 36

2020 . . . . . . . . . 174,836 54,843 9,844 64,686 2.7 37

Intermediate:

2021 . . . . . . . . . 175,723 55,738 9,563 65,301 2.7 37

2025 . . . . . . . . . 182,182 60,844 9,708 70,552 2.6 39

2030 . . . . . . . . . 185,390 67,410 9,890 77,300 2.4 42

2035 . . . . . . . . . 187,712 71,598 10,332 81,930 2.3 44

2040 . . . . . . . . . 189,142 73,804 10,948 84,752 2.2 45

2045 . . . . . . . . . 191,692 74,609 11,815 86,424 2.2 45
65

Long-Range Estimates

Notes: 

1. The number of beneficiaries does not include uninsured individuals who received benefits under

section 228 of the Social Security Act. The General Fund of the Treasury reimbursed the trust funds for the

costs of most of these individuals.

2. Historical covered worker and beneficiary data are subject to revision.

3. Components may not sum to totals because of rounding.

Intermediate (Cont.):

2050 . . . . . . . . . 195,083 76,008 12,422 88,430 2.2 45

2055 . . . . . . . . . 198,939 78,164 12,884 91,048 2.2 46

2060 . . . . . . . . . 202,962 81,261 13,009 94,270 2.2 46

2065 . . . . . . . . . 206,690 84,289 13,189 97,478 2.1 47

2070 . . . . . . . . . 210,214 87,370 13,397 100,767 2.1 48

2075 . . . . . . . . . 213,932 90,551 13,468 104,019 2.1 49

2080 . . . . . . . . . 218,321 92,721 13,633 106,354 2.1 49

2085 . . . . . . . . . 223,629 93,662 13,960 107,622 2.1 48

2090 . . . . . . . . . 229,522 93,913 14,710 108,623 2.1 47

2095 . . . . . . . . . 235,468 95,534 15,258 110,792 2.1 47

Low-cost:

2021 . . . . . . . . . 178,378 55,733 9,563 65,295 2.7 37

2025 . . . . . . . . . 185,357 60,763 9,243 70,006 2.6 38

2030 . . . . . . . . . 189,804 67,098 8,714 75,812 2.5 40

2035 . . . . . . . . . 193,191 70,687 8,624 79,310 2.4 41

2040 . . . . . . . . . 196,045 72,247 8,892 81,139 2.4 41

2045 . . . . . . . . . 201,194 72,372 9,449 81,820 2.5 41

2050 . . . . . . . . . 207,730 73,110 9,852 82,962 2.5 40

2055 . . . . . . . . . 214,918 74,693 10,183 84,876 2.5 39

2060 . . . . . . . . . 222,208 77,279 10,296 87,575 2.5 39

2065 . . . . . . . . . 229,275 79,812 10,493 90,305 2.5 39

2070 . . . . . . . . . 236,506 82,353 10,761 93,115 2.5 39

2075 . . . . . . . . . 244,559 84,900 10,985 95,885 2.6 39

2080 . . . . . . . . . 253,988 86,430 11,343 97,773 2.6 38

2085 . . . . . . . . . 264,902 86,883 11,911 98,794 2.7 37

2090 . . . . . . . . . 276,474 87,396 12,805 100,201 2.8 36

2095 . . . . . . . . . 287,718 90,253 13,454 103,707 2.8 36

High-cost:

2021 . . . . . . . . . 174,775 55,746 9,559 65,305 2.7 37

2025 . . . . . . . . . 175,998 60,967 10,200 71,168 2.5 40

2030 . . . . . . . . . 181,089 67,873 11,090 78,963 2.3 44

2035 . . . . . . . . . 182,554 72,806 12,118 84,925 2.1 47

2040 . . . . . . . . . 182,596 75,915 13,057 88,972 2.1 49

2045 . . . . . . . . . 182,252 77,776 14,197 91,973 2.0 50

2050 . . . . . . . . . 182,012 80,154 14,973 95,127 1.9 52

2055 . . . . . . . . . 181,983 83,126 15,525 98,651 1.8 54

2060 . . . . . . . . . 182,157 86,896 15,587 102,483 1.8 56

2065 . . . . . . . . . 181,883 90,547 15,640 106,187 1.7 58

2070 . . . . . . . . . 181,079 94,268 15,620 109,889 1.6 61

2075 . . . . . . . . . 179,837 98,111 15,311 113,422 1.6 63

2080 . . . . . . . . . 178,572 100,929 14,986 115,915 1.5 65

2085 . . . . . . . . . 177,715 102,284 14,661 116,944 1.5 66

2090 . . . . . . . . . 177,226 101,831 14,844 116,674 1.5 66

2095 . . . . . . . . . 177,119 101,277 15,032 116,309 1.5 66

a Workers who are paid at some time during the year for employment on which OASDI taxes are due.

b Beneficiaries with monthly benefits in current-payment status as of June 30.

c This column is the sum of OASI and DI beneficiaries. A small number of beneficiaries receive benefits

from both funds.

Table IV.B3.—Covered Workers and Beneficiaries, Calendar Years 1945-2095 (Cont.)

Calendar year

Covered

workersa

(in thousands)

Beneficiariesb (in thousands) Covered

workers per

OASDI

beneficiary

OASDI

beneficiaries

per 100

covered

OASI DI OASDI workers c
Actuarial Estimates

66

The effect of the demographic shift under the three alternatives on the

OASDI cost rates is clear when one considers the projected number of

OASDI beneficiaries per 100 covered workers. Compared to the 2020 level

of 37 beneficiaries per 100 covered workers, the Trustees project that this

ratio rises to 44 by 2038 under the intermediate assumptions because the

growth in beneficiaries greatly exceeds the growth in workers. By 2095, this

projected ratio rises further under the intermediate and high-cost assumptions, reaching 47 under the intermediate assumptions and 66 under the highcost assumptions. Under the low-cost assumptions, this ratio rises to 41 by

2038 and then generally declines, reaching 36 by 2095. Figure IV.B2 shows

beneficiaries per 100 covered workers.

For each alternative, the curve in figure IV.B2 is strikingly similar to the corresponding cost-rate curve in figure IV.B1. This similarity emphasizes the

extent to which the cost rate is determined by the age distribution of the population. The cost rate is essentially the product of the number of beneficiaries

and their average benefit, divided by the product of the number of covered

workers and their average taxable earnings. For this reason, the pattern of the

annual cost rates is similar to that of the annual ratios of beneficiaries to

workers.

 Figure IV.B2.—Number of OASDI Beneficiaries Per 100 Covered Workers

0

10

20

30

40

50

60

70

80

90

100

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

Calendar year

Historical Projected

III

II

I
67

Long-Range Estimates

Table IV.B3 also shows the number of covered workers per OASDI beneficiary, which was about 2.7 for 2020. Under the intermediate assumptions,

this ratio declines generally throughout the long-range period, reaching 2.3

for 2038 and 2.1 by 2095. Under the low-cost assumptions, this ratio

declines to 2.4 for 2038, then generally rises to 2.8 by 2095. Under the highcost assumptions, this ratio decreases steadily to 1.5 by 2095.

3. Trust Fund Ratios and Test of Long-Range Close Actuarial Balance

Trust fund ratios are critical indicators of the adequacy of the financial

resources of the Social Security program. The trust fund ratio for a year is the

amount of asset reserves in a fund at the beginning of a year expressed as a

percentage of the cost for the year. Under present law, the OASI and DI Trust

Funds do not have the authority to borrow other than in the form of advance

tax transfers, which are limited to expected taxes for the current calendar

month. If reserves held in either trust fund become depleted during a year,

and continuing revenue falls short of the cost of scheduled benefits, then full

scheduled benefits would not be payable on a timely basis. For this reason,

the trust fund ratio is a critical financial measure.

The trust fund ratio serves an additional important purpose in assessing the

actuarial status of the program. If the projected trust fund ratio is positive

throughout the period and is either level or increasing at the end of the

period, then projected adequacy for the long-range period is likely to continue for subsequent reports. Under these conditions, the program has

achieved sustainable solvency.

Table IV.B4 shows the Trustees’ projections of trust fund ratios by alternative, without regard to advance tax transfers that would be effected, for the

separate and combined OASI and DI Trust Funds. The table also shows the

years of trust fund reserve depletion and the percentage of scheduled benefits

that would be payable thereafter, by alternative.

Under the intermediate assumptions, the OASI trust fund ratio is projected to

decline from 280 percent at the beginning of 20211 until the trust fund

reserves become depleted in 2033 (one year earlier than projected in last

year’s report), at which time 76 percent of scheduled benefits would be payable. The DI trust fund ratio decreases from 66 percent at the beginning of

2021 to 62 percent in 2022. After 2022, the DI trust fund ratio increases for a

time, reflecting the period of recent and near-term expected low incidence

rates, reaching a peak of 116 percent by 2040. The ratio then declines until

 1 For presentation in this report, if the scheduled January 3, 2021 payment, actually paid on December 31,

2020, were a) counted as reducing trust fund reserves at the end of 2020 and b) excluded from the calculation of 2021 cost, then the OASI trust fund ratio shown for 2021 would be 283 percent.
Actuarial Estimates

68

the trust fund reserves become depleted in 2057 (8 years earlier than projected in last year’s report). At that time, 91 percent of scheduled benefits

would be payable. The differences in depletion years for both OASI and DI

from last year’s report are largely due to the revenue effects from the 2020

recession.

Under the intermediate assumptions, the trust fund ratio for the combined

OASI and DI Trust Funds declines from 253 percent at the beginning of

2021 until the combined fund reserves become depleted early in 2034 (one

year earlier than projected in last year’s report), at which time 78 percent of

scheduled benefits would be payable.

Under the low-cost assumptions, the trust fund ratio for the DI program

increases from 2022 throughout the remainder of the projection period, from

65 percent at the beginning of 2022 to the extremely high level of

2,981 percent for 2096. For the OASI program, the trust fund ratio declines

steadily, from 280 percent for 2021 until the reserves become depleted in

2040, at which time 88 percent of scheduled benefits would be payable. For

the combined OASDI program, the trust fund ratio declines from 253 percent

for 2021 until the combined fund reserves become depleted in 2061. However, the trust funds would have sufficient income by the end of 2092 to permit full payment of scheduled benefits thereafter and also to pay in arrears

the temporary shortfalls between 2061 and 2092. By 2093, trust fund

reserves become positive and the trust fund ratio increases thereafter, to a

ratio of 23 percent in 2096. Because the DI trust fund ratio is positive

throughout the projection period and increasing at the end of the period,

under the low-cost assumptions, only the DI program achieves sustainable

solvency.

Under the high-cost assumptions, the OASI trust fund ratio declines from

280 percent for 2021 until reserves become depleted in 2031, at which time

68 percent of scheduled benefits would still be payable. The DI trust fund

ratio declines from 66 percent for 2021 until the reserves become depleted in

2027. At that time, 87 percent of scheduled benefits would still be payable.

The combined OASI and DI trust fund ratio declines from 252 percent for

2021 until reserves become depleted in 2031, at which time 70 percent of

scheduled benefits would still be payable.

The Trustees project trust fund reserve depletion within the 75-year projection period with the exception of the DI Trust Fund under the low-cost

assumptions. It is therefore very likely that lawmakers will need to increase

income, reduce program costs, or both, in order to maintain solvency for the

trust funds. The stochastic projections discussed in appendix E suggest that

trust fund reserve depletion is highly probable before mid-century.
69

Long-Range Estimates

In the 2020 report, the Trustees projected that the combined trust fund

reserves would become depleted in 2031 and 2035 under the high-cost and

intermediate assumptions, respectively, and would become temporarily

depleted between 2079 and 2088 under the low-cost assumptions.

Note: The definition of trust fund ratio appears in the Glossary. The ratios shown for the combined trust

funds for years after reserve depletion of either the DI or OASI Trust Fund are hypothetical.

Since 2013, when the Trustees modified the test of long-range close actuarial

balance, the standard for each trust fund requires meeting two conditions:

Table IV.B4.—Trust Fund Ratios, Calendar Years 2021-2095a

[In percent]

a Benefit payments scheduled to be paid on January 3 are actually paid on December 31 as required by the

statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund ratios reflect the 12 months of benefits scheduled for payment each year.

Calendar

year

Intermediate Low-cost High-cost

OASI DI OASDI OASI DI OASDI OASI DI OASDI

2021 . . . . . . . . . . . . . 280 66 253 280 67 253 280 66 252

2022 . . . . . . . . . . . . . 255 62 231 256 65 232 255 59 230

2023 . . . . . . . . . . . . . 235 62 214 238 73 219 231 51 208

2024 . . . . . . . . . . . . . 214 63 196 220 83 205 206 41 185

2025 . . . . . . . . . . . . . 193 65 178 203 98 191 179 31 161

2026 . . . . . . . . . . . . . 171 68 159 186 115 179 153 20 136

2027 . . . . . . . . . . . . . 150 70 141 171 137 167 126 8 112

2028 . . . . . . . . . . . . . 129 73 122 155 162 156 99 b 86

2029 . . . . . . . . . . . . . 107 77 104 141 193 146 72 b 61

2030 . . . . . . . . . . . . . 85 81 85 126 227 136 43 b

b Trust fund reserves would be depleted at the beginning of this year.

34

2035 . . . . . . . . . . . . . b 105 b 61 429 94 bbb

2040 . . . . . . . . . . . . . b 116 b 4 637 63 bbb

2045 . . . . . . . . . . . . . b 102 b b 812 39 bbb

2050 . . . . . . . . . . . . . b 69 b b 987 23 bbb

2055 . . . . . . . . . . . . . b 26 b b 1,170 12 bbb

2060 . . . . . . . . . . . . . bbb b 1,394 2 bbb

2065 . . . . . . . . . . . . . bbb b 1,628 b bbb

2070 . . . . . . . . . . . . . bbb b 1,869 b bbb

2075 . . . . . . . . . . . . . bbb b 2,142 b bbb

2080 . . . . . . . . . . . . . bbb b 2,410 b bbb

2085 . . . . . . . . . . . . . bbb b 2,629 b bbb

2090 . . . . . . . . . . . . . bbb b 2,756 b bbb

2095 . . . . . . . . . . . . . bbb b 2,939 17 bbb

Trust fund reserves 

permanently 

become 

depleted in . . . . . . 2033 2057 2034 2040 c

c Trust fund reserves would not be depleted within the projection period.

d 2031 2027 2031

Payable benefits as 

percent of scheduled benefits:

At the time of 

permanent 

reserve

depletion . . . . . 76 91 78 88 c d 68 87 70

For 2095 . . . . . 72 92 74 100 c d

d Trust fund reserves would be depleted for a temporary period, and return to positive levels before the end

of the period.

46 64 48
Actuarial Estimates

70

(1) the test of short-range financial adequacy is satisfied; and (2) the trust

fund ratios stay above zero throughout the 75-year projection period, allowing scheduled benefits to be paid in a timely manner throughout the period.

Both the long-range test and the short-range test are applied based on the

intermediate set of assumptions. As discussed in section IV.A, the DI Trust

Fund fails the test of short-range financial adequacy because the trust fund

ratio does not reach 100 percent during the 10-year period. The OASI and

combined OASI and DI Trust Funds fail the test of short-range financial adequacy because the trust fund ratios drop below 100 percent by the end of the

10-year period. Under the intermediate assumptions, the OASI Trust Fund

reserves become depleted in 2033, DI Trust Fund reserves become depleted

in 2057, and the combined OASI and DI Trust Fund reserves become

depleted in 2034. Therefore, the OASI, DI, and combined OASI and DI

Trust Funds all fail the test of long-range close actuarial balance.

Figure IV.B3 illustrates the trust fund ratios for the separate OASI and DI

Trust Funds for each of the alternative sets of assumptions. DI Trust Fund

status is more uncertain than OASI Trust Fund status because there is a high

degree of uncertainty associated with future disability prevalence. A graph of

the trust fund ratios for the combined trust funds appears in figure II.D6.

 Figure IV.B3.—Long-Range OASI and DI Trust Fund Ratios

[Asset reserves as a percentage of annual cost]

0%

200%

400%

600%

800%

1,000%

1990 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090

Calendar year

OASI

DI

Historical Projected

III

II I

I

II

III
71

Long-Range Estimates

4. Summarized Income Rates, Summarized Cost Rates, and Actuarial

Balances

Summarized values for the full 75-year period are useful in analyzing the

program’s long-range financial adequacy over the period as a whole, both

under present law and under proposed modifications to the law. All annual

amounts included in a summarized value are present-value discounted to the

valuation date. It is important to note that the actuarial balance indicates the

solvency status of the fund only for the very end of the period.

Table IV.B5 presents summarized income rates, summarized cost rates, and

actuarial balances for 25-year, 50-year, and 75-year valuation periods. Summarized income rates are the sum of the present value of non-interest income

for a period (which includes scheduled payroll taxes, the projected income

from the taxation of scheduled benefits, and reimbursements from the General Fund of the Treasury) and the starting trust fund asset reserves,

expressed as a percentage of the present value of taxable payroll over the

period. Under current law, the total OASDI payroll tax rate will remain at

12.4 percent in the future. In contrast, the Trustees expect income from taxation of benefits, expressed as a percentage of taxable payroll, to increase in

most years of the long-range period for the reasons discussed on page 154.

Summarized cost rates are the sum of the present value of cost for a period

(which includes scheduled benefits, administrative expenses, net interchange

with the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries) and the present value of the cost of

reaching a target trust fund of 100 percent of annual cost at the end of the

period, expressed as a percentage of the present value of taxable payroll over

the period.

The actuarial balance for a valuation period is equal to the difference

between the summarized income rate and the summarized cost rate for the

period. An actuarial balance of zero for any period indicates that cost for the

period could be met for the period as a whole (but not necessarily at all

points within the period), with a remaining trust fund reserve at the end of

the period equal to 100 percent of the following year’s cost. A negative actuarial balance for a period indicates that the present value of income to the

program plus the existing trust fund is less than the present value of the cost

of the program plus the cost of reaching a target trust fund reserve of

one year’s cost by the end of the period. Generally, a trust fund is deemed to

be adequately financed for a period if the actuarial balance is zero or positive, meaning that the reserves at the end of the period are at least equal to
Actuarial Estimates

72

annual cost. Note that solvency is possible with a small negative actuarial

balance where reserves are still positive.1

Table IV.B5 contains summarized rates for the intermediate, low-cost, and

high-cost assumptions. The low-cost and high-cost assumptions define a

wide range of possibilities. Financial outcomes as good as the low-cost scenario or as bad as the high-cost scenario are unlikely to occur.

For the 25-year valuation period, the OASDI program has an actuarial balance of -0.37 percent of taxable payroll under the low-cost assumptions,

-2.37 percent under the intermediate assumptions, and -4.66 percent under

the high-cost assumptions. These balances indicate that the program is not

adequately financed for the 25-year valuation period under any of these three

sets of assumptions.

For the 50-year valuation period, the OASDI program has actuarial balances

of -0.31 percent under the low-cost assumptions, -3.14 percent under the

intermediate assumptions, and -6.79 percent under the high-cost assumptions. These actuarial balances mean that the OASDI program is not adequately financed for the 50-year valuation period under any of these three

sets of assumptions.

For the entire 75-year valuation period, the combined OASDI program has

actuarial balances of -0.12 percent of taxable payroll under the low-cost

assumptions, -3.54 percent under the intermediate assumptions, and

-8.25 percent under the high-cost assumptions. These balances indicate that

the combined OASDI program is not adequately financed for the 75-year

valuation period under any of these three sets of assumptions.

Assuming the intermediate assumptions accurately capture future demographic and economic trends, solvency for the program over the next

75 years could be restored using a variety of approaches. For example, revenue could be increased in a manner equivalent to an immediate and permanent increase in the combined Social Security payroll tax rate from

12.40 percent to 15.76 percent (a relative increase of 27.1 percent),2 cost

could be reduced in a manner equivalent to an immediate and permanent

 1 A program is solvent over any period for which the trust fund maintains a positive level of asset reserves.

In contrast, the actuarial balance for a period includes the cost of having a target fund equal to 100 percent of

the following year’s cost at the end of the period. Therefore, if a program ends the period with reserves that

are positive but not sufficient to cover the following year’s costs, it will be solvent at the end of the period

and yet still have a small negative actuarial balance for that period.

 2 The 3.36 percentage point increase in the payroll tax rate required to achieve 75-year solvency differs

somewhat from the 3.54 percent actuarial deficit. This is primarily because the rate increase required to

achieve 75-year solvency reflects a zero trust fund reserve at the end of the period, whereas the 3.54 percent

actuarial deficit incorporates an ending trust fund reserve equal to one year’s cost. While such an increase in

the payroll tax rate would cause some behavioral changes in earnings and ensuing changes in benefit levels,

such changes are not included in these calculations because they are assumed to have roughly offsetting

effects on OASDI actuarial status over the 75-year long-range period as a whole.
73

Long-Range Estimates

reduction in scheduled benefits of about 21 percent, or some combination of

approaches could be used.

However, eliminating the actuarial deficit for the next 75-year valuation

period requires raising payroll taxes or lowering benefits by more than is

required just to achieve solvency, because the actuarial deficit includes the

cost of attaining a target trust fund equal to 100 percent of annual program

cost by the end of the period. The actuarial deficit could be eliminated for the

75-year period by increasing revenue in a manner equivalent to an immediate

and permanent increase in the combined payroll tax from 12.40 percent to

15.94 percent (a relative increase of 28.5 percent),1 reducing cost in a manner equivalent to an immediate reduction in scheduled benefits of about

22 percent, or some combination of approaches could be used.

Under the intermediate assumptions, the OASDI program has large annual

deficits toward the end of the long-range period that reach 4.34 percent of

payroll for 2095 (see table IV.B1). These large deficits indicate that annual

cost continues to exceed non-interest income after 2095, so continued adequate financing would require larger changes than those needed to maintain

solvency for the 75-year period. Over the period extending through the

infinite horizon, the actuarial deficit is 4.6 percent of payroll under the intermediate assumptions.

 1 The calculation of the payroll tax rate increase required to eliminate the actuarial deficit also does not

include the effects of behavioral changes, because they are assumed to have roughly offsetting effects.

Table IV.B5.—Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2021-2095

[As a percentage of taxable payroll]

Valuation period

Summarized income rate Summarized cost rate

Actuarial

balance

Non-interest

income

Beginning

asset reservesa Total Costa

Ending

target

funda Total

OASI:

Intermediate:

2021-45. . . . . 11.34 1.23 12.57 14.35 0.59 14.94 -2.37

2021-70. . . . . 11.42 .66 12.07 14.87 .28 15.15 -3.07

2021-95. . . . . 11.46 .48 11.93 15.23 .16 15.39 -3.46

Low-cost:

2021-45. . . . . 11.25 1.05 12.30 12.56 .51 13.08 -.78

2021-70. . . . . 11.28 .53 11.81 12.34 .23 12.57 -.76

2021-95. . . . . 11.28 .37 11.65 12.10 .14 12.24 -.59

High-cost:

2021-45. . . . . 11.45 1.43 12.88 16.37 .68 17.05 -4.17

2021-70. . . . . 11.59 .81 12.41 18.15 .34 18.49 -6.08

2021-95. . . . . 11.70 .62 12.32 19.60 .20 19.80 -7.48
Actuarial Estimates

74

Note: Components may not sum to totals because of rounding.

5. Open-Group Unfunded Obligation

Consistent with practice since 1965, this report focuses on a 75-year opengroup valuation to evaluate the long-run financial status of the OASDI program. The open-group valuation includes non-interest income and cost for

past, current, and future participants through the year 2095. The open-group

unfunded obligation measures the adequacy of financing over the period as a

whole for a program financed on a pay-as-you-go basis. On this basis, payroll taxes and scheduled benefits for all participants are included through

2095.

The open-group unfunded obligation increased from $16.8 trillion shown in

last year's report to $19.8 trillion in this report. If there had been no changes

in starting values, assumptions, laws, or methods for this report, then the

DI:

Intermediate:

2021-45. . . . . 1.82 0.04 1.86 1.79 0.08 1.87 b

2021-70. . . . . 1.83 .02 1.85 1.89 .03 1.92 -.07

2021-95. . . . . 1.83 .02 1.85 1.90 .02 1.92 -.08

Low-cost:

2021-45. . . . . 1.81 .04 1.85 1.39 .06 1.44 .41

2021-70. . . . . 1.82 .02 1.84 1.37 .03 1.39 .45

2021-95. . . . . 1.82 .01 1.83 1.34 .02 1.36 .47

High-cost:

2021-45. . . . . 1.83 .05 1.88 2.27 .10 2.37 -.49

2021-70. . . . . 1.84 .03 1.86 2.54 .04 2.58 -.71

2021-95. . . . . 1.84 .02 1.86 2.61 .02 2.63 -.77

OASDI:

Intermediate:

2021-45. . . . . 13.16 1.27 14.43 16.14 .66 16.80 -2.37

2021-70. . . . . 13.24 .68 13.92 16.76 .31 17.07 -3.14

2021-95. . . . . 13.29 .49 13.78 17.13 .18 17.31 -3.54

Low-cost:

2021-45. . . . . 13.06 1.09 14.15 13.95 .57 14.52 -.37

2021-70. . . . . 13.09 .55 13.65 13.70 .26 13.96 -.31

2021-95. . . . . 13.10 .38 13.48 13.44 .15 13.60 -.12

High-cost:

2021-45. . . . . 13.27 1.48 14.76 18.64 .78 19.42 -4.66

2021-70. . . . . 13.43 .84 14.27 20.68 .38 21.07 -6.79

2021-95. . . . . 13.54 .64 14.18 22.20 .22 22.43 -8.25

a Benefit payments scheduled to be paid on January 3 are actually paid on December 31 as required by the

statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for

payment each year.

b Between -0.005 and 0 percent of taxable payroll.

Table IV.B5.—Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2021-2095 (Cont.)

[As a percentage of taxable payroll]

Valuation period

Summarized income rate Summarized cost rate

Actuarial

balance

Non-interest

income

Beginning

asset reservesa Total Costa

Ending

target

funda Total
75

Long-Range Estimates

open-group unfunded obligation would have increased to $17.5 trillion

solely due to the change in the valuation period. This expected increase in

the unfunded obligation occurs because: (1) the unfunded obligation is now

discounted to January 1, 2021, rather than to January 1, 2020, which tends to

increase the unfunded obligation by the annual nominal interest rate; and

(2) the unfunded obligation now includes an additional year (2095). However, changes in the law, assumptions, methods, and starting values resulted

in a net $2.3 trillion increase in the unfunded obligation. 

The 75-year unfunded obligation is equivalent to 3.35 percent of OASDI taxable payroll and 1.2 percent of GDP for 2021-95.1 These percentages were

3.03 and 1.0, respectively, for last year’s report. The 75-year unfunded obligation as a percentage of taxable payroll is less than the actuarial deficit,

because the unfunded obligation excludes the cost of having an ending target

trust fund value.

The actuarial deficit was 3.21 percent of payroll in last year’s report, and was

expected to increase to a deficit of 3.27 percent of payroll solely due to the

change in the valuation period. Changes in the law, assumptions, methods,

and starting values combined to account for an additional 0.27 percentage

point increase (worsening) in the actuarial deficit to 3.54 percent of payroll.

The actuarial deficit is 1.2 percent of GDP in this year’s report, increased

from 1.1 percent in last year’s report.

As mentioned above, the open-group unfunded obligation expressed in dollars, as well as the actuarial deficit, increased (worsened) more than would

be expected from changing the valuation period alone. This increase

occurred for a variety of reasons described in the next section, primarily

reductions in near-term interest rates and updates to methods and programmatic data.

Table IV.B6 presents the components and the calculation of the long-range

(75-year) actuarial balance under the intermediate assumptions. The present

value of future cost less future non-interest income over the long-range

period, minus the amount of trust fund asset reserves at the beginning of the

projection period, is $19.8 trillion for the OASDI program. This amount is

the 75-year “open-group unfunded obligation” (see row H). The actuarial

deficit (which is the negative of the actuarial balance) combines this

unfunded obligation with the present value of the ending target trust fund and

expresses the total as a percentage of the present value of the taxable payroll

for the period. The present value of future non-interest income minus cost,

 1 The present value of taxable payroll for 2021-95 is $591.5 trillion. The present value of GDP for 2021-95

is $1,698.0 trillion. In last year’s report, the present value of taxable payroll for 2020-94 was $554.6 trillion

and the present value of GDP was $1,614.2 trillion.
Actuarial Estimates

76

plus starting trust fund reserves, minus the present value of the ending target

trust fund, is -$20.9 trillion for the OASDI program. 

Note: Components may not sum to totals because of rounding.

Consideration of summary measures alone (such as the actuarial balance and

open-group unfunded obligation) for a 75-year period can lead to incorrect

perceptions and to policy prescriptions that do not achieve sustainable solvency. These concerns can be addressed by considering the trend in trust

fund ratios toward the end of the period. (See the discussion of “sustainable

solvency” beginning on page 53.)

Another measure of trust fund finances, discussed in appendix F, is the

infinite horizon unfunded obligation, which takes account of all annual balances, even those after 75 years. The extension of the time period past

75 years assumes that the current-law OASDI program and the demographic

and economic trends used for the 75-year projection continue indefinitely.

This infinite horizon unfunded obligation is estimated to be 4.6 percent of

taxable payroll or 1.4 percent of GDP. These percentages were 4.6 and 1.4,

respectively, for last year’s report. Of course, the degree of uncertainty associated with estimates increases substantially for years further in the future.

6. Reasons for Change in Actuarial Balance From Last Report

Table IV.B7 shows the effects of changes on the long-range actuarial balance

under the intermediate assumptions, by category, between last year’s report

and this report.

Table IV.B6.—Components of 75-Year Actuarial Balance and Unfunded Obligation

Under Intermediate Assumptions

Item OASI DI OASDI

Present value as of January 1, 2021 (in billions):

A. Payroll tax revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $62,602 $10,631 $73,233

B. Reimbursements from general revenue. . . . . . . . . . . . . . . . . . . a

a Less than $0.5 billion.

a a

C. Taxation of benefits revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,157 190 5,347

D. Non-interest income (A + B + C) . . . . . . . . . . . . . . . . . . . . . . . 67,759 10,821 78,580

E. Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,065 11,256 101,321

F. Cost minus non-interest income (E - D) . . . . . . . . . . . . . . . . . . 22,306 435 22,742

G. Trust fund asset reserves at start of period . . . . . . . . . . . . . . . . 2,812 97 2,908

H. Open-group unfunded obligation (F - G) . . . . . . . . . . . . . . . . . 19,495 339 19,833

I. Ending target trust fundb . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 

b The calculation of the actuarial balance includes the cost of accumulating a target trust fund reserve equal

to 100 percent of annual cost at the end of the period.

964 123 1,087

J. Income minus cost, plus reserves at start of period, minus

ending target trust fund (D - E + G - I = - H - I) . . . . . . . . . . . . -20,459 -462 -20,921

K. Taxable payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 591,491 591,491 591,491

Percent of taxable payroll:

Actuarial balance (100 × J ÷ K) . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54
77

Long-Range Estimates

Note: Components may not sum to totals because of rounding.

If the law, data, assumptions, and methods had all remained unchanged from

last year’s Trustees Report, the long-range OASDI actuarial balance would

have decreased (become more negative) by 0.06 percent of taxable payroll

solely due to the change in the valuation period. However, as described

below, projections in this report also reflect new data and changes in law,

assumptions, and methods. These changes, including the change in the valuation period, combine to decrease (worsen) the long-range OASDI actuarial

balance by 0.32 percentage point, from -3.21 percent of taxable payroll in

last year’s report to -3.54 percent in this report.

Legislation/Regulation

Changes in law, regulations, and policy result in a decrease in the long-range

OASDI actuarial balance of 0.01 percent of payroll.

Since the last report, there has been one change in policy that is expected to

have a significant financial effect on the long-range actuarial balance. The

estimates presented in last year’s report reflected the assumption that the

Deferred Action for Childhood Arrivals (DACA) policy would be phased

out, consistent with the Department of Homeland Security’s September 5,

2017 rescission of the 2012 DACA policy directive. This year’s report incorporates the effects of two developments during 2020 and early 2021. First,

pursuant to a United States District Court order, the US Citizenship and

Table IV.B7.—Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions

[As a percentage of taxable payroll]

Item OASI DI OASDI

Shown in last year’s report:

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.00 1.85 13.85

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.14 1.92 17.06

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.14 -.07 -3.21

Changes in actuarial balance due to changes in:

Legislation / Regulation . . . . . . . . . . . . . . . . . . . . . . . -.01 .00 -.01

Valuation perioda . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a The change in the 75-year valuation period from last year’s report to this report means that the 75-year

actuarial balance now includes the relatively large negative annual balance for 2095. This change in the valuation period results in a larger long-range actuarial deficit. The actuarial deficit includes the trust fund

reserve at the beginning of the projection period.

-.05 -.01 -.06

Demographic data and assumptions. . . . . . . . . . . . . . .06 .01 .07

Economic data and assumptions. . . . . . . . . . . . . . . . . .00 .00 .00

Disability data and assumptions. . . . . . . . . . . . . . . . . .00 .00 .00

Methods and programmatic data . . . . . . . . . . . . . . . . -.32 -.01 -.33

Total change in actuarial balance . . . . . . . . . . . . . . . . . . -.32 -.01 -.32

Shown in this report:

Actuarial balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -.08 -3.54

Income rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.93 1.85 13.78

Cost rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.39 1.92 17.31
Actuarial Estimates

78

Immigration Services resumed accepting first-time applications and renewal

requests for participation in the DACA program, effective December 7,

2020. Second, on January 20, 2021, President Biden issued a memorandum

directing the Secretary of Homeland Security to take appropriate action, in

consultation with the Attorney General, to preserve and fortify DACA consistent with applicable law. This change to preserve DACA extends indefinitely the ability of those qualifying to remain in the country and work

lawfully. The effect over the next 75 years is to increase future benefits

slightly more than future payroll tax revenue because: (1) a significant portion of the payroll taxes from this group has already been credited to the trust

funds, while the vast majority of the OASDI benefits they will earn will be in

the future, dependent on their preserving DACA status; and (2) currently

scheduled payroll tax rates are not sufficient to fully finance future benefits

for this group and in general. This change in policy is thus estimated to

decrease the long-range actuarial balance by 0.01 percent of taxable payroll.

Valuation Period

As mentioned above, changing the 75-year valuation period from 2020

through 2094 for last year’s report to 2021 through 2095 for this report

decreases the projected long-range OASDI actuarial balance by 0.06 percent

of taxable payroll. This decrease is mainly the result of including the relatively large negative annual balance for 2095 in this year’s 75-year projection period. Note that the actuarial balance calculation includes trust fund

reserves at the beginning of the projection period. These reserves reflect the

program’s net financial flows for all past years, including 2020, up to the

start of the valuation period.

Demographic Data and Assumptions

New demographic data and changes in demographic assumptions combine to

increase (improve) the long-range OASDI actuarial balance by 0.07 percent

of taxable payroll.

Two ultimate demographic assumptions were changed for this year’s report.

First, future birth rates are now projected using a cohort-based model. (This

change in methodology is described in detail and quantified separately in the

“Methods and Programmatic Data” section below.) With this new cohort

approach, the Trustees increased the ultimate total fertility rate from 1.95 to

2.00. This ultimate rate will not be realized on a period basis until 2056,

which is about 25 years later than the ultimate rate was reached in last year’s

report. This change in the ultimate fertility assumption, after making the

change in method, increases the actuarial balance by 0.09 percent of taxable
79

Long-Range Estimates

payroll. (As indicated later, this effect due to the change in assumption is

fully offset by the effect of the change in method.)

Second, this year’s report adds an additional cause of death category by separating dementia out from the all-other-causes category, due to its very different historical trend and prospects for future improvement. At the same time,

ultimate rates of mortality improvement have been updated for cardiovascular disease for all age groups and for the all-other-causes category at ages 85

and over. These changes to the ultimate mortality assumptions increase the

actuarial balance by 0.04 percent of taxable payroll.

Updates to near-term mortality assumptions to reflect the effects of the

COVID-19 pandemic increase the long-range actuarial balance by 0.04 percent of taxable payroll. Death rates were increased significantly for 2020 and

2021, and to a lesser extent for 2022 and 2023, to account for the elevated

deaths during the pandemic period. Projected death rates for years after 2023

are unchanged from the levels that would have been projected in the absence

of the pandemic.

Several demographic data updates also resulted in significant changes in the

long-range actuarial balance. First, birth data through the third quarter of

2020 indicate somewhat lower fertility rates than were assumed in last year’s

report for 2020. These updated data result in lower birth rates during the

transition period to the ultimate level, decreasing the actuarial balance by

0.04 percent of taxable payroll. Second, new mortality data (final 2018 and

2019 data for ages under 65 from NCHS; final 2017 and preliminary 2018

and 2019 data for ages 65 and older from Medicare experience) were incorporated into the projection. Without considering the other changes to death

rates, these new data alone result in slightly lower death rates for all future

years, decreasing the actuarial balance by 0.01 percent of taxable payroll.

Third, updates to lawful permanent resident (LPR) immigration data

decrease the actuarial balance by 0.01 percent of taxable payroll. Finally,

updates to historical population data, other-than-LPR immigration data, marriage and divorce data, and other minor data updates combine to decrease the

actuarial balance by 0.03 percent of taxable payroll.

Economic Data and Assumptions

New economic data and changes in economic assumptions, in combination,

have a negligible net effect on the long-range OASDI actuarial balance.

Two ultimate economic assumptions were changed for this year’s report.

First, the ultimate age-sex-adjusted unemployment rate is reduced from

5.0 percent for last year’s report to 4.5 percent for this year’s report. At the

same time, the labor force projection model was updated to incorporate data
Actuarial Estimates

80

from the latest complete economic cycle (2007-19), and to reflect changes in

the relationships among factors affecting labor force participation and

employment. (This change in methodology is described in more detail and

quantified separately in the “Methods and Programmatic Data” section

below.) As mentioned in last year’s report, the Trustees believe that a structural shift has occurred in relationships between employment, unemployment, and the labor force, and thus future long-term unemployment rates and

labor force participation rates will both remain somewhat below long-term

past averages. This change to the ultimate unemployment rate assumption

alone increases the actuarial balance by 0.07 percent of taxable payroll.

Second, the average real wage differential over the last 65 years of the projection period for this year’s report is 1.15 percentage points per year,

slightly higher than the 1.14 value in last year’s report. The real wage differential assumptions for the first ten years of the projection period were also

increased. These higher long-term and near-term real wage differential

assumptions are based primarily on updated projections by the Centers for

Medicare and Medicaid Services (CMS) of slower assumed growth in

employer-sponsored group health insurance premiums. Because these premiums are not subject to the payroll tax, slower growth in these premiums

means that a larger share of employee compensation will be in the form of

wages that are subject to the payroll tax. These changes to the real wage differential assumptions increase the long-range actuarial balance by

0.04 percent of taxable payroll.

Although the ultimate real interest rate assumption remains at 2.3 percent for

this year’s report, interest rates over the next ten years have been adjusted

downward significantly. Real interest rates are now assumed to be negative

for calendar years 2021 through 2024, with a gradual rise to the ultimate real

interest rate after the economy has fully recovered from the recession. This

change to the near-term real interest rate assumptions decreases the actuarial

balance by 0.03 percent of payroll.

Other changes to historical data and near-term economic assumptions combine for a net decrease in the actuarial balance of 0.09 percent of taxable payroll. The pandemic and ensuing recession have had dramatic effects on

economic experience during 2020 and early 2021, and, in turn, the expected

path of the economy over the next few years. In particular, the level of potential GDP is assumed to be roughly 1 percent lower than the level in last

year’s report beginning with the second quarter of 2020. This shift to a lower

level of potential GDP reflects the expectation of a permanent level shift due

to the effects of the recession on total economy labor productivity and the

size of the population at ages 16 and over.
81

Long-Range Estimates

Disability Data and Assumptions

New disability data and changes in near-term disability assumptions have a

negligible net effect on the long-range OASDI actuarial balance. 

Methods and Programmatic Data

The projections in this report also reflect several methodological improvements and updates based on new program-specific data. These methodological changes, programmatic data updates, and interactions combine to

decrease the long-range OASDI actuarial balance by 0.33 percent of taxable

payroll. Descriptions of six significant methodological changes and programmatic data updates follow.

First, as mentioned earlier under the “Demographic Data and Assumptions”

section, future birth rates are now projected using a cohort-based approach,

rather than the period-based approach used in the 2020 and prior reports. The

cohort method provides a direct reflection of the shift in childbearing to older

ages that has been observed since the end of the baby-boom period in 1965,

and results in a much more extended transition to ultimate birth rates from

the current low levels. This methodology improvement decreases the actuarial balance by 0.10 percent of taxable payroll. As mentioned earlier, the net

effect of this change in method and the change in the assumed ultimate total

fertility rate is very small.

The second significant update is to the model used to project the civilian

labor force by age, sex, marital status, and presence of children. As mentioned earlier under the “Economic Data and Assumptions” section, the

model was updated to incorporate data from the latest complete economic

cycle, thereby putting more weight on the recent relationships among the

various factors affecting labor force participation. Overall, improvements to

the labor force model decrease the actuarial balance by 0.04 percent of taxable payroll.

The third significant set of changes is related to the sample used for the longrange model for projecting average benefit levels of retired-worker and disabled-worker beneficiaries who become newly entitled for benefits. This

model uses a large sample of 10 percent of all newly entitled retired-worker

beneficiaries in a recent year. The sample used in last year’s report was for

worker beneficiaries newly entitled in 2016, while this year’s report uses the

results from worker beneficiaries newly entitled in 2017. This update to the

sample data decreases the actuarial balance by 0.02 percent of payroll. Data

updates and updates to the methodology for projecting average benefit levels

combine to decrease the actuarial balance by an additional 0.07 percent of

payroll. A primary reason for this decrease in actuarial balance is a method
Actuarial Estimates

82

change to improve the assignment of projected earnings by age of initial entitlement, better reflecting the change between historical and projected retired

worker distributions by entitlement age.

Fourth, recent data and estimates provided by the Office of Tax Analysis

(OTA) at the Department of the Treasury indicate lower near-term and ultimate levels of revenue from taxation of OASDI benefits than projected in

last year’s report. The decrease in projected ratios of income tax on benefits

to benefit amounts decreases in the actuarial balance by 0.04 percent of taxable payroll.

Fifth, methodology changes to improve projections of retroactive benefits

and effective interest rates combine to decrease the actuarial balance by 0.03

percent of payroll. The projections for retroactive benefits for retired workers

now better capture the different rules for workers who become newly entitled

prior to normal retirement age (NRA) versus those who become entitled at or

after normal retirement age. In addition, the projections for retroactive benefits for all categories of beneficiaries were improved to incorporate additional years of historical data for determining retroactive amounts.

Projections of effective interest rates were improved to better reflect the

expected detailed operations of the separate trust funds in years after the

short-range period and prior to trust fund depletion, and to more appropriately limit the rates used in years in which one trust fund becomes depleted

and the other does not.

The sixth significant change is updating two sets of benefit adjustment factors based on new programmatic data: the post-entitlement adjustment factors and the Windfall Elimination Provision (WEP) reduction factors. Postentitlement factors are used to account for changes in benefit levels, primarily due to differential mortality by benefit level and earnings after benefit

entitlement. WEP reduction factors are used to adjust benefits for individuals

who receive a pension based on specified categories of employment not covered by OASDI. These data updates combine to decrease the actuarial balance by 0.01 percent of payroll.

In addition to these six significant methodological changes and programmatic data updates, changes in starting levels and projected levels of OASI

and DI beneficiaries and benefit amounts over the first 10 years of the projection period, updating other programmatic data, other small methodological improvements, and interactions among the various method changes and

updates to programmatic experience combine to decrease the long-range

actuarial balance by 0.03 percent of taxable payroll.
83

Long-Range Estimates

Figure IV.B4 compares the annual balances for this report and the prior

year’s report for the combined OASDI program over the long-range (75-

year) projection period. The figure illustrates the annual effects of the

changes described earlier in this section.

The annual balances in this year’s report are lower (more negative) in years

from 2021 through 2090, and then higher for 2091 through 2095. The differences in annual balances fluctuate somewhat in the early 2020s during the

recovery from the recession, are small in the late 2020s, generally grow until

the late 2050s, and then decline thereafter and change sign in 2090. For this

year’s report, the annual balance improves from 2021 to 2022, due to the

assumed path of recovery from the COVID-19 pandemic and the ensuing

recession, which were not reflected in last year’s report. The trends later in

the projection are mainly due to the changes made this year to fertility methodology and assumptions. In particular, the new cohort-based projection

method extends the transition from current low birth rates to the higher ultimate total fertility rate of 2.00 children per woman, such that projected total

fertility rates are lower in this report through calendar year 2036.

For 2095, the projected annual deficit is 4.34 percent of taxable payroll in

this report, compared to 4.55 percent in last year's report. For the full 75-year

projection period, the annual balances average 0.23 percentage point lower

in this year’s report.

 Figure IV.B4.—OASDI Annual Balances: 2020 and 2021 Trustees Reports

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

-6%

-4%

-2%

0%

2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar year

2020 Report

2021 Report
Assumptions and Methods

84

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

The future income and cost of the OASDI program will depend on many

demographic, economic, and program-specific factors. Trust fund income

will depend on how these factors affect the size and composition of the

working population as well as the level and distribution of earnings. Similarly, program cost will depend on how these factors affect the size and composition of the beneficiary population as well as the general level of benefits.

The Trustees make basic assumptions for several of these factors based on

analysis of historical trends, historical conditions, and expected future conditions. These factors include fertility, mortality, immigration, marriage,

divorce, productivity, inflation, average earnings, unemployment, real interest rates, and disability incidence and termination. Other factors depend on

these basic assumptions. These other, often interdependent, factors include

total population, life expectancy, labor force participation, gross domestic

product, and program-specific factors. Each year the Trustees reexamine

these assumptions and methods in light of new information and make appropriate revisions. The assumptions for this report were selected by the middle

of May 2021.

Future levels of these factors and their interrelationships are inherently

uncertain. To address these uncertainties, this report uses three sets of

assumptions, designated as intermediate (alternative II), low-cost

(alternative I), and high-cost (alternative III). The intermediate set represents

the Trustees’ best estimate of the future course of the population and the

economy. With regard to the net effect on the actuarial status of the OASDI

program, the low-cost set is more optimistic and the high-cost set is more

pessimistic. The low-cost and high-cost sets of assumptions reflect significant potential changes in the interrelationships among factors, as well as

changes in the values for individual factors. 

While it is unlikely that all of the factors and interactions will differ in the

specified directions from the intermediate values, many combinations of

individual differences in the factors could have a similar overall effect. Outcomes with overall long-range cost as low as the low-cost scenario or as high

as the high-cost scenario are very unlikely. This report also includes a section

on sensitivity analysis, where factors are changed one at a time (see

appendix D), and a section on stochastic projections, which provides a probability distribution of possible future outcomes, with most of the key factors

being varied around the intermediate alternative (see appendix E).
85

Demographic Assumptions and Methods

Readers should interpret with care the estimates based on the three sets of

alternative assumptions. These estimates are not specific predictions of the

future financial status of the OASDI program. Rather, they provide a reasonable range of future income and cost.

All of the key demographic, economic, and program-specific assumptions

reach their long-range ultimate values within the next 25 years. For extrapolations beyond the 75-year long-range period, the ultimate levels or trends

reached by the end of the 75-year period remain unchanged. The assumed

ultimate values represent average annual experience or growth rates. Actual

future values will exhibit fluctuations or cyclical patterns, as in the past.

At this time, there is no consensus on what the lasting effects of the COVID19 pandemic on long-term experience might be, if any. Given the unprecedented level of uncertainty, the Trustees have assumed that the pandemic will

have no net effect on the individual long-range ultimate assumptions. However, pandemic effects are reflected in the short-range (first 10-year) period,

as described in the remainder of this chapter.

The following sections briefly discuss the various assumptions and methods

used in making the estimates of trust fund actuarial status, which are the

focus of this report.1 There are, of course, many interrelationships among

these factors that are important but are beyond the scope of this discussion. 

A. DEMOGRAPHIC ASSUMPTIONS AND METHODS

This section of the report provides a brief overview of the demographic historical data and the assumptions used for the projections.

1. Fertility Assumptions

Birth rates by single year of age, for girls and women aged 14 to 49,2 are the

basis for the fertility assumptions. These rates apply to the total number of

women, across all marital statuses, in the midyear population at each age.

Table V.A1 displays the historical and projected total fertility rates.3

 1 Actuarial Studies published by the Office of the Chief Actuary, Social Security Administration, contain

further details about the assumptions, methods, and actuarial estimates. A complete list of available studies

may be found at www.ssa.gov/OACT/NOTES/actstud.html. This entire report, along with supplemental

year-by-year tables and additional documentation on assumptions and methods, may be found at

www.ssa.gov/OACT/TR/2021/.

 2 Birth rates at age 14 include births to girls aged 14 and under, and birth rates at age 49 include births to

women aged 49 and over.

 3 The total fertility rate may be interpreted as the average number of children that would be born to a woman

if she were to experience, at each age of her life, the birth rate observed in, or assumed for, a specified year,

and if she were to survive the entire childbearing period. A rate of about 2.1 would ultimately result in a

nearly constant population if immigration and emigration were both zero, and if death rates were to remain

at current levels.
Assumptions and Methods

86

Historically, birth rates in the United States have fluctuated widely. The total

fertility rate decreased from 3.31 children per woman at the end of World

War I (1918) to 2.15 during the Great Depression (1936). After 1936, the

total fertility rate rose to 3.68 in 1957 and then fell to 1.74 by 1976. After

1976, the total fertility rate rose above 2.00 by 1990, where it generally

remained through 2009, but dropped below 1.90 for 2011 and has been at relatively low levels since then. It is estimated to be 1.65 for 2020.

The Trustees assume that the COVID-19 pandemic will affect birth rates in

years 2021 through 2026. Under the intermediate assumptions, the total fertility rate is projected to decrease to a level of 1.54 for 2021 and 1.62 for

2022. The total fertility rate for 2023 is projected to be 1.71 children per

woman, which is the rate that would have been projected in the absence of

the pandemic. The low birth rates for 2021 and 2022 are then projected to be

fully made up with elevated rates in 2024 through 2026, before returning to

the levels that would have been projected in the absence of the pandemic for

2027 and thereafter. In other words, the pandemic is expected to cause a

number of women to defer childbearing from 2021-22 to 2024-26.

The variations in the historical total fertility rate resulted from changes in

many factors, including social attitudes, economic conditions, birth-control

practices, and the racial/ethnic composition of the population. Since the

baby-boom era (1946-65), women have had higher educational attainment,

higher labor force participation, an older average age at first marriage, a

higher propensity to remain unmarried, and higher rates of divorce. All of

these factors are consistent with continued lower total fertility rates than

those experienced during the baby-boom era. Based on consideration of

these factors, the Trustees expect the ultimate total fertility rate to be relatively close to the average level since the end of the baby-boom era. The

assumed ultimate total fertility rates are 2.20, 2.00, and 1.70 children per

woman for the low-cost, intermediate, and high-cost assumptions, respectively. The low-cost and intermediate assumed ultimate rates are 0.05 higher

than those used in last year’s report and the same as those used in the 2019

report. For the high-cost assumption, the ultimate rate is 0.05 lower than the

assumption used in last year’s report.

The 2021 Trustees Report uses a cohort-based projection approach rather

than the period-based approach used in the 2020 and prior Trustees Reports,

resulting in a much longer transition to ultimate birth rates from the current

low birth rates. The cohort-based approach assumes a more gradual shift to

older ages of childbearing for birth cohorts who have not yet reached fertility

completion at age 49. For the intermediate assumptions, after the assumed

pandemic effects (i.e., after 2026), the projected total fertility rate gradually
87

Demographic Assumptions and Methods

increases through the year the ultimate value is reached (2056). While the

ultimate total fertility rate for alternative II is higher in this year’s report than

in the 2020 report, the total fertility rate is lower for years after the pandemic

through 2036 due to the new cohort-based projection approach. The assumed

low-cost and high-cost total fertility rates trend away from the intermediate

path, reaching their ultimate levels in 2056.

2. Mortality Assumptions

Mortality projections are developed by assuming ultimate average annual

percentage reductions in future mortality rates by age group and cause of

death. For this year’s report, these ultimate rates of reduction were revised

and a new cause of death, dementia, was added. The assumptions were then

used to estimate future central death rates by age group, sex, and cause of

death. Adjustments were made to the death rates in 2020, 2021, 2022, and

2023 to account for the effects of the COVID-19 pandemic. Preliminary data

for 2020 show that while the effects of the pandemic led to significantly

higher death rates for those aged 15 and older, the death rates for those under

age 15 were significantly lower, though not quite to the same degree. Thus,

for ages 15 and over, death rates are assumed to increase above what would

have been projected in the absence of the pandemic by 16.4 percent for 2020,

15 percent for 2021, 4 percent for 2022, and 1 percent for 2023. For ages

under 15, death rates are assumed to decrease by 14 percent for 2020,

10 percent for 2021, and 2 percent for 2022, with no adjustment for 2023.

From the estimated central death rates, probabilities of death by single year

of age and sex were calculated. Projected death rates for years after 2023 are

unchanged from the levels that would have been projected in the absence of

the pandemic, under the assumption that increased deaths from the residual

effects of living through the pandemic (both physiological and psychological) will be roughly offset by decreased deaths that instead happened sooner

(during the pandemic).

Historical death rates were calculated for years 1900 through 2019 for ages

below 65 (and for all ages for years prior to 1968) using data from the

National Center for Health Statistics (NCHS).1 For ages 65 and over, final

Medicare data on deaths for years 1968 through 2017 and preliminary data

for 2018 and 2019 were used.2 Death rates by cause of death were produced

for all ages for years 1979-2019 using data from the NCHS.

 1 These rates reflect NCHS data on deaths and Census estimates of population.

 2 These rates reflect Medicare data on deaths and enrollments.
Assumptions and Methods

88

The total age-sex-adjusted death rate1 declined at an average annual rate of

1.02 percent between 1900 and 2019. Between 1979 and 2019, the period for

which death rates were analyzed by cause, the total age-sex-adjusted death

rate, for all causes combined, declined at an average rate of 0.85 percent per

year.

Death rates have declined substantially in the U.S. since 1900, with rapid

declines over some periods and slow or no improvement over the other periods. Many factors are responsible for historical reductions in death rates,

including medical advances, increased availability of health-care services,

and improvements in sanitation and nutrition. Historical death rates generally

declined more slowly for older ages and more rapidly for children and

infants than for the rest of the population. Between 1900 and 2019, the agesex-adjusted death rate declined at an average rate of 0.78 percent per year

for ages 65 and over, and 2.97 percent per year for ages under 15.

Mortality assumptions differ for the low-cost, intermediate, and high-cost

scenarios. Throughout the projection period, the low-cost scenario contains

annual percentage reductions that are smaller than those in the intermediate

scenario, while those in the high-cost scenario are larger. The ultimate annual

percentage reductions for each of the three alternatives were revised for this

year’s report. For the intermediate assumptions, the resulting total ultimate

rates of improvement are slightly lower in this year’s report than they were in

last year’s report. The changes to the low-cost and high-cost assumptions

widened the range of rates of mortality improvement.

The trends in the annual reductions in central death rates were calculated for

the period from 2008 to 2019 for both the NCHS and Medicare data, by age

group, sex, and cause of death.2 These trends are the starting reductions for

alternative II. For alternatives I and III, 50 and 150 percent of the starting

reductions are used, respectively. These annual reductions, by alternative, are

assumed to transition rapidly from the starting reductions until they reach the

ultimate annual percentage reductions assumed for 2045 and later.

Table V.A1 contains historical and projected age-sex-adjusted death rates for

the total population (all ages), for ages under 65, and for ages 65 and over.

Age-sex adjustment eliminates the effect of a changing distribution of population by age and sex, allowing the pure effects of changes in death rates to

be observed. Under the intermediate assumptions, projected age-sex-adjusted

death rates are higher than the rates in last year’s report for the age group

 1 Based on the enumerated total population as of April 1, 2010, if that population were to experience the

death rates by age and sex for the selected year.

 2 Cause of death is only available for the NCHS data.
89

Demographic Assumptions and Methods

under 65 and slightly higher than the rates in last year’s report for the age

group 65 and over. These changes primarily result from incorporating more

recent historical data, which continue to show low rates of improvement.

The projected average annual rate of decline for the total age-sex-adjusted

death rate is about 0.46 percent, 0.93 percent, and 1.48 percent between 2020

and 2095 for alternatives I, II, and III, respectively. In keeping with the patterns observed in the historical data, the assumed future rates of decline are

greater for younger ages than for older ages, but to a substantially lesser

degree than in the past. Accordingly, the projected age-sex-adjusted death

rates for ages 65 and over decline at average annual rates of about

0.45 percent, 0.88 percent, and 1.34 percent between 2020 and 2095 for

alternatives I, II, and III, respectively. The projected age-sex-adjusted death

rates for ages under 15 decline at average annual rates of about 0.32 percent,

1.32 percent, and 2.74 percent between 2020 and 2095 for alternatives I, II,

and III, respectively. It should be noted that these average annual rates of

decline between 2020 and 2095 are not comparable with the rates of decline

between 2019 and 2094 in last year’s report. As mentioned above, to reflect

the effects of the pandemic in this year’s report, death rates for 2020 were

increased by 16.4 percent for ages 15 and older, and decreased by 14 percent

for ages under 15. For all three alternatives, this short-term change in death

rates for 2020 increases the total (all ages) average annual rate of decline

between 2020 and 2095 by about 0.20 percentage point from what would

have been projected in the absence of COVID-19.

Demographers express a wide range of views on the likely rate of future

decline in death rates. For example, some believe that the long-standing historical tendency for mortality to decline more slowly at the oldest ages will

cease in the future. Others believe that biological factors, social factors, and

limitations on health care spending may slow future rates of decline in mortality. 
Assumptions and Methods

90

.

Table V.A1.—Fertility and Mortality Assumptions,a

Calendar Years 1940-2095

Calendar year

Total

fertility

rateb

Age-sex-adjusted death ratec

per 100,000

Total Under 65 65 and over

Historical data:

1940 . . . . . . . . . 2.23 1,919.8 750.1 9,718.8

1945 . . . . . . . . . 2.42 1,716.6 674.8 8,662.9

1950 . . . . . . . . . 3.03 1,561.9 570.2 8,173.7

1955 . . . . . . . . . 3.50 1,453.8 508.2 7,758.4

1960 . . . . . . . . . 3.61 1,454.3 503.2 7,795.6

1965 . . . . . . . . . 2.88 1,428.8 495.2 7,653.9

1970 . . . . . . . . . 2.43 1,340.0 485.7 7,036.3

1975 . . . . . . . . . 1.77 1,204.8 426.6 6,393.6

1980 . . . . . . . . . 1.82 1,136.9 384.3 6,154.3

1985 . . . . . . . . . 1.83 1,081.0 353.3 5,932.9

1990 . . . . . . . . . 2.07 1,022.9 333.6 5,618.9

1995 . . . . . . . . . 1.98 1,002.7 317.9 5,568.6

2000 . . . . . . . . . 2.05 961.5 281.0 5,498.9

2005 . . . . . . . . . 2.06 901.9 270.7 5,110.3

2010 . . . . . . . . . 1.93 820.8 248.5 4,636.1

2011 . . . . . . . . . 1.89 820.8 249.2 4,631.3

2012 . . . . . . . . . 1.88 811.8 248.8 4,565.6

2013 . . . . . . . . . 1.85 812.4 249.6 4,564.6

2014 . . . . . . . . . 1.87 805.2 251.8 4,495.1

2015 . . . . . . . . . 1.85 815.4 255.3 4,549.7

2016 . . . . . . . . . 1.82 808.8 261.0 4,461.0

2017 . . . . . . . . . 1.77 812.8 261.6 4,487.7

2018 . . . . . . . . . 1.73 d803.4 258.8 d4,434.6

2019 . . . . . . . . . 1.70 d792.3 d257.6 d4,357.1

2020 . . . . . . . . . e1.65 f923.7 f299.9 f5,083.2

Intermediate: 

2025 . . . . . . . . . 1.82 771.1 255.3 4,210.0

2030 . . . . . . . . . 1.87 741.5 245.2 4,050.3

2035 . . . . . . . . . 1.93 711.6 233.9 3,896.7

2040 . . . . . . . . . 1.98 683.0 222.8 3,751.4

2045 . . . . . . . . . 2.00 655.9 212.1 3,614.9

2050 . . . . . . . . . 2.00 630.3 201.9 3,486.7

2055 . . . . . . . . . 2.00 606.3 192.3 3,366.5

2060 . . . . . . . . . 2.00 583.7 183.2 3,253.5

2065 . . . . . . . . . 2.00 562.4 174.7 3,147.3

2070 . . . . . . . . . 2.00 542.3 166.6 3,047.3

2075 . . . . . . . . . 2.00 523.4 159.0 2,953.2

2080 . . . . . . . . . 2.00 505.5 151.8 2,864.4

2085 . . . . . . . . . 2.00 488.7 144.9 2,780.5

2090 . . . . . . . . . 2.00 472.7 138.5 2,701.3

2095 . . . . . . . . . 2.00 457.6 132.4 2,626.4
91

Demographic Assumptions and Methods

3. Immigration Assumptions

Projections of the total Social Security area population reflect assumptions

for annual immigration flows. For this report, four categories of immigration

flows are used:

Low-cost: 

2025 . . . . . . . . . 1.97 797.3 264.8 4,347.2

2030 . . . . . . . . . 2.07 788.6 262.8 4,294.2

2035 . . . . . . . . . 2.13 778.2 259.2 4,238.4

2040 . . . . . . . . . 2.18 767.4 255.1 4,182.6

2045 . . . . . . . . . 2.20 756.6 251.0 4,127.6

2050 . . . . . . . . . 2.20 745.9 246.8 4,073.6

2055 . . . . . . . . . 2.20 735.4 242.7 4,020.8

2060 . . . . . . . . . 2.20 725.2 238.6 3,969.2

2065 . . . . . . . . . 2.20 715.2 234.7 3,918.6

2070 . . . . . . . . . 2.20 705.4 230.8 3,869.2

2075 . . . . . . . . . 2.20 695.8 227.0 3,820.8

2080 . . . . . . . . . 2.20 686.3 223.3 3,773.5

2085 . . . . . . . . . 2.20 677.1 219.7 3,727.1

2090 . . . . . . . . . 2.20 668.1 216.1 3,681.8

2095 . . . . . . . . . 2.20 659.3 212.6 3,637.4

High-cost:

2025 . . . . . . . . . 1.59 739.2 243.6 4,044.0

2030 . . . . . . . . . 1.59 683.4 223.1 3,752.0

2035 . . . . . . . . . 1.63 631.2 202.9 3,486.7

2040 . . . . . . . . . 1.68 584.2 184.2 3,250.7

2045 . . . . . . . . . 1.70 542.3 167.4 3,041.7

2050 . . . . . . . . . 1.70 505.0 152.3 2,856.2

2055 . . . . . . . . . 1.70 471.8 138.9 2,691.3

2060 . . . . . . . . . 1.70 442.1 126.8 2,544.0

2065 . . . . . . . . . 1.70 415.4 116.0 2,411.9

2070 . . . . . . . . . 1.70 391.5 106.3 2,292.9

2075 . . . . . . . . . 1.70 369.8 97.5 2,185.3

2080 . . . . . . . . . 1.70 350.2 89.6 2,087.6

2085 . . . . . . . . . 1.70 332.4 82.5 1,998.4

2090 . . . . . . . . . 1.70 316.1 76.0 1,916.8

2095 . . . . . . . . . 1.70 301.2 70.1 1,841.8

a This table contains basic assumptions along with key summary values that are derived from basic assumptions.

b The total fertility rate for any year is the average number of children that would be born to a woman if she

were to experience, at each age of her life, the birth rate observed in, or assumed for, the selected year, and if

she were to survive the entire childbearing period.

c Based on the enumerated total population as of April 1, 2010, if that population were to experience the

death rates by age and sex observed in, or assumed for, the selected year.

d Estimated using final data for ages below 65 and preliminary data for ages 65 and older.

e Estimated using provisional data through the third quarter and the intermediate assumptions.

f Estimated using the intermediate assumptions for all ages.

Table V.A1.—Fertility and Mortality Assumptions,a

Calendar Years 1940-2095 (Cont.)

Calendar year

Total

fertility

rateb

Age-sex-adjusted death ratec

per 100,000

Total Under 65 65 and over
Assumptions and Methods

92

 • Lawful permanent resident (LPR) immigration: Persons who enter the

Social Security area and are granted LPR status, or who are already in

the Social Security area and adjust their status to become LPRs.1

 • Legal emigration: LPRs and citizens who leave the Social Security area

population. 

 • Other-than-LPR immigration: Persons who enter the Social Security

area and stay to the end of the year without being granted LPR status,

such as undocumented immigrants, and foreign workers and students

entering with temporary visas. 

 • Other-than-LPR emigration: Other-than-LPR immigrants who leave the

Social Security area population or who adjust their status to become

LPRs. 

Net LPR immigration is the difference between LPR immigration and legal

emigration. Net other-than-LPR immigration is the difference between otherthan-LPR immigration and other-than-LPR emigration. Total net immigration refers to the sum of net LPR immigration and net other-than-LPR immigration.

Immigration assumptions differ for the low-cost, intermediate, and high-cost

scenarios. The low-cost scenario includes higher annual net immigration and

the high-cost scenario includes lower annual net immigration. Table V.A2

contains historical and projected levels of various immigration flows. 

LPR immigration has increased significantly since World War II, due to various factors and legislative changes, including the Immigration Act of 1965

and the Immigration Act of 1990. 

For all three alternatives, the Trustees assume that the COVID-19 pandemic

will affect LPR immigration in years 2020 through 2025. The assumed LPR

immigration levels for 2020 and 2021 are 390,000 lower than would have

been assumed in the absence of the pandemic. LPR immigration levels for

2022 are assumed to be the same as would have been assumed in the absence

of the pandemic. LPR immigration levels for 2023 through 2025 are assumed

to be higher than would have been assumed in the absence of the pandemic,

fully making up for the lower levels in 2020 and 2021.

For the intermediate alternative, the ultimate level of annual LPR immigration, which includes residents who adjust their status to become LPRs, is

 1 Persons who enter the country with legal visas but without LPR status, such as temporary foreign workers

and students, are not included in the “LPR immigration” category.
93

Demographic Assumptions and Methods

assumed to be 1,050,000 persons for 2026 and later. For alternative I, ultimate annual LPR immigration is assumed to be 1,250,000 persons for 2026

and later, and for alternative III, ultimate annual LPR immigration is

assumed to be 850,000 persons for 2026 and later. The ultimate levels of

LPR immigration are unchanged from last year’s report. 

The assumed ratios of annual legal emigration to LPR immigration are 20,

25, and 30 percent for alternatives I, II, and III, respectively. This range is

consistent with the limited historical data for legal emigration from the

Social Security area. These ratios are unchanged from last year’s report.

Under the intermediate alternative, by combining the ultimate annual LPR

immigration and legal emigration assumptions, ultimate annual net LPR

immigration is about 788,000 persons. For the low-cost and high-cost scenarios, ultimate annual net LPR immigration is 1,000,000 persons and

595,000 persons, respectively.

The estimated number of other-than-LPR immigrants residing in the Social

Security area and the annual level of other-than-LPR immigration were

affected significantly by the economic recession of 2007-09. Although otherthan-LPR immigration was greatly reduced during the economic downturn

and immediate years thereafter, it returned to higher levels for 2014 through

2018, and is assumed to remain at a higher level in 2019, reflecting a recovery from levels experienced during the recession. 

For all three alternatives, the Trustees assume that the COVID-19 pandemic

will affect other-than-LPR immigration in years 2020 through 2025. The

assumed other-than-LPR immigration levels for 2020 are 780,000 lower for

the low-cost and intermediate scenarios, and 720,000 lower for the high-cost

scenario, than would have been assumed in the absence of the pandemic. The

assumed other-than-LPR immigration levels for 2021 are 450,000 lower for

the low-cost scenario, 420,000 lower for the intermediate scenario, and

360,000 lower for the high-cost scenario, than would have been assumed in

the absence of the pandemic. Other-than-LPR immigration levels for 2022

are assumed to be the same as would have been assumed in the absence of

the pandemic. Other-than-LPR immigration levels for 2023 through 2025 are

assumed to be higher than would have been assumed in the absence of the

pandemic, fully making up for the lower levels in 2020 and 2021. 

The ultimate levels of other-than-LPR immigration are 1,350,000 persons for

alternative II, 1,850,000 persons for alternative I, and 850,000 persons for

alternative III. The ultimate levels are attained in year 2026 for all three

alternatives. In last year’s report, the ultimate levels were 1,650,000 persons

and 1,050,000 persons, for alternatives I and III, respectively. The ultimate

level for alternative II is unchanged from last year.
Assumptions and Methods

94

Emigration from the other-than-LPR immigrant population includes those

who leave the Social Security area and those who adjust their status to

become LPRs. This other-than-LPR immigrant population is highly mobile

and far more likely to leave the Social Security area than is the citizen or

LPR population. However, as other-than-LPR immigrants stay in the country

for longer periods of time, they generally become less likely to leave the

country.

Under the intermediate assumptions, the total annual number of other-thanLPR immigrants who leave the Social Security area averages about 421,000

through the 75-year projection period. The ultimate annual number of otherthan-LPR immigrants who adjust status to become LPRs is assumed to be

450,000 for the intermediate assumptions, and is unchanged from last year’s

report. For the low-cost and high-cost scenarios, the total annual number of

other-than-LPR emigrants averages about 577,000 and 264,000, respectively,

through the 75-year projection period. The ultimate annual number of people

adjusting status to LPR status is assumed to be 550,000 persons and 350,000

persons, for the low-cost and high-cost scenarios, respectively, and is

unchanged from last year’s report. 

Under the assumptions described above, the projected size of the other-thanLPR immigrant population grows substantially, from about 15.1 million by

the end of 2021 to about 35.4 million by the end of 2095. This growth

reflects the excess of annual immigration over the combined annual numbers

of emigrants (including adjustments of status) and deaths that occur within

the other-than-LPR immigrant population.

Under the intermediate assumptions, projected net other-than-LPR immigration gradually decreases over time. Because the projected number of otherthan-LPR immigrants leaving the Social Security area is based on rates of

departure, an increase in the number of other-than-LPR immigrants residing

in the Social Security area results in an increase in the number who emigrate

out of the area. All other components of net other-than-LPR immigration are

assumed to be stable after 2025, and thus do not contribute toward any

change in annual net other-than-LPR immigration. Under the intermediate

assumptions, the projected average annual level of net other-than-LPR immigration over the 75-year projection period is about 488,000 persons. For the

low-cost and high-cost assumptions, projected average annual net other-thanLPR immigration is about 732,000 persons and 245,000 persons, respectively.

The projected average annual level of total net immigration (LPR and otherthan-LPR, combined) is about 1,280,000 persons per year during the 75-year
95

Demographic Assumptions and Methods

projection period under the intermediate assumptions. For the low-cost and

high-cost assumptions, projected average annual total net immigration is

about 1,736,000 persons and 844,000 persons, respectively.

Demographers express a wide range of views about the future course of

immigration for the United States. Some believe that net immigration will

increase substantially in the future. Others believe that potential immigrants

may be increasingly attracted to other countries, that the number of potential

immigrants may be lower due to lower birth rates in many countries, or that

changes in the law or enforcement of the law will reduce immigration. 
Assumptions and Methods

96

Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2095

[in thousands]

Calendar 

year

LPR immigration Other-than-LPR immigrationb

Total net

immigration

LPR

in

Legal

out

Adjustments

of statusc d NetLPR

OtherthanLPR

in

OtherthanLPR

out

Adjustments

of statusc d

Net

otherthanLPR

Historical data:

1940 . . . . 61 15 - 46 - - - - -

1945 . . . . 73 18 - 55 - - - - -

1950 . . . . 227 57 - 171 - - - - -

1955 . . . . 280 70 - 210 - - - - -

1960 . . . . 268 67 - 201 - - - - -

1965 . . . . 261 77 49 232 - - 49 - -

1970 . . . . 307 93 65 279 - - 65 - -

1975 . . . . 340 98 53 294 - - 53 - -

1980 . . . . 431 136 112 407 - - 112 203 610

1985 . . . . 458 144 119 432 - - 119 260 692

1990 . . . . 548 166 114 497 - - 114 629 1,125

1995 . . . . 511 192 255 575 - - 255 563 1,137

2000 . . . . 482 224 413 672 1,427 309 413 705 1,376

2005 . . . . 561 290 597 869 1,821 77 597 1,148 2,016

2010 . . . . 622 262 426 786 680 205 426 50 835

2011 . . . . 647 264 408 791 684 345 408 -69 722

2012 . . . . 621 255 401 766 722 450 401 -129 637

2013 . . . . 589 249 409 748 836 335 409 92 840

2014 . . . . 627 256 398 769 1,460 148 398 913 1,682

2015 . . . . 689 271 395 813 1,263 190 395 677 1,491

2016 . . . . 763 292 407 877 1,127 698 407 21 899

2017 . . . . 722 280 398 840 931 280 398 253 1,092

2018 . . . . 678 270 403 810 e901 e234 403 e264 e1,075

2019 . . . . e566 e258 e466 e774 f1,100 e246 e466 f389 f1,163

2020 . . . . f210 f

165 f450 f495 f420 f253 f450 f-283 f212

Intermediate: 

2025 . . . . 860 328 450 983 1,750 306 450 994 1,977

2030 . . . . 600 263 450 788 1,350 349 450 551 1,339

2035 . . . . 600 263 450 788 1,350 374 450 526 1,314

2040 . . . . 600 263 450 788 1,350 399 450 501 1,288

2045 . . . . 600 263 450 788 1,350 419 450 481 1,269

2050 . . . . 600 263 450 788 1,350 432 450 468 1,256

2055 . . . . 600 263 450 788 1,350 440 450 460 1,247

2060 . . . . 600 263 450 788 1,350 447 450 453 1,240

2065 . . . . 600 263 450 788 1,350 454 450 446 1,234

2070 . . . . 600 263 450 788 1,350 459 450 441 1,229

2075 . . . . 600 263 450 788 1,350 463 450 437 1,225

2080 . . . . 600 263 450 788 1,350 466 450 434 1,222

2085 . . . . 600 263 450 788 1,350 468 450 432 1,220

2090 . . . . 600 263 450 788 1,350 469 450 431 1,218

2095 . . . . 600 263 450 788 1,350 470 450 430 1,217
97

Demographic Assumptions and Methods

Low-cost: 

2025 . . . . 960 302 550 1,208 2,260 355 550 1,355 2,563

2030 . . . . 700 250 550 1,000 1,850 428 550 872 1,872

2035 . . . . 700 250 550 1,000 1,850 480 550 820 1,820

2040 . . . . 700 250 550 1,000 1,850 529 550 771 1,771

2045 . . . . 700 250 550 1,000 1,850 568 550 732 1,732

2050 . . . . 700 250 550 1,000 1,850 596 550 704 1,704

2055 . . . . 700 250 550 1,000 1,850 616 550 684 1,684

2060 . . . . 700 250 550 1,000 1,850 631 550 669 1,669

2065 . . . . 700 250 550 1,000 1,850 643 550 657 1,657

2070 . . . . 700 250 550 1,000 1,850 653 550 647 1,647

2075 . . . . 700 250 550 1,000 1,850 659 550 641 1,641

2080 . . . . 700 250 550 1,000 1,850 664 550 636 1,636

2085 . . . . 700 250 550 1,000 1,850 667 550 633 1,633

2090 . . . . 700 250 550 1,000 1,850 669 550 631 1,631

2095 . . . . 700 250 550 1,000 1,850 671 550 629 1,629

High-cost:

2025 . . . . 760 333 350 777 1,210 261 350 599 1,376

2030 . . . . 500 255 350 595 850 271 350 229 824

2035 . . . . 500 255 350 595 850 269 350 231 826

2040 . . . . 500 255 350 595 850 271 350 229 824

2045 . . . . 500 255 350 595 850 270 350 230 825

2050 . . . . 500 255 350 595 850 268 350 232 827

2055 . . . . 500 255 350 595 850 265 350 235 830

2060 . . . . 500 255 350 595 850 263 350 237 832

2065 . . . . 500 255 350 595 850 262 350 238 833

2070 . . . . 500 255 350 595 850 262 350 238 833

2075 . . . . 500 255 350 595 850 262 350 238 833

2080 . . . . 500 255 350 595 850 263 350 237 832

2085 . . . . 500 255 350 595 850 263 350 237 832

2090 . . . . 500 255 350 595 850 264 350 236 831

2095 . . . . 500 255 350 595 850 264 350 236 831

a This table contains basic assumptions along with key summary values that are derived from basic assumptions.

b Historical other-than-LPR immigration and emigration estimates depend on a residual method. The Office

of the Chief Actuary developed these estimates, as well as the resulting other-than-LPR January 1 stock

estimates, for years through 2000. For years 2001 and later, the residual method uses stock estimates. For

2001 through 2004, the stock is set to values that linearly grade from the 2000 stock estimate to the DHS

2005 stock estimate. For 2005 through 2012, stock estimates come from DHS. For 2013 through 2019,

stock estimates are developed by the Office of the Chief Actuary, based on the same methods used by DHS.

c Estimates do not include persons who attained LPR status under the special one-time provisions of the

Immigration Reform and Control Act of 1986.

d Adjustments of status are a positive for net LPR immigration and a negative for net other-than-LPR immigration.

e Estimated.

f Estimated, intermediate alternative.

Note: Components may not sum to totals because of rounding.

Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2095 (Cont.)

[in thousands]

Calendar 

year

LPR immigration Other-than-LPR immigrationb

Total net

immigration

LPR

in

Legal

out

Adjustments

of statusc d NetLPR

OtherthanLPR

in

OtherthanLPR

out

Adjustments

of statusc d

Net

otherthanLPR
Assumptions and Methods

98

4. Total Population Estimates

The starting Social Security area population for December 31, 2018, is

derived from the Census Bureau’s estimate of the residents of the 50 States

and D.C. and U.S. Armed Forces overseas. Adjustments are made to reflect

mortality assumptions for the aged population since 2010 that are consistent

with Medicare and Social Security data, net immigration assumptions for the

aged population since 2010, estimates of the net undercount in the 2010 census, inclusion of U.S. citizens living abroad (including residents of U.S. territories), and inclusion of non-citizens living abroad who are insured for Social

Security benefits. The Office of the Chief Actuary projects the population in

the Social Security area by age, sex, and marital status for December 31 of

each year from 2019 through 2095 by combining the assumptions for future

fertility, mortality, and immigration with assumptions for marriage and

divorce. Previous sections of this chapter present the assumptions for future

fertility, mortality, and immigration. Assumptions for future rates of marriage and divorce reflect historical data from the National Center for Health

Statistics, the Census Bureau, and selected individual States. 

This report presents a July 1 (i.e., midyear) population for each year, which

is derived from surrounding December populations. Table V.A3 shows the

historical and projected population for July 1 by broad age group, for the

three alternatives. It also shows the aged and total dependency ratios (see

table footnotes for definitions).
99

Demographic Assumptions and Methods

Table V.A3.—Social Security Area Population on July 1 and Dependency Ratios,

Calendar Years 1945-2095

Calendar year

Population (in thousands) Dependency ratio

Under 20 20-64

65 and

over Total Ageda Totalb

Historical data:

1945 . . . . . . . . . . . . . . 49,107 87,891 10,886 147,883 0.124 0.683

1950 . . . . . . . . . . . . . . 53,918 92,190 12,789 158,897 .139 .724

1955 . . . . . . . . . . . . . . 63,337 96,003 15,159 174,499 .158 .818

1960 . . . . . . . . . . . . . . 72,939 99,746 17,295 189,980 .173 .905

1965 . . . . . . . . . . . . . . 80,021 104,832 19,079 203,932 .182 .945

1970 . . . . . . . . . . . . . . 80,995 112,938 20,885 214,817 .185 .902

1975 . . . . . . . . . . . . . . 78,643 122,588 23,316 224,547 .190 .832

1980 . . . . . . . . . . . . . . 74,849 134,028 26,307 235,184 .196 .755

1985 . . . . . . . . . . . . . . 72,896 144,584 29,128 246,608 .201 .706

1990 . . . . . . . . . . . . . . 74,792 152,731 31,926 259,449 .209 .699

1995 . . . . . . . . . . . . . . 79,286 160,737 34,298 274,321 .213 .707

2000 . . . . . . . . . . . . . . 81,981 170,168 35,501 287,649 .209 .690

2005 . . . . . . . . . . . . . . 83,951 181,107 37,135 302,193 .205 .669

2010 . . . . . . . . . . . . . . 85,675 188,246 41,021 314,942 .218 .673

2011 . . . . . . . . . . . . . . 85,304 189,812 41,737 316,853 .220 .669

2012 . . . . . . . . . . . . . . 84,909 190,264 43,417 318,590 .228 .674

2013 . . . . . . . . . . . . . . 84,600 190,957 44,796 320,353 .235 .678

2014 . . . . . . . . . . . . . . 84,520 191,926 46,185 322,631 .241 .681

2015 . . . . . . . . . . . . . . 84,569 193,065 47,590 325,225 .246 .685

2016 . . . . . . . . . . . . . . 84,566 193,719 49,077 327,361 .253 .690

2017 . . . . . . . . . . . . . . 84,456 194,136 50,586 329,178 .261 .696

2018c . . . . . . . . . . . . . 84,264 194,564 52,163 330,990 .268 .701

2019d . . . . . . . . . . . . . 84,011 195,009 53,812 332,832 .276 .707

2020d . . . . . . . . . . . . . 83,548 195,129 55,319 333,997 .284 .712

Intermediate:

2025 . . . . . . . . . . . . . . 82,821 197,423 63,481 343,725 .322 .741

2030 . . . . . . . . . . . . . . 83,162 200,693 71,158 355,013 .355 .769

2035 . . . . . . . . . . . . . . 85,567 204,251 75,635 365,453 .370 .789

2040 . . . . . . . . . . . . . . 89,337 207,696 78,066 375,099 .376 .806

2045 . . . . . . . . . . . . . . 93,604 210,352 79,706 383,662 .379 .824

2050 . . . . . . . . . . . . . . 95,620 213,721 81,987 391,328 .384 .831

2055 . . . . . . . . . . . . . . 96,684 217,161 85,002 398,847 .391 .837

2060 . . . . . . . . . . . . . . 97,740 220,717 88,716 407,174 .402 .845

2065 . . . . . . . . . . . . . . 99,647 224,663 92,207 416,517 .410 .854

2070 . . . . . . . . . . . . . . 102,460 227,952 95,938 426,350 .421 .870

2075 . . . . . . . . . . . . . . 105,559 230,510 99,996 436,065 .434 .892

2080 . . . . . . . . . . . . . . 108,070 234,871 102,453 445,394 .436 .896

2085 . . . . . . . . . . . . . . 109,817 240,838 103,858 454,512 .431 .887

2090 . . . . . . . . . . . . . . 111,335 247,817 104,684 463,835 .422 .872

2095 . . . . . . . . . . . . . . 113,185 253,204 107,255 473,644 .424 .871
Assumptions and Methods

100

Notes:

1. Historical data are subject to revision.

2. Components may not sum to totals because of rounding.

5. Life Expectancy Estimates

Life expectancy, or the average remaining number of years expected prior to

death, is an additional way to summarize the Trustees’ mortality assumptions. This report includes life expectancy in two different forms (period and

cohort), which are useful for two separate purposes.

Low-cost:

2025 . . . . . . . . . . . . . . 85,270 199,678 63,364 348,312 0.317 0.744

2030 . . . . . . . . . . . . . . 88,701 204,886 70,670 364,257 .345 .778

2035 . . . . . . . . . . . . . . 94,556 210,320 74,553 379,428 .354 .804

2040 . . . . . . . . . . . . . . 101,833 215,609 76,246 393,688 .354 .826

2045 . . . . . . . . . . . . . . 108,451 221,267 77,117 406,835 .349 .839

2050 . . . . . . . . . . . . . . 112,157 228,535 78,701 419,392 .344 .835

2055 . . . . . . . . . . . . . . 115,166 236,169 81,153 432,488 .344 .831

2060 . . . . . . . . . . . . . . 118,935 243,903 84,434 447,272 .346 .834

2065 . . . . . . . . . . . . . . 124,170 251,981 87,554 463,705 .347 .840

2070 . . . . . . . . . . . . . . 130,403 259,658 90,869 480,929 .350 .852

2075 . . . . . . . . . . . . . . 136,555 267,276 94,411 498,242 .353 .864

2080 . . . . . . . . . . . . . . 141,637 277,540 96,347 515,524 .347 .857

2085 . . . . . . . . . . . . . . 145,863 290,022 97,293 533,177 .335 .838

2090 . . . . . . . . . . . . . . 150,226 302,738 98,785 551,748 .326 .823

2095 . . . . . . . . . . . . . . 155,401 313,309 102,772 571,482 .328 .824

High-cost:

2025 . . . . . . . . . . . . . . 79,938 195,361 63,648 338,948 .326 .735

2030 . . . . . . . . . . . . . . 76,454 196,784 71,828 345,066 .365 .754

2035 . . . . . . . . . . . . . . 74,618 198,573 77,116 350,307 .388 .764

2040 . . . . . . . . . . . . . . 74,071 200,259 80,557 354,887 .402 .772

2045 . . . . . . . . . . . . . . 75,647 199,514 83,251 358,412 .417 .796

2050 . . . . . . . . . . . . . . 75,921 198,293 86,496 360,710 .436 .819

2055 . . . . . . . . . . . . . . 75,054 196,754 90,283 362,091 .459 .840

2060 . . . . . . . . . . . . . . 73,432 195,273 94,557 363,262 .484 .860

2065 . . . . . . . . . . . . . . 72,034 194,200 98,443 364,676 .507 .878

2070 . . . . . . . . . . . . . . 71,449 192,201 102,536 366,187 .533 .905

2075 . . . . . . . . . . . . . . 71,565 188,771 106,988 367,324 .567 .946

2080 . . . . . . . . . . . . . . 71,700 186,237 109,787 367,723 .589 .974

2085 . . . . . . . . . . . . . . 71,328 184,640 111,383 367,351 .603 .990

2090 . . . . . . . . . . . . . . 70,507 185,301 110,675 366,482 .597 .978

2095 . . . . . . . . . . . . . . 69,634 185,259 110,536 365,428 .597 .973

a Ratio of the population at ages 65 and over to the population at ages 20-64.

b Ratio of the population at ages 65 and over and the population under age 20 to the population at

ages 20-64.

c Estimated.

d Estimated, intermediate alternative.

Table V.A3.—Social Security Area Population on July 1 and Dependency Ratios,

Calendar Years 1945-2095 (Cont.)

Calendar year

Population (in thousands) Dependency ratio

Under 20 20-64

65 and

over Total Ageda Totalb
101

Demographic Assumptions and Methods

 • Period life expectancy for a given year incorporates the actual or

expected death rates at each age for that year. It is a useful summary statistic for illustrating the overall level of the death rates experienced in a

single year. Period life expectancy for a particular year provides an individual’s expected average remaining lifetime at a selected age, assuming no change in death rates after that year. Table V.A4 presents

historical and projected life expectancy calculated on a period basis. 

 • Cohort life expectancy does not incorporate death rates for a single

year, but for the series of years in which the individual will actually

reach each succeeding age if he or she survives. Cohort life expectancy

provides an individual’s expected average remaining lifetime at a

selected age in a given year, using actual or expected future death rates.

Table V.A5 presents historical and projected life expectancy calculated

on a cohort basis. Cohort life expectancy is somewhat greater than

period life expectancy for a given year because: (1) death rates at any

age tend to decline over time; and (2) cohort life expectancy uses death

rates from future years, while period life expectancy uses death rates

only from the given year.

Life expectancy at a given age reflects death rates at that and all older ages.

Period life expectancy is somewhat related to the age-sex-adjusted death rate

discussed in section V.A.2. However, life expectancy places far greater

weight on death rates at relatively younger ages than those at relatively older

ages. Therefore, changes in death rates at younger ages have far greater

effects in changing life expectancy over time. It is important to keep this

concept in mind when considering trends in life expectancy. 
Assumptions and Methods

102

Table V.A4.—Period Life Expectancya

a The period life expectancy at a given age for a given year is the average remaining number of years

expected prior to death for a person at that exact age, born on January 1, using the mortality rates for that

year over the course of his or her remaining life.

Historical data

Calendar

year

At birth At age 65

Male Female Male Female

1940 . . . . 61.4 65.7 11.9 13.4

1945 . . . . 62.9 68.4 12.6 14.4

1950 . . . . 65.6 71.1 12.8 15.1

1955 . . . . 66.7 72.8 13.1 15.6

1960 . . . . 66.7 73.2 12.9 15.9

1965 . . . . 66.8 73.8 12.9 16.3

1970 . . . . 67.1 74.9 13.1 17.1

1975 . . . . 68.7 76.6 13.7 18.0

1980 . . . . 69.9 77.5 14.0 18.4

1985 . . . . 71.1 78.2 14.4 18.6

1990 . . . . 71.8 78.9 15.0 19.0

1995 . . . . 72.5 79.1 15.4 19.0

2000 . . . . 74.0 79.4 15.9 19.0

2005 . . . . 74.8 80.0 16.7 19.5

2010 . . . . 76.1 80.9 17.6 20.2

2011 . . . . 76.2 80.9 17.6 20.2

2012 . . . . 76.3 81.0 17.7 20.3

2013 . . . . 76.3 81.0 17.7 20.3

2014 . . . . 76.3 81.1 17.8 20.4

2015 . . . . 76.1 80.9 17.8 20.3

2016 . . . . 76.0 81.0 17.9 20.5

2017 . . . . 76.0 81.0 17.9 20.5

2018b . . .

b Estimated using final data for ages below 65 and preliminary data for ages 65 and older.

76.1 81.1 18.0 20.6

2019b . . . 76.2 81.3 18.1 20.7

2020c . . .

c Estimated using the intermediate assumptions for all ages.

74.5 79.7 17.0 19.5

Intermediate Low-cost High-cost

Calendar

year

At birth At age 65 At birth At age 65 At birth At age 65

Male Female Male Female Male Female Male Female Male Female Male Female

2025 . . . . 76.5 81.6 18.4 21.0 76.1 81.2 18.2 20.7 77.1 82.0 18.8 21.3

2030 . . . . 77.0 82.0 18.7 21.3 76.2 81.3 18.3 20.8 78.1 82.9 19.4 21.8

2035 . . . . 77.6 82.5 19.1 21.6 76.4 81.5 18.4 20.9 79.2 83.8 20.0 22.4

2040 . . . . 78.1 82.9 19.4 21.8 76.6 81.6 18.5 21.0 80.2 84.6 20.6 22.9

2045 . . . . 78.7 83.3 19.7 22.1 76.7 81.8 18.6 21.1 81.1 85.4 21.2 23.4

2050 . . . . 79.2 83.8 20.0 22.4 76.9 81.9 18.7 21.2 82.0 86.1 21.7 23.9

2055 . . . . 79.7 84.2 20.3 22.7 77.1 82.1 18.8 21.3 82.8 86.8 22.2 24.4

2060 . . . . 80.2 84.6 20.6 22.9 77.3 82.3 18.9 21.4 83.6 87.4 22.7 24.8

2065 . . . . 80.6 85.0 20.9 23.2 77.5 82.4 19.0 21.5 84.4 88.0 23.1 25.2

2070 . . . . 81.1 85.4 21.1 23.4 77.7 82.6 19.1 21.6 85.1 88.5 23.6 25.6

2075 . . . . 81.6 85.7 21.4 23.6 77.9 82.7 19.2 21.7 85.7 89.1 24.0 25.9

2080 . . . . 82.0 86.1 21.7 23.9 78.0 82.9 19.3 21.8 86.4 89.5 24.4 26.3

2085 . . . . 82.4 86.4 21.9 24.1 78.2 83.0 19.5 21.9 86.9 90.0 24.8 26.6

2090 . . . . 82.8 86.7 22.2 24.3 78.4 83.2 19.6 22.0 87.5 90.4 25.2 26.9

2095 . . . . 83.2 87.1 22.4 24.5 78.6 83.3 19.7 22.1 88.0 90.9 25.5 27.2
103

Demographic Assumptions and Methods

Table V.A5.—Cohort Life Expectancya

a The cohort life expectancy at a given age for a given year is the average remaining number of years

expected prior to death for a person at that exact age, born on January 1, using the mortality rates for the

series of years in which the individual will actually reach each succeeding age if he or she survives.

Calendar

year

Intermediate Low-cost High-cost

At birth b At age 65 c At birth b

b Cohort life expectancy at birth for those born in the calendar year is based on a combination of actual, estimated, and projected death rates for birth years 1940 through 2019. For birth years after 2019, these values

depend on estimated and projected death rates.

At age 65 c

c Age 65 cohort life expectancy for those attaining age 65 in calendar years 1940 through 2017 depends on

actual death rates or on a combination of actual, estimated, and projected death rates. After 2017, these values depend on estimated and projected death rates.

At birth b At age 65 c

Male Female Male Female Male Female Male Female Male Female Male Female

1940 . . . . 70.2 76.4 12.7 14.7 70.1 76.3 12.7 14.7 70.3 76.6 12.7 14.7

1945 . . . . 72.0 78.1 13.0 15.4 71.8 77.8 13.0 15.4 72.2 78.4 13.0 15.4

1950 . . . . 73.1 79.4 13.1 16.2 72.8 79.0 13.1 16.2 73.5 79.9 13.1 16.2

1955 . . . . 73.6 79.9 13.1 16.7 73.1 79.3 13.1 16.7 74.2 80.6 13.1 16.7

1960 . . . . 74.2 80.2 13.2 17.4 73.5 79.5 13.2 17.4 75.1 81.2 13.2 17.4

1965 . . . . 75.1 80.8 13.5 18.0 74.2 79.8 13.5 18.0 76.3 82.0 13.5 18.0

1970 . . . . 76.2 81.6 13.8 18.5 75.1 80.4 13.8 18.5 77.8 83.2 13.8 18.5

1975 . . . . 77.1 82.3 14.2 18.7 75.6 80.9 14.2 18.7 79.0 84.2 14.2 18.7

1980 . . . . 77.8 82.9 14.7 18.8 76.1 81.3 14.7 18.8 80.1 85.0 14.7 18.8

1985 . . . . 78.3 83.4 15.4 19.0 76.3 81.5 15.4 19.0 80.9 85.8 15.4 19.1

1990 . . . . 78.9 83.9 16.0 19.3 76.6 81.8 16.0 19.3 81.8 86.5 16.0 19.3

1995 . . . . 79.5 84.4 16.6 19.6 76.9 82.0 16.6 19.6 82.8 87.3 16.7 19.6

2000 . . . . 80.0 84.8 17.3 20.0 77.1 82.2 17.3 19.9 83.6 87.9 17.4 20.1

2005 . . . . 80.5 85.2 17.8 20.4 77.3 82.4 17.7 20.3 84.3 88.5 18.0 20.6

2010 . . . . 81.0 85.6 18.2 20.8 77.6 82.6 18.0 20.5 85.1 89.1 18.5 21.2

2011 . . . . 81.1 85.7 18.3 20.9 77.6 82.6 18.0 20.6 85.3 89.2 18.7 21.3

2012 . . . . 81.2 85.7 18.4 20.9 77.7 82.7 18.1 20.6 85.4 89.3 18.8 21.4

2013 . . . . 81.3 85.8 18.4 21.0 77.7 82.7 18.1 20.6 85.5 89.4 18.9 21.5

2014 . . . . 81.4 85.9 18.5 21.1 77.7 82.7 18.1 20.7 85.7 89.5 19.0 21.7

2015 . . . . 81.5 86.0 18.5 21.1 77.8 82.8 18.1 20.7 85.8 89.6 19.1 21.8

2016 . . . . 81.6 86.0 18.6 21.2 77.8 82.8 18.1 20.7 86.0 89.7 19.2 21.9

2017 . . . . 81.6 86.1 18.6 21.3 77.9 82.8 18.2 20.8 86.1 89.8 19.3 22.0

2018 . . . . 81.7 86.2 18.7 21.3 77.9 82.9 18.2 20.8 86.2 89.9 19.4 22.1

2019 . . . . 81.8 86.3 18.8 21.4 77.9 82.9 18.2 20.8 86.4 90.0 19.6 22.2

2020 . . . . 82.0 86.4 18.8 21.5 78.0 83.0 18.2 20.8 86.6 90.2 19.7 22.4

2025 . . . . 82.4 86.7 19.3 21.8 78.2 83.1 18.4 21.0 87.2 90.6 20.4 23.0

2030 . . . . 82.8 87.0 19.6 22.1 78.3 83.2 18.5 21.1 87.8 91.1 21.0 23.5

2035 . . . . 83.3 87.4 19.9 22.4 78.5 83.4 18.7 21.2 88.5 91.6 21.6 24.1

2040 . . . . 83.7 87.7 20.2 22.7 78.7 83.5 18.8 21.3 89.0 92.0 22.2 24.5

2045 . . . . 84.1 88.0 20.5 23.0 78.9 83.7 18.9 21.4 89.6 92.4 22.7 25.0

2050 . . . . 84.5 88.3 20.8 23.2 79.1 83.8 19.0 21.5 90.1 92.8 23.2 25.4

2055 . . . . 84.8 88.6 21.1 23.5 79.2 84.0 19.1 21.6 90.6 93.2 23.7 25.8

2060 . . . . 85.2 88.9 21.4 23.7 79.4 84.1 19.2 21.7 91.0 93.5 24.1 26.2

2065 . . . . 85.6 89.2 21.7 24.0 79.6 84.2 19.3 21.8 91.5 93.8 24.6 26.5

2070 . . . . 85.9 89.4 21.9 24.2 79.7 84.4 19.4 21.9 91.9 94.1 25.0 26.9

2075 . . . . 86.2 89.7 22.2 24.4 79.9 84.5 19.5 22.0 92.3 94.4 25.3 27.2

2080 . . . . 86.6 89.9 22.4 24.6 80.1 84.6 19.6 22.1 92.7 94.7 25.7 27.5

2085 . . . . 86.9 90.2 22.7 24.9 80.2 84.8 19.7 22.2 93.1 95.0 26.1 27.8

2090 . . . . 87.2 90.4 22.9 25.1 80.4 84.9 19.8 22.3 93.4 95.3 26.4 28.1

2095 . . . . 87.5 90.6 23.2 25.3 80.6 85.0 19.9 22.3 93.8 95.6 26.7 28.4
Assumptions and Methods

104

B. ECONOMIC ASSUMPTIONS AND METHODS

The three alternative sets of economic assumptions provide a reasonable

range for estimating the financial status of the trust funds. The intermediate

assumptions reflect the Trustees’ consensus expectation of sustained moderate economic growth after completion of the recovery from the pandemicinduced recession that started in the first quarter of 2020, and their best estimate for other economic parameters. The low-cost assumptions represent a

more optimistic outlook with a faster recovery to a higher level of economic

output, stronger long-term economic growth, and relatively optimistic levels

for other parameters. The high-cost assumptions represent a more pessimistic

scenario with a second “dip” in gross domestic product (GDP) in 2021, prolonging the recession that started in 2020, slower economic growth in the

long term, and relatively pessimistic levels for other parameters.

Actual economic data were generally available through the end of 2020 at

the time the assumptions for this report were set. The data indicated that economic activity reached a peak in the fourth quarter of 2019.1 A precipitous

decline in economic activity in March and April of 2020 led to GDP in the

second quarter of 2020 being more than 10 percent below the peak in the

fourth quarter of 2019. GDP recovered substantially by the fourth quarter of

2020, but was still about 2.4 percent below the level in the fourth quarter of

2019.

Under the intermediate assumptions, the economy is projected to reach its

sustainable trend level of output in 2023. Under the low-cost assumptions,

the economy is projected to recover at a faster rate and return to a higher sustainable trend level of output in 2022. Under the high-cost assumptions, the

sustainable trend level is lower. GDP falls to about 5 percent below that

lower sustainable trend level in the fourth quarter of 2021, and then recovers

fully by 2028. Complete economic cycles have little effect on the long-range

estimates of financial status of the trust funds, so the assumptions do not

include cycles beyond the short-range period (2021 through 2030).

The key economic assumptions underlying the three sets of projections of the

future financial status of the OASI and DI Trust Funds are discussed in the

remainder of this section.

 1 On a monthly basis, economic activity peaked in February 2020, but the decline in March was sharp

enough that the output in the first quarter of 2020 was substantially below the output in the fourth quarter of

2019. See https://www.nber.org/news/business-cycle-dating-committee-announcement-june-8-2020. 
105

Economic Assumptions and Methods

1. Productivity Assumptions

Total U.S. economy productivity is defined as the ratio of real GDP to hours

worked by all workers.1 The rate of change in total-economy productivity is

a major determinant of the growth of average earnings. Over the last six

complete economic cycles (1969-73, 1973-79, 1979-90, 1990-2001,

2001-07, and 2007-19, measured peak to peak), the annual increases in totaleconomy productivity averaged 2.66, 1.07, 1.41, 1.85, 2.19, and

1.11 percent, respectively. For the period from 1969 to 2019, covering those

last six complete economic cycles, the annual increase in total-economy productivity averaged 1.59 percent.

The assumed ultimate annual increases in total-economy productivity are

1.93, 1.63, and 1.33 percent for the low-cost, intermediate, and high-cost

assumptions, respectively.2 These rates of increase are unchanged from the

2020 report. 

The annual change in total-economy productivity for 2020 is estimated to be

2.43 percent under the intermediate assumptions, as employment declined

more than GDP during the recession. For the intermediate assumptions, the

annual rate of change in productivity is 1.46 percent for 2021, averages

0.97 percent for 2022 through 2023, is 1.40 percent for 2024, and reaches

close to its ultimate value of 1.63 percent for 2025 and thereafter. For the

low-cost assumptions, the annual rate of change in productivity is

2.64 percent for 2021, declines to 1.04 percent for 2023, and then reaches

close to its ultimate value of 1.93 percent for 2025 and thereafter. For the

high-cost assumptions, the assumed prolonged recession lowers the annual

rate of change in productivity to 0.65 percent for 2021. The growth rate

remains low, averaging 0.72 percent for 2022 through 2025, averages

1.33 percent for 2026 through 2030, and stabilizes at its ultimate value of

1.33 percent thereafter.

2. Price Inflation Assumptions

Changes in the Consumer Price Index for Urban Wage Earners and Clerical

Workers (CPI) directly affect the OASDI program through the automatic

cost-of-living benefit increases. Changes in the GDP price index (GDP deflator) affect the nominal levels of GDP, wages, self-employment income, aver-

 1 Historical levels of real GDP are from the National Income and Product Accounts (NIPA) produced by the

Bureau of Economic Analysis (BEA). Historical total hours worked are provided by the Bureau of Labor

Statistics (BLS) and cover all U.S. Armed Forces and civilian employment.

 2 These assumptions for total-economy productivity are consistent with ultimate annual increases in private

nonfarm business productivity of 2.36, 2.00, and 1.63 percent. Private nonfarm business productivity

excludes the farm, government, nonprofit institution, and private household sectors.
Assumptions and Methods

106

age earnings, and taxable payroll. For a given real rate of growth in average

earnings, a higher price inflation rate immediately results in a higher nominal

rate of growth in both earnings and revenues, while the resulting added

growth in nominal benefit levels occurs with a delay, causing an overall

increase (improvement) in the actuarial balance. Similarly, a lower price

inflation rate causes an overall decrease in the actuarial balance. 

The annual increases in the CPI averaged 4.91, 8.54, 5.30, 2.73, 2.63, and

1.73 percent over the economic cycles 1969-73, 1973-79, 1979-90,

1990-2001, 2001-07, and 2007-19, respectively.1 The annual increases in the

GDP deflator averaged 5.04, 7.54, 4.61, 2.08, 2.49, and 1.63 percent for the

respective economic cycles. For the period from 1969 to 2019, covering the

last six complete economic cycles, the annual increases in the CPI and the

GDP deflator averaged 3.89 and 3.45 percent, respectively. The annual rate

of change for 2020 is 1.21 percent for the CPI and 1.16 percent for the GDP

deflator.

The assumed ultimate annual increases in the CPI are 3.00, 2.40, and

1.80 percent for the low-cost, intermediate, and high-cost assumptions,

respectively. These values are unchanged from the 2020 report. 

For the intermediate assumptions, the annual rate of change in the CPI is

3.06 percent for 2021, and reaches the ultimate growth rate of 2.40 percent

for 2022 and thereafter. For the low-cost assumptions, the annual rate of

change in the CPI is 3.32 percent for 2021, 3.03 percent for 2022, and

reaches its ultimate growth rate of 3.00 percent for 2023 and thereafter. For

the high-cost assumptions, the annual rate of change in the CPI is

2.54 percent for 2021, 1.44 percent for 2022, and reaches its ultimate growth

rate of 1.80 percent for 2024 and thereafter. 

The annual increase in the GDP deflator differs from the annual increase in

the CPI because the two indices are constructed using different computational methods and coverage (the set of goods and services used in the measurement). The difference between the rate of change in the CPI and the rate

of change in the GDP deflator is called the price differential in this report.

For the period including 1969 through 2019, covering the last six complete

economic cycles, the average annual price differential was 0.46 percentage

point. For 2020, the annual price differential is 0.05 percentage point.

 1 BLS produces a series called the Consumer Price Index Research Series Using Current Methods

(CPI-U-RS) that approximates the measured rate of inflation over the 1978-2020 period had the method currently used been in effect since 1978. BLS does not revise the CPI values published in earlier years, for

which different methods were used. These CPI published values are shown in table V.B1. The Trustees use

an adjusted CPI series based on the CPI-U-RS when setting the ultimate price inflation assumption because

it provides a time series that is consistent with the current method for computing the CPI.
107

Economic Assumptions and Methods

The small price differential for 2020 primarily reflects a decline in oil prices.

Changes in oil prices affect the CPI much more than the GDP deflator

because oil represents a much larger share of U.S. consumption than of U.S.

production. Oil prices are assumed to grow at a relatively stable rate after

2022. For the intermediate assumptions, the price differential is

0.66 percentage point for 2021, 0.25 percentage point for 2022, and

0.35 percentage point for 2023 and later.

The assumed ultimate price differentials are 0.25, 0.35, and 0.45 percentage

point for the low-cost, intermediate, and high-cost alternatives, respectively.

Varying the ultimate projected price differential across alternatives recognizes the historical variation in this measure. Accordingly, the assumed ultimate annual increases in the GDP deflator are 2.75 (3.00 less 0.25), 2.05

(2.40 less 0.35), and 1.35 (1.80 less 0.45) percent for the low-cost, intermediate, and high-cost alternatives, respectively. The ultimate price differentials

for the three alternatives are unchanged from the 2020 report.

3. Average Earnings Assumptions

The average level of nominal earnings in OASDI covered employment for

each year has a direct effect on the size of the taxable payroll and on the

future level of average benefits. In addition, under the automatic adjustment

provisions in the law, growth in the average wage in the U.S. economy

directly affects certain parameters used in the OASDI benefit formulas, as

well as the contribution and benefit base, the exempt amounts under the

retirement earnings test, the amount of earnings required for a quarter of coverage, and in certain circumstances, the automatic cost-of-living benefit

increases.

Projected growth rates in average covered earnings are derived from projections of average U.S. earnings. Average U.S. earnings is defined as the ratio

of the sum of total U.S. wages and net proprietors’ income to the sum of total

U.S. civilian employment and Armed Forces. The growth rate in average

U.S. earnings for any period is equal to the combined growth rates for total

U.S. economy productivity, average hours worked, the ratio of earnings to

total labor compensation (which includes fringe benefits), the ratio of total

labor compensation to GDP, and the GDP deflator.

The average annual change in average hours worked was -0.21 percent over

the last six complete economic cycles covering the period from 1969 to

2019. The annual change in average hours worked averaged -0.89, -0.55,

-0.11, 0.10, -0.50, and -0.05 percent over the economic cycles 1969-73,

1973-79, 1979-90, 1990-2001, 2001-07, and 2007-19, respectively. For
Assumptions and Methods

108

2020, the annual change in average hours worked per week is estimated to be

an increase of 0.40 percent, likely due to the changing composition between

full-time and part-time employed workers.

The assumed ultimate annual rates of change for average hours worked are

0.05, -0.05, and -0.15 percent for the low-cost, intermediate, and high-cost

assumptions, respectively. These values are unchanged from the 2020 report.

The average annual change in the ratio of earnings to total labor compensation was -0.14 percent from 1969 to 2019. Most of this decrease was due to

the relative increase in the cost of employer-sponsored group health insurance (ESGHI) for wage workers. Assuming that the level of total employee

compensation is not affected by the amount of ESGHI, any increase or

decrease in the cost of ESGHI leads to a commensurate decrease or increase

in other components of employee compensation, including wages. Projections of future ratios of earnings to total labor compensation follow this principle. The Trustees assume that the total amount of future ESGHI premiums

will be affected by provisions of the Affordable Care Act of 2010 (ACA). A

key provision of ACA affecting the projected growth in ESGHI premiums,

the excise tax on ESGHI premiums (commonly referred to as the “Cadillac

Tax”), was repealed in December 2019. As a result, the Trustees have

assumed starting with the 2020 Trustees Report that ESGHI premiums will

increase faster, and wages therefore more slowly, than was assumed in the

2010 through 2019 reports. Data from BEA indicate that the other significant

component of non-wage employee compensation is employer contributions

to retirement plans. This component is assumed to grow faster than employee

compensation in the future as life expectancy and potential time in retirement

increase.

The average annual rates of change in the ratio of wages to employee compensation from 2030 to 2095 are about -0.02, -0.12, and -0.22 percent for the

low-cost, intermediate, and high-cost assumptions, respectively. These

assumed rates are about 0.01 percentage point higher (less negative) than

those assumed for the 2020 report. Under the intermediate assumptions, the

ratio of wages to employee compensation declines from 0.815 for 2020 to

0.752 for 2095.

Because earnings and compensation are the same for self-employed workers,

the ratio of earnings to total labor compensation includes self-employment

income both in the numerator and in the denominator. As a result, the rate of

change in the ratio of earnings to total labor compensation (which, under the

intermediate assumptions, averages -0.10 percent from 2030 to 2095) is

higher (less negative) than the rate of change in the ratio of wages to

employee compensation.
109

Economic Assumptions and Methods

The ratio of total labor compensation (i.e., employee compensation and net

proprietors’ income) to GDP varies over the economic cycle and with

changes in the relative sizes of different sectors of the economy. Over the last

six complete economic cycles from 1969 to 2019, this ratio has averaged

0.622. The ratio declined from a recent high of 0.649 for 2001 to 0.602 in

2009, increased to 0.612 in 2012, and was 0.611 in 2019. This ratio increased

to 0.628 for 2020 and is assumed to reach 0.631 by 2030. For years after

2030, the relative sizes of different sectors of the economy are assumed to

remain about constant,1 and therefore the ratio of total labor compensation to

GDP remains at about the 2030 level for each set of assumptions.

The projected average annual growth rate in average nominal U.S. earnings

from 2030 to 2095 is about 3.56 percent for the intermediate assumptions.

This growth rate reflects the average annual growth rate of approximately

-0.10 percent for the ratio of earnings to total labor compensation, and also

reflects the assumed ultimate annual growth rates of 1.63 percent for productivity, -0.05 percent for average hours worked, and 2.05 percent for the GDP

deflator. Similarly, the projected average annual growth rates in average

nominal U.S. earnings are 4.77 percent for the low-cost assumptions and

2.36 percent for the high-cost assumptions.

Over long periods, the average annual growth rate in the average wage in

OASDI covered employment (henceforth the “average covered wage”) is

expected to be very close to the average annual growth rate in average U.S.

earnings. The estimated annual rate of change in the average covered wage is

2.73 percent for 2020 under the intermediate assumptions. From 2020 to

2030, the annual rate of change in the average covered wage averages 5.22,

3.94, and 2.75 percent for the low-cost, intermediate, and high-cost assumptions, respectively. The projected average annual growth rates in the average

covered wage from 2030 to 2095 are 4.77, 3.55, and 2.33 percent for the

low-cost, intermediate, and high-cost assumptions, respectively. 

4. Assumed Real Wage Differential

The real increase in the average covered wage has traditionally been

expressed in the form of a real wage differential—the annual percentage

change in the average covered wage minus the annual percentage change in

the CPI. For the period from 1969 to 2019, covering the last six complete

economic cycles, the real wage differential averaged 0.79 percentage point,

the result of averages of 1.02, 0.04, 0.44, 1.47, 0.83, and 0.75 percentage

 1 The sole exception is the employment in the U.S. Armed Forces, which has declined in size over the last

40 years, and is assumed to remain at its 2019 level throughout the 75-year projection period.
Assumptions and Methods

110

points over the economic cycles 1969-73, 1973-79, 1979-90, 1990-2001,

2001-07, and 2007-19, respectively.

For the years 2031 through 2095, the projected average annual real wage differentials for OASDI covered employment are 1.77, 1.15, and

0.53 percentage points for the low-cost, intermediate, and high-cost assumptions, respectively. The rounded average annual real wage differentials are

0.01 percentage point higher than in the 2020 report. 

The real wage differential for 2020 is estimated to be 1.52 percentage points

under the intermediate assumptions. For the intermediate assumptions, the

real wage differential is projected to increase to 3.16 percentage points in

2021, and then generally decline to its long-run average of 1.15 percentage

points for 2031 through 2095. For the low-cost assumptions, the real wage

differential is 3.66 percentage points for 2021, 3.87 percentage points in

2022, and reaches its long-run average of 1.77 percentage points for 2031

through 2095. For the high-cost assumptions, the real wage differential is

2.67 percentage points for 2021. Due to the assumed “second dip” of the

“double dip” recession, it declines to -0.39 percent in 2022. It then fluctuates

in years 2023 through 2030, averaging 0.86 percentage point, before reaching its long-run average of 0.53 percentage point for 2031 through 2095.
111

Economic Assumptions and Methods

Table V.B1.—Principal Economic Assumptions

Calendar year

Annual percentage changea in—

Realwage

differentialb

Productivity

(Total U.S.

economy)

Earnings as

a percent of

total labor

compensation

Average

hours

worked

GDP

price

index

Average

annual wage

in covered

employment

Consumer

Price

Index

Historical data:

5-year periods:

1960 to 1965 . . . 3.27 -0.18 0.16 1.36 3.22 1.24 1.98

1965 to 1970 . . . 2.06 -.30 -.68 4.02 5.84 4.23 1.61

1970 to 1975 . . . 2.09 -.49 -.89 6.61 6.58 6.76 -.22

1975 to 1980 . . . .95 -.33 -.18 7.21 8.89 8.91 -.04

1980 to 1985 . . . 1.73 -.36 .01 5.24 6.52 5.22 1.29

1985 to 1990 . . . 1.34 -.20 -.07 3.14 4.79 3.83 .96

1990 to 1995 . . . 1.31 -.11 .33 2.45 3.54 3.03 .51

1995 to 2000 . . . 2.32 .28 .14 1.67 5.31 2.43 2.88

2000 to 2005 . . . 2.66 -.38 -.79 2.29 2.69 2.49 .20

2005 to 2010 . . . 1.77 -.02 -.48 1.92 2.51 2.30 .22

2010 to 2015 . . . .54 .16 .37 1.72 2.93 1.61 1.31

2015 to 2020 . . . c1.23 .10 .03 1.66 c2.91 1.70 c1.21

Economic cycles:d

1969 to 1973 . . . 2.66 -.34 -.89 5.04 5.93 4.91 1.02

1973 to 1979 . . . 1.07 -.43 -.55 7.54 8.58 8.54 .04

1979 to 1990 . . . 1.41 -.29 -.11 4.61 5.78 5.30 .44

1990 to 2001 . . . 1.85 .05 .10 2.08 4.19 2.73 1.47

2001 to 2007 . . . 2.19 -.18 -.50 2.49 3.45 2.63 .83

2007 to 2019 . . . 1.11 .05 -.05 1.63 2.49 1.73 .75

Single years:

2010 . . . . . . . . . . 2.60 .21 .54 1.17 2.59 2.07 .52

2011 . . . . . . . . . . .06 .32 .92 2.08 3.14 3.56 -.41

2012 . . . . . . . . . . .46 .47 -.02 1.92 3.32 2.10 1.22

2013 . . . . . . . . . . .60 -.33 .24 1.77 1.22 1.37 -.15

2014 . . . . . . . . . . .63 .27 .28 1.84 3.59 1.50 2.09

2015 . . . . . . . . . . .96 .05 .42 .96 3.40 -.41 3.82

2016 . . . . . . . . . . .40 .10 -.41 1.05 1.23 .98 .25

2017 . . . . . . . . . . 1.00 .13 .09 1.91 3.39 2.13 1.26

2018 . . . . . . . . . . 1.05 -.06 .35 2.39 3.48 2.55 .93

2019 . . . . . . . . . . 1.30 .22 -.28 1.81 3.75 1.66 2.08

2020 . . . . . . . . . . c2.43 .13 .40 1.16 c2.73 1.21 c1.52

Intermediate: 

2021 . . . . . . . . . . 1.46 -.16 .20 2.39 6.22 3.06 3.16

2022 . . . . . . . . . . .94 -.02 -.16 2.15 4.24 2.40 1.84

2023 . . . . . . . . . . .99 .05 -.12 2.05 3.68 2.40 1.28

2024 . . . . . . . . . . 1.40 e -.08 2.05 3.41 2.40 1.01

2025 . . . . . . . . . . 1.63 -.03 -.05 2.05 3.63 2.40 1.23

2026 . . . . . . . . . . 1.64 -.03 -.05 2.05 3.64 2.40 1.24

2027 . . . . . . . . . . 1.63 -.05 -.05 2.05 3.65 2.40 1.25

2028 . . . . . . . . . . 1.63 -.05 -.05 2.05 3.67 2.40 1.27

2029 . . . . . . . . . . 1.63 -.05 -.05 2.05 3.66 2.40 1.26

2030 . . . . . . . . . . 1.63 -.09 -.05 2.05 3.61 2.40 1.21

2030 to 2095 . . . 1.63 -.10 -.05 2.05 3.55 2.40 1.15
Assumptions and Methods

112

5. Labor Force, Employment, and Unemployment Projections

Employment is a fundamental component of economic output (GDP), taxable payroll, and the determination of OASDI benefit eligibility and benefit

levels. U.S. employment is projected in two components: the size of the

labor force (those employed or seeking employment) and the unemployment

rate (the proportion of those in the labor force who are not employed).

Table V.B2 provides the historical and projected rates of change in employment, which follow from the rates of change in the labor force, adjusted for

the varying unemployment rates from year to year.

The model used by the Office of the Chief Actuary projects the civilian labor

force by age, sex, marital status, and presence of children. The model was

updated for this report to incorporate data from the latest complete economic

Low-cost: 

2021 . . . . . . . . . . 2.64 -0.05 0.27 2.58 6.97 3.32 3.66

2022 . . . . . . . . . . 1.51 -.03 -.11 2.79 6.89 3.03 3.87

2023 . . . . . . . . . . 1.04 .07 .02 2.75 4.67 3.00 1.67

2024 . . . . . . . . . . 1.56 .04 .05 2.75 4.45 3.00 1.45

2025 . . . . . . . . . . 1.95 .02 .05 2.75 4.84 3.00 1.84

2026 . . . . . . . . . . 1.94 .02 .05 2.75 4.85 3.00 1.85

2027 . . . . . . . . . . 1.93 .01 .05 2.75 4.88 3.00 1.88

2028 . . . . . . . . . . 1.93 .02 .05 2.75 4.92 3.00 1.92

2029 . . . . . . . . . . 1.93 .03 .05 2.75 4.91 3.00 1.91

2030 . . . . . . . . . . 1.93 e .05 2.75 4.88 3.00 1.88

2030 to 2095 . . . 1.93 -.01 .05 2.75 4.77 3.00 1.77

High-cost: 

2021 . . . . . . . . . . .65 -.12 .14 1.99 5.21 2.54 2.67

2022 . . . . . . . . . . .74 -.03 -.30 1.22 1.05 1.44 -.39

2023 . . . . . . . . . . .70 .04 -.23 1.37 3.65 1.82 1.83

2024 . . . . . . . . . . .59 -.02 -.15 1.35 2.12 1.80 .32

2025 . . . . . . . . . . .86 -.07 -.15 1.35 2.35 1.80 .55

2026 . . . . . . . . . . 1.25 -.08 -.15 1.35 2.71 1.80 .91

2027 . . . . . . . . . . 1.37 -.11 -.15 1.35 2.84 1.80 1.04

2028 . . . . . . . . . . 1.43 -.12 -.15 1.35 2.80 1.80 1.00

2029 . . . . . . . . . . 1.27 -.13 -.15 1.35 2.44 1.80 .64

2030 . . . . . . . . . . 1.32 -.17 -.15 1.35 2.35 1.80 .56

2030 to 2095 . . . 1.33 -.18 -.15 1.35 2.33 1.80 .53

a For rows with a single year listed, the value is the annual percentage change from the prior year. For rows

with a range of years listed, the value is the compound average annual percentage change.

b For rows with a single year listed, the value is the annual percentage change in the average annual wage in

covered employment less the annual percentage change in the Consumer Price Index. For rows with a range

of years listed, the value is the average of annual values of the real wage differential, beginning with the year

following the first year of the range. Values are rounded after all computations.

c Estimated values for 2020 vary slightly by alternative and are shown for the intermediate assumptions.

d Economic cycles are shown from peak to peak.

e Greater than -0.005 and less than 0.005 percent.

Table V.B1.—Principal Economic Assumptions (Cont.)

Calendar year

Annual percentage changea in—

Realwage

differentialb

Productivity

(Total U.S.

economy)

Earnings as

a percent of

total labor

compensation

Average

hours

worked

GDP

price

index

Average

annual wage

in covered

employment

Consumer

Price

Index
113

Economic Assumptions and Methods

cycle, and to reflect changes in the relationships among factors affecting

labor force participation. Projections of the labor force participation rates

reflect changes in disability prevalence, educational attainment, marriage

patterns, the average level of Social Security retirement benefits, the state of

the economy, and life expectancy.

The annual rate of growth in the size of the labor force decreased from an

average of about 2.6 percent during the 1969-73 economic cycle and

2.7 percent during the 1973-79 cycle to 1.7 percent during the 1979-90 cycle,

1.2 percent during the 1990-2001 cycle, 1.1 percent during the

2001-07 cycle, and 0.5 percent during the 2007-19 cycle. The labor force

growth is expected to remain subdued due to a slowing of growth in the

working-age population in the future—a consequence of the baby-boom

generation reaching retirement ages and succeeding lower-birth-rate cohorts

reaching working ages. Under the intermediate assumptions, the labor force

is projected to increase by an average of 0.8 percent per year from 2020 to

2030 and 0.4 percent per year from 2030 to 2095.

Labor force participation rates are projected with a model that uses demographic and economic assumptions specific to each alternative. More optimistic economic assumptions in the low-cost alternative are consistent with

higher labor force participation rates, while demographic assumptions in the

low-cost alternative (such as slower improvement in longevity) are consistent with lower labor force participation rates. These economic and demographic influences have largely offsetting effects. Therefore, the projected

labor force participation rates do not vary substantially across alternatives.

Historically, labor force participation rates reflect trends in demographics

and pensions. Between the mid-1960s and the mid-1980s, labor force participation rates at ages 50 and over declined for men but were fairly stable for

women. During this period, the baby-boom generation reached working age

and more women entered the labor force. This increasing supply of labor

allowed employers to offer attractive early retirement options. Between the

mid-1980s and the mid-1990s, participation rates at ages 55 and older

roughly stabilized for men and increased for women. Since the mid-1990s,

however, participation rates for both sexes at ages 50 and over have generally risen.

Many economic and demographic factors, including longevity, health, disability prevalence, the business cycle, incentives for retirement in Social

Security and private pensions, education, and marriage patterns, will influence future labor force participation rates. The Office of the Chief Actuary

models some of these factors explicitly. To model the effects of other factors

related to increases in life expectancy, projected participation rates are

adjusted upward for mid-career and older ages to reflect projected increases
Assumptions and Methods

114

in life expectancy. For the intermediate projections, this adjustment increases

the total labor force by 2.9 percent for 2095.

For men age 16 and over, the projected age-adjusted labor force participation

rates1 for 2095 are 72.6, 72.3, and 71.7 percent for the low-cost, intermediate, and high-cost assumptions, respectively. For women age 16 and over, the

projected age-adjusted labor force participation rates for 2095 are 62.2, 61.9,

and 61.4 percent for the low-cost, intermediate, and high-cost assumptions,

respectively. These age-adjusted labor force participation rates for 2095 are

higher under all three alternatives than the age-adjusted rates for 2019 of

71.3 percent for men and 59.5 percent for women (based on actual age-specific rates published by the Bureau of Labor Statistics), primarily due to the

Trustees’ projected increases in life expectancy. 

Projected labor force participation rates in this report are slightly lower than

in the 2020 report. These lower rates resulted from incorporating into the

model the data and historical relationships among factors affecting labor

force participation from the latest complete economic cycle (2007-19). Labor

force participation rates were lower on average in recent years than in earlier

periods. The updated model is consistent with the Trustees’ belief, expressed

in the 2020 report, that a structural shift has occurred in the components of

employment, such that long-term unemployment rates and labor force participation rates will both remain somewhat below long-term past averages, with

relatively little change in the projected ratios of employment to population.

The total civilian unemployment rates are presented in table V.B2. For years

through 2030, the table presents total civilian rates without adjustment for

the changing age-sex distribution of the population. For years after 2030, the

table presents age-sex-adjusted rates, using the age-sex distribution of the

2011 civilian labor force. Age-sex-adjusted rates allow for more meaningful

comparisons across longer time periods.

The total civilian unemployment rate reflects the projected levels of unemployment for various age-sex groups of the population. Each group’s unemployment rate gradually approaches an assumed stable value within the first

ten years of the projection period for all alternatives, and thus the total agesex-adjusted civilian unemployment rate reaches its ultimate assumed value

within the first ten years of the projection period.

The assumed ultimate age-sex-adjusted unemployment rates are 3.5, 4.5, and

5.5 percent for the low-cost, intermediate, and high-cost assumptions,

 1 The Office of the Chief Actuary adjusts the labor force participation rates to the 2011 age distribution of

the civilian noninstitutional U.S. population.
115

Economic Assumptions and Methods

respectively. These values are 0.5 percentage point lower than in the

2020 report, consistent with the Trustees’ belief that unemployment rates

will remain below long-term past averages, as mentioned above. The Trustees assume that, as the economy recovers from the recent recession, the

unemployment rate will decrease from 8.1 percent for 2020 to the assumed

4.5 percent for 2024 under the intermediate assumptions. Under the low-cost

assumptions, the ultimate unemployment rate is reached in 2023. Under the

high-cost assumptions, the unemployment rate declines to 6.9 percent in

2021, then rises to a peak of 8.2 percent in 2022, and then gradually

decreases to the ultimate unemployment rate in 2029.1

6. Gross Domestic Product Projections

The value of real GDP is equal to the product of three components:

(1) productivity (i.e., output per hour worked), (2) average weekly total

employment,2 and (3) average hours worked per week, times 52. Consequently, the growth rate in real GDP is equal to the combined growth rates

for productivity, total employment, and average hours worked. For the period

from 1969 to 2019, which covers the last six complete economic cycles, the

average annual growth in real GDP was 2.7 percent, combining average

growth rates of 1.6 percent for productivity, 1.3 percent for total employment, and -0.2 percent for average hours worked

( ). The real GDP for 2020 is 3.5 percent

below its 2019 level.

For the intermediate assumptions, the average annual growth in real GDP is

2.6 percent from 2020 to 2030, combining the average growth rates of

1.46 percent for productivity, 1.14 percent for total employment, and

-0.05 percent for average hours worked. The projected average annual

growth in real GDP of 2.6 percent from 2020 to 2030 is higher than the

underlying sustainable trend rate of 2.1 percent, due to the assumed recovery

from the recession. After 2030, the annual growth in real GDP follows the

sustainable trend rate and averages 2.0 percent, which combines the projected ultimate annual growth rate of 1.63 percent for productivity, average

annual growth rate of 0.40 percent for total employment, and the ultimate

annual growth rate of -0.05 percent for average hours worked per week. The

projected growth rate of real GDP is lower than the past average growth rate

 1 The assumed ultimate unemployment rates are age-sex-adjusted rates. For the high-cost assumptions, the

age-sex-adjusted unemployment rate in 2029 is 5.5 percent, while the unadjusted rate is 5.4 percent, as

shown in table V.B2.

 2 Total employment is the sum of the U.S. Armed Forces and total civilian employment, which can be

expressed as a product of the total civilian labor force and the complement of the unemployment rate.

1.027 1.016 1.013 0.998 = × ×
Assumptions and Methods

116

mainly because the working-age population is expected to grow more slowly

than in the past.

For the low-cost assumptions, the annual growth in real GDP averages

3.4 percent from 2020 to 2030 and 2.7 percent from 2030 to 2095. For the

high-cost assumptions, the annual growth in real GDP averages 1.7 percent

from 2020 to 2030 and 1.2 percent from 2030 to 2095.

7. Interest Rates

Table V.B2 presents average annual nominal and real interest rates for newly

issued trust fund securities. The nominal rate is the average of the nominal

interest rates for special U.S. Government obligations issuable to the trust

funds in each of the 12 months of the year. Interest for these securities is

compounded semiannually, or at redemption if sooner. The real interest rate

is defined as the annual yield rate for investments in these securities divided

by the annual rate of growth in the CPI for the first year after issuance. The

real rate shown for each year reflects the actual realized (historical) or

expected (future) real yield on securities issuable in the prior year.

To develop a reasonable range of assumed ultimate future real interest rates

for the three alternatives, the Office of the Chief Actuary examined historical

experience for the last six complete economic cycles. For the period from

1969 to 2019, the real interest rate averaged 2.4 percent per year. The real

interest rates averaged 1.6, -1.0, 5.1, 4.1, 2.0, and 0.8 percent per year over

the economic cycles 1969-73, 1973-79, 1979-90, 1990-2001, 2001-07, and

2007-19, respectively. The assumed ultimate real interest rates are

2.8 percent, 2.3 percent, and 1.8 percent for the low-cost, intermediate, and

high-cost assumptions, respectively. These rates are unchanged from the

2020 report.

The average annual nominal interest rate was approximately 2.2 percent for

securities newly issuable in 2019, implying an effective annual yield of

2.2 percent for securities held one year. The CPI rose from 2019 to 2020 by

approximately 1.2 percent. The annual real interest rate for 2020 was therefore 1.0 percent. From 2020 to 2030, projected nominal interest rates depend

on changes in the economic cycle and in the CPI. When combined with the

ultimate CPI assumptions of 3.0, 2.4, and 1.8 percent, the assumed ultimate

real interest rates produce ultimate nominal interest rates of 5.8 percent for

the low-cost assumptions, 4.7 percent for the intermediate assumptions, and

3.6 percent for the high-cost assumptions. These nominal rates for newly

issued trust fund securities reach their ultimate levels by 2030.
117

Economic Assumptions and Methods

Table V.B2.—Additional Economic Factors

Calendar year 

Average annual

unemployment

ratea

Annual percentage changeb in— Average annual interest rate

Labor

forcec Totalemploymentd RealGDPe Nominalf Realg

Historical data:

5-year periods:

1960 to 1965. . . . . 5.5 1.3 1.6 5.1 4.0 2.5

1965 to 1970. . . . . 3.9 2.2 2.1 3.5 5.9 1.0

1970 to 1975. . . . . 6.1 2.5 1.5 2.7 6.7 h

1975 to 1980. . . . . 6.8 2.7 2.9 3.7 8.5 -.9

1980 to 1985. . . . . 8.3 1.5 1.5 3.3 12.1 6.9

1985 to 1990. . . . . 5.9 1.7 2.0 3.3 8.5 5.1

1990 to 1995. . . . . 6.6 1.0 .9 2.6 7.0 4.3

1995 to 2000. . . . . 4.6 1.5 1.8 4.3 6.2 3.9

2000 to 2005. . . . . 5.4 .9 .7 2.6 4.6 2.4

2005 to 2010. . . . . 6.8 .6 -.4 .9 3.8 1.8

2010 to 2015. . . . . 7.2 .4 1.3 2.2 2.0 .5

2015 to 2020. . . . . 5.0 .5 -.2 1.1 2.0 .5

Economic cycles:i

1969 to 1973. . . . . 5.3 2.6 1.8 3.6 6.5 1.6

1973 to 1979. . . . . 6.8 2.7 2.4 3.0 7.7 -1.0

1979 to 1990. . . . . 7.1 1.7 1.7 3.0 10.3 5.1

1990 to 2001. . . . . 5.5 1.2 1.2 3.2 6.5 4.1

2001 to 2007. . . . . 5.3 1.1 1.1 2.8 4.5 2.0

2007 to 2019. . . . . 6.4 .5 .6 1.7 2.4 .8

Single years:

2010 . . . . . . . . . . . 9.6 -.2 -.6 2.6 2.8 .9

2011 . . . . . . . . . . . 8.9 -.2 .6 1.6 2.4 -.7

2012 . . . . . . . . . . . 8.1 .9 1.8 2.2 1.5 .3

2013 . . . . . . . . . . . 7.4 .3 1.0 1.8 1.9 .1

2014 . . . . . . . . . . . 6.2 .3 1.6 2.5 2.3 .4

2015 . . . . . . . . . . . 5.3 .8 1.7 3.1 2.0 2.7

2016 . . . . . . . . . . . 4.9 1.3 1.7 1.7 1.8 1.0

2017 . . . . . . . . . . . 4.4 .7 1.2 2.3 2.3 -.3

2018 . . . . . . . . . . . 3.9 1.1 1.6 3.0 2.9 -.2

2019 . . . . . . . . . . . 3.7 .9 1.1 2.2 2.2 1.2

2020 . . . . . . . . . . . 8.1 -1.7 -6.2 -3.5 1.0 1.0
Assumptions and Methods

118

Intermediate:

2021 . . . . . . . . . . . 5.8 0.3 2.7 4.4 1.5 -2.0

2022 . . . . . . . . . . . 4.9 2.0 2.9 3.7 1.8 -.8

2023 . . . . . . . . . . . 4.6 1.3 1.7 2.5 2.0 -.6

2024 . . . . . . . . . . . 4.5 .9 .9 2.3 2.4 -.4

2025 . . . . . . . . . . . 4.5 .7 .7 2.3 3.0 h

2026 . . . . . . . . . . . 4.5 .5 .6 2.2 3.7 .6

2027 . . . . . . . . . . . 4.5 .4 .4 2.0 4.4 1.3

2028 . . . . . . . . . . . 4.5 .5 .5 2.1 4.6 2.0

2029 . . . . . . . . . . . 4.4 .5 .5 2.0 4.6 2.2

2030 . . . . . . . . . . . 4.4 .5 .5 2.0 4.7 2.2

2035 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2040 . . . . . . . . . . . 4.5 .3 .3 1.9 4.7 2.3

2045 . . . . . . . . . . . 4.5 .4 .4 1.9 4.7 2.3

2050 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2055 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2060 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2065 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2070 . . . . . . . . . . . 4.5 .3 .3 1.9 4.7 2.3

2075 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2080 . . . . . . . . . . . 4.5 .4 .4 2.0 4.7 2.3

2085 . . . . . . . . . . . 4.5 .5 .5 2.1 4.7 2.3

2090 . . . . . . . . . . . 4.5 .5 .5 2.1 4.7 2.3

2095 . . . . . . . . . . . 4.5 .5 .5 2.0 4.7 2.3

Low-cost:

2021 . . . . . . . . . . . 5.3 .7 3.6 6.7 1.6 -2.3

2022 . . . . . . . . . . . 3.8 1.8 3.5 4.9 2.1 -1.4

2023 . . . . . . . . . . . 3.5 1.6 1.9 3.0 2.6 -.8

2024 . . . . . . . . . . . 3.5 1.5 1.5 3.1 3.3 -.3

2025 . . . . . . . . . . . 3.5 .9 .9 2.9 4.1 .3

2026 . . . . . . . . . . . 3.5 .8 .8 2.8 4.8 1.1

2027 . . . . . . . . . . . 3.5 .6 .7 2.6 5.4 1.8

2028 . . . . . . . . . . . 3.5 .7 .7 2.7 5.7 2.4

2029 . . . . . . . . . . . 3.5 .7 .7 2.6 5.8 2.7

2030 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8

2035 . . . . . . . . . . . 3.5 .5 .5 2.5 5.8 2.8

2040 . . . . . . . . . . . 3.5 .5 .5 2.5 5.8 2.8

2045 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8

2050 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8

2055 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8

2060 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8

2065 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8

2070 . . . . . . . . . . . 3.5 .6 .6 2.6 5.8 2.8

2075 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8

2080 . . . . . . . . . . . 3.5 .8 .8 2.8 5.8 2.8

2085 . . . . . . . . . . . 3.5 .8 .8 2.8 5.8 2.8

2090 . . . . . . . . . . . 3.5 .8 .8 2.8 5.8 2.8

2095 . . . . . . . . . . . 3.5 .7 .7 2.7 5.8 2.8

Table V.B2.—Additional Economic Factors (Cont.)

Calendar year 

Average annual

unemployment

ratea

Annual percentage changeb in— Average annual interest rate

Labor

forcec Totalemploymentd RealGDPe Nominalf Realg
119

Economic Assumptions and Methods

High-cost:

2021 . . . . . . . . . . . 6.9 -0.6 0.6 1.4 1.3 -1.5

2022 . . . . . . . . . . . 8.2 .2 -1.0 -.6 1.5 -.1

2023 . . . . . . . . . . . 7.6 1.2 1.9 2.4 1.9 -.3

2024 . . . . . . . . . . . 7.1 1.4 1.9 2.3 2.4 .1

2025 . . . . . . . . . . . 6.7 1.1 1.5 2.2 3.0 .6

2026 . . . . . . . . . . . 6.2 .6 1.1 2.2 3.5 1.2

2027 . . . . . . . . . . . 5.7 .4 .9 2.1 3.6 1.7

2028 . . . . . . . . . . . 5.5 .4 .7 1.9 3.7 1.8

2029 . . . . . . . . . . . 5.4 .3 .4 1.5 3.6 1.9

2030 . . . . . . . . . . . 5.4 .3 .3 1.5 3.6 1.8

2035 . . . . . . . . . . . 5.5 .2 .2 1.4 3.6 1.8

2040 . . . . . . . . . . . 5.5 h .1 1.2 3.6 1.8

2045 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8

2050 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8

2055 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8

2060 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8

2065 . . . . . . . . . . . 5.5 h h 1.1 3.6 1.8

2070 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8

2075 . . . . . . . . . . . 5.5 -.1 -.1 1.0 3.6 1.8

2080 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8

2085 . . . . . . . . . . . 5.5 -.1 -.1 1.1 3.6 1.8

2090 . . . . . . . . . . . 5.5 h h 1.1 3.6 1.8

2095 . . . . . . . . . . . 5.5 h h 1.2 3.6 1.8

a The Office of the Chief Actuary adjusts the civilian unemployment rates for 2031 and later to the age-sex

distribution of the civilian labor force in 2011. For years through 2030, the values are the total rates without

adjustment for the changing age-sex distribution.

b For rows with a single year listed, the value is the annual percentage change from the prior year. For rows

with a range of years listed, the value is the compounded average annual percentage change.

c The U.S. civilian labor force.

d Total U.S. military and civilian employment.

e The value of the total output of goods and services in 2012 dollars.

f The average of the nominal interest rates, compounded semiannually, for special public-debt obligations

issuable to the trust funds in each of the 12 months of the year.

g The realized or expected annual real yield for each year on securities issuable in the prior year.

h Greater than -0.05 and less than 0.05 percent.

i Economic cycles are shown from peak to peak.

Table V.B2.—Additional Economic Factors (Cont.)

Calendar year 

Average annual

unemployment

ratea

Annual percentage changeb in— Average annual interest rate

Labor

forcec Totalemploymentd RealGDPe Nominalf Realg
Assumptions and Methods

120

C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS

The Office of the Chief Actuary at the Social Security Administration uses a

set of models to project future income and cost under the OASDI program.

These models rely not only on the demographic and economic assumptions

described in the previous sections, but also on a number of program-specific

assumptions and methods. Values of many program parameters change from

year to year as prescribed by formulas set out in the Social Security Act.

These program parameters affect the level of payroll taxes collected and the

level of benefits paid. The office uses more complex models to project the

numbers of future workers covered under OASDI and the levels of their covered earnings, as well as the numbers of future beneficiaries and the expected

levels of their benefits. The following subsections provide descriptions of

these program-specific assumptions and methods.

1. Automatically Adjusted Program Parameters

The Social Security Act requires that certain parameters affecting the determination of OASDI benefits and taxes be adjusted annually to reflect

changes in particular economic measures. Formulas prescribed in the law,

applied to reported statistics, change these program parameters annually. The

law bases these automatic adjustments on measured changes in the national

average wage index (AWI) and the Consumer Price Index for Urban Wage

Earners and Clerical Workers (CPI).1 This section shows values for program

parameters adjusted using these indices from the time that these adjustments

became effective through 2030. Projected values for future years depend on

the economic assumptions described in the preceding section of this report.

Tables V.C1 and V.C2 present the historical and projected values of the CPIbased benefit increases, the AWI series, and the values of many of the wageindexed program parameters. Each table shows projections under the three

alternative sets of assumptions. Table V.C1 includes:

 • The annual cost-of-living benefit increase percentages. The automatic

cost-of-living adjustment provisions in the Social Security Act specify

increases in OASDI monthly benefits based on increases in the CPI.

Volatility in oil prices has resulted in substantial volatility in cost-of-living adjustments over the last two decades. A large cost-of-living adjustment for December 2008 was followed by no cost-of-living adjustments

for December 2009 and December 2010. More recent volatility in oil

 1 The Federal Register publishes details of these indexation procedures annually. Also see

www.ssa.gov/OACT/COLA/.
121

Program Assumptions and Methods

prices again affected the CPI, resulting in no cost-of-living adjustment

for December 2015. Cost-of-living adjustments resumed in December

2016. All three sets of assumptions include annual cost-of-living adjustments for all future years.

 • The annual levels of and percentage increases in the AWI. Under section 215(b)(3) of the Social Security Act, Social Security benefit computations index taxable earnings (for most workers first becoming

eligible for benefits in 1979 or later) using the AWI for each year after

1950. This procedure converts a worker’s past earnings to approximately average-wage-indexed equivalent values near the time of his or

her benefit eligibility. Other program parameters presented in this section that are subject to the automatic-adjustment provisions also rely on

the AWI.

 • The wage-indexed contribution and benefit base. For any year, the contribution and benefit base is the maximum amount of earnings subject to

the OASDI payroll tax and creditable toward benefit computation. The

Social Security Act defers any increase in the contribution and benefit

base if there is no cost-of-living adjustment effective for December of

the preceding year. There was no increase in the contribution and benefit base for 2010, 2011, or 2016 because there was no cost-of-living

adjustment for the immediate prior December in each case. Under all

three sets of assumptions, the contribution and benefit base is projected

to increase for all future years.

 • The wage-indexed retirement earnings test exempt amounts. The

exempt amounts are the annual amount of earnings below which beneficiaries do not have benefits withheld. A lower exempt amount applies

for years prior to the year of attaining normal retirement age. A higher

exempt amount applies beginning with the year in which a beneficiary

attains normal retirement age. Starting in 2000, the retirement earnings

test no longer applies beginning with the month of attaining normal

retirement age. The Social Security Act defers any increase in these

exempt amounts if there is no cost-of-living adjustment effective for

December of the preceding year. There was no increase in these exempt

amounts for 2010, 2011, or 2016 because there was no cost-of-living

adjustment for the immediate prior December. Under all three sets of

assumptions, the exempt amounts increase for all future years.
Assumptions and Methods

122

Table V.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and 

Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2030

Calendar year

Cost-of-living

benefit

increasea

(percent)

Average

wage index (AWI) b Contribution

and benefit

base c

Retirement earnings

test exempt amount

Amount

Increase

(percent)

Under

NRAd At NRAe

Historical data:

1975 . . . . . . . . . . . 8.0 $8,630.92 7.5 $14,100 $2,520 $2,520

1976 . . . . . . . . . . . 6.4 9,226.48 6.9 15,300 2,760 2,760

1977 . . . . . . . . . . . 5.9 9,779.44 6.0 16,500 3,000 3,000

1978 . . . . . . . . . . . 6.5 10,556.03 7.9 17,700 3,240 4,000

1979 . . . . . . . . . . . 9.9 11,479.46 8.7 22,900 3,480 4,500

1980 . . . . . . . . . . . 14.3 12,513.46 9.0 25,900 3,720 5,000

1981 . . . . . . . . . . . 11.2 13,773.10 10.1 29,700 4,080 5,500

1982 . . . . . . . . . . . 7.4 14,531.34 5.5 32,400 4,440 6,000

1983 . . . . . . . . . . . 3.5 15,239.24 4.9 35,700 4,920 6,600

1984 . . . . . . . . . . . 3.5 16,135.07 5.9 37,800 5,160 6,960

1985 . . . . . . . . . . . 3.1 16,822.51 4.3 39,600 5,400 7,320

1986 . . . . . . . . . . . 1.3 17,321.82 3.0 42,000 5,760 7,800

1987 . . . . . . . . . . . 4.2 18,426.51 6.4 43,800 6,000 8,160

1988 . . . . . . . . . . . 4.0 19,334.04 4.9 45,000 6,120 8,400

1989 . . . . . . . . . . . 4.7 20,099.55 4.0 48,000 6,480 8,880

1990 . . . . . . . . . . . 5.4 21,027.98 4.6 51,300 6,840 9,360

1991 . . . . . . . . . . . 3.7 21,811.60 3.7 53,400 7,080 9,720

1992 . . . . . . . . . . . 3.0 22,935.42 5.2 55,500 7,440 10,200

1993 . . . . . . . . . . . 2.6 23,132.67 .9 57,600 7,680 10,560

1994 . . . . . . . . . . . 2.8 23,753.53 2.7 60,600 8,040 11,160

1995 . . . . . . . . . . . 2.6 24,705.66 4.0 61,200 8,160 11,280

1996 . . . . . . . . . . . 2.9 25,913.90 4.9 62,700 8,280 12,500

1997 . . . . . . . . . . . 2.1 27,426.00 5.8 65,400 8,640 13,500

1998 . . . . . . . . . . . 1.3 28,861.44 5.2 68,400 9,120 14,500

1999 . . . . . . . . . . . f2.5 30,469.84 5.6 72,600 9,600 15,500

2000 . . . . . . . . . . . 3.5 32,154.82 5.5 76,200 10,080 17,000

2001 . . . . . . . . . . . 2.6 32,921.92 2.4 80,400 10,680 25,000

2002 . . . . . . . . . . . 1.4 33,252.09 1.0 84,900 11,280 30,000

2003 . . . . . . . . . . . 2.1 34,064.95 2.4 87,000 11,520 30,720

2004 . . . . . . . . . . . 2.7 35,648.55 4.6 87,900 11,640 31,080

2005 . . . . . . . . . . . 4.1 36,952.94 3.7 90,000 12,000 31,800

2006 . . . . . . . . . . . 3.3 38,651.41 4.6 94,200 12,480 33,240

2007 . . . . . . . . . . . 2.3 40,405.48 4.5 97,500 12,960 34,440

2008 . . . . . . . . . . . 5.8 41,334.97 2.3 102,000 13,560 36,120

2009 . . . . . . . . . . . .0 40,711.61 -1.5 106,800 14,160 37,680

2010 . . . . . . . . . . . .0 41,673.83 2.4 106,800 14,160 37,680

2011 . . . . . . . . . . . 3.6 42,979.61 3.1 106,800 14,160 37,680

2012 . . . . . . . . . . . 1.7 44,321.67 3.1 110,100 14,640 38,880

2013 . . . . . . . . . . . 1.5 44,888.16 1.3 113,700 15,120 40,080

2014 . . . . . . . . . . . 1.7 46,481.52 3.5 117,000 15,480 41,400

2015 . . . . . . . . . . . .0 48,098.63 3.5 118,500 15,720 41,880

2016 . . . . . . . . . . . .3 48,642.15 1.1 118,500 15,720 41,880

2017 . . . . . . . . . . . 2.0 50,321.89 3.5 127,200 16,920 44,880

2018 . . . . . . . . . . . 2.8 52,145.80 3.6 128,400 17,040 45,360

2019 . . . . . . . . . . . 1.6 54,099.99 3.7 132,900 17,640 46,920

Intermediate:

2020 . . . . . . . . . . . g1.3 55,576.94 2.7 g137,700 g18,240 g48,600

2021 . . . . . . . . . . . 3.1 59,064.67 6.3 g142,800 g18,960 g50,520

2022 . . . . . . . . . . . 2.4 61,600.90 4.3 146,700 19,440 51,840

2023 . . . . . . . . . . . 2.4 63,849.67 3.7 156,000 20,760 55,080

2024 . . . . . . . . . . . 2.4 66,000.86 3.4 162,900 21,600 57,480

2025 . . . . . . . . . . . 2.4 68,383.15 3.6 168,600 22,440 59,520

2026 . . . . . . . . . . . 2.4 70,873.78 3.6 174,300 23,160 61,560

2027 . . . . . . . . . . . 2.4 73,475.22 3.7 180,600 24,000 63,840

2028 . . . . . . . . . . . 2.4 76,170.31 3.7 187,200 24,840 66,120

2029 . . . . . . . . . . . 2.4 78,951.37 3.7 194,100 25,800 68,520

2030 . . . . . . . . . . . 2.4 81,801.34 3.6 201,300 26,760 71,040
123

Program Assumptions and Methods

Table V.C2 shows values for other wage-indexed parameters. The table provides historical values from 1978, when indexing of the amount of earnings

required for a quarter of coverage first began, through 2021, and also shows

projected values through 2030. These other wage-indexed program parameters are:

 • The bend points in the formula for computing the primary insurance

amount (PIA) for workers who reach age 62, become disabled, or die in

a given year. As figure V.C1 illustrates, these two bend points define

three ranges in a worker’s average indexed monthly earnings (AIME).

The formula for the worker’s PIA multiplies a 90, 32, or 15 percent facLow-cost:

2020 . . . . . . . . . . . g1.3 $55,741.04 3.0 g$137,700 g$18,240 g$48,600

2021 . . . . . . . . . . . 3.5 59,648.50 7.0 g142,800 g18,960 g50,520

2022 . . . . . . . . . . . 3.0 63,755.58 6.9 147,300 19,560 51,960

2023 . . . . . . . . . . . 3.0 66,712.89 4.6 157,500 20,880 55,680

2024 . . . . . . . . . . . 3.0 69,647.48 4.4 168,600 22,320 59,520

2025 . . . . . . . . . . . 3.0 72,991.20 4.8 176,400 23,400 62,280

2026 . . . . . . . . . . . 3.0 76,531.70 4.9 183,900 24,360 65,040

2027 . . . . . . . . . . . 3.0 80,275.57 4.9 192,900 25,560 68,040

2028 . . . . . . . . . . . 3.0 84,217.83 4.9 202,200 26,880 71,400

2029 . . . . . . . . . . . 3.0 88,345.11 4.9 212,100 28,200 74,880

2030 . . . . . . . . . . . 3.0 92,646.16 4.9 222,600 29,520 78,600

High-cost:

2020 . . . . . . . . . . . g1.3 55,467.53 2.5 g137,700 g18,240 g48,600

2021 . . . . . . . . . . . 2.4 58,429.26 5.3 g142,800 g18,960 g50,520

2022 . . . . . . . . . . . 1.6 59,127.30 1.2 146,700 19,440 51,720

2023 . . . . . . . . . . . 1.8 61,216.49 3.5 154,500 20,520 54,480

2024 . . . . . . . . . . . 1.8 62,482.94 2.1 156,300 20,760 55,200

2025 . . . . . . . . . . . 1.8 63,944.74 2.3 161,700 21,480 57,120

2026 . . . . . . . . . . . 1.8 65,675.50 2.7 165,000 21,960 58,320

2027 . . . . . . . . . . . 1.8 67,545.75 2.8 168,900 22,440 59,640

2028 . . . . . . . . . . . 1.8 69,439.08 2.8 173,400 23,040 61,320

2029 . . . . . . . . . . . 1.8 71,137.10 2.4 178,500 23,640 63,000

2030 . . . . . . . . . . . 1.8 72,816.93 2.4 183,600 24,360 64,800

a Effective with benefits payable for June in each year 1975-82, and for December in each year after 1982.

b See table VI.G6 for projected dollar amounts of the AWI for years beyond the last year of this table.

c Public Law 95-216 specified amounts for 1978-81. Public Law 101-239 changed the indexing procedure

and caused slightly higher bases after 1989.

d Normal retirement age. See table V.C3 for specific values.

e In 1955-82, the retirement earnings test did not apply at ages 72 and over. In 1983-99, the test did not apply

at ages 70 and over. Beginning in 2000, the test does not apply beginning with the month of normal retirement

age attainment. In the year of normal retirement age attainment, the higher exempt amount applies to earnings

prior to the month of normal retirement age attainment. Public Law 95-216 specified amounts for 1978-82.

Public Law 104-121 specified amounts for 1996-2002.

f Originally determined as 2.4 percent. Pursuant to Public Law 106-554, effectively 2.5 percent.

g Actual amount, as determined under automatic-adjustment provisions.

Table V.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and 

Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2030 (Cont.)

Calendar year

Cost-of-living

benefit

increasea

(percent)

Average

wage index (AWI) b Contribution

and benefit

base c

Retirement earnings

test exempt amount

Amount

Increase

(percent)

Under

NRAd At NRAe
Assumptions and Methods

124

tor by the portion of the worker’s AIME that falls within the three

respective ranges, and then adds the resulting products together.

 • The bend points in the formula for computing the maximum total

amount of monthly benefits payable based on the earnings record of a

retired or deceased worker (maximum family benefit). As figure V.C2

illustrates, these three bend points define four ranges in a worker’s PIA.

The formula for the maximum family benefit multiplies a 150, 272, 134,

or 175 percent factor by the portion of the worker’s PIA that falls within

the four respective ranges, and then adds the resulting products together.

 Figure V.C1.—Primary-Insurance-Amount Formula for Those Newly Eligible in 2021

90% 

32% 

15% 

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000

Primary Insurance Amount 

Average Indexed Monthly Earnings

First 

bend point

($996)

Second 

bend point

($6,002)
125

Program Assumptions and Methods

 • The amount of earnings required in a year to earn a quarter of coverage

(QC). The number and timing of QCs earned determines an individual’s

insured status—the basic requirement for benefit eligibility under

OASDI.

 • The old-law contribution and benefit base—the contribution and benefit

base that would have been in effect without enactment of the 1977

amendments. This old-law base is used in determining special-minimum benefits for certain workers who have many years of low earnings

in covered employment. Since 1986, the calculation of OASDI benefits

for certain workers who are eligible to receive pensions based on noncovered employment uses the old-law base. In addition, the Railroad

Retirement program and the Employee Retirement Income Security Act

of 1974 use the old-law base for certain purposes.

 Figure V.C2.—OASI Maximum-Family-Benefit Formula 

for Those Newly Eligible in 2021

150% 

272% 

134% 

175% 

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$0 $500 $1,000 $1,500 $2,000 $2,500 $3,000

Maximum family benefit 

Primary Insurance Amount

Third 

bend point

($2,395)

Second 

bend point

($1,837)

First 

bend point

($1,272)
Assumptions and Methods

126

Table V.C2.—Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2030

Calendar year

AIME bend

points in PIA

formulaa

PIA bend points

in OASI maximumfamily-benefit formulab

Earnings

required for

a quarter of

coverage

Old-law

contribution

and benefit

basec First Second First Second Third

Historical data:

1978 . . . . . . . . . d d d d de $250 e $17,700

1979 . . . . . . . . . e $180 e $1,085 e $230 e $332 e $433 260 18,900

1980 . . . . . . . . . 194 1,171 248 358 467 290 20,400

1981 . . . . . . . . . 211 1,274 270 390 508 310 22,200

1982 . . . . . . . . . 230 1,388 294 425 554 340 24,300

1983 . . . . . . . . . 254 1,528 324 468 610 370 26,700

1984 . . . . . . . . . 267 1,612 342 493 643 390 28,200

1985 . . . . . . . . . 280 1,691 358 517 675 410 29,700

1986 . . . . . . . . . 297 1,790 379 548 714 440 31,500

1987 . . . . . . . . . 310 1,866 396 571 745 460 32,700

1988 . . . . . . . . . 319 1,922 407 588 767 470 33,600

1989 . . . . . . . . . 339 2,044 433 626 816 500 35,700

1990 . . . . . . . . . 356 2,145 455 656 856 520 38,100

1991 . . . . . . . . . 370 2,230 473 682 890 540 39,600

1992 . . . . . . . . . 387 2,333 495 714 931 570 41,400

1993 . . . . . . . . . 401 2,420 513 740 966 590 42,900

1994 . . . . . . . . . 422 2,545 539 779 1,016 620 45,000

1995 . . . . . . . . . 426 2,567 544 785 1,024 630 45,300

1996 . . . . . . . . . 437 2,635 559 806 1,052 640 46,500

1997 . . . . . . . . . 455 2,741 581 839 1,094 670 48,600

1998 . . . . . . . . . 477 2,875 609 880 1,147 700 50,700

1999 . . . . . . . . . 505 3,043 645 931 1,214 740 53,700

2000 . . . . . . . . . 531 3,202 679 980 1,278 780 56,700

2001 . . . . . . . . . 561 3,381 717 1,034 1,349 830 59,700

2002 . . . . . . . . . 592 3,567 756 1,092 1,424 870 63,000

2003 . . . . . . . . . 606 3,653 774 1,118 1,458 890 64,500

2004 . . . . . . . . . 612 3,689 782 1,129 1,472 900 65,100

2005 . . . . . . . . . 627 3,779 801 1,156 1,508 920 66,900

2006 . . . . . . . . . 656 3,955 838 1,210 1,578 970 69,900

2007 . . . . . . . . . 680 4,100 869 1,255 1,636 1,000 72,600

2008 . . . . . . . . . 711 4,288 909 1,312 1,711 1,050 75,900

2009 . . . . . . . . . 744 4,483 950 1,372 1,789 1,090 79,200

2010 . . . . . . . . . 761 4,586 972 1,403 1,830 1,120 79,200

2011 . . . . . . . . . 749 4,517 957 1,382 1,803 1,120 79,200

2012 . . . . . . . . . 767 4,624 980 1,415 1,845 1,130 81,900

2013 . . . . . . . . . 791 4,768 1,011 1,459 1,903 1,160 84,300

2014 . . . . . . . . . 816 4,917 1,042 1,505 1,962 1,200 87,000

2015 . . . . . . . . . 826 4,980 1,056 1,524 1,987 1,220 88,200

2016 . . . . . . . . . 856 5,157 1,093 1,578 2,058 1,260 88,200

2017 . . . . . . . . . 885 5,336 1,131 1,633 2,130 1,300 94,500

2018 . . . . . . . . . 895 5,397 1,144 1,651 2,154 1,320 95,400

2019 . . . . . . . . . 926 5,583 1,184 1,708 2,228 1,360 98,700

2020 . . . . . . . . . 960 5,785 1,226 1,770 2,309 1,410 102,300

2021 . . . . . . . . . 996 6,002 1,272 1,837 2,395 1,470 106,200

Intermediate:

2022 . . . . . . . . . 1,023 6,166 1,307 1,887 2,461 1,510 108,900

2023 . . . . . . . . . 1,087 6,553 1,389 2,005 2,615 1,600 115,800

2024 . . . . . . . . . 1,134 6,834 1,449 2,091 2,727 1,670 120,900

2025 . . . . . . . . . 1,175 7,084 1,502 2,168 2,827 1,730 125,400

2026 . . . . . . . . . 1,215 7,323 1,552 2,241 2,922 1,790 129,600

2027 . . . . . . . . . 1,259 7,587 1,608 2,322 3,028 1,850 134,100

2028 . . . . . . . . . 1,304 7,863 1,667 2,406 3,138 1,920 139,200

2029 . . . . . . . . . 1,352 8,152 1,728 2,494 3,253 1,990 144,300

2030 . . . . . . . . . 1,402 8,451 1,791 2,586 3,373 2,060 149,400
127

Program Assumptions and Methods

In addition to the economic factors that affect the determination of OASDI

benefits, there are certain legislated changes that affect current and future

benefit amounts. Two such changes are the scheduled increases in the normal

retirement age and in the delayed retirement credits. Table V.C3 shows the

scheduled changes in these parameters and the resulting effects on benefit

levels expressed as a percentage of PIA.

Low-cost:

2022 . . . . . . . . . $1,026 $6,184 $1,311 $1,892 $2,468 $1,510 $109,500

2023 . . . . . . . . . 1,098 6,618 1,403 2,025 2,641 1,620 117,000

2024 . . . . . . . . . 1,173 7,073 1,499 2,164 2,823 1,730 125,100

2025 . . . . . . . . . 1,228 7,402 1,569 2,265 2,954 1,810 130,800

2026 . . . . . . . . . 1,282 7,727 1,638 2,364 3,084 1,890 136,800

2027 . . . . . . . . . 1,343 8,098 1,717 2,478 3,232 1,980 143,100

2028 . . . . . . . . . 1,409 8,491 1,800 2,598 3,389 2,070 150,300

2029 . . . . . . . . . 1,478 8,906 1,888 2,725 3,554 2,180 157,500

2030 . . . . . . . . . 1,550 9,344 1,981 2,859 3,729 2,280 165,300

High-cost:

2022 . . . . . . . . . 1,021 6,154 1,305 1,883 2,456 1,500 108,900

2023 . . . . . . . . . 1,075 6,483 1,374 1,984 2,587 1,580 114,600

2024 . . . . . . . . . 1,088 6,560 1,391 2,007 2,618 1,600 116,100

2025 . . . . . . . . . 1,127 6,792 1,440 2,078 2,710 1,660 120,000

2026 . . . . . . . . . 1,150 6,932 1,470 2,121 2,767 1,690 122,700

2027 . . . . . . . . . 1,177 7,094 1,504 2,171 2,831 1,730 125,400

2028 . . . . . . . . . 1,209 7,287 1,545 2,230 2,908 1,780 129,000

2029 . . . . . . . . . 1,243 7,494 1,589 2,293 2,991 1,830 132,600

2030 . . . . . . . . . 1,278 7,704 1,633 2,357 3,075 1,880 136,200

a The formula to compute a PIA is: (1) 90% of AIME below the first bend point, plus (2) 32% of AIME in

excess of the first bend point but not in excess of the second, plus (3) 15% of AIME in excess of the second

bend point. The bend points are determined based on the first year a beneficiary becomes eligible for benefits.

b The formula to compute an OASI family maximum is: (1) 150% of PIA below the first bend point, plus

(2) 272% of PIA in excess of the first bend point but not in excess of the second, plus (3) 134% of PIA in

excess of the second bend point but not in excess of the third, plus (4) 175% of PIA in excess of the third

bend point. This formula also determines family maximums for disabled workers first eligible after 1978 and

entitled before July 1980.

c Contribution and benefit base that would have been in effect without enactment of the Social Security

Amendments of 1977. Public Law 101-239 changed the indexing procedure and caused slightly higher bases

after 1989.

d No provision in law for this amount in this year.

e Amount specified by Social Security Amendments of 1977.

Table V.C2.—Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2030 (Cont.)

Calendar year

AIME bend

points in PIA

formulaa

PIA bend points

in OASI maximumfamily-benefit formulab

Earnings

required for

a quarter of

coverage

Old-law

contribution

and benefit

basec First Second First Second Third
Assumptions and Methods

128

2. Covered Employment

Projections of the total U.S. civilian labor force and unemployment rate (see

table V.B2) are based on Bureau of Labor Statistics definitions from the Current Population Survey (CPS). These projections represent the average

weekly number of employed and unemployed persons, age 16 and over, in

the U.S. in a calendar year. Covered employment for a calendar year is

defined as the total number of persons who have any OASDI covered earnings (that is, earnings subject to the OASDI payroll tax) at any time during

that year. For those age 16 and over, projected covered employment is the

sum of age-sex groups, each reflecting the growth projected for the group’s

total U.S employment and average weeks worked per year.1 For the shortrange period, the age-sex-adjusted average weeks worked rises slightly as the

age-sex-adjusted unemployment rate declines to its ultimate assumed value

of 4.5 percent. After 2030, the average weeks worked for each age-sex group

Table V.C3.—Legislated Changes in Normal Retirement Age and Delayed Retirement

Credits for Persons Attaining Age 62 in Each Year 1986 and Later

Year of birth

Year of

attainment of

age 62

Normal

retirement

age (NRA)

Credit for each 

year of delayed 

retirement after

NRA (percent)

Benefit, as a percentage of PIA, 

beginning at age —

62 65 66 67 70

1924 . . . . . . . . 1986. . . . . . . . 65 . . . . . . . . 3 80 100 103 106 115

1925 . . . . . . . . 1987. . . . . . . . 65 . . . . . . . . 3 1/2 80 100 103 1/2 107 117 1/2

1926 . . . . . . . . 1988. . . . . . . . 65 . . . . . . . . 3 1/2 80 100 103 1/2 107 117 1/2

1927 . . . . . . . . 1989. . . . . . . . 65 . . . . . . . . 4 80 100 104 108 120

1928 . . . . . . . . 1990. . . . . . . . 65 . . . . . . . . 4 80 100 104 108 120

1929 . . . . . . . . 1991. . . . . . . . 65 . . . . . . . . 4 1/2 80 100 104 1/2 109 122 1/2

1930 . . . . . . . . 1992. . . . . . . . 65 . . . . . . . . 4 1/2 80 100 104 1/2 109 122 1/2

1931 . . . . . . . . 1993. . . . . . . . 65 . . . . . . . . 5 80 100 105 110 125

1932 . . . . . . . . 1994. . . . . . . . 65 . . . . . . . . 5 80 100 105 110 125

1933 . . . . . . . . 1995. . . . . . . . 65 . . . . . . . . 5 1/2 80 100 105 1/2 111 127 1/2

1934 . . . . . . . . 1996. . . . . . . . 65 . . . . . . . . 5 1/2 80 100 105 1/2 111 127 1/2

1935 . . . . . . . . 1997. . . . . . . . 65 . . . . . . . . 6 80 100 106 112 130

1936 . . . . . . . . 1998. . . . . . . . 65 . . . . . . . . 6 80 100 106 112 130

1937 . . . . . . . . 1999. . . . . . . . 65 . . . . . . . . 6 1/2 80 100 106 1/2 113 132 1/2

1938 . . . . . . . . 2000. . . . . . . . 65, 2 mo . . . 6 1/2 79 1/6 98 8/9 105 5/12 111 11/12 131 5/12

1939 . . . . . . . . 2001. . . . . . . . 65, 4 mo . . . 7 78 1/3 97 7/9 104 2/3 111 2/3 132 2/3

1940 . . . . . . . . 2002. . . . . . . . 65, 6 mo . . . 7 77 1/2 96 2/3 103 1/2 110 1/2 131 1/2

1941 . . . . . . . . 2003. . . . . . . . 65, 8 mo . . . 7 1/2 76 2/3 95 5/9 102 1/2 110 132 1/2

1942 . . . . . . . . 2004. . . . . . . . 65, 10 mo . . 7 1/2 75 5/6 94 4/9 101 1/4 108 3/4 131 1/4

1943-54 . . . . . 2005-16 . . . . . 66 . . . . . . . . 8 75 93 1/3 100 108 132

1955 . . . . . . . . 2017. . . . . . . . 66, 2 mo . . . 8 74 1/6 92 2/9 98 8/9 106 2/3 130 2/3

1956 . . . . . . . . 2018. . . . . . . . 66, 4 mo . . . 8 73 1/3 91 1/9 97 7/9 105 1/3 129 1/3

1957 . . . . . . . . 2019. . . . . . . . 66, 6 mo . . . 8 72 1/2 90 96 2/3 104 128

1958 . . . . . . . . 2020. . . . . . . . 66, 8 mo . . . 8 71 2/3 88 8/9 95 5/9 102 2/3 126 2/3

1959 . . . . . . . . 2021. . . . . . . . 66, 10 mo . . 8 70 5/6 87 7/9 94 4/9 101 1/3 125 1/3

1960 & later . . 2022 & later . 67 . . . . . . . . 8 70 86 2/3 93 1/3 100 124

 1 For those under age 16, projected covered employment is the sum of age-sex components, each of which is

projected as a ratio to the Social Security area population.
129

Program Assumptions and Methods

is assumed to remain constant. The projection method also accounts for

changes in non-OASDI-covered employment and the increase in coverage of

Federal civilian employment as a result of the 1983 Social Security Amendments. It also reflects changes in the number and employment status of otherthan-LPR immigrants residing within the Social Security coverage area, such

as undocumented immigrants and foreign workers and students with temporary visas.

The covered-worker rate is the ratio of OASDI covered workers to the Social

Security area population. For men age 16 and over, the projected ageadjusted covered-worker rates1 for 2095 are 68.8, 68.8, and 68.6 percent for

the low-cost, intermediate, and high-cost assumptions, respectively. For

women age 16 and over, the projected age-adjusted covered-worker rates for

2095 are 66.5, 65.9, and 65.1 percent for the low-cost, intermediate, and

high-cost assumptions, respectively. For men, the intermediate projected rate

for 2095 is lower than the 2019 age-adjusted rate of 70.8 percent primarily

due to the projected increase in the portion of the Social Security area population that consists of other-than-LPR immigrants. For women, the intermediate projected rate for 2095 is higher than the 2019 age-adjusted rate of

65.4 percent because the projected increase in the age-adjusted labor force

participation rate more than offsets the projected increase in the portion of

the population that will be other-than-LPR immigrants.

3. Insured Population

Eligibility for worker benefits under the OASDI program requires some

threshold level of work in covered employment. A worker satisfies this

requirement by his or her accumulation of quarters of coverage (QCs). Prior

to 1978, a worker earned one QC for each calendar quarter in which he or

she earned at least $50. In 1978, when annual earnings reporting replaced

quarterly reporting, the amount required to earn a QC (up to a maximum of

four per year) was set at $250. As specified in the law, the Social Security

Administration has adjusted this amount each year since then according to

changes in the AWI. Its value in 2021 is $1,470.

There are three types of insured status that a worker can earn under the

OASDI program. The number and recency of QCs earned determine each

status. A worker is fully insured when his or her total number of QCs is

greater than or equal to the number of years elapsed after the year of attainment of age 21 (but not less than six). After a worker has accumulated

 1 Age-adjusted covered-worker rates are adjusted to the 2011 age distribution of the Social Security area

population.
Assumptions and Methods

130

40 QCs, he or she remains permanently fully insured. A worker is disability

insured if he or she is: (1) a fully insured worker who has accumulated 20

QCs during the 40-quarter period ending with the current quarter, (2) a fully

insured worker aged 24-30 who has accumulated QCs during one-half of the

quarters elapsed after the quarter of attainment of age 21 and up to and

including the current quarter, or (3) a fully insured worker under age 24 who

has accumulated six QCs during the 12-quarter period ending with the current quarter. A worker is currently insured when he or she has accumulated

six QCs during the 13-quarter period ending with the current quarter. Periods

of disability reduce the number of quarters required for insured status, but

not below the minimum of six QCs.

There are many types of benefits payable to workers and their family members under the OASDI program. A worker must be fully insured to be eligible for a primary retirement benefit and for his or her spouse or children to

be eligible for auxiliary retirement benefits. A deceased worker must have

been either currently insured or fully insured at the time of death for his or

her children (and their mother or father) to be eligible for benefits. If there

are no eligible surviving children, the deceased worker must have been fully

insured at the time of death for his or her surviving spouse to be eligible. A

worker must be disability insured to be eligible for a primary disability benefit and for his or her spouse or children to be eligible for auxiliary disability

benefits.

The Office of the Chief Actuary estimates the fully insured population, as a

percentage of the Social Security area population, by single year of age and

sex starting in 1969. The short-range model extrapolates the historical trend

in these rates from data in the Continuous Work History Sample (CWHS).

The model uses information on quarters of coverage earned due to employment covered by Social Security derived from tabulations of the CWHS. The

model also uses historical administrative data on beneficiaries in force and

estimated historical mortality rates. The model combines this information to

estimate the proportion of individuals who were alive and fully insured as of

the end of each historical year. Using projected mortality rates and covered

workers, the model extrapolates these rates into the future and applies them

to the historical and projected population to arrive at the fully insured population by age and sex through the end of the short-range period.

The long-range fully insured model uses 30,000 simulated work histories for

each sex and birth cohort, representing everyone except the other-than-LPR

immigrant population.1 For the other-than-LPR immigrant population, the

 1 Those granted legal work authorization through the 2012 Deferred Action for Childhood Arrivals program

are included in the simulations.
131

Program Assumptions and Methods

model generates substantially lower percentages attaining fully insured status. The model constructs simulated work histories using past coverage rates,

earnings distributions, and amounts required for crediting QCs, and develops

them in a manner that replicates historical individual variations in work patterns. The probability of covered employment in any year is assumed to be

higher for those who have worked more consistently in the recent past.

Model parameters are selected so that simulated fully insured percentages

are consistent with the fully insured percentages estimated by the short-range

model for the recent historical period.

The Office of the Chief Actuary estimates the disability insured population,

as a percentage of the fully insured population, by age and sex starting

in 1969. The office bases historical values on a tabulation of the disability

insured population from the CWHS and estimates of the fully insured population. The short-range model projects these percentages by using the relationship between the historical percentages and covered-worker rates. The

long-range model projects these percentages by using the same simulated

work histories used to project the fully insured percentages. The long-range

model makes additional adjustments to the model simulations in order to

bring the disability insured percentages in the historical and short-range periods into close agreement with those estimated from the CWHS and the shortrange model.

The office does not project the currently insured population because the

number of beneficiaries who are entitled to benefits based solely on currently

insured status has been very small recently and is likely to remain small in

the future.

Using these insured models, the percentage of the Social Security area population aged 62 and over that is fully insured is projected to change from its

estimated level of 88.1 for December 31, 2018, to 86.0, 88.0, and 90.5 for

December 31, 2095, under the low-cost, intermediate, and high-cost alternatives, respectively. Over the projection period, the percentages for both men

and women change significantly. The percentage for men declines, reflecting, in part, increases in the percent of the population that is classified as

other-than-LPR immigrants and is thus less likely to have earnings reported

and credited to them. The percentage for women increases, reflecting the

past substantial growth in the employment of younger cohorts of women.

Under the intermediate assumptions, for example, the percentage for men

decreases from 94.1 to 87.1, and the percentage for women increases from

83.1 to 88.9.
Assumptions and Methods

132

4. Old-Age and Survivors Insurance Beneficiaries

The Office of the Chief Actuary projects the number of OASI beneficiaries

for each type of benefit separately by the sex of the worker on whose earnings the benefits are based and by the age of the beneficiary. For the longrange period, the office also projects the number of beneficiaries by marital

status for several types of benefits. The office uses two separate models in

making these projections. The short-range model makes projections during

the first 10 years of the projection period and the long-range model makes

projections thereafter.

The short-range model develops the number of retired-worker beneficiaries

by applying award rates to the aged fully insured population, excluding those

already receiving retired-worker, disabled-worker, aged-widow(er), or agedspouse benefits, and by applying termination rates to the number of retiredworker beneficiaries.

The long-range model projects the number of retired-worker beneficiaries

who were not previously converted from disabled-worker beneficiary status

as a percentage of the exposed population.1 For age 62, the model projects

this percentage by using a linear regression based on the historical relationship between this percentage, the employment rate2 at age 62, and the number of months from age 62 to normal retirement age. The percentage for ages

70 and over is nearly 100 because delayed retirement credits cannot be

earned after age 70. The long-range model projects the percentage for each

age 63 through 69 based on historical experience with an adjustment for

changes in the portion of the primary insurance amount that is payable at

each age of entitlement. The model adjusts these percentages for ages 62

through 69 to reflect changes in the normal retirement age.

The long-range model calculates the number of retired-worker beneficiaries

previously converted from disabled-worker beneficiary status using an

extension of disabled-worker death rates by age, sex, and duration.

The Office of the Chief Actuary estimates the number of aged-spouse beneficiaries, excluding those who are also receiving a retired-worker benefit, from

the population projected by age and sex. Benefits of aged-spouse beneficiaries depend on the earnings records of their husbands or wives, who are

referred to as “earners.” The short-range model projects insured aged-spouse

beneficiaries in conjunction with the retired-worker beneficiaries. This

 1 The exposed population is the fully insured population age 62 and over, excluding persons entitled to or

converted from disabled-worker benefits and fully insured persons entitled only to widow(er) benefits.

 2 The employment rate is the ratio of U.S. civilian employment to the civilian noninstitutional population.
133

Program Assumptions and Methods

model projects uninsured aged-spouse beneficiaries by applying award rates

to the aged uninsured male or female population and by applying termination

rates to the population already receiving such benefits.

The long-range model estimates aged-spouse beneficiaries separately for

those married and divorced. The model projects the number of married agedspouse beneficiaries, by age and sex, by applying a series of factors to the

number of spouses, aged 62 and over, in the population. These factors are the

probabilities that the spouse and the earner meet all of the conditions of

eligibility—that is, the probabilities that: (1) the earner is 62 or over, (2) the

earner is insured, (3) the earner is either receiving benefits or has suspended

benefits, (4) the spouse is not receiving a benefit for the care of an entitled

child, (5) the spouse is either not insured or is insured but not receiving benefits, and (6) the spouse is not eligible to receive a significant government

pension based on earnings from noncovered employment. To calculate the

estimated number of aged-spouse beneficiaries, the model applies a projected prevalence rate to the resulting number of spouses. Due to the Bipartisan Budget Act of 2015, aged spouses are no longer eligible to receive an

aged-spouse benefit if the earner suspends their benefit after April 29, 2016.

Additionally, for those turning age 62 in 2016 and later, deemed filing now

applies to all retired workers and spouses even after initial entitlement,

regardless of age. Thus, spouses who are insured are no longer eligible to

delay their retired-worker benefit while receiving an aged-spouse benefit.

The long-range model estimates the number of divorced aged-spouse beneficiaries, by age and sex, by applying the same factors to the number of

divorced persons aged 62 and over in the population, with three differences.

First, the model applies a factor to reflect the probability that the earner (former spouse) is still alive. If the former spouse is not alive, the person may be

entitled to a divorced widow(er) benefit. Second, the model applies a factor

to reflect the probability that the marriage to the former spouse lasted at least

10 years. Third, the model does not apply factor (3) in the previous paragraph because, effective January 1985, a divorced person is generally no longer required to wait for the former spouse to receive benefits.

The Office of the Chief Actuary bases the projected numbers of children

under age 18, and students aged 18 and 19, who are eligible for benefits as

children of retired-worker beneficiaries, on the projected number of children

in the population. The short-range model develops the number of entitled

children by applying award rates to the number of children in the population

who have two living parents and by applying termination rates to the number

of children already receiving benefits.
Assumptions and Methods

134

The long-range model projects separately the number of entitled children by

sex of the earner parent. For each age under 18, the model multiplies the projected number of children with a parent aged 62 and over by the ratio of the

number of retired workers aged 62 to 71 to the number of members of the

population aged 62 to 71. For student beneficiaries, the model multiplies the

number of children aged 18 and 19 in the population by the probabilities that:

(1) the parent is alive, aged 62 or over, insured, and receiving a retiredworker benefit; and (2) the child is attending high school.

The Office of the Chief Actuary projects the number of disabled children,

aged 18 and over, of retired-worker beneficiaries from the adult population.

The short-range model applies award rates to the population and applies termination rates to the number of disabled children already receiving benefits.

The long-range model projects the number of disabled children in a manner

similar to that used for student children except for a factor that reflects the

probability of being disabled before age 22.

The short-range model develops the number of spouses of retired workers,

who are entitled to spouse benefits because they are caring for a child who is

under age 16 or disabled, by applying award rates to the number of awards to

children of retired workers and by applying termination rates to the number

of young spouses with a child in their care who are already receiving benefits. The long-range model projects the number of young-spouse beneficiaries with a child in their care as a proportion of the number of child

beneficiaries of retired workers, including projected changes in average family size.

The Office of the Chief Actuary projects the number of aged-widow(er) beneficiaries, excluding those who are also receiving a retired-worker benefit,

from the population by age and sex. The short-range model projects fully

insured aged-widow(er) beneficiaries in conjunction with the retired-worker

beneficiaries. The model projects the number of uninsured aged-widow(er)

beneficiaries by applying award rates to the aged uninsured male or female

population and by applying termination rates to the population already

receiving such benefits. The long-range model projects uninsured agedwidow(er) beneficiaries by marital status. The model multiplies the number

of widow(er)s in the population aged 60 and over by the probabilities that:

(1) the deceased earner is fully insured at death, (2) the widow(er) is not

receiving a benefit for the care of an entitled child, (3) the widow(er) is not

fully insured, and (4) the widow(er) benefits are not withheld because of

receipt of a significant government pension based on earnings in noncovered

employment. In addition, the model applies the same factors to the number

of divorced persons aged 60 and over in the population and includes addi-
135

Program Assumptions and Methods

tional factors representing the probability that the person’s former earner

spouse has died and that the marriage lasted at least 10 years. The model

projects the number of insured aged-widow(er) beneficiaries who are ages

60 through 70 in a manner similar to that for uninsured aged-widow(er) beneficiaries. In addition, the model assumes that some insured widow(er)s who

had not applied for their retired-worker benefits will receive widow(er) benefits. The model projects insured aged-widow(er) beneficiaries over age 70 by

applying termination rates to the population that started receiving such benefits prior to age 70.

The short-range model develops the number of disabled-widow(er) beneficiaries by applying award rates to the uninsured male or female population

and by applying termination rates to the population already receiving a disabled-widow(er) benefit. The long-range model projects the number for each

cohort by age from 50 to normal retirement age as percentages of the widowed and divorced populations, adjusted for the insured status of the

deceased spouse, the prevalence of disability, and the probability that the disabled spouse is not receiving another type of benefit.

The Office of the Chief Actuary bases the projected number of children

under age 18, and students aged 18 and 19, who are entitled to benefits as

survivors of deceased workers, on the number of children in the population

whose mothers or fathers are deceased. The short-range model develops the

number of entitled children by applying award rates to the number of

orphaned children and by applying termination rates to the number of children already receiving benefits.

The long-range model projects the number of surviving-child beneficiaries in

a manner similar to that for student beneficiaries of retired workers, except

that the model replaces the probability that the parent is aged 62 or over with

the probability that the parent is deceased.

The Office of the Chief Actuary projects the number of surviving-disabledchild beneficiaries, aged 18 and over, from the adult population. The shortrange model applies award rates to the population and applies termination

rates to the number of surviving-disabled-child beneficiaries already receiving benefits. The long-range model projects the number of surviving-disabled-child beneficiaries in a manner similar to that for surviving-studentchild beneficiaries, except for including an additional factor to reflect the

probability of being disabled before age 22.

The short-range model develops the numbers of entitled surviving-mother

and surviving-father beneficiaries by applying award rates to the number of

awards to surviving-child beneficiaries, in cases where the children are either
Assumptions and Methods

136

under age 16 or disabled, and by applying termination rates to the number of

surviving-mother and surviving-father beneficiaries already receiving benefits. The long-range model estimates the numbers of surviving-mother and

surviving-father beneficiaries, assuming they are not remarried, from the

number of surviving-child beneficiaries.

The Office of the Chief Actuary projects the number of surviving-parent

beneficiaries based on the historical pattern of the number of such beneficiaries.

Table V.C4 shows the projected number of beneficiaries under the OASI program by type of benefit. The retired-worker beneficiary counts include those

persons who receive a residual auxiliary benefit in addition to their retiredworker benefit. The office makes estimates of the number and amount of

residual payments separately for spouses and widow(er)s.

Table V.C4.—OASI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1945-2095

[In thousands]

Calendar year

Retired workers and auxiliaries Survivors

Worker Total a Spouse Child

WidowwidowerMotherfather Child Parent

Historical data:

1945 . . . . . . . . . . 518 159 13 94 121 377 6 1,288

1950 . . . . . . . . . . 1,771 508 46 314 169 653 15 3,477

1955 . . . . . . . . . . 4,474 1,192 122 701 292 1,154 25 7,961

1960 . . . . . . . . . . 8,061 2,269 268 1,544 401 1,577 36 14,157

1965 . . . . . . . . . . 11,101 2,614 461 2,371 472 2,074 35 19,128

1970 . . . . . . . . . . 13,349 2,668 546 3,227 523 2,688 29 23,030

1975 . . . . . . . . . . 16,589 2,867 643 3,888 582 2,919 21 27,509

1980 . . . . . . . . . . 19,564 3,018 639 4,415 563 2,610 15 30,823

1985 . . . . . . . . . . 22,435 3,069 456 4,862 372 1,918 10 33,122

1990 . . . . . . . . . . 24,841 3,104 421 5,098 304 1,777 6 35,551

1995 . . . . . . . . . . 26,679 3,027 441 5,213 275 1,884 4 37,522

2000 . . . . . . . . . . 28,505 2,798 459 4,901 203 1,878 3 38,747

2005 . . . . . . . . . . 30,461 2,524 488 4,569 178 1,903 2 40,126

2010 . . . . . . . . . . 34,593 2,316 580 4,285 159 1,913 2 43,847

2011 . . . . . . . . . . 35,600 2,291 594 4,239 158 1,907 2 44,791

2012 . . . . . . . . . . 36,720 2,280 612 4,193 154 1,907 1 45,868

2013 . . . . . . . . . . 37,893 2,285 625 4,139 150 1,899 1 46,992

2014 . . . . . . . . . . 39,009 2,303 635 4,092 143 1,892 1 48,075

2015 . . . . . . . . . . 40,089 2,335 648 4,050 140 1,893 1 49,155

2016 . . . . . . . . . . 41,233 2,370 661 4,004 133 1,893 1 50,296

2017 . . . . . . . . . . 42,447 2,375 675 3,961 128 1,904 1 51,491

2018 . . . . . . . . . . 43,721 2,391 690 3,908 121 1,911 1 52,743

2019 . . . . . . . . . . 45,094 2,430 701 3,878 117 1,916 1 54,137

2020 . . . . . . . . . . 46,330 2,323 704 3,823 115 1,936 1 55,231

Intermediate:

2021 . . . . . . . . . . 47,428 2,182 720 3,776 113 1,971 1 56,190

2025 . . . . . . . . . . 52,878 1,794 772 3,714 108 2,048 1 61,314

2030 . . . . . . . . . . 59,512 1,705 853 3,635 104 2,115 1 67,925

2035 . . . . . . . . . . 63,708 1,642 928 3,364 117 2,136 1 71,896

2040 . . . . . . . . . . 65,944 1,509 1,010 3,128 131 2,194 1 73,916
137

Program Assumptions and Methods

Notes: 

1. The number of beneficiaries does not include uninsured individuals who receive benefits under

section 228 of the Social Security Act. Transfers from the General Fund of the Treasury reimburse the OASI

Trust Fund for the cost of most of these individuals.

2. Components may not sum to totals because of rounding.

Intermediate (Cont.):

2045 . . . . . . . . . . 66,932 1,417 1,030 2,982 129 2,206 1 74,695

2050 . . . . . . . . . . 68,549 1,377 1,075 2,861 126 2,193 1 76,182

2055 . . . . . . . . . . 70,885 1,382 1,123 2,771 121 2,150 1 78,432

2060 . . . . . . . . . . 74,109 1,405 1,172 2,697 116 2,080 1 81,579

2065 . . . . . . . . . . 77,173 1,435 1,182 2,665 112 2,023 1 84,591

2070 . . . . . . . . . . 80,247 1,476 1,195 2,658 111 2,003 1 87,691

2075 . . . . . . . . . . 83,347 1,508 1,227 2,648 111 2,007 1 90,848

2080 . . . . . . . . . . 85,369 1,518 1,249 2,615 109 2,006 1 92,868

2085 . . . . . . . . . . 86,279 1,514 1,257 2,558 107 1,987 1 93,703

2090 . . . . . . . . . . 86,606 1,538 1,257 2,524 104 1,958 1 93,987

2095 . . . . . . . . . . 88,350 1,574 1,299 2,502 102 1,931 1 95,758

Low-cost:

2021 . . . . . . . . . . 47,414 2,182 721 3,775 113 1,974 1 56,180

2025 . . . . . . . . . . 52,756 1,797 779 3,710 109 2,075 1 61,226

2030 . . . . . . . . . . 59,049 1,719 876 3,622 109 2,207 1 67,584

2035 . . . . . . . . . . 62,431 1,638 965 3,407 117 2,366 1 70,925

2040 . . . . . . . . . . 63,854 1,491 1,070 3,193 133 2,549 1 72,290

2045 . . . . . . . . . . 64,055 1,381 1,101 3,066 133 2,654 1 72,390

2050 . . . . . . . . . . 64,932 1,326 1,162 2,957 133 2,712 1 73,223

2055 . . . . . . . . . . 66,639 1,307 1,228 2,871 132 2,731 1 74,909

2060 . . . . . . . . . . 69,293 1,299 1,299 2,795 132 2,728 1 77,547

2065 . . . . . . . . . . 71,793 1,292 1,327 2,756 135 2,761 1 80,065

2070 . . . . . . . . . . 74,220 1,295 1,361 2,743 140 2,855 1 82,615

2075 . . . . . . . . . . 76,566 1,292 1,420 2,727 146 2,979 1 85,131

2080 . . . . . . . . . . 77,848 1,280 1,460 2,694 151 3,082 1 86,516

2085 . . . . . . . . . . 78,192 1,259 1,483 2,658 154 3,149 1 86,896

2090 . . . . . . . . . . 78,726 1,289 1,500 2,678 157 3,204 1 87,555

2095 . . . . . . . . . . 81,544 1,338 1,590 2,731 160 3,269 1 90,632

High-cost:

2021 . . . . . . . . . . 47,445 2,182 719 3,777 113 1,968 1 56,206

2025 . . . . . . . . . . 53,040 1,792 768 3,722 106 2,023 1 61,451

2030 . . . . . . . . . . 60,129 1,695 832 3,659 97 2,016 1 68,429

2035 . . . . . . . . . . 65,338 1,677 883 3,299 111 1,872 1 73,179

2040 . . . . . . . . . . 68,705 1,558 931 3,026 119 1,789 1 76,129

2045 . . . . . . . . . . 70,855 1,492 939 2,847 113 1,719 1 77,966

2050 . . . . . . . . . . 73,509 1,487 967 2,703 105 1,651 1 80,422

2055 . . . . . . . . . . 76,684 1,533 990 2,596 96 1,565 1 83,465

2060 . . . . . . . . . . 80,631 1,589 1,003 2,509 86 1,460 1 87,279

2065 . . . . . . . . . . 84,370 1,645 987 2,472 77 1,358 1 90,910

2070 . . . . . . . . . . 88,186 1,691 974 2,451 71 1,281 1 94,654

2075 . . . . . . . . . . 92,049 1,734 971 2,434 66 1,226 1 98,480

2080 . . . . . . . . . . 94,770 1,762 969 2,391 61 1,182 1 101,135

2085 . . . . . . . . . . 96,143 1,747 959 2,298 57 1,134 1 102,337

2090 . . . . . . . . . . 95,714 1,750 938 2,209 52 1,083 1 101,746

2095 . . . . . . . . . . 95,340 1,767 933 2,111 47 1,033 1 101,233

a Retired-worker beneficiaries include persons who also receive a residual benefit consisting of the excess of

an auxiliary benefit over their retired-worker benefit.

Table V.C4.—OASI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1945-2095 (Cont.)

[In thousands]

Calendar year

Retired workers and auxiliaries Survivors

Worker Total a Spouse Child

WidowwidowerMotherfather Child Parent
Assumptions and Methods

138

5. Disability Insurance Beneficiaries

The DI Trust Fund pays for benefits to disabled workers who: (1) satisfy the

disability insured requirements, (2) are unable to engage in any substantial

gainful activity due to a medically determinable physical or mental impairment severe enough to satisfy the requirements of the program, and (3) have

not yet attained normal retirement age. Spouses and children of such disabled

workers may also receive DI benefits provided they satisfy certain criteria,

primarily age and earnings requirements.

The Office of the Chief Actuary projects the number of disabled-worker beneficiaries in current-payment status (disability prevalence) for each future

year. The projections start with the number in current-payment status as of

December 2020. Projections of the number of new beneficiaries awarded

benefits each year (disability incidence) and the number of beneficiaries

leaving the disability rolls each year then determine the number in currentpayment status in later years. Beneficiaries leave the rolls due to death and

recovery (disability terminations) and due to conversion from disabledworker to retired-worker beneficiary status at normal retirement age, after

which the OASI Trust Fund pays for benefits. The remainder of this section

describes the concepts of disability incidence, termination, and prevalence.

a. Disability Incidence

The disability incidence rate is the ratio of the number of new beneficiaries

awarded benefits each year to the number of individuals who meet insured

requirements but are not yet receiving benefits (the disability-exposed population1). The Office of the Chief Actuary projects the number of newly

awarded beneficiaries for each future year by multiplying assumed age-sexspecific disability incidence rates and the projected disability-exposed population by age and sex.

Figure V.C3 illustrates the projected incidence rates under the three alternatives along with historical rates. Incidence rates have varied substantially

during the historical period since 1970 due to a variety of demographic and

economic factors, along with changes in legislation and program administration. The solid lines in figure V.C3 show the age-sex-adjusted incidence rate

consistent with the age-sex distribution of the disability-exposed population

for 2000. This adjustment allows a meaningful comparison of incidence rates

over time by focusing on the likelihood of being awarded disabled worker

 1 The disability-exposed population excludes those receiving benefits, while the disability insured population includes them. Section V.C.3 of this report describes the projection of the disability insured population.
139

Program Assumptions and Methods

benefits, excluding the effects of a changing distribution of the population

toward ages where disability is more or less likely.

The dashed lines in figure V.C3 represent the gross (unadjusted) incidence

rates. The changing age-sex distribution of the exposed population over time

influences these unadjusted rates. The gross incidence rate fell below the

age-sex-adjusted rate between 1975 and 2000 as the baby-boom generation

increased the size of the younger working-age population, where disability

incidence is lower than in older populations. After 1990, the gross rate generally increased relative to the age-sex-adjusted rate as the baby-boom generation moved into an age range where disability incidence peaks. The projected

gross incidence rate generally declines relative to the age-sex-adjusted rate

as the baby-boom generation moves above the normal retirement age and the

lower-birth-rate cohorts of the 1970s enter prime disability ages (50 to normal retirement age). As these smaller cohorts age beyond normal retirement

age, by about 2050, the gross incidence rate returns to a higher relative level

under the intermediate assumptions. Thereafter, the gross rate remains higher

than the age-sex-adjusted rate, and reflects the persistently higher average

age of the working-age population, which is largely due to lower birth rates

since 1965, and to the increase in the normal retirement age.

For the first 10 years of the projection period (through 2030), incidence rates

reflect several factors including: (1) aspects of program administration, such

as efforts to reduce the disability determination backlogs and recent changes

in procedures for adjudicating claims; (2) assumed future unemployment

rates; and (3) recent trends in incidence. At the beginning of the period of

high unemployment that began in 2007, disability incidence rates were well

above the general trend level, with rates reaching a peak in 2010. Over the

last few years, incidence rates have subsided as the economy has recovered,

and have persisted at levels well below those expected over the long-term.

Some of the elevation of disability incidence rates experienced during the

recession that began in 2007 and the lowering of incidence rates experienced

during the recovery are likely due to many individuals applying for disability

benefits earlier than they would have otherwise. For 2020, the actual incidence rate (3.5 per thousand) was below the level projected in last year’s

report (4.3 per thousand). In this year’s report, incidence rates under the

intermediate alternative are projected to rise quickly from the level in 2020

to a temporary peak in 2022, decline from that peak in 2023, and then gradually rise through the rest of the short-range period toward the ultimate

assumed levels. This projected pattern of incidence over the next several

years is based on a variety of factors, including that disability applications

are expected to increase to pre-pandemic levels as the COVID-19 pandemic
Assumptions and Methods

140

recedes, the economy will continue to recover, and there will be a temporary

increase in applications partially offsetting reduced levels experienced

during the pandemic. In 2030, at the end of the short-range period, age-sexspecific incidence rates are assumed to reach the ultimate rates assumed for

the long-range projections. These ultimate age-sex-specific disability incidence rates were selected based on careful analysis of historical levels and

patterns and expected future conditions, including the impact of scheduled

increases in the normal retirement age.1 The ultimate incidence rates represent the expected average rates of incidence for the future.

For the intermediate alternative, the Trustees assume that the ultimate agesex-adjusted incidence rate (adjusted to the disability-exposed population for

the year 2000) will be 5.0 awards per thousand exposed, which is the same as

in last year’s report. Figure V.C3 illustrates that the assumed ultimate agesex-adjusted incidence rate of 5.0 is slightly lower than the average rate for

the historical period 1970 through 2020 (5.1 per thousand). However, a similar comparison using gross incidence rates gives a very different result. The

projected ultimate gross incidence rate is substantially greater than the average gross rate over the historical period due to the large changes in the agesex distribution of the disability-exposed population between 1970 and 2010.

The Trustees assume that the ultimate age-sex-adjusted incidence rates for

the low-cost and high-cost alternatives will be 4.0 and 6.0 awards per thousand exposed, or about 1.0 awards per thousand lower and 1.0 awards per

thousand higher, respectively, than the ultimate incidence rate for the intermediate alternative. These ultimate age-sex-adjusted incidence rates are similar to those in last year’s report.

 1 Projected incidence rates are adjusted upward to account for additional workers who are expected to file

for disability benefits (rather than retirement benefits) in response to reductions in retirement benefits as the

normal retirement age rises.
141

Program Assumptions and Methods

b. Disability Termination

Beneficiaries stop receiving disability benefits when they die, experience an

improvement in their medically-determinable impairment such that they are

deemed able to engage in substantial gainful activity, or return to substantial

work. Disabled-worker beneficiaries who return to substantial work for an

extended period are deemed to have recovered, and their benefits are then

terminated. The termination rate is the ratio of the number of terminations

for these reasons to the average number of disabled-worker beneficiaries

during the year.

The Office of the Chief Actuary projects termination rates by age, sex, and

reason for termination. In addition, the office projects termination rates by

duration of entitlement to disabled-worker benefits in the long-range period

(post-2030).

In the short-range period (through 2030), the projected age-sex-adjusted

death rate (adjusted to the 2000 disabled-worker beneficiary population)

under the intermediate assumptions declines from the temporarily elevated

rate of 28.2 deaths per thousand beneficiaries for 2020 to about 24.0 per

thousand for 2030. These rates are assumed to remain elevated through 2023

 Figure V.C3.—DI Disability Incidence Rates, 1970-2095

[Awards per thousand disability-exposed]

0

1

2

3

4

5

6

7

8

9

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

Calendar year

Gross incidence rates

Age-sex-adjusted

incidence rates

I

II

Historical Projected

III

III

II

I
Assumptions and Methods

142

due to the COVID-19 pandemic, and then return to follow the underlying

declining trend in general population mortality. The projected age-sexadjusted recovery rate (medical improvement and return to substantial work)

under the intermediate assumptions decreases from the relatively high level

of 14.0 per thousand beneficiaries for 2020 to 10.3 per thousand beneficiaries for 2030. The recovery rate has been high in recent years due to an ongoing administrative effort to eliminate a backlog of medical continuing

disability reviews. The recovery rate is expected to increase temporarily

through 2022 as these reviews are completed and the backlog is eliminated

over the next several years. Thereafter, the rate decreases as the backlog is

reduced. Under the low-cost and high-cost assumptions, total age-sexadjusted termination rates due to death and recovery are roughly 10-

15 percent higher or lower, respectively, than under the intermediate assumptions.

For the long-range period (post-2030), the Office of the Chief Actuary projects death and recovery rates by age, sex, and duration of entitlement relative

to the average level of rates experienced over the base period 2011 through

2015. The assumed ultimate age-sex-adjusted recovery rate for disabled

workers is about 10.4 per thousand beneficiaries. The assumed ultimate agesex-adjusted recovery rates for the low-cost and high-cost alternatives are

about 12.5 and 8.3 recoveries per thousand beneficiaries, respectively. Death

rates by age and sex change throughout the long-range period at the same

rate as death rates in the general population. The age-sex-adjusted death rate

decreases from 28.2 per thousand beneficiaries in 2020 to 22.2, 12.8, and

6.2 per thousand disabled-worker beneficiaries for 2095 under the low-cost,

intermediate, and high-cost assumptions, respectively.

Figure V.C4 illustrates gross and age-sex-adjusted total termination rates

(including both recoveries and deaths) for disabled-worker beneficiaries for

the historical period since 1970, and for the projection period through 2095.

As with incidence rates, the age-sex-adjusted termination rate illustrates the

real change in the tendency to terminate benefits. Changes in the age-sex distribution of the beneficiary population influence the gross termination rate. A

shift in the disabled-worker beneficiary population to older ages, as occurred

over the past 20 years when the baby-boom generation moved into pre-retirement ages, increases gross death termination rates relative to the age-sexadjusted rates.
143

Program Assumptions and Methods

c. Comparison of Incidence, Termination, and Conversion

Incidence and termination rates are the foundation for projecting the number

of disabled-worker beneficiaries in current-payment status. At normal retirement age, all disabled-worker beneficiaries convert to retired-worker status

and leave the DI rolls. 

Figure V.C5 compares the historical and projected (intermediate) levels of

incidence, termination, and conversion on both a gross basis and an age-sexadjusted basis. Incidence rates have varied widely, and the Trustees expect

the age-sex adjusted rates under the intermediate assumptions to remain near

the middle of the high and low extremes experienced since 1970. Termination rates have declined and the Trustees expect them to continue to decline,

largely because of declining death rates. 

Conversions are a transfer of beneficiaries at normal retirement age from the

DI program to the OASI program. Therefore, the disability “conversion” rate

is 100 percent for disabled-worker beneficiaries reaching normal retirement

age in a given year and zero at all other ages. After conversion, recovery

from the disabling condition is no longer relevant for benefit eligibility. The

conversion ratio is the number of conversions in a given year (that is, benefi-

 Figure V.C4.—DI Disability Termination Rates, 1970-2095

[Terminations per thousand disabled-worker beneficiaries]

0

20

40

60

80

100

120

140

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

Calendar year

Gross termination rates

Age-sex-adjusted

termination rates

II

III

I

Historical Projected
Assumptions and Methods

144

ciaries who reach normal retirement age) divided by the average number of

disabled-worker beneficiaries at all ages in that year. The ratio is constant on

an age-sex-adjusted basis, except for the two periods during which normal

retirement age increases under current law. On a gross basis, however, the

conversion ratio rises and falls with the changing proportion of all disabledworker beneficiaries who attain normal retirement age in a given year. The

gross conversion ratio generally increases from 2005 to 2030 due to aging of

the beneficiary population.

d. DI Beneficiaries and Disability Prevalence Rates

The Office of the Chief Actuary makes detailed projections of disabledworker awards, terminations, and conversions and combines these to project

the number of disabled workers receiving benefits over the next 75 years.

Table V.C5 presents the projected numbers of disabled workers in currentpayment status. The number of disabled workers in current-payment status

grows from 8.2 million at the end of 2020, to 10.9 million, 12.6 million, and

12.8 million at the end of 2095, under the low-cost, intermediate, and highcost assumptions, respectively. Of course, much of this growth results from

 Figure V.C5.—Comparison of DI Disability Incidence Rates, Termination Rates and 

Conversion Ratios Under Intermediate Assumptions, 1970-2095

[Awards per thousand disability-exposed;

terminations and conversions per thousand disabled-worker beneficiaries]

0

20

40

60

80

100

120

140

160

0

1

2

3

4

5

6

7

8

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

Termination rates &

Conversion ratios

Incidence rates

Calendar year

Gross incidence rates

Age-sex-adjusted incidence rates

Gross conversion ratios

Age-sex-adjusted conversion ratios

Gross termination rates

Historical Projected

Age-sex-adjusted termination rates
145

Program Assumptions and Methods

the growth and aging of the population described earlier in this chapter.

Table V.C5 also presents projected numbers of auxiliary beneficiaries and

disability prevalence rates on both a gross basis and an age-sex-adjusted

basis.

Table V.C5.—DI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1960-2095

[Beneficiaries in thousands; prevalence rates per thousand persons insured for disability benefits]

Calendar year

Disabledworker

beneficiaries

Auxiliary beneficiaries

Total

beneficiaries

Disability

prevalence rates

Spouse Child Gross

Age-sexadjusteda

Historical data:

1960. . . . . . . . . . . . 455 77 155 687

1965. . . . . . . . . . . . 988 193 558 1,739

1970. . . . . . . . . . . . 1,493 283 889 2,665 20 18

1975. . . . . . . . . . . . 2,488 453 1,411 4,351 29 28

1980. . . . . . . . . . . . 2,856 462 1,359 4,677 28 31

1985. . . . . . . . . . . . 2,653 306 945 3,904 24 26

1990. . . . . . . . . . . . 3,007 266 989 4,261 25 28

1995. . . . . . . . . . . . 4,179 264 1,409 5,852 33 35

2000. . . . . . . . . . . . 5,036 165 1,466 6,667 36 36

2005. . . . . . . . . . . . 6,519 157 1,633 8,309 45 40

2010. . . . . . . . . . . . 8,204 161 1,820 10,185 55 44

2011. . . . . . . . . . . . 8,576 164 1,874 10,614 58 45

2012. . . . . . . . . . . . 8,827 163 1,900 10,890 59 46

2013. . . . . . . . . . . . 8,941 157 1,889 10,987 60 46

2014. . . . . . . . . . . . 8,955 150 1,828 10,932 59 46

2015. . . . . . . . . . . . 8,909 143 1,756 10,808 59 45

2016. . . . . . . . . . . . 8,809 136 1,667 10,612 58 44

2017. . . . . . . . . . . . 8,695 127 1,590 10,412 57 43

2018. . . . . . . . . . . . 8,537 119 1,507 10,164 55 41

2019. . . . . . . . . . . . 8,378 114 1,434 9,927 54 40

2020. . . . . . . . . . . . 8,151 105 1,364 9,620 52 39

Intermediate:

2021. . . . . . . . . . . . 8,067 106 1,336 9,509 52 38

2025. . . . . . . . . . . . 8,348 111 1,334 9,793 52 38

2030. . . . . . . . . . . . 8,395 109 1,399 9,903 52 39

2035. . . . . . . . . . . . 8,738 110 1,539 10,387 53 40

2040. . . . . . . . . . . . 9,174 112 1,760 11,046 55 41

2045. . . . . . . . . . . . 9,853 123 1,918 11,894 58 42

2050. . . . . . . . . . . . 10,316 127 2,035 12,478 60 43

2055. . . . . . . . . . . . 10,683 132 2,100 12,915 61 43

2060. . . . . . . . . . . . 10,778 129 2,114 13,021 61 44

2065. . . . . . . . . . . . 10,956 132 2,119 13,208 61 44

2070. . . . . . . . . . . . 11,120 137 2,161 13,418 61 44

2075. . . . . . . . . . . . 11,085 137 2,242 13,464 60 44

2080. . . . . . . . . . . . 11,187 137 2,336 13,660 59 44

2085. . . . . . . . . . . . 11,460 138 2,414 14,011 59 45

2090. . . . . . . . . . . . 12,157 150 2,475 14,782 61 45

2095. . . . . . . . . . . . 12,635 153 2,521 15,308 62 45
Assumptions and Methods

146

Note: Components may not sum to totals because of rounding.

The disability prevalence rate is the ratio of the number of disabled-worker

beneficiaries in current-payment status to the number of persons insured for

disability benefits. Figure V.C6 illustrates the historical and projected disability prevalence rates on both a gross basis and on an age-sex-adjusted

basis (adjusted to the age-sex distribution of the disability insured population

for the year 2000).

Changes in prevalence rates are a direct result of changes in incidence rates

and termination rates. Figure V.C5 depicts patterns for incidence and termination rates, which are helpful for understanding the trend in prevalence

Low-cost:

2021. . . . . . . . . . . . 8,048 106 1,336 9,489 51 37

2025. . . . . . . . . . . . 7,884 110 1,255 9,249 49 35

2030. . . . . . . . . . . . 7,320 108 1,243 8,671 45 33

2035. . . . . . . . . . . . 7,212 89 1,335 8,636 43 33

2040. . . . . . . . . . . . 7,340 85 1,528 8,953 43 33

2045. . . . . . . . . . . . 7,752 90 1,660 9,501 44 33

2050. . . . . . . . . . . . 8,046 91 1,753 9,890 45 33

2055. . . . . . . . . . . . 8,308 92 1,806 10,206 45 33

2060. . . . . . . . . . . . 8,390 89 1,830 10,309 44 33

2065. . . . . . . . . . . . 8,560 89 1,866 10,515 43 33

2070. . . . . . . . . . . . 8,747 93 1,951 10,791 43 33

2075. . . . . . . . . . . . 8,837 93 2,073 11,003 42 33

2080. . . . . . . . . . . . 9,099 94 2,198 11,390 41 34

2085. . . . . . . . . . . . 9,590 97 2,301 11,987 42 34

2090. . . . . . . . . . . . 10,389 109 2,389 12,886 43 34

2095. . . . . . . . . . . . 10,928 111 2,473 13,513 43 34

High-cost:

2021. . . . . . . . . . . . 8,076 105 1,334 9,516 52 38

2025. . . . . . . . . . . . 8,835 113 1,413 10,361 56 40

2030. . . . . . . . . . . . 9,522 110 1,527 11,159 60 45

2035. . . . . . . . . . . . 10,393 135 1,689 12,216 64 48

2040. . . . . . . . . . . . 11,171 145 1,871 13,187 68 51

2045. . . . . . . . . . . . 12,122 165 2,013 14,300 74 52

2050. . . . . . . . . . . . 12,742 174 2,126 15,042 78 54

2055. . . . . . . . . . . . 13,191 184 2,183 15,558 81 55

2060. . . . . . . . . . . . 13,243 179 2,167 15,589 82 55

2065. . . . . . . . . . . . 13,351 178 2,111 15,640 83 55

2070. . . . . . . . . . . . 13,367 181 2,065 15,613 84 55

2075. . . . . . . . . . . . 13,027 178 2,055 15,260 84 56

2080. . . . . . . . . . . . 12,707 176 2,076 14,959 83 56

2085. . . . . . . . . . . . 12,376 167 2,095 14,638 82 56

2090. . . . . . . . . . . . 12,598 177 2,100 14,875 83 56

2095. . . . . . . . . . . . 12,791 179 2,082 15,052 84 57

a Adjusted to the age-sex distribution of the disability insured population for the year 2000.

Table V.C5.—DI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1960-2095 (Cont.)

[Beneficiaries in thousands; prevalence rates per thousand persons insured for disability benefits]

Calendar year

Disabledworker

beneficiaries

Auxiliary beneficiaries

Total

beneficiaries

Disability

prevalence rates

Spouse Child Gross

Age-sexadjusteda
147

Program Assumptions and Methods

rates. Annual incidence and termination rates are not directly comparable or

combinable because their denominators differ.

Age-sex-adjusted prevalence rates have increased primarily because: (1) termination rates, in particular death termination rates, have declined;

(2) incidence rates at younger ages have increased relative to rates at older

ages (new beneficiaries at younger ages have more potential years on the disability rolls); (3) incidence rates have increased substantially for women to

parity with men; and (4) the maturation of the DI program (disabled worker

benefits became available to those over age 50 at the start of the program in

1957 and to younger workers in 1960, and disability insured status requirements were eased for those under age 31 in 1968). Gross prevalence rates

have increased more than age-sex-adjusted prevalence rates since the babyboom generation began to reach ages 45 through normal retirement age, a

time of life when disability incidence rates are relatively high. The Office of

the Chief Actuary projects both gross and age-sex adjusted prevalence rates

to grow at a slower pace based on assumed stabilization in these four factors:

(1) the age distribution of the general population, (2) the age distribution of

the disability insured population, (3) incidence rates by age and sex, and

(4) DI program age and insured requirements. As these factors gradually sta-

 Figure V.C6.—DI Disability Prevalence Rates, 1970-2095

[Rate per thousand persons insured for disability benefits]

0

10

20

30

40

50

60

70

80

90

100

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

Calendar year

Gross prevalence rates

Age-sex-adjusted

prevalence rates

II III

II

I

I

Historical Projected

III
Assumptions and Methods

148

bilize, the declining death termination rate continues to have a small influence toward higher disability prevalence rates.

As mentioned above in the discussion of incidence and termination rates, the

age-sex-adjusted prevalence rate isolates the changing trend in the underlying likelihood of receiving benefits for the insured population, without

reflecting changes in the age distribution of the population. As with incidence rates, gross disability prevalence rates declined relative to the age-sexadjusted rate when the baby-boom generation reached working age between

1970 and 1990; this trend reflects the lower disability prevalence rates associated with younger ages. Conversely, the gross rate of disability prevalence

has increased relative to the age-sex-adjusted rate after 1990 due to the aging

of the baby-boom generation into ages with higher disability prevalence

rates.

Under the intermediate assumptions, the projected age-sex-adjusted disability prevalence rate grows from 38.6 per thousand disability insured workers

at the end of 2020 to 44.9 per thousand at the end of 2095. The projected

age-sex-adjusted disability prevalence rate at the end of 2095 is 33.9 per

thousand under the low-cost assumptions and 56.6 per thousand under the

high-cost assumptions.

Table V.C5 presents projections of the numbers of auxiliary beneficiaries

paid from the DI Trust Fund. As indicated at the beginning of this subsection, auxiliary beneficiaries are qualifying spouses and children of disabled

workers. A spouse must either be at least age 62 or have an eligible child

beneficiary in his or her care who is either under age 16 or disabled prior to

age 22. A child must be: (1) under age 18, (2) age 18 or 19 and still a student

in high school, or (3) age 18 or older and disabled prior to age 22.

The projection of the number of auxiliary beneficiaries relies on the projected number of disabled-worker beneficiaries. In the short-range period

(2021 through 2030), the Office of the Chief Actuary projects incidence and

termination rates for each category of auxiliary beneficiary. After 2030, the

office projects child beneficiaries at ages 18 and under in relation to the projected number of children in the population using the probability that either

of their parents is a disabled-worker beneficiary. The office projects the

remaining categories of children and spouses in a similar manner.

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

Contributions

Covered earnings include both covered wages and covered self-employment

net earnings. The Office of the Chief Actuary projects covered wages for
149

Program Assumptions and Methods

component sectors of the economy (i.e., private, State and local, Federal

civilian, and military) based on the projected overall growth of sectoral and

total wages in the U.S. economy. The projections of covered wages also

reflect changes in covered employment due to a relative increase in non-covered undocumented immigrants and to the mandatory coverage of new hires

in the Federal civilian sector. The office projects covered self-employment

net earnings based on the growth in net proprietors’ income in the U.S. economy.

Taxable earnings are the portion of covered earnings subject to the Social

Security payroll tax. Taxable wages for an employee are total covered wages

from all wage employment up to the contribution and benefit base. Taxable

wages for an employer are the sum of all covered wages paid to each

employee up to the base. Employees with multiple jobs whose total wages

exceed the base are eligible for a refund of excess employee taxes withheld;

employers are not eligible for a refund on this basis. For self-employed

workers with no taxable wages, taxable earnings are the amount of covered

self-employment net earnings up to the base. For self-employed workers

with taxable wages less than the base, covered self-employment net earnings

are taxable up to the difference between the base and their taxable wages.

For projection purposes, the Office of the Chief Actuary computes taxable

earnings based on a proportion of covered earnings that is at or below the

base.

The OASDI taxable payroll (see table VI.G6) for a year is computed as the

amount of earnings which, when multiplied by the combined OASDI

employee-employer payroll tax rate for that year, yields the total amount of

payroll taxes due from wages paid and self-employment net earnings for the

year. The Trustees use taxable payroll to determine income rates, cost rates,

and actuarial balances. Taxable payroll is derived by adjusting total taxable

earnings to account for categories of earnings that are taxed at rates other

than the combined employee-employer rate and to take into account amounts

credited as wages that were not included in normally reported wages. For

1951 and later, taxable earnings are reduced by one-half of the amount of

wages paid to employees with multiple jobs that exceed the contribution and

benefit base. For 1983 through 2001, deemed wage credits for military service after 1956 are added to taxable earnings. The self-employment tax rates

for 1951 through 1983 were less than the combined employee-employer

rates; therefore, the self-employment component of taxable payroll for those

years is reduced by multiplying the ratio of the self-employment rate to the

combined employee-employer rate times the taxable self-employment net

earnings. Finally, for 1966 through 1979, employers were exempt from pay-
Assumptions and Methods

150

ing their share of payroll tax on their employees’ tips and, for 1980 through

1987, employers paid tax on only part of their employees’ tips. For those

years, the taxable payroll is reduced by half of the amount of tips for which

the employer owed no payroll tax.

The ratio of taxable payroll to covered earnings (the taxable ratio) fell from

88.6 percent for 1984 to 82.6 percent for 2000, mostly due to much higher

increases in wage levels for very high earners than for all other earners. From

2000 to 2010, the taxable ratio varied with the business cycle, rising during

economic downturns and falling during recoveries. Specifically, the taxable

ratio rose to 85.7 percent for 2002, declined to 82.4 percent for 2007, rose to

85.2 percent for 2009, and was 83.0 percent for 2019.

For this report, the Trustees assume a level for the taxable ratio at the end of

the short-range period (2030) of 82.5 percent for the intermediate assumptions, 84.0 percent for the low-cost assumptions, and 81.0 percent for the

high-cost assumptions.1 These are the same assumptions that the Trustees

made for the end of the short-range period (2029) for the 2020 report.

The Office of the Chief Actuary projects payroll tax contributions using the

patterns of tax collection required by Federal laws and regulations. The

office determines payroll tax liabilities by multiplying the scheduled tax rates

for each year by the amount of taxable wages and self-employment net earnings for that year. The office then splits these liabilities into amounts by collection period. For wages, Federal law requires that employers withhold

OASDI and HI payroll taxes and Federal individual income taxes from

employees’ pay. As an employer’s accumulation of such taxes (including the

employer share of payroll taxes) meets certain thresholds, which the Department of the Treasury determines, the employer must deposit these taxes with

the U.S. Treasury by a specific day, depending on the amount of money

involved.2 For projection purposes, the office splits the payroll tax contributions related to wages into amounts paid in the same quarter as incurred and

in the following quarter. Self-employed workers must make estimated tax

payments on their earnings four times during the year and make up any

underestimate on their individual income tax returns. The projection splits

the self-employed tax liabilities by collection quarter to reflect this pattern. 

 1 The taxable ratio drifts down slightly after 2030, to 82.3, 84.0, and 80.6 percent for 2095 for the intermediate, low-cost, and high-cost assumptions, respectively, as self-employment income becomes an increasing

share of total earnings.

 2 Generally, the higher the amount of liability, the sooner the taxes must be paid. For smaller employers,

payment is due by the middle of the month following when the liability was incurred. Medium-size employers have three banking days in which to make their deposits. Larger employers must make payment on the

next business day after paying their employees.
151

Program Assumptions and Methods

The projected tax contributions also reflect the method used to ensure that

money transferred to the trust funds is adjusted, over time, to equal the actual

liability owed. Because payers generally make tax payments without identifying the separate OASDI contribution amounts, Treasury makes daily transfers of money from the General Fund to the trust funds on an initial

estimated basis. The Social Security Administration periodically certifies the

amounts of wages and self-employment net earnings on which tax contributions are owed for each year, at which time Treasury determines adjustments

to appropriations to reconcile tax liabilities with deposits in the trust funds.

This process also includes periodic transfers from the trust funds to the General Fund for contributions on wages in excess of the contribution and benefit base.

Table V.C6 shows the payroll tax contribution rates applicable under current

law in each calendar year and the allocation of these rates between the OASI

and DI Trust Funds.1 It also shows the contribution and benefit base for each

year through 2021.

 1 Table VI.G1 shows the payroll tax contribution rates for the Hospital Insurance (HI) program.
Assumptions and Methods

152

Table V.C6.—Contribution and Benefit Base and Payroll Tax Contribution Rates

Calendar years

Contribution

and benefit 

base

Payroll tax contribution rates (percent)

Employees and employers, 

combineda Self-employedb

OASDI OASI DI OASDI OASI DI

1937-49 . . . . . . . . . $3,000 2.00 2.00 — — — —

1950. . . . . . . . . . . . 3,000 3.00 3.00 — — — —

1951-53 . . . . . . . . . 3,600 3.00 3.00 — 2.2500 2.2500 —

1954. . . . . . . . . . . . 3,600 4.00 4.00 — 3.0000 3.0000 —

1955-56 . . . . . . . . . 4,200 4.00 4.00 — 3.0000 3.0000 —

1957-58 . . . . . . . . . 4,200 4.50 4.00 0.50 3.3750 3.0000 0.3750

1959. . . . . . . . . . . . 4,800 5.00 4.50 .50 3.7500 3.3750 .3750

1960-61 . . . . . . . . . 4,800 6.00 5.50 .50 4.5000 4.1250 .3750

1962. . . . . . . . . . . . 4,800 6.25 5.75 .50 4.7000 4.3250 .3750

1963-65 . . . . . . . . . 4,800 7.25 6.75 .50 5.4000 5.0250 .3750

1966. . . . . . . . . . . . 6,600 7.70 7.00 .70 5.8000 5.2750 .5250

1967. . . . . . . . . . . . 6,600 7.80 7.10 .70 5.9000 5.3750 .5250

1968. . . . . . . . . . . . 7,800 7.60 6.65 .95 5.8000 5.0875 .7125

1969. . . . . . . . . . . . 7,800 8.40 7.45 .95 6.3000 5.5875 .7125

1970. . . . . . . . . . . . 7,800 8.40 7.30 1.10 6.3000 5.4750 .8250

1971. . . . . . . . . . . . 7,800 9.20 8.10 1.10 6.9000 6.0750 .8250

1972. . . . . . . . . . . . 9,000 9.20 8.10 1.10 6.9000 6.0750 .8250

1973. . . . . . . . . . . . 10,800 9.70 8.60 1.10 7.0000 6.2050 .7950

1974. . . . . . . . . . . . 13,200 9.90 8.75 1.15 7.0000 6.1850 .8150

1975. . . . . . . . . . . . 14,100 9.90 8.75 1.15 7.0000 6.1850 .8150

1976. . . . . . . . . . . . 15,300 9.90 8.75 1.15 7.0000 6.1850 .8150

1977. . . . . . . . . . . . 16,500 9.90 8.75 1.15 7.0000 6.1850 .8150

1978. . . . . . . . . . . . 17,700 10.10 8.55 1.55 7.1000 6.0100 1.0900

1979. . . . . . . . . . . . 22,900 10.16 8.66 1.50 7.0500 6.0100 1.0400

1980. . . . . . . . . . . . 25,900 10.16 9.04 1.12 7.0500 6.2725 .7775

1981. . . . . . . . . . . . 29,700 10.70 9.40 1.30 8.0000 7.0250 .9750

1982. . . . . . . . . . . . 32,400 10.80 9.15 1.65 8.0500 6.8125 1.2375

1983. . . . . . . . . . . . 35,700 10.80 9.55 1.25 8.0500 7.1125 .9375

1984c . . . . . . . . . . . 37,800 11.40 10.40 1.00 11.4000 10.4000 1.0000

1985c . . . . . . . . . . . 39,600 11.40 10.40 1.00 11.4000 10.4000 1.0000

1986c . . . . . . . . . . . 42,000 11.40 10.40 1.00 11.4000 10.4000 1.0000

1987c . . . . . . . . . . . 43,800 11.40 10.40 1.00 11.4000 10.4000 1.0000

1988c . . . . . . . . . . . 45,000 12.12 11.06 1.06 12.1200 11.0600 1.0600

1989c . . . . . . . . . . . 48,000 12.12 11.06 1.06 12.1200 11.0600 1.0600

1990 . . . . . . . . . . . 51,300 12.40 11.20 1.20 12.4000 11.2000 1.2000

1991. . . . . . . . . . . . 53,400 12.40 11.20 1.20 12.4000 11.2000 1.2000

1992. . . . . . . . . . . . 55,500 12.40 11.20 1.20 12.4000 11.2000 1.2000

1993. . . . . . . . . . . . 57,600 12.40 11.20 1.20 12.4000 11.2000 1.2000

1994. . . . . . . . . . . . 60,600 12.40 10.52 1.88 12.4000 10.5200 1.8800

1995. . . . . . . . . . . . 61,200 12.40 10.52 1.88 12.4000 10.5200 1.8800

1996. . . . . . . . . . . . 62,700 12.40 10.52 1.88 12.4000 10.5200 1.8800

1997. . . . . . . . . . . . 65,400 12.40 10.70 1.70 12.4000 10.7000 1.7000

1998. . . . . . . . . . . . 68,400 12.40 10.70 1.70 12.4000 10.7000 1.7000

1999. . . . . . . . . . . . 72,600 12.40 10.70 1.70 12.4000 10.7000 1.7000

2000. . . . . . . . . . . . 76,200 12.40 10.60 1.80 12.4000 10.6000 1.8000

2001. . . . . . . . . . . . 80,400 12.40 10.60 1.80 12.4000 10.6000 1.8000

2002. . . . . . . . . . . . 84,900 12.40 10.60 1.80 12.4000 10.6000 1.8000

2003. . . . . . . . . . . . 87,000 12.40 10.60 1.80 12.4000 10.6000 1.8000

2004. . . . . . . . . . . . 87,900 12.40 10.60 1.80 12.4000 10.6000 1.8000

2005. . . . . . . . . . . . 90,000 12.40 10.60 1.80 12.4000 10.6000 1.8000
153

Program Assumptions and Methods

7. Income From Taxation of Benefits

Under current law, the OASI and DI Trust Funds are credited with income

tax revenue from the taxation of up to the first 50 percent of taxpayers’ OASI

and DI benefit payments. (The HI Trust Fund receives the remainder of the

income tax revenue from the taxation of up to 85 percent of taxpayers’ OASI

and DI benefit payments.) Benefits are partially subject to federal income tax

for beneficiaries with income (defined for this purpose as adjusted gross

income excluding Social Security benefits, plus half of their Social Security

benefits and all of their non-taxable interest income) in excess of specified

threshold amounts. The threshold amounts are $25,000 for single filers,

$32,000 for joint filers, and $0 for those married individuals filing separately.

2006. . . . . . . . . . . . $94,200 12.40 10.60 1.80 12.4000 10.6000 1.8000

2007. . . . . . . . . . . . 97,500 12.40 10.60 1.80 12.4000 10.6000 1.8000

2008. . . . . . . . . . . . 102,000 12.40 10.60 1.80 12.4000 10.6000 1.8000

2009. . . . . . . . . . . . 106,800 12.40 10.60 1.80 12.4000 10.6000 1.8000

2010d . . . . . . . . . . . 106,800 12.40 10.60 1.80 12.4000 10.6000 1.8000

2011d . . . . . . . . . . . 106,800 10.40 8.89 1.51 10.4000 8.8900 1.5100

2012d . . . . . . . . . . . 110,100 10.40 8.89 1.51 10.4000 8.8900 1.5100

2013. . . . . . . . . . . . 113,700 12.40 10.60 1.80 12.4000 10.6000 1.8000

2014. . . . . . . . . . . . 117,000 12.40 10.60 1.80 12.4000 10.6000 1.8000

2015. . . . . . . . . . . . 118,500 12.40 10.60 1.80 12.4000 10.6000 1.8000

2016. . . . . . . . . . . . 118,500 12.40 10.03 2.37 12.4000 10.0300 2.3700

2017. . . . . . . . . . . . 127,200 12.40 10.03 2.37 12.4000 10.0300 2.3700

2018. . . . . . . . . . . . 128,400 12.40 10.03 2.37 12.4000 10.0300 2.3700

2019. . . . . . . . . . . . 132,900 12.40 10.60 1.80 12.4000 10.6000 1.8000

2020. . . . . . . . . . . . 137,700 12.40 10.60 1.80 12.4000 10.6000 1.8000

2021. . . . . . . . . . . . 142,800 12.40 10.60 1.80 12.4000 10.6000 1.8000

2022 and later . . . . e 12.40 10.60 1.80 12.4000 10.6000 1.8000

a Except as noted below, the combined employee/employer rate is divided equally between employees and

employers.

b Beginning in 1990, self-employed persons receive a deduction, for purposes of computing their net earnings, equal to half of the combined OASDI and HI contributions that would be payable without regard to the

contribution and benefit base. The OASDI contribution rate then applies to net earnings after this deduction,

but subject to the OASDI base.

c In 1984 only, employees received an immediate credit of 0.3 percent of taxable wages against their OASDI

payroll tax contributions. The self-employed received similar credits of 2.7 percent, 2.3 percent, and

2.0 percent against their combined OASDI and Hospital Insurance (HI) contributions on net earnings from

self-employment in 1984, 1985, and 1986-89, respectively. The General Fund of the Treasury reimbursed the

trust funds for these credits.

d Public Law 111-147 exempted most employers from paying the employer share of OASDI payroll tax on

wages paid during the period March 19, 2010 through December 31, 2010 to certain qualified individuals

hired after February 3, 2010. Public Law 111-312 reduced the OASDI payroll tax rate for 2011 by

2 percentage points for employees and for self-employed workers. Public Law 112-96 extended the 2011

rate reduction through 2012. These laws require that the General Fund of the Treasury reimburse the OASI

and DI Trust Funds for these temporary reductions in 2010 through 2012 payroll tax revenue, in order to

“replicate to the extent possible” revenue that would have been received if the combined employee/employer

payroll tax rates had remained at 12.4 percent for OASDI (10.6 percent for OASI and 1.8 percent for DI).

e Subject to automatic adjustment based on increases in average wages.

Table V.C6.—Contribution and Benefit Base and Payroll Tax Contribution Rates (Cont.)

Calendar years

Contribution

and benefit 

base

Payroll tax contribution rates (percent)

Employees and employers, 

combineda Self-employedb

OASDI OASI DI OASDI OASI DI
Assumptions and Methods

154

For the short-range period, the Office of the Chief Actuary estimates the

income to the OASI and DI Trust Funds from taxation of benefits by applying the following two factors (projected by the Office of Tax Analysis,

Department of the Treasury) to total OASI and DI scheduled benefits: (1) the

percentage of taxpayers’ scheduled benefits (limited to 50 percent) that is

taxable and (2) the average marginal tax rate applicable to those benefits. Up

to 85 percent of benefits may be subject to federal income tax, with any tax

on more than 50 percent of a taxpayer’s benefits credited to the Medicare

Hospital Insurance Trust Fund.

For the long-range period, the office estimates the income to the trust funds

from taxation of benefits by applying projected ratios of taxation of OASI

and DI benefits to total OASI and DI scheduled benefits. These tax ratios

rely on estimates from the Office of Tax Analysis in the Department of the

Treasury. The Office of the Chief Actuary’s estimates reflect the following

assumptions: (1) The income thresholds used for benefit taxation are specified in the Internal Revenue Code to be constant in the future, and have never

been changed, while income and benefit levels continue to rise. Accordingly,

projected ratios of income from taxation of benefits to the amount of benefits

increase gradually. (2) A permanent level shift upward in the ratios is projected for 2026 and beyond due to the expiration of the personal income tax

provisions in Public Law 115-97, the Tax Cuts and Jobs Act of 2017. (3)

Because indexation of income tax brackets is not specified in the Social

Security Act, and because periodic changes have been made in the past to

avoid indefinite compression of the income tax brackets relative to income

levels (bracket creep), the Trustees assume that such periodic changes will

occur in the future. As a result, after the tenth year of the projection period,

income tax brackets are assumed to rise with average wages, rather than with

the C-CPI-U as specified under current law. Thus, the income tax brackets

are projected to roughly maintain their levels relative to the income distribution. 

8. Average Benefits

Projections of average benefits for each benefit type reflect recent historical

averages, projected average primary insurance amounts (PIAs), and projected ratios of average benefits to average PIAs. Calculations of average

PIAs are based on projected distributions of beneficiaries by duration from

year of initial entitlement, average PIAs at initial entitlement, and increases

in PIAs after initial entitlement. Projected increases in average PIAs after initial entitlement depend on automatic benefit increases, recomputations to

reflect additional covered earnings, and differences in mortality by level of
155

Program Assumptions and Methods

lifetime earnings. Calculations of future average PIAs at initial entitlement

are based on projected earnings histories, which in turn reflect a combination

of the actual earnings histories associated with a sample of 2017 initial entitlements and more recent actual earnings levels by age and sex for covered

workers.

For retired-worker, aged-spouse, and aged-widow(er) benefits, the percentage of the PIA that is payable depends on the age at initial entitlement to

benefits. Projected ratios of average benefits to average PIAs for these types

of benefits are based on projections of age distributions at initial entitlement.

9. Scheduled Benefits

For each type of benefit, scheduled benefits are the product of the number of

beneficiaries and the corresponding average monthly benefit. The shortrange model calculates scheduled benefits on a quarterly basis. The longrange model calculates all scheduled benefits on an annual basis, using the

number of beneficiaries at the beginning and end of the year. Adjustments to

these annual scheduled benefits include retroactive payments to newly

awarded beneficiaries and other amounts not reflected in the regular monthly

scheduled benefits.

Scheduled lump-sum death benefits are estimated as the product of: (1) the

number of lump-sum death payments projected on the basis of the assumed

death rates, the projected fully insured population, and the estimated percentage of the fully insured population that will qualify for lump-sum death payments; and (2) the amount of the lump-sum death payment, which is $255

(unindexed since 1973).

10.Illustrative Scheduled Benefit Amounts

Table V.C7 shows, under the intermediate assumptions, future benefit

amounts payable upon retirement at the normal retirement age and at age 65,

for various hypothetical workers attaining age 65 in 2021 and subsequent

years. The illustrative benefit amounts in table V.C7 are presented in CPIindexed 2021 dollars—that is, adjusted to 2021 levels by the CPI indexing

series shown in table VI.G6. As a point of comparison, table V.C7 also

shows the national average wage index (AWI) for 2021 and subsequent years

in CPI-indexed 2021 dollars.

The normal retirement age was 65 for individuals who reached age 62 before

2000. It increased to age 66 during the period 2000 through 2005, at a rate of

2 months per year as workers attained age 62. Under current law, the normal

retirement age increases to age 67 during the period 2017 through 2022, also

by 2 months per year as workers attain age 62. The illustrative benefit
Assumptions and Methods

156

amounts shown in table V.C7 for retirees at age 65 are lower than the

amounts shown for retirees at normal retirement age because the statute

requires an actuarial reduction for monthly benefits taken before normal

retirement age to reflect the expected additional years benefits will be collected. For example, those who collect benefits starting in 2027 at age 65 will

receive benefits for two more years than if they instead claim benefits at the

normal retirement age (age 67) unless they die between the ages of

65 and 67.

Table V.C7 shows five different pre-retirement earnings patterns. Four of

these patterns assume the earnings history of workers with scaled-earnings

patterns1 and reflect very low, low, medium, and high career-average levels

of pre-retirement earnings starting at age 21. The fifth pattern assumes the

earnings history of a steady maximum earner starting at age 22. The four

scaled-earnings patterns derive from earnings experienced by insured workers during calendar years 1998 through 2017. These earnings levels differ by

age. The career-average level of earnings for each scaled case targets a percent of the AWI. 

For the scaled medium earner, the career-average earnings level is about

equal to the AWI (estimated to be $59,065 for 2021). For the scaled very

low, low, and high earners, the career-average earnings level, wage-indexed

to the year before starting benefits, is about 25 percent, 45 percent, and

160 percent of the AWI, respectively (estimated to be $14,766, $26,579, and

$94,503, respectively, for 2021). The steady maximum earner has earnings at

or above the contribution and benefit base ($142,800 for 2021) for each year

starting at age 22 through the year prior to retirement.

 1 Actuarial Note 2021.3 has more details on scaled-earnings patterns.

See www.ssa.gov/OACT/NOTES/ran3/.

Table V.C7.—Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, Calendar Years 2021-2095

Year attain 

age 65a Age atretirement

Scaled very

low

earningsb Scaled lowearningsc

Scaled

medium

earningsd Scaled highearningse

Steady

maximum

earningsf

National

Average Wage

Index in 2021

dollarsg

Benefits in 2021 dollarsh with retirement at normal retirement age

2021 . . . . 66:4 $10,826 $14,181 $23,393 $30,958 $37,881 $59,065

2025 . . . . 67:0 11,358 14,893 24,583 32,488 40,007 62,196

2030 . . . . 67:0 12,403 16,238 26,789 35,450 43,668 66,081

2035 . . . . 67:0 13,180 17,253 28,467 37,664 46,435 70,190

2040 . . . . 67:0 14,001 18,327 30,231 40,001 49,296 74,464

2045 . . . . 67:0 14,850 19,438 32,062 42,427 52,299 78,601

2050 . . . . 67:0 15,674 20,516 33,838 44,784 55,149 82,896

2055 . . . . 67:0 16,527 21,642 35,696 47,236 58,080 87,571
157

Program Assumptions and Methods

11. Administrative Expenses

The projection of administrative expenses through the short-range period is

based on historical experience and the projected growth in average wages.

The Office of Budget of the Social Security Administration provides estimates for the first several years of the projection. For years after the short2060 . . . . 67:0 $17,467 $22,864 $37,712 $49,903 $61,312 $92,595

2065 . . . . 67:0 18,470 24,177 39,876 52,768 64,808 97,976

2070 . . . . 67:0 19,540 25,584 42,194 55,836 68,574 103,646

2075 . . . . 67:0 20,672 27,063 44,635 59,065 72,548 109,599

2080 . . . . 67:0 21,858 28,616 47,197 62,455 76,715 115,828

2085 . . . . 67:0 23,103 30,244 49,879 66,005 81,078 122,345

2090 . . . . 67:0 24,404 31,945 52,688 69,721 85,638 129,305

2095 . . . . 67:0 25,791 33,764 55,687 73,688 90,504 136,764

Benefits in 2021 dollarsh with retirement at age 65

2021 . . . . 65:0 9,794 12,825 21,162 28,009 34,180 59,065

2025 . . . . 65:0 9,842 12,883 21,270 28,128 34,384 62,196

2030 . . . . 65:0 10,743 14,065 23,195 30,704 37,590 66,081

2035 . . . . 65:0 11,414 14,942 24,647 32,627 39,978 70,190

2040 . . . . 65:0 12,130 15,876 26,182 34,657 42,442 74,464

2045 . . . . 65:0 12,863 16,837 27,767 36,757 45,052 78,601

2050 . . . . 65:0 13,576 17,771 29,310 38,800 47,504 82,896

2055 . . . . 65:0 14,318 18,747 30,912 40,920 50,030 87,571

2060 . . . . 65:0 15,130 19,807 32,658 43,230 52,809 92,595

2065 . . . . 65:0 16,000 20,943 34,533 45,714 55,819 97,976

2070 . . . . 65:0 16,931 22,159 36,543 48,370 59,064 103,646

2075 . . . . 65:0 17,907 23,440 38,657 51,169 62,488 109,599

2080 . . . . 65:0 18,937 24,789 40,878 54,106 66,082 115,828

2085 . . . . 65:0 20,014 26,197 43,199 57,183 69,838 122,345

2090 . . . . 65:0 21,142 27,673 45,632 60,402 73,766 129,305

2095 . . . . 65:0 22,345 29,246 48,228 63,837 77,958 136,764

a Attains age 65 on January 1 of the year.

b Career-average earnings at about 25 percent of the AWI.

c Career-average earnings at about 45 percent of the AWI.

d Career-average earnings at about 100 percent of the AWI. Such a worker would have career-average earnings at approximately the 56th percentile of all new retired-worker beneficiaries.

e Career-average earnings at about 160 percent of the AWI.

f Earnings for each year at or above the contribution and benefit base.

g Average Wage Index from table VI.G6, adjusted to be in 2021 dollars by using the CPI indexing series

from table VI.G6.

h Annual amounts are the total for the 12-month period starting with the month of retirement, adjusted to be

in 2021 dollars by using the CPI indexing series from table VI.G6.

Note: Benefits shown at age 65 reflect adjustments for early retirement. For early retirement as early as

age 62, the benefit amount is reduced 5/9 of one percent for each month before normal retirement age, up to

36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per

month. For example, if the number of reduction months is 60 (the maximum number for retirement at 62

when normal retirement age is 67), then the benefit is reduced by 30 percent. Delayed retirement credit is

generally given for retirement after the normal retirement age. The delayed retirement credit is 2/3 of one

percent per month for persons born in 1943 and later. No credit is given for delaying benefits after attaining

age 70. See table V.C3 for additional details, including adjustments applying to other birth years.

Table V.C7.—Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, Calendar Years 2021-2095 (Cont.)

Year attain 

age 65a Age atretirement

Scaled very

low

earningsb Scaled lowearningsc

Scaled

medium

earningsd Scaled highearningse

Steady

maximum

earningsf

National

Average Wage

Index in 2021

dollarsg
Assumptions and Methods

158

range period, projected administrative expenses reflect increases in the number of beneficiaries in current-payment status, and increases in the average

wage. However, the increases in average wage are partially offset by

assumed administrative productivity gains.

12.Railroad Retirement Financial Interchange

Railroad workers are covered under a separate multi-tiered benefit plan, with

a first tier of coverage similar to OASDI coverage. An annual financial interchange between the Railroad Retirement fund and the OASI and DI Trust

Funds is made to resolve the difference between: (1) the amount of OASDI

benefits that would be paid to railroad workers and their families if railroad

employment had been covered under the OASDI program, plus administrative expenses associated with these benefits; and (2) the amount of OASDI

payroll tax and income tax that would be received with allowances for interest from railroad workers.

Calculation of the financial interchange with the Railroad Retirement reflects

trends similar to those used in estimating the cost of OASDI benefits. The

annual short-range net cost for the OASI and DI Trust Funds is about

$5-$6 billion and the long-range summarized net cost for the OASI and DI

Trust Funds is 0.05 percent of taxable payroll.
159

History of Trust Fund Operations

VI. APPENDICES

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS

The Federal Old-Age and Survivors Insurance (OASI) Trust Fund was established on January 1, 1940 as a separate account in the United States Treasury.

The Federal Disability Insurance (DI) Trust Fund, another separate account

in the United States Treasury, was established on August 1, 1956. These

funds conduct the financial operations of the OASI and DI programs. The

Board of Trustees is responsible for overseeing the financial operations of

these funds. The following paragraphs describe the various components of

trust fund income and cost. Following this description, tables VI.A1 and

VI.A2 present the historical operations of the separate trust funds since their

inception, and table VI.A3 presents the operations of the hypothetical combined trust funds1 during the period when they have co-existed.

The primary income of these two funds comes from appropriations under

permanent authority on the basis of payroll tax contributions. Federal law

requires that all employees who work in OASDI covered employment, and

their employers, make payroll tax contributions on their wages up to a specified annual maximum amount (the contribution and benefit base). Employees and their employers must also make payroll tax contributions on monthly

cash tips if such tips are at least $20. Self-employed persons must make payroll tax contributions on their covered net earnings from self-employment

subject to the annual contribution and benefit base. The Federal Government

pays amounts equivalent to the combined employer and employee contributions that would be paid on deemed wage credits attributable to military service performed between 1957 and 2001, if such wage credits were covered

wages. Treasury initially deposits payroll tax contributions to the trust funds

each day on an estimated basis. Subsequently, Treasury makes adjustments

based on the certified amount of wages and self-employment earnings in the

records of the Social Security Administration.

Income also includes various reimbursements from the General Fund of the

Treasury, such as: (1) the cost of noncontributory wage credits for military

service before 1957, and periodic adjustments to previous determinations of

this cost; (2) the cost in 1971 through 1982 of deemed wage credits for military service performed after 1956; (3) the cost of benefits to certain uninsured persons who attained age 72 before 1968; (4) the cost of payroll tax

credits provided to employees in 1984 and self-employed persons in 1984

through 1989 by Public Law 98-21; (5) the cost in 2009 through 2017 of

excluding certain self-employment earnings from SECA taxes under Public

 1 The OASI and DI Trust Funds are distinct legal entities which operate independently. To illustrate the

actuarial status of the program as a whole, the fund operations are often combined on a hypothetical basis.
Appendices

160

Law 110-246; and (6) payroll tax revenue forgone under the provisions of

Public Laws 111-147, 111-312, 112-78, and 112-96.

Beginning in 1984, Federal law subjected up to 50 percent of an individual’s

or couple’s OASDI benefits to Federal income taxation under certain circumstances. Effective for taxable years beginning after 1993, the law increased

the maximum percentage from 50 percent to 85 percent. Treasury credits the

proceeds from this taxation of up to 50 percent of benefits to the OASI and

DI Trust Funds in advance, on an estimated basis, at the beginning of each

calendar quarter, with no reimbursement to the General Fund for interest

costs attributable to the advance transfers.1 Treasury makes subsequent

adjustments based on the actual amounts shown on annual income tax

records. Each of the OASI and DI Trust Funds receives the income taxes

paid on the benefits from that trust fund.2

Another source of income to the trust funds is interest received on investments held by the trust funds. On a daily basis, Treasury invests trust fund

income in interest-bearing obligations of the U.S. Government. These investments include the special public-debt obligations described in the next paragraph. The Social Security Act also authorizes the trust funds to hold

obligations guaranteed as to both principal and interest by the United States.

The act therefore permits the trust funds to hold certain Federally sponsored

agency obligations and marketable obligations.3 The trust funds may acquire

any of these obligations on original issue at the issue price or by purchase of

outstanding obligations at their market price.

The Social Security Act authorizes the issuance of special public-debt obligations for purchase exclusively by the trust funds. The act provides that the

interest rate for special obligations newly issued in any month is the average

market yield, as of the last business day of the prior month, on all of the outstanding marketable U.S. obligations that are due or callable more than

4 years in the future. This rate is rounded to the nearest one-eighth of one

percent. Beginning January 1999, in calculating the average market yield

rate for this purpose, the Treasury incorporates the yield to the call date when

a callable bond’s market price is above par.

Although the Social Security Act does not authorize the purchase or sale of

special issue securities in the open market, Treasury redeems special issue

securities prior to maturity at par value when needed to meet current operat-

 1 The HI Trust Fund receives the additional tax revenue resulting from the increase to 85 percent.

 2 A special provision applies to benefits paid to nonresident aliens. Effective for taxable years beginning

after 1994, Public Law 103-465 subjects benefits to a flat-rate tax, usually 25.5 percent, before they are

paid. Therefore, this tax remains in the trust funds. From 1984 to 1994, the flat-rate tax was usually

15 percent.

 3 The Social Security Act requires the trust funds to acquire special-issue obligations unless the Managing

Trustee determines that the purchase of marketable obligations is in the public interest. The purchase of marketable obligations has been quite limited and has not occurred since 1980.
161

History of Trust Fund Operations

ing expenses. As a result, changes in market yield rates after issuance of special issue securities do not cause fluctuations in the value of these securities.

As is true for marketable Treasury securities held by the public, the full faith

and credit of the U.S. Government backs all of the investments held by the

trust funds.

Annual cost for the OASI and DI Trust Funds primarily consists of:

(1) OASDI benefit payments1, net of any reimbursements from the General

Fund of the Treasury for unnegotiated benefit checks; and (2) expenses

incurred by the Social Security Administration and the Department of the

Treasury in administering the OASDI program and the provisions of the

Internal Revenue Code relating to the collection of contributions. Such

administrative expenses include, among other items, the cost of (1) payroll;

(2) construction, rental, lease, or purchase of office buildings and related

facilities for the Social Security Administration; and (3) information technology systems. The Social Security Act prohibits payments from the OASI and

DI Trust Funds for any purpose not related to the payment of benefits or

administrative costs for the OASDI program. 

Annual cost also includes: (1) the costs of vocational rehabilitation services

furnished to disabled persons receiving cash benefits because of their disabilities, where such services contributed to their successful rehabilitation; and

(2) net costs of the provisions of the Railroad Retirement Act that provide for

a system of coordination and financial interchange between the Railroad

Retirement program and the Social Security program. Under the financial

interchange provisions, the Railroad Retirement program’s Social Security

Equivalent Benefit Account and the trust funds interchange amounts on an

annual basis so that each trust fund is in the same position it would have been

had railroad employment always been covered under Social Security.

The statements of the operations of the trust funds in this report do not

include the net worth of facilities and other fixed capital assets because the

value of fixed capital assets is not available in the form of a financial asset

redeemable for the payment of benefits or administrative costs. As a result of

this unavailability, the actuarial status of the trust funds does not take these

assets into account.

 1 Periodically, benefit payments which were scheduled to be paid on January 3 were actually paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for

benefits scheduled for January 3, 1982. The most recent such accelerated payment affected benefits scheduled to be paid on January 3, 2021. For comparability with the values for historical years and the projections

in this report, all trust fund operations and asset reserves reflect the 12 months of benefits scheduled for payment each year without regard to the accelerated payments described above.
Appendices

162

Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2020

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

1937f . . $0.8 $0.8 — — gg g — — $0.8 $0.8 —

1938f . . .4 .4 — — gg g — — .4 1.1 7,660

1939f . . .6 .6 — — gg g — — .6 1.7 8,086

1940 . . .4 .3 — — g $0.1 g g — .3 2.0 2,781

1941 . . .8 .8 — — $0.1 .1 $0.1 g — .7 2.8 1,782

1942 . . 1.1 1.0 — — .1 .2 .1 g — .9 3.7 1,737

1943 . . 1.3 1.2 — — .1 .2 .2 g — 1.1 4.8 1,891

1944 . . 1.4 1.3 — — .1 .2 .2 g — 1.2 6.0 2,025

1945 . . 1.4 1.3 — — .1 .3 .3 g — 1.1 7.1 1,975

1946 . . 1.4 1.3 — — .2 .4 .4 g — 1.0 8.1 1,704

1947 . . 1.7 1.6 g — .2 .5 .5 g — 1.2 9.4 1,592

1948 . . 2.0 1.7 g — .3 .6 .6 $0.1 — 1.4 10.7 1,542

1949 . . 1.8 1.7 g — .1 .7 .7 .1 — 1.1 11.8 1,487

1950 . . 2.9 2.7 g — .3 1.0 1.0 .1 — 1.9 13.7 1,156

1951 . . 3.8 3.4 g — .4 2.0 1.9 .1 — 1.8 15.5 698

1952 . . 4.2 3.8 — — .4 2.3 2.2 .1 — 1.9 17.4 681

1953 . . 4.4 3.9 — — .4 3.1 3.0 .1 — 1.3 18.7 564

1954 . . 5.6 5.2 — — .4 3.7 3.7 .1 g 1.9 20.6 500

1955 . . 6.2 5.7 — — .5 5.1 5.0 .1 g 1.1 21.7 405

1956 . . 6.7 6.2 — — .5 5.8 5.7 .1 g .9 22.5 371

1957 . . 7.4 6.8 — — .6 7.5 7.3 .2 g -.1 22.4 300

1958 . . 8.1 7.6 — — .6 8.6 8.3 .2 $0.1 -.5 21.9 259

1959 . . 8.6 8.1 — — .5 10.3 9.8 .2 .3 -1.7 20.1 212

1960 . . 11.4 10.9 — — .5 11.2 10.7 .2 .3 .2 20.3 180

1961 . . 11.8 11.3 — — .5 12.4 11.9 .2 .3 -.6 19.7 163

1962 . . 12.6 12.1 — — .5 14.0 13.4 .3 .4 -1.4 18.3 141

1963 . . 15.1 14.5 — — .5 14.9 14.2 .3 .4 .1 18.5 123

1964 . . 16.3 15.7 — — .6 15.6 14.9 .3 .4 .6 19.1 118

1965 . . 16.6 16.0 — — .6 17.5 16.7 .3 .4 -.9 18.2 109

1966 . . 21.3 20.6 $0.1 — .6 19.0 18.3 .3 .4 2.3 20.6 96

1967 . . 24.0 23.1 .1 — .8 20.4 19.5 .4 .5 3.7 24.2 101

1968 . . 25.0 23.7 .4 — .9 23.6 22.6 .5 .4 1.5 25.7 103

1969 . . 29.6 27.9 .4 — 1.2 25.2 24.2 .5 .5 4.4 30.1 102

1970 . . 32.2 30.3 .4 — 1.5 29.8 28.8 .5 .6 2.4 32.5 101

1971 . . 35.9 33.7 .5 — 1.7 34.5 33.4 .5 .6 1.3 33.8 94

1972 . . 40.1 37.8 .5 — 1.8 38.5 37.1 .7 .7 1.5 35.3 88

1973 . . 48.3 46.0 .4 — 1.9 47.2 45.7 .6 .8 1.2 36.5 75

1974 . . 54.7 52.1 .4 — 2.2 53.4 51.6 .9 .9 1.3 37.8 68

1975 . . 59.6 56.8 .4 — 2.4 60.4 58.5 .9 1.0 -.8 37.0 63

1976 . . 66.3 63.4 .6 — 2.3 67.9 65.7 1.0 1.2 -1.6 35.4 54

1977 . . 72.4 69.6 .6 — 2.2 75.3 73.1 1.0 1.2 -2.9 32.5 47

1978 . . 78.1 75.5 .6 — 2.0 83.1 80.4 1.1 1.6 -5.0 27.5 39

1979 . . 90.3 87.9 .6 — 1.8 93.1 90.6 1.1 1.4 -2.9 24.7 30

1980 . . 105.8 103.5 .5 — 1.8 107.7 105.1 1.2 1.4 -1.8 22.8 23

1981 . . 125.4 122.6 .7 — 2.1 126.7 123.8 1.3 1.6 -1.3 21.5 18

1982 . . 125.2 123.7 .7 — .8 142.1 138.8 1.5 1.8 h .6 22.1 15

1983 . . 150.6 138.3 5.5 — 6.7 153.0 149.2 1.5 2.3 -2.4 19.7 14

1984 . . 169.3 159.5 4.7 $2.8 2.3 161.9 157.8 1.6 2.4 7.4 27.1 i

20

1985 . . 184.2 175.1 4.0 3.2 1.9 171.2 167.2 1.6 2.3 h8.7 35.8 i

24

1986 . . 197.4 189.1 1.8 3.4 3.1 181.0 176.8 1.6 2.6 h3.2 39.1 i

28

1987 . . 210.7 201.1 1.7 3.3 4.7 187.7 183.6 1.5 2.6 23.1 62.1 i

30

1988 . . 240.8 227.7 2.1 3.4 7.6 200.0 195.5 1.8 2.8 40.7 102.9 i

41

1989 . . 264.7 248.1 2.1 2.4 12.0 212.5 208.0 1.7 2.8 52.2 155.1 i

59

1990 . . 286.7 266.1 -.7 4.8 16.4 227.5 223.0 1.6 3.0 59.1 214.2 i

78

1991 . . 299.3 272.5 .1 5.9 20.8 245.6 240.5 1.8 3.4 53.7 267.8 87

1992 . . 311.2 281.1 -.1 5.9 24.3 259.9 254.9 1.8 3.1 51.3 319.1 103

1993 . . 323.3 290.9 g 5.3 27.0 273.1 267.8 2.0 3.4 50.2 369.3 117

1994 . . 328.3 293.3 g 5.0 29.9 284.1 279.1 1.6 3.4 44.1 413.5 130
163

History of Trust Fund Operations

1995 . . $342.8 $304.7 -$0.2 $5.5 $32.8 $297.8 $291.6 $2.1 $4.1 $45.0 $458.5 139

1996 . . 363.7 321.6 g 6.5 35.7 308.2 302.9 1.8 3.6 55.5 514.0 149

1997 . . 397.2 349.9 g 7.4 39.8 322.1 316.3 2.1 3.7 75.1 589.1 160

1998 . . 424.8 371.2 g 9.1 44.5 332.3 326.8 1.9 3.7 92.5 681.6 177

1999 . . 457.0 396.4 g 10.9 49.8 339.9 334.4 1.8 3.7 117.2 798.8 201

2000 . . 490.5 421.4 g 11.6 57.5 358.3 352.7 2.1 3.5 132.2 931.0 223

2001 . . 518.1 441.5 g 11.9 64.7 377.5 372.3 2.0 3.3 140.6 1,071.5 247

2002 . . 539.7 455.2 .4 12.9 71.2 393.7 388.1 2.1 3.5 146.0 1,217.5 272

2003 . . 543.8 456.1 g 12.5 75.2 406.0 399.8 2.6 3.6 137.8 1,355.3 300

2004 . . 566.3 472.8 g 14.6 79.0 421.0 415.0 2.4 3.6 145.3 1,500.6 322

2005 . . 604.3 506.9 -.3 13.8 84.0 441.9 435.4 3.0 3.6 162.4 1,663.0 340

2006 . . 642.2 534.8 g 15.6 91.8 461.0 454.5 3.0 3.5 181.3 1,844.3 361

2007 . . 675.0 560.9 g 17.2 97.0 495.7 489.1 3.1 3.6 179.3 2,023.6 372

2008 . . 695.5 574.6 g 15.6 105.3 516.2 509.3 3.2 3.6 179.3 2,202.9 392

2009 . . 698.2 570.4 g 19.9 107.9 564.3 557.2 3.4 3.7 133.9 2,336.8 390

2010 . . 677.1 544.8 2.0 22.1 108.2 584.9 577.4 3.5 3.9 92.2 2,429.0 400

2011 . . 698.8 482.4 87.8 22.2 106.5 603.8 596.2 3.5 4.1 95.0 2,524.1 402

2012 . . 731.1 503.9 97.7 26.7 102.8 645.5 637.9 3.4 4.1 85.6 2,609.7 391

2013 . . 743.8 620.8 4.2 20.7 98.1 679.5 672.1 3.4 3.9 64.3 2,674.0 384

2014 . . 769.4 646.2 .4 28.0 94.8 714.2 706.8 3.1 4.3 55.2 2,729.2 374

2015 . . 801.6 679.5 .3 30.6 91.2 750.5 742.9 3.4 4.3 51.0 2,780.3 364

2016 . . 797.5 678.8 .1 31.6 87.0 776.4 768.6 3.5 4.3 21.1 2,801.3 358

2017 . . 825.6 706.5 g 35.9 83.2 806.7 798.7 3.7 4.3 19.0 2,820.3 347

2018 . . 831.0 715.9 g 34.5 80.7 853.5 844.9 3.8 4.8 -22.4 2,797.9 330

2019 . . 917.9 805.1 g 34.9 77.9 911.4 902.8 3.7 4.9 6.5 2,804.3 307

2020 . . 968.3 856.0 g 39.0 73.3 961.0 952.4 3.7 4.8 7.4 2,811.7 292

a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security

Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust

fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year without

regard to the accelerated payments described above.

b Includes net reimbursements from the General Fund of the Treasury to the OASI Trust Fund for: (1) the cost of

noncontributory wage credits for military service before 1957; (2) the cost in 1971-82 of deemed wage credits

for military service performed after 1956; (3) the cost of benefits to certain uninsured persons who attained

age 72 before 1968; (4) the cost of payroll tax credits provided to employees in 1984 and self-employed persons

in 1984-89 by Public Law 98-21; (5) the cost in 2009-17 of excluding certain self-employment earnings from

SECA taxes under Public Law 110-246; and (6) payroll tax revenue forgone under the provisions of Public

Laws 111-147, 111-312, 112-78, and 112-96.

c Net interest includes net profits or losses on marketable investments. Beginning in 1967, the trust fund pays

administrative expenses on an estimated basis, with a final adjustment including interest made in the following

fiscal year. Net interest includes the amounts of these interest adjustments. The 1970 report describes the

accounting for administrative expenses for years prior to 1967. Beginning in October 1973, figures include relatively small amounts of gifts to the fund. Net interest for 1983-86 reflects payments for interest on amounts

owed under the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements

paid from the trust fund to the General Fund on advance tax transfers.

d Beginning in 1966, includes payments for vocational rehabilitation services furnished to disabled persons

receiving benefits because of their disabilities. Beginning in 1983, net benefit amounts include reimbursements

paid from the General Fund to the trust fund for unnegotiated benefit checks. Excluding the portion attributable

to vocational rehabilitation services and unnegotiated benefit checks, amounts are the same as benefits scheduled under law at that time for all historical years.

e The “Trust fund ratio” column represents asset reserves at the beginning of a year as a percentage of cost

during the year. The table shows no ratio for 1937 because no reserves existed at the beginning of the year.

f Operations prior to 1940 are for the Old-Age Reserve Account established by the original Social Security Act.

The 1939 Amendments transferred the asset reserves of the Account to the OASI Trust Fund effective

January 1, 1940.

g Between -$50 million and $50 million.

h Reflects interfund borrowing of $17.5 billion by the OASI Trust Fund from the DI and HI Trust Funds in 1982

and the subsequent repayment of those loans in 1985 ($4.4 billion) and 1986 ($13.2 billion).

i Reserves used for the trust fund ratio calculation include January advance tax transfers.

Note: Components may not sum to totals because of rounding.

Table VI.A1.— Operations of the OASI Trust Fund, Calendar Years 1937-2020 (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Appendices

164

Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2020

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsa d

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

1957 . . $0.7 $0.7 — — f $0.1 $0.1 f — $0.6 $0.6 —

1958 . . 1.0 1.0 — — f .3 .2 f — .7 1.4 249

1959 . . .9 .9 — — f .5 .5 f f .4 1.8 284

1960 . . 1.1 1.0 — — $0.1 .6 .6 f f .5 2.3 304

1961 . . 1.1 1.0 — — .1 1.0 .9 $0.1 f .1 2.4 239

1962 . . 1.1 1.0 — — .1 1.2 1.1 .1 f -.1 2.4 206

1963 . . 1.2 1.1 — — .1 1.3 1.2 .1 f -.1 2.2 183

1964 . . 1.2 1.2 — — .1 1.4 1.3 .1 f -.2 2.0 159

1965 . . 1.2 1.2 — — .1 1.7 1.6 .1 f -.4 1.6 121

1966 . . 2.1 2.0 f — .1 1.9 1.8 .1 f .1 1.7 82

1967 . . 2.4 2.3 f — .1 2.1 1.9 .1 f .3 2.0 83

1968 . . 3.5 3.3 f — .1 2.5 2.3 .1 f 1.0 3.0 83

1969 . . 3.8 3.6 f — .2 2.7 2.6 .1 f 1.1 4.1 111

1970 . . 4.8 4.5 f — .3 3.3 3.1 .2 f 1.5 5.6 126

1971 . . 5.0 4.6 $0.1 — .4 4.0 3.8 .2 f 1.0 6.6 140

1972 . . 5.6 5.1 .1 — .4 4.8 4.5 .2 f .8 7.5 140

1973 . . 6.4 5.9 .1 — .5 6.0 5.8 .2 f .5 7.9 125

1974 . . 7.4 6.8 .1 — .5 7.2 7.0 .2 f .2 8.1 110

1975 . . 8.0 7.4 .1 — .5 8.8 8.5 .3 f -.8 7.4 92

1976 . . 8.8 8.2 .1 — .4 10.4 10.1 .3 f -1.6 5.7 71

1977 . . 9.6 9.1 .1 — .3 11.9 11.5 .4 f -2.4 3.4 48

1978 . . 13.8 13.4 .1 — .3 13.0 12.6 .3 f .9 4.2 26

1979 . . 15.6 15.1 .1 — .4 14.2 13.8 .4 f 1.4 5.6 30

1980 . . 13.9 13.3 .1 — .5 15.9 15.5 .4 f -2.0 3.6 35

1981 . . 17.1 16.7 .2 — .2 17.7 17.2 .4 f -.6 3.0 21

1982 . . 22.7 22.0 .2 — .5 18.0 17.4 .6 f g -.4 2.7 17

1983 . . 20.7 18.0 1.1 — 1.6 18.2 17.5 .6 f 2.5 5.2 15

1984 . . 17.3 15.5 .4 $0.2 1.2 18.5 17.9 .6 f -1.2 4.0 h35

1985 . . 19.3 17.0 1.2 .2 .9 19.5 18.8 .6 f g2.4 6.3 h27

1986 . . 19.4 18.2 .2 .2 .8 20.5 19.9 .6 $0.1 g1.5 7.8 h38

1987 . . 20.3 19.5 .2 f .6 21.4 20.5 .8 .1 -1.1 6.7 h44

1988 . . 22.7 21.8 .2 .1 .6 22.5 21.7 .7 .1 .2 6.9 h38

1989 . . 24.8 23.8 .2 .1 .7 23.8 22.9 .8 .1 1.0 7.9 h38

1990 . . 28.8 28.4 -.6 .1 .9 25.6 24.8 .7 .1 3.2 11.1 h40

1991 . . 30.4 29.1 f .2 1.1 28.6 27.7 .8 .1 1.8 12.9 39

1992 . . 31.4 30.1 f .2 1.1 32.0 31.1 .8 .1 -.6 12.3 40

1993 . . 32.3 31.2 f .3 .8 35.7 34.6 1.0 .1 -3.4 9.0 35

1994 . . 52.8 51.4 f .3 1.2 38.9 37.7 1.0 .1 14.0 22.9 23

1995 . . 56.7 54.4 -.2 .3 2.2 42.1 40.9 1.1 .1 14.6 37.6 55

1996 . . 60.7 57.3 f .4 3.0 45.4 44.2 1.2 f 15.4 52.9 83

1997 . . 60.5 56.0 f .5 4.0 47.0 45.7 1.3 .1 13.5 66.4 113

1998 . . 64.4 59.0 f .6 4.8 49.9 48.2 1.6 .2 14.4 80.8 133

1999 . . 69.5 63.2 f .7 5.7 53.0 51.4 1.5 .1 16.5 97.3 152

2000 . . 77.9 71.1 -.8 .7 6.9 56.8 55.0 1.6 .2 21.1 118.5 171

2001 . . 83.9 74.9 f .8 8.2 61.4 59.6 1.7 f 22.5 141.0 193

2002 . . 87.4 77.3 f .9 9.2 67.9 65.7 2.0 .2 19.5 160.5 208

2003 . . 88.1 77.4 f .9 9.7 73.1 70.9 2.0 .2 15.0 175.4 219

2004 . . 91.4 80.3 f 1.1 10.0 80.6 78.2 2.2 .2 10.8 186.2 218

2005 . . 97.4 86.1 f 1.1 10.3 88.0 85.4 2.3 .3 9.4 195.6 212

2006 . . 102.6 90.8 f 1.2 10.6 94.5 91.7 2.3 .4 8.2 203.8 207

2007 . . 109.9 95.2 f 1.4 13.2 98.8 95.9 2.5 .4 11.1 214.9 206

2008 . . 109.8 97.6 f 1.3 11.0 109.0 106.0 2.5 .4 .9 215.8 197

2009 . . 109.3 96.9 f 2.0 10.5 121.5 118.3 2.7 .4 -12.2 203.5 178
165

History of Trust Fund Operations

2010. . . $104.0 $92.5 $0.4 $1.9 $9.3 $127.7 $124.2 $3.0 $0.5 -$23.6 $179.9 159

2011. . . 106.3 81.9 14.9 1.6 7.9 132.3 128.9 2.9 .5 -26.1 153.9 136

2012. . . 109.1 85.6 16.5 .6 6.4 140.3 136.9 2.9 .5 -31.2 122.7 110

2013. . . 111.2 105.4 .7 .4 4.7 143.4 140.1 2.8 .6 -32.2 90.4 86

2014. . . 114.9 109.7 .1 1.7 3.4 145.1 141.7 2.9 .4 -30.2 60.2 62

2015. . . 118.6 115.4 f 1.1 2.1 146.6 143.4 2.8 .4 -28.0 32.3 41

2016. . . 160.0 157.4 f 1.2 1.4 145.9 142.8 2.8 .4 14.1 46.3 22

2017. . . 171.0 167.1 f 2.0 1.9 145.8 142.8 2.8 .2 25.1 71.5 32

2018. . . 172.3 169.2 f .5 2.6 146.8 143.7 2.9 .2 25.6 97.1 49

2019. . . 143.9 139.4 f 1.6 2.9 147.9 145.1 2.7 .1 -4.0 93.1 66

2020. . . 149.7 145.3 f 1.7 2.8 146.3 143.6 2.6 .1 3.5 96.6 64

a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security

Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust

fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year without

regard to the accelerated payments described above.

b Includes net reimbursements from the General Fund of the Treasury to the DI Trust Fund for: (1) the cost of

noncontributory wage credits for military service before 1957; (2) the cost in 1971-82 of deemed wage credits

for military service performed after 1956; (3) the cost of payroll tax credits provided to employees in 1984 and

self-employed persons in 1984-89 by Public Law 98-21; (4) the cost in 2009-17 of excluding certain selfemployment earnings from SECA taxes under Public Law 110-246; and (5) payroll tax revenue forgone under

the provisions of Public Laws 111-147, 111-312, 112-78, and 112-96.

c Net interest includes net profits or losses on marketable investments. Beginning in 1967, the trust fund pays

administrative expenses on an estimated basis, with a final adjustment including interest made in the following

fiscal year. Net interest includes the amounts of these interest adjustments. The 1970 report describes the

accounting for administrative expenses for years prior to 1967. Beginning in July 1974, figures include relatively small amounts of gifts to the fund. Net interest for 1983-86 reflects payments for interest on amounts

owed under the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements

paid from the trust fund to the General Fund on advance tax transfers.

d Beginning in 1966, includes payments for vocational rehabilitation services furnished to disabled persons

receiving benefits because of their disabilities. Beginning in 1983, net benefit amounts include reimbursements

paid from the General Fund to the trust fund for unnegotiated benefit checks. Excluding the portion attributable

to vocational rehabilitation services and unnegotiated benefit checks, amounts are the same as benefits scheduled under law at that time for all historical years.

e The “Trust fund ratio” column represents asset reserves at the beginning of a year as a percentage of cost

during the year. The table shows no ratio for 1957 because no reserves existed at the beginning of the year.

f Between -$50 million and $50 million.

g Reflects interfund borrowing by the OASI Trust Fund from the DI Trust Fund in 1982 of $5.1 billion and the

subsequent repayment of that loan in 1985 ($2.5 billion) and 1986 ($2.5 billion).

h Reserves used for the trust fund ratio calculation include January advance tax transfers.

Note: Components may not sum to totals because of rounding.

Table VI.A2.— Operations of the DI Trust Fund, Calendar Years 1957-2020 (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsa d

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Appendices

166

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

Calendar Years 1957-2020

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe

1957 . . $8.1 $7.5 — — $0.6 $7.6 $7.4 $0.2 f $0.5 $23.0 298

1958 9.1 8.5 — — .6 8.9 8.6 .2 $0.1 .2 23.2 259

1959 . . 9.5 8.9 — — .6 10.8 10.3 .2 .3 -1.3 22.0 215

1960 . . 12.4 11.9 — — .6 11.8 11.2 .2 .3 .6 22.6 186

1961 . . 12.9 12.3 — — .6 13.4 12.7 .3 .3 -.5 22.2 169

1962 . . 13.7 13.1 — — .6 15.2 14.5 .3 .4 -1.5 20.7 146

1963 . . 16.2 15.6 — — .6 16.2 15.4 .3 .4 f 20.7 128

1964 . . 17.5 16.8 — — .6 17.0 16.2 .4 .4 .5 21.2 122

1965 . . 17.9 17.2 — — .7 19.2 18.3 .4 .5 -1.3 19.8 110

1966 . . 23.4 22.6 $0.1 — .7 20.9 20.1 .4 .5 2.5 22.3 95

1967 . . 26.4 25.4 .1 — .9 22.5 21.4 .5 .5 3.9 26.3 99

1968 . . 28.5 27.0 .4 — 1.0 26.0 25.0 .6 .5 2.5 28.7 101

1969 . . 33.3 31.5 .5 — 1.3 27.9 26.8 .6 .5 5.5 34.2 103

1970 . . 37.0 34.7 .5 — 1.8 33.1 31.9 .6 .6 3.9 38.1 103

1971 . . 40.9 38.3 .5 — 2.0 38.5 37.2 .7 .6 2.4 40.4 99

1972 . . 45.6 42.9 .5 — 2.2 43.3 41.6 .9 .7 2.3 42.8 93

1973 . . 54.8 51.9 .5 — 2.4 53.1 51.5 .8 .8 1.6 44.4 80

1974 . . 62.1 58.9 .5 — 2.7 60.6 58.6 1.1 .9 1.5 45.9 73

1975 . . 67.6 64.3 .5 — 2.9 69.2 67.0 1.2 1.0 -1.5 44.3 66

1976 . . 75.0 71.6 .7 — 2.7 78.2 75.8 1.2 1.2 -3.2 41.1 57

1977 . . 82.0 78.7 .7 — 2.5 87.3 84.7 1.4 1.2 -5.3 35.9 47

1978 . . 91.9 88.9 .8 — 2.3 96.0 93.0 1.4 1.6 -4.1 31.7 37

1979 . . 105.9 103.0 .7 — 2.2 107.3 104.4 1.5 1.5 -1.5 30.3 30

1980 . . 119.7 116.7 .7 — 2.3 123.5 120.6 1.5 1.4 -3.8 26.5 25

1981 . . 142.4 139.4 .8 — 2.2 144.4 141.0 1.7 1.6 -1.9 24.5 18

1982 . . 147.9 145.7 .9 — 1.4 160.1 156.2 2.1 1.8 g .2 24.8 15

1983 . . 171.3 156.3 6.7 — 8.3 171.2 166.7 2.2 2.3 .1 24.9 14

1984 . . 186.6 175.0 5.2 $3.0 3.4 180.4 175.7 2.3 2.4 6.2 31.1 h21

1985 . . 203.5 192.1 5.2 3.4 2.7 190.6 186.1 2.2 2.4 g11.1 42.2 h24

1986 . . 216.8 207.4 1.9 3.7 3.9 201.5 196.7 2.2 2.7 g 4.7 46.9 h29

1987 . . 231.0 220.6 1.9 3.2 5.3 209.1 204.1 2.4 2.6 21.9 68.8 h31

1988 . . 263.5 249.5 2.3 3.4 8.2 222.5 217.1 2.5 2.9 41.0 109.8 h41

1989 . . 289.4 271.9 2.3 2.5 12.7 236.2 230.9 2.4 2.9 53.2 163.0 h57

1990 . . 315.4 294.5 -1.3 5.0 17.2 253.1 247.8 2.3 3.0 62.3 225.3 h75

1991 . . 329.7 301.6 .1 6.1 21.9 274.2 268.2 2.6 3.5 55.5 280.7 82

1992 . . 342.6 311.3 -.1 6.1 25.4 291.9 286.0 2.7 3.2 50.7 331.5 96

1993 . . 355.6 322.0 .1 5.6 27.9 308.8 302.4 3.0 3.4 46.8 378.3 107

1994 . . 381.1 344.7 f 5.3 31.1 323.0 316.8 2.7 3.5 58.1 436.4 117

1995 . . 399.5 359.1 -.4 5.8 35.0 339.8 332.6 3.1 4.1 59.7 496.1 128

1996 . . 424.5 378.9 f 6.8 38.7 353.6 347.0 3.0 3.6 70.9 567.0 140

1997 . . 457.7 406.0 f 7.9 43.8 369.1 362.0 3.4 3.7 88.6 655.5 154

1998 . . 489.2 430.2 f 9.7 49.3 382.3 375.0 3.5 3.8 106.9 762.5 171

1999 . . 526.6 459.6 f 11.6 55.5 392.9 385.8 3.3 3.8 133.7 896.1 194

2000 . . 568.4 492.5 -.8 12.3 64.5 415.1 407.6 3.8 3.7 153.3 1,049.4 216

2001 . . 602.0 516.4 f 12.7 72.9 438.9 431.9 3.7 3.3 163.1 1,212.5 239

2002 . . 627.1 532.5 .4 13.8 80.4 461.7 453.8 4.2 3.6 165.4 1,378.0 263

2003 . . 631.9 533.5 f 13.4 84.9 479.1 470.8 4.6 3.7 152.8 1,530.8 288

2004 . . 657.7 553.0 f 15.7 89.0 501.6 493.3 4.5 3.8 156.1 1,686.8 305

2005 . . 701.8 592.9 -.3 14.9 94.3 529.9 520.7 5.3 3.9 171.8 1,858.7 318

2006 . . 744.9 625.6 f 16.9 102.4 555.4 546.2 5.3 3.8 189.5 2,048.1 335

2007 . . 784.9 656.1 f 18.6 110.2 594.5 584.9 5.5 4.0 190.4 2,238.5 345

2008 . . 805.3 672.1 f 16.9 116.3 625.1 615.3 5.7 4.0 180.2 2,418.7 358

2009 . . 807.5 667.3 f 21.9 118.3 685.8 675.5 6.2 4.1 121.7 2,540.3 353
167

History of Trust Fund Operations

Tables VI.A4 and VI.A5 show the total asset reserves of the OASI Trust

Fund and the DI Trust Fund, respectively, at the end of calendar years 2019

and 2020. The tables show the invested asset reserves by interest rate and

year of maturity. Bonds issued to the trust funds in 2020 had an interest rate

of 0.750 percent, compared with an interest rate of 2.250 percent for bonds

issued in 2019.

2010 . . $781.1 $637.3 $2.4 $23.9 $117.5 $712.5 $701.6 $6.5 $4.4 $68.6 $2,609.0 357

2011 . . 805.1 564.2 102.7 23.8 114.4 736.1 725.1 6.4 4.6 69.0 2,677.9 354

2012 . . 840.2 589.5 114.3 27.3 109.1 785.8 774.8 6.3 4.7 54.4 2,732.3 341

2013 . . 855.0 726.2 4.9 21.1 102.8 822.9 812.3 6.2 4.5 32.1 2,764.4 332

2014 . . 884.3 756.0 .5 29.6 98.2 859.2 848.5 6.1 4.7 25.0 2,789.5 322

2015 . . 920.2 794.9 .3 31.6 93.3 897.1 886.3 6.2 4.7 23.0 2,812.5 311

2016 . . 957.5 836.2 .1 32.8 88.4 922.3 911.4 6.2 4.7 35.2 2,847.7 305

2017 . . 996.6 873.6 f 37.9 85.1 952.5 941.5 6.5 4.5 44.1 2,891.8 299

2018 . . 1,003.4 885.1 f 35.0 83.3 1,000.2 988.6 6.7 4.9 3.1 2,894.9 289

2019 . . 1,061.8 944.5 f 36.5 80.8 1,059.3 1,047.9 6.4 4.9 2.5 2,897.4 273

2020 . . 1,118.1 1,001.3 f 40.7 76.1 1,107.2 1,095.9 6.3 5.0 10.9 2,908.3 262

a Beginning in 1979, benefit payments scheduled to be paid on January 3 of a given year were paid on

December 31 of the preceding year as required by the statutory provision included in the 1977 Social Security

Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. Such advance payments have occurred about every 7 years, first for benefits scheduled for January 3, 1982. For comparability with other historical years and the projections in this report, all trust

fund operations and asset reserves reflect the 12 months of benefits scheduled for payment in each year without

regard to the accelerated payments described above.

b Includes net reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds for: (1) the

cost of noncontributory wage credits for military service before 1957; (2) the cost in 1971-82 of deemed wage

credits for military service performed after 1956; (3) the cost of benefits to certain uninsured persons who

attained age 72 before 1968; (4) the cost of payroll tax credits provided to employees in 1984 and self-employed

persons in 1984-89 by Public Law 98-21; (5) the cost in 2009-17 of excluding certain self-employment earnings

from SECA taxes under Public Law 110-246; and (6) payroll tax revenue forgone under the provisions of Public

Laws 111-147, 111-312, 112-78, and 112-96.

c Net interest includes net profits or losses on marketable investments. Beginning in 1967, the trust funds pay

administrative expenses on an estimated basis, with a final adjustment including interest made in the following

fiscal year. Net interest includes the amounts of these interest adjustments. The 1970 report describes the

accounting for administrative expenses for years prior to 1967. Beginning in October 1973, figures include relatively small amounts of gifts to the funds. Net interest for 1983-86 reflects payments for interest on amounts

owed under the interfund borrowing provisions. During 1983-90, net interest reflects interest reimbursements

paid from the trust funds to the General Fund on advance tax transfers.

d Beginning in 1966, includes payments for vocational rehabilitation services furnished to disabled persons

receiving benefits because of their disabilities. Beginning in 1983, net benefit amounts include reimbursements

paid from the General Fund to the trust funds for unnegotiated benefit checks. Excluding the portion attributable

to vocational rehabilitation services and unnegotiated benefit checks, amounts are the same as benefits scheduled

under law at that time for all historical years.

e The “Trust fund ratio” column represents asset reserves at the beginning of a year as a percentage of cost during

the year.

f Between -$50 million and $50 million.

g Reflects interfund borrowing by the OASI Trust Fund from the HI Trust Fund in 1982 of $12.4 billion and the

subsequent repayment of that loan in 1985 ($1.8 billion) and 1986 ($10.6 billion).

h Reserves used for the trust fund ratio calculation include January advance tax transfers.

Note: Components may not sum to totals because of rounding.

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

Calendar Years 1957-2020 (Cont.)

[Dollar amounts in billions]

Calendar

year

Income Cost Asset Reservesa

Total

Net payroll tax

contributions

GF

reimbursementsbTaxation of

benefits

Net

interestc Totala

Benefit

paymentsad

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioe
Appendices

168

Note: Amounts of special issue securities are at par value. The trust fund purchases and redeems special

issue securities at par value. The table groups equal amounts that mature in two or more years at a given

interest rate.

Table VI.A4.—OASI Trust Fund Asset Reserves, End of 

Calendar Years 2019 and 2020

[In thousands]

December 31, 2019 December 31, 2020

Obligations sold only to the trust funds (special issue securities): 

Certificates of indebtedness: 

 0.875 percent, 2021 — $31,409,192

 1.875 percent, 2020 $53,898,934 —

Bonds:

 0.750 percent, 2022-25 — 59,725,632

 0.750 percent, 2026-33 — 119,451,256

 1.375 percent, 2021 6,693,020 —

 1.375 percent, 2022-25 26,772,080 26,772,080

 1.375 percent, 2026 6,693,019 6,693,019

 1.375 percent, 2027 173,240,401 173,240,401

 1.750 percent, 2021 4,908,185 —

 1.750 percent, 2022-25 19,632,740 19,632,740

 1.750 percent, 2026-27 9,816,372 9,816,372

 1.750 percent, 2028 178,148,587 178,148,587

 1.875 percent, 2021 2,320,956 —

 1.875 percent, 2022-27 13,925,736 13,925,736

 1.875 percent, 2028-30 6,962,865 6,962,865

 1.875 percent, 2031 188,111,583 188,111,583

 2.000 percent, 2021 3,655,628 —

 2.000 percent, 2022-25 14,622,512 14,622,512

 2.000 percent, 2026-29 14,622,516 14,622,516

 2.000 percent, 2030 185,790,628 185,790,628

 2.250 percent, 2021 5,582,927 —

 2.250 percent, 2022-25 22,331,708 22,331,708

 2.250 percent, 2026-27 11,165,852 11,165,852

 2.250 percent, 2028 5,582,927 5,582,927

 2.250 percent, 2029 183,731,514 183,731,514

 2.250 percent, 2030-31 3,193,030 3,193,030

 2.250 percent, 2032 189,708,097 189,708,097

 2.250 percent, 2033 12,818,538 12,818,538

 2.250 percent, 2034 177,899,339 177,899,339

 2.500 percent, 2021 5,971,787 —

 2.500 percent, 2022-25 23,887,148 23,887,148

 2.500 percent, 2026 166,547,382 166,547,382

 2.875 percent, 2021 7,264,432 —

 2.875 percent, 2022-24 21,793,296 21,793,296

 2.875 percent, 2025 160,575,595 160,575,595

 2.875 percent, 2032 1 1

 2.875 percent, 2033 176,889,560 176,889,560

 3.250 percent, 2021 10,628,270 —

 3.250 percent, 2022-23 21,256,540 21,256,540

 3.250 percent, 2024 153,311,163 153,311,163

 4.000 percent, 2021 12,075,192 —

 4.000 percent, 2022 12,075,192 12,075,192

 4.000 percent, 2023 142,682,893 142,682,893

 4.125 percent, 2020 82,329,713 —

 5.000 percent, 2020 12,454,232 —

 5.000 percent, 2021 12,454,232 10,010,036

 5.000 percent, 2022 130,607,701 130,607,701

 5.125 percent, 2020 11,567,769 —

 5.125 percent, 2021 118,153,469 118,153,469

Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,804,355,261 2,793,146,100

Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a A negative amount for a given year represents a situation where actual program cost exceeded the amount of

invested securities of the OASI Trust Fund that were redeemed to cover such cost. In this situation, future

redemption of additional invested securities will be required to pay for this shortfall. For 2020 and other calendar years where January 3 of the following year is a Sunday, a positive amount is shown on a liability basis

for benefits scheduled to be paid on January 3 of the following year that were, by law, actually paid on the preceding December 31.

-33,356 18,569,550

Total asset reserves 2,804,321,905 2,811,715,650
169

History of Trust Fund Operations

Note: Amounts of special issue securities are at par value. The trust fund purchases and redeems special

issue securities at par value. The table groups equal amounts that mature in two or more years at a given

interest rate.

Table VI.A5.—DI Trust Fund Asset Reserves, End of Calendar Years 2019 and 2020

[In thousands]

December 31, 2019 December 31, 2020

Obligations sold only to the trust funds (special issue securities):

Certificates of indebtedness: 

 0.875 percent, 2021 — $110,721

 1.875 percent, 2020 $6,293,202 —

Bonds:

 0.750 percent, 2024-26 — 1,438,419

 0.750 percent, 2027-29 — 1,438,422

 0.750 percent, 2030-34 — 2,397,365

 0.750 percent, 2035 — 5,348,270

 1.875 percent, 2022 3,011,390 595,277

 2.250 percent, 2021 4,458,053 —

 2.250 percent, 2024-25 2,489,358 2,489,358

 2.250 percent, 2026 1,244,680 1,244,680

 2.250 percent, 2027-32 7,468,074 7,468,074

 2.250 percent, 2033-34 9,737,594 9,737,594

 2.875 percent, 2024-25 7,248,238 7,248,238

 2.875 percent, 2026-32 25,368,826 25,368,826

 4.000 percent, 2023 14,675,554 14,675,554

 5.000 percent, 2022 11,142,596 11,142,596

Total investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93,137,565 90,703,394

Undisbursed balancesa . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

a A negative amount for a given year represents a situation where actual program cost exceeded the amount

of invested securities of the DI Trust Fund that were redeemed to cover such cost. In this situation, future

redemption of additional invested securities will be required to pay for this shortfall. For 2020 and other calendar years where January 3 of the following year is a Sunday, a positive amount is shown on a liability

basis for benefits scheduled to be paid on January 3 of the following year that were, by law, actually paid on

the preceding December 31.

-54,812 5,866,965

Total asset reserves 93,082,753 96,570,359
Appendices

170

B. HISTORY OF ACTUARIAL STATUS ESTIMATES

This appendix chronicles the history of the long-range OASDI actuarial balance and the year of combined OASI and DI Trust Fund reserve depletion

since 1982 under the intermediate assumptions. The actuarial balance is the

principal summary measure of actuarial status for the long-range period as a

whole. The year of trust fund reserve depletion is also critical, as it indicates

the year by which legislative action would be needed in order to maintain

timely payment of scheduled benefits. 

The 1983 report was the last report for which the actuarial balance was positive. The two basic components of actuarial balance are the summarized

income rate and the summarized cost rate, both of which are expressed as

percentages of taxable payroll over the period. Section IV.B.4 defines the

summarized income rate, summarized cost rate, and actuarial balance in

detail. For any given period, the actuarial balance includes the difference

between the present value of non-interest income for the period and the present value of the cost for the period, each divided by the present value of taxable payroll for all years in the period. The computation of the actuarial

balance also includes:

 • In the reports for 1988 and later, the amount of the trust fund asset

reserves on hand at the beginning of the valuation period; and

 • In the reports for 1991 and later, the present value of a target trust fund

asset reserve equal to 100 percent of the annual cost to be reached and

maintained at the end of the valuation period.

Reports of 1973-87 used the average-cost method, a simpler method which

approximates the results of the present-value approach for computing the

actuarial balance. Under the average-cost method, the sum of the annual cost

rates over the 75-year projection period was divided by the total number of

years, 75, to obtain the average cost rate per year. A similar computation produced the average income rate. The actuarial balance was the difference

between the average income rate and the average cost rate.

When the 1973 report introduced the average-cost method, the financing of

the program was more nearly on a pay-as-you-go basis over the long-range.

Also, the long-range demographic and economic assumptions in that report

produced an annual rate of growth in total taxable payroll which was about

the same as the annual rate at which the trust funds earned interest. In either

circumstance (i.e., pay-as-you-go financing, where the annual income rate is

the same as the annual cost rate, or an annual rate of growth in total taxable

payroll equal to the annual interest rate), the average-cost method produces
171

History of Actuarial Status

the same result as the present-value method. However, by 1988, neither of

these circumstances still existed.

After the 1977 and 1983 Social Security Amendments, projections indicated

substantial increases in the trust fund reserves continuing well into the 21st

century. These laws changed the program’s financing from essentially payas-you-go to partial advance funding through the 75-year period. Also, for

the reports from 1973 through 1987, long-range fertility rates and average

real wage growth assumptions were gradually reduced, resulting in an annual

rate of growth in taxable payroll that was significantly lower than the

assumed interest rate by 1987. As a result of the difference between this rate

of growth and the assumed interest rate, the results of the average-cost

method and the present-value method began to diverge in the reports for

1973 through 1987, and by 1988 they were quite different. While the average-cost method reflected most of the effects of assumed interest rates, it no

longer reflected all interest effects. The present-value method, by contrast,

accurately reflects the implications of assumed interest rates. As a result, the

1988 report reintroduced the present-value method of calculating the actuarial balance.

A positive actuarial balance indicates that estimated income (plus starting

reserves, beginning with the 1988 report) is more than sufficient to meet estimated trust fund obligations (plus the ending target fund, beginning with the

1991 report) for the period as a whole. Even with a positive actuarial balance, it is possible for reserves to become temporarily depleted within the

long-range period. An actuarial balance of zero indicates that the estimated

income (plus starting reserves, beginning with the 1988 report) exactly

matches estimated trust fund obligations (plus the ending target fund, beginning with the 1991 report) for the period as a whole. A negative actuarial balance indicates that estimated income (plus starting reserves, beginning with

the 1988 report) is insufficient to meet estimated trust fund obligations (plus

the ending target fund, beginning with the 1991 report) for the entire period. 

Table VI.B1 contains the long-range OASDI actuarial balances, summarized

income rates, and summarized cost rates for the 1982 report through the current report. The reports presented these values on the basis of the intermediate assumptions, which recent reports refer to as alternative II and reports

from 1982 to 1990 referred to as alternative II-B.
Appendices

172

Note: Components may not sum to totals because of rounding.

Table VI.B1.—Long-Range OASDI Actuarial Balances and Trust Fund Reserve 

Depletion Dates as Shown in the Trustees Reports for 1982-2021 

under Intermediate Assumptionsa

[As a percentage of taxable payroll]

a This table shows the actuarial balance and year of trust fund reserve depletion based on the intermediate

assumptions, which the 1982-90 reports referred to as alternative II-B and the 1991 and later reports refer to

as alternative II.

Year of report

Summarized

income rate

Summarized

cost rate

Actuarial

balanceb

b The definition and method of calculating the actuarial balance were changed in 1988 and 1991. See text

for details.

Change from

previous yearc

c A detailed year-by-year breakdown of the reasons for the changes in the actuarial balance since the 1983

Trustees Report may be found in Actuarial Note 2021.8 at www.ssa.gov/OACT/NOTES/ran8/.

Year of

combined trust

fund reserve

depletion

1982 . . . . . . . . . . . 12.27 14.09 -1.82 d 1983

1983 . . . . . . . . . . . 12.87 12.84 +.02 +1.84 solvent

1984 . . . . . . . . . . . 12.90 12.95 -.06 -.08 solvent

1985 . . . . . . . . . . . 12.94 13.35 -.41 -.35 2049

1986 . . . . . . . . . . . 12.96 13.40 -.44 -.03 2051

1987 . . . . . . . . . . . 12.89 13.51 -.62 -.18 2051

1988 . . . . . . . . . . . 12.94 13.52 -.58 +.04 2048

1989 . . . . . . . . . . . 13.02 13.72 -.70 -.13 2046

1990 . . . . . . . . . . . 13.04 13.95 -.91 -.21 2043

1991 . . . . . . . . . . . 13.11 14.19 -1.08 -.17 2041

1992 . . . . . . . . . . . 13.16 14.63 -1.46 -.38 2036

1993 . . . . . . . . . . . 13.21 14.67 -1.46 d

d Between -0.005 and 0.005 percent of taxable payroll.

2036

1994 . . . . . . . . . . . 13.24 15.37 -2.13 -.66 2029

1995 . . . . . . . . . . . 13.27 15.44 -2.17 -.04 2030

1996 . . . . . . . . . . . 13.33 15.52 -2.19 -.02 2029

1997 . . . . . . . . . . . 13.37 15.60 -2.23 -.03 2029

1998 . . . . . . . . . . . 13.45 15.64 -2.19 +.04 2032

1999 . . . . . . . . . . . 13.49 15.56 -2.07 +.12 2034

2000 . . . . . . . . . . . 13.51 15.40 -1.89 +.17 2037

2001 . . . . . . . . . . . 13.58 15.44 -1.86 +.03 2038

2002 . . . . . . . . . . . 13.72 15.59 -1.87 -.01 2041

2003 . . . . . . . . . . . 13.78 15.70 -1.92 -.04 2042

2004 . . . . . . . . . . . 13.84 15.73 -1.89 +.03 2042

2005 . . . . . . . . . . . 13.87 15.79 -1.92 -.04 2041

2006 . . . . . . . . . . . 13.88 15.90 -2.02 -.09 2040

2007 . . . . . . . . . . . 13.92 15.87 -1.95 +.06 2041

2008 . . . . . . . . . . . 13.94 15.63 -1.70 +.26 2041

2009 . . . . . . . . . . . 14.02 16.02 -2.00 -.30 2037

2010 . . . . . . . . . . . 14.01 15.93 -1.92 +.08 2037

2011 . . . . . . . . . . . 14.02 16.25 -2.22 -.30 2036

2012 . . . . . . . . . . . 14.02 16.69 -2.67 -.44 2033

2013 . . . . . . . . . . . 13.88 16.60 -2.72 -.05 2033

2014 . . . . . . . . . . . 13.89 16.77 -2.88 -.16 2033

2015 . . . . . . . . . . . 13.86 16.55 -2.68 +.20 2034

2016 . . . . . . . . . . . 13.84 16.50 -2.66 +.02 2034

2017 . . . . . . . . . . . 13.84 16.67 -2.83 -.17 2034

2018 . . . . . . . . . . . 13.84 16.69 -2.84 -.02 2034

2019 . . . . . . . . . . . 13.81 16.60 -2.78 +.06 2035

2020 . . . . . . . . . . . 13.85 17.06 -3.21 -.43 2035

2021 . . . . . . . . . . . 13.78 17.31 -3.54 -.32 2034
173

History of Actuarial Status

For several of the years included in the table, significant legislative changes

or definitional changes affected the actuarial balance. The Social Security

Amendments of 1983 account for the largest single change shown in the

table: the actuarial balance of -1.82 for the 1982 report improved to +0.02 for

the 1983 report. In 1985, the actuarial balance changed largely because of an

adjustment made to the method for estimating the age distribution of immigrants.

Rebenchmarking of the National Income and Product Accounts and changes

in demographic assumptions contributed to the change in the actuarial balance for 1987. Various changes in assumptions and methods for the 1988

report had roughly offsetting effects on the actuarial balance. In 1989 and

1990, changes in economic assumptions accounted for most of the changes

in the actuarial balance.

In 1991, the effect of legislation, changes in economic assumptions, and the

introduction of the cost of reaching and maintaining an ending target trust

fund level combined to produce the change in the actuarial balance. In 1992,

changes in disability assumptions and the method for projecting average benefit levels accounted for most of the change in the actuarial balance. In 1993,

numerous small changes in assumptions and methods had offsetting effects

on the actuarial balance. In 1994, changes in the real wage assumptions, disability rates, and the earnings sample used for projecting average benefit levels accounted for most of the change in the actuarial balance. In 1995,

numerous small changes had largely offsetting effects on the actuarial balance, including a substantial reallocation of the payroll tax rate, which

reduced the OASI actuarial balance, but increased the DI actuarial balance.

In 1996, a change in the method of projecting dually-entitled beneficiaries

produced a large increase in the actuarial balance, which almost totally offset

decreases produced by changes in the valuation period and in the demographic and economic assumptions. Various changes in assumptions and

methods for the 1997 report had roughly offsetting effects on the actuarial

balance. In 1998, increases caused by changes in the economic assumptions,

although partially offset by decreases produced by changes in the valuation

period and in the demographic assumptions, accounted for most of the

changes in the actuarial balance. In 1999, increases caused by changes in the

economic assumptions (related to improvements in the CPI by the Bureau of

Labor Statistics) accounted for most of the changes in the actuarial balance.

For the 2000 report, changes in economic assumptions and methodology

caused increases in the actuarial balance, although reductions in the balance

caused by the change in valuation period and changes in demographic

assumptions partially offset these increases. 
Appendices

174

For the 2001 report, increases caused by changes in the demographic starting

values, although partially offset by a decrease produced by the change in the

valuation period, accounted for most of the changes in the actuarial balance.

For the 2002 report, changes in the valuation period and the demographic

assumptions—both decreases in the actuarial balance—were offset by

changes in the economic assumptions, while an increase due to disability

assumptions was slightly more than offset by a decrease due to changes in

the projection methods and data. For the 2003 report, an increase due to the

change in program assumptions was more than offset by decreases due to the

change in valuation period and changes in demographic assumptions. In the

2004 report, increases due to changing the method of projecting benefit levels for higher earners more than offset decreases in the actuarial balance arising from the change in the valuation period and the net effect of other

changes in programmatic data and methods. For the 2005 report, an increase

due to changing the method of projecting future average benefit levels was

more than offset by decreases due to changes in the valuation period, updated

starting values for the economic assumptions, and other methodological

changes. 

In 2006, decreases in the actuarial balance due to the change in the valuation

period, a reduction in the ultimate annual real interest rate, and improvements in calculating mortality for disabled workers, were greater in aggregate than increases in the actuarial balance due to changes in demographic

starting values and the ultimate total fertility rate, as well as other programmatic data and method changes. For the 2007 report, increases in the actuarial balance arising from revised disability incidence rate assumptions,

improvements in average benefit level projections, and changes in near-term

economic projections, more than offset decreases in the balance due to the

valuation period change and updated historical mortality data. For the 2008

report, the large increase in the actuarial balance was primarily due to

changes in immigration projection methods and assumptions. These changes

more than offset the decreases in the actuarial balance due to the change in

the valuation period and the lower starting and ultimate mortality rates. In

2009, changes in starting values and near-term economic assumptions due to

the economic recession, faster ultimate rates of decline in death rates for

ages 65-84, and the change in the valuation period accounted for most of the

large decrease in the actuarial balance. Legislative changes, in particular the

estimated effects of the Patient Protection and Affordable Care Act and the

Health Care and Education Reconciliation Act of 2010, were the main reason

for the increase in the actuarial balance for the 2010 report. The change in

the valuation period partially offset this increase; there were also changes in
175

History of Actuarial Status

several assumptions, methods, and recent data which had largely offsetting

effects.

For the 2011 report, changes in mortality projections, due to new starting

values and revised methods, were the most significant of several factors contributing to the increase in the deficit. In 2012, changes in economic assumptions and starting values accounted for about half of the decrease in actuarial

balance. Other factors worsening the actuarial balance were the change in

valuation period, changes to starting demographic values, changes to ultimate disability incidence assumptions, and methodology changes and data

updates. For the 2013 report, the change in valuation period accounted for

the entire net change in the actuarial balance. The effects of substantially

lower death rates for 2009 than previously projected and the American Taxpayer Relief Act of 2012 (which lowered the Federal marginal income tax

rates) were offset by updates of program-specific data and methodology

improvements. In 2014, changes in economic data and assumptions

accounted for the majority of the net change in the actuarial balance. Other

factors worsening the actuarial balance were the change in the valuation

period and various methodology improvements and data updates. For the

2015 report, methodological improvements and updates of programmatic

data accounted for the majority of the net increase in the actuarial balance.

Also increasing the actuarial balance were a lower assumed ultimate average

wage differential and changes in near-term economic assumptions. These

increases were offset somewhat by the change in the valuation period and

updates to historical and near-term projected birth rates.

For the 2016 report, the actuarial balance increased primarily due to the

effects of the Bipartisan Budget Act of 2015 and improvements made to

immigration methods. The most notable immigration change was a revision

to the method for projecting emigration of the never-authorized population to

reflect lower rates of emigration for those who have resided here longer.

These increases in the actuarial balance were largely offset by the effects of

changes in ultimate economic assumptions, including a lower real interest

rate and a lower annual increase in the rate of price inflation. In 2017, the

change in the valuation period and various methodology improvements

accounted for most of the net reduction in the actuarial balance. Other economic factors also contributed to worsening the actuarial balance, including

a lower real wage differential assumption and an assumed weaker recovery

from the recent recession. These reductions were offset somewhat by lower

estimated disability incidence rates over the short-range period. For the 2018

report, incorporating the effects of lower-than-expected birth rates, lower

near-term fertility assumptions, and the change in the valuation period
Appendices

176

decreased the actuarial balance. Offsetting these factors to a large degree

were the effects of higher-than-expected death rates and several methods

improvements, most notably an update to the sample used to project average

benefit levels for newly-entitled worker beneficiaries.

For the 2019 report, the actuarial balance increased primarily due to higherthan-expected death rates and lower near-term and ultimate disability incidence rate assumptions. Partially offsetting these factors were the effects of a

lower ultimate real interest rate assumption and the change in the valuation

period. 

For the 2020 report, the actuarial balance decreased primarily due to the following factors. First, the repeal of the Affordable Care Act’s excise tax on

employer-sponsored group health insurance premiums reduced projected

earnings as a share of employee compensation, having a significant negative

financial effect on the trust funds. In addition, lower assumed values for the

ultimate total fertility rate, the ultimate rate of price inflation, and the ultimate real interest rate, as compared to the rates assumed for the 2019 report,

decreased the actuarial balance.

Section IV.B.6 describes changes affecting the actuarial balance shown for

the 2021 report.
177

Fiscal Year Operations and Projections

C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND 

OPERATIONS THROUGH 2030

Tables VI.C1, VI.C2, and VI.C3 contain details of the fiscal year 2020 operations of the OASI, DI, and the combined OASI and DI Trust Funds, respectively. The fiscal year for the U.S. Government is the 12-month period

ending September 30. Fiscal year 2020 is the most recent fiscal year for

which complete information is available. The descriptions of the values in

these tables are similar to the corresponding descriptions and values in the

calendar year operations tables in section III.A. Please see that section for a

description of the various items of income and cost.
Appendices

178

Note: Components may not sum to totals because of rounding.

Table VI.C1.—Operations of the OASI Trust Fund, Fiscal Year 2020

[In millions]

Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,804,312

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior years

$841,664

Payments from the General Fund of the Treasury for payroll tax contributions subject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 841,664

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a . 7

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

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa 7

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 236

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,674

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,910

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,988

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and

the General Fund account for the Supplemental Security Income program, (2) interest arising from the

revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the trust fund.

2

Total investment income and interest adjustments . . . . . . . . . . . . . . . . . . . . . . . . 75,990

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 955,571

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

940,224

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -38

Payment for costs of vocational rehabilitation services for disabled beneficiaries 14

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 940,200

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,844

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,151

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 512

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2

Miscellaneous reimbursements from the General Fund e . . . . . . . . . . . . . . . . . . . . 

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

related to administering the OASI program.

-3

Net administrative expenses 3,658

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 948,702

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,869

Total invested assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,213

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f A negative balance represents a situation where the actual program cash payments exceeded the amount of

invested securities of the OASI Trust Fund that were redeemed to make such payments. In this situation,

future redemption of additional invested securities will be required to pay for this shortfall.

-32

Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,811,181
179

Fiscal Year Operations and Projections

Note: Components may not sum to totals because of rounding.

Table VI.C2.—Operations of the DI Trust Fund, Fiscal Year 2020

[In millions]

Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $96,409

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior years.

$142,898

Payments from the General Fund of the Treasury for payroll tax contributions subject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,898

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a. 1

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

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Income based on taxation of benefit payments:

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

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,667

Total income from taxation of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,671

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,813

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust fund and

the General Fund account for the Supplemental Security Income program, (2) interest arising from the

revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the trust fund.

5

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 2,817

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147,387

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

144,001

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -21

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 104

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144,084

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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

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

related to administering the DI program.

-2

Net administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,505

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 146,733

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 655

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,209

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f A negative balance represents a situation where the actual program cash payments exceeded the amount of

invested securities of the DI Trust Fund that were redeemed to make such payments. In this situation, future

redemption of additional invested securities will be required to pay for this shortfall.

-146

Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,063
Appendices

180

Note: Components may not sum to totals because of rounding.

Table VI.C3.—Operations of the Combined OASI and DI Trust Funds, Fiscal Year 2020

[In millions]

Total asset reserves, September 30, 2019. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,900,721

Income:

Net payroll tax contributions:

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

a Includes adjustments for prior years.

$984,562

Payments from the General Fund of the Treasury for payroll tax contributions subject to refund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —

Net payroll tax contributionsa. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 984,562

Reimbursements from the General Fund:

Reduction in payroll tax contributions due to P.L.s 111-312, 112-78, and 112-96a. 8

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

b Between -$0.5 and $0.5 million.

Net General Fund reimbursementsa 8

Income based on taxation of benefit payments:

Withheld from benefit payments to nonresident aliens . . . . . . . . . . . . . . . . . . . . . . 240

All other, not subject to withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,341

Total income from taxation of benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,581

Investment income and interest adjustments:

Interest on investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78,800

Interest adjustmentsc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

c Includes: (1) interest on adjustments in the allocation of administrative expenses between the trust funds

and the General Fund account for the Supplemental Security Income program, (2) interest arising from the

revised allocation of administrative expenses among the trust funds, and (3) interest on certain reimbursements to the trust funds.

7

Total investment income and interest adjustments. . . . . . . . . . . . . . . . . . . . . . . . 78,807

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

Total income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,102,958

Cost:

Benefit payments:

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

d Includes net reductions for the recovery of overpayments.

1,084,224

Reimbursement from the General Fund for unnegotiated checks . . . . . . . . . . . . . . -59

Payment for costs of vocational rehabilitation services for disabled beneficiaries . 118

Net benefit paymentsd . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,084,284

Financial interchange with the Railroad Retirement “Social Security Equivalent

Benefit Account”. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,988

Administrative expenses:

Costs incurred by:

Social Security Administration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,551

Department of the Treasury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 605

Offsetting miscellaneous receipts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2

Demonstration projects. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

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

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

related to administering the OASI and DI programs.

-4

Net administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,163

Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,095,435

Net increase in asset reserves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,524

Total invested assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,908,423

Undisbursed balancesf . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

f A negative net balance represents a situation where the actual combined program cash payments exceeded

the amount of invested securities of the OASI and DI Trust Funds that were redeemed to make such payments. In this situation, future net redemption of additional invested securities will be required to pay for this

shortfall.

-178

Total asset reserves, September 30, 2020. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,908,245
181

Fiscal Year Operations and Projections

Tables VI.C4, VI.C5, and VI.C6 show estimates of the operations and status of

the OASI, DI, and the hypothetical combined OASI and DI Trust Funds,

respectively, during fiscal years 2016 through 2030. 

Note: Components may not sum to totals because of rounding.

Table VI.C4.—Operations of the OASI Trust Fund, Fiscal Years 2016-2030

[Dollar amounts in billions]

Fiscal 

year

Income Cost Asset Reserves

Total

Net payroll tax

contributions

GF

reimbursementsa

a Includes reimbursements from the General Fund of the Treasury to the OASI Trust Fund for: (1) the cost of

payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21;

(2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public Law 110-

246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-78, and

112-96.

Taxation of

benefitsb

b Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

Net

interest Total

Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioc

c The “Trust fund ratio” column represents asset reserves at the beginning of a year (which are identical to

reserves at the end of the prior year shown in the “Amount at end of year” column) as a percentage of cost for

the year. 

Historical data:

2016 . . $799.9 $679.6 $0.1 $31.1 $89.1 $769.8 $762.1 $3.4 $4.3 $30.1 $2,796.6 359

2017 . . 822.4 702.1 d 35.4 84.9 799.0 791.1 3.6 4.3 23.5 2,820.1 350

2018 . . 822.4 706.1 d 34.7 81.6 841.5 833.0 3.7 4.8 -19.0 2,801.1 335

2019 . . 900.1 785.6 d 34.9 79.6 896.8 888.1 3.9 4.9 3.2 2,804.3 312

2020 . . 955.6 841.7 d

d Between -$50 million and $50 million.

37.9 76.0 948.7 940.2 3.7 4.8 6.9 2,811.2 296

Intermediate:

2021 . . 932.0 827.7 d 33.7 70.6 994.4 985.2 4.0 5.1 -62.4 2,748.8 283

2022 . . 1,010.8 903.9 d 42.6 64.3 1,055.2 1,045.6 4.0 5.6 -44.4 2,704.4 260

2023 . . 1,045.7 940.2 d 46.2 59.3 1,122.5 1,112.9 4.1 5.5 -76.9 2,627.5 241

2024 . . 1,091.4 986.1 d 50.1 55.1 1,193.9 1,184.1 4.2 5.6 -102.5 2,525.0 220

2025 . . 1,135.0 1,028.1 d 54.5 52.3 1,268.5 1,258.5 4.3 5.6 -133.6 2,391.4 199

2026 . . 1,190.4 1,074.0 d 66.0 50.4 1,347.1 1,336.9 4.5 5.8 -156.7 2,234.8 178

2027 . . 1,240.2 1,114.7 d 74.0 51.6 1,429.0 1,418.6 4.6 5.8 -188.8 2,045.9 156

2028 . . 1,299.3 1,167.9 d 80.1 51.3 1,517.9 1,507.3 4.7 5.8 -218.6 1,827.4 135

2029 . . 1,346.6 1,212.0 d 86.4 48.2 1,610.0 1,599.2 4.8 5.9 -263.4 1,564.0 114

2030 . . 1,396.9 1,260.7 d 93.2 43.0 1,704.8 1,693.9 5.0 6.0 -308.0 1,256.0 92

Low-cost:

2021 . . 938.3 834.0 d 33.7 70.6 994.1 985.0 4.0 5.1 -55.8 2,755.4 283

2022 . . 1,058.9 951.4 d 42.7 64.8 1,057.4 1,047.9 4.0 5.5 1.5 2,756.9 261

2023 . . 1,098.3 990.8 d 46.5 61.0 1,129.9 1,120.4 4.1 5.4 -31.6 2,725.3 244

2024 . . 1,167.9 1,057.5 d 50.7 59.7 1,207.6 1,197.8 4.3 5.5 -39.8 2,685.6 226

2025 . . 1,236.1 1,121.2 d 55.4 59.5 1,289.3 1,279.2 4.5 5.6 -53.3 2,632.3 208

2026 . . 1,318.1 1,189.0 d 67.4 61.8 1,375.8 1,365.3 4.7 5.8 -57.6 2,574.7 191

2027 . . 1,395.5 1,252.7 d 75.9 66.9 1,466.7 1,456.0 4.9 5.8 -71.2 2,503.5 176

2028 . . 1,486.9 1,332.9 d 82.6 71.4 1,565.9 1,554.9 5.1 5.9 -78.9 2,424.5 160

2029 . . 1,568.4 1,404.8 d 89.6 74.0 1,669.9 1,658.7 5.3 5.9 -101.5 2,323.1 145

2030 . . 1,656.7 1,483.8 d 97.2 75.7 1,778.4 1,766.9 5.5 6.0 -121.8 2,201.3 131

High-cost:

2021 . . 928.4 824.1 d 33.7 70.6 994.6 985.5 4.0 5.1 -66.2 2,744.9 283

2022 . . 949.3 843.5 d 42.5 63.4 1,050.9 1,041.3 4.0 5.6 -101.6 2,643.4 261

2023 . . 966.0 863.6 d 45.7 56.7 1,110.7 1,101.0 4.1 5.5 -144.7 2,498.7 238

2024 . . 996.5 895.9 d 49.3 51.2 1,175.3 1,165.5 4.1 5.6 -178.8 2,319.9 213

2025 . . 1,026.0 925.8 d 53.4 46.8 1,243.2 1,233.3 4.2 5.7 -217.2 2,102.7 187

2026 . . 1,066.3 960.0 d 64.4 41.9 1,314.5 1,304.5 4.3 5.7 -248.2 1,854.6 160

2027 . . 1,099.7 989.1 d 71.8 38.8 1,388.3 1,378.2 4.3 5.7 -288.6 1,565.9 134

2028 . . 1,137.4 1,026.9 d 77.4 33.0 1,468.0 1,457.9 4.4 5.7 -330.6 1,235.3 107

2029 . . 1,160.1 1,051.9 d 83.2 25.0 1,549.8 1,539.6 4.5 5.8 -389.7 845.7 80

2030 . . 1,185.1 1,078.4 d 89.3 17.4 1,633.1 1,622.8 4.5 5.8 -448.0 397.7 52
Appendices

182

Note: Components may not sum to totals because of rounding.

Table VI.C5.—Operations of the DI Trust Fund, Fiscal Years 2016-2030a

[Dollar amounts in billions]

a The DI Trust Fund becomes depleted in fiscal year 2028 under the high-cost assumptions. For any period

during which reserves would be depleted, scheduled benefits could not be paid in full on a timely basis, income

from taxing benefits would be less than would apply to scheduled benefits, and interest on trust fund reserves

would be negligible.

Fiscal 

year

Income Cost Asset Reserves

Total

Net payroll tax

contributions

GF

reimbursementsb

b Includes reimbursements from the General Fund of the Treasury to the DI Trust Fund for: (1) the cost of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law 98-21;

(2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public

Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312,

112-78, and 112-96.

Taxation of

benefitsc

c Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

Net

interest Total

Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratiod

d The “Trust fund ratio” column represents asset reserves at the beginning of a year (which are identical to

reserves at the end of the prior year shown in the “Amount at end of year” column) as a percentage of cost for

the year. 

Historical data:

2016. . $150.3 $147.6 e

e Between -$50 million and $50 million.

$1.2 $1.5 $146.2 $143.1 $2.8 $0.4 $4.1 $45.7 28

2017. . 169.5 165.9 e 2.0 1.6 145.8 142.9 2.7 .2 23.7 69.4 31

2018. . 170.3 167.0 e 1.0 2.2 146.6 143.6 2.8 .2 23.7 93.1 47

2019. . 151.0 146.8 e 1.2 2.9 147.7 144.9 2.8 .1 3.3 96.4 63

2020. . 147.4 142.9 e 1.7 2.8 146.7 144.1 2.5 .1 .7 97.1 66

Intermediate:

2021. . 143.7 140.6 e .4 2.7 145.2 142.3 2.7 .2 -1.4 95.7 67

2022. . 157.5 153.5 e 1.5 2.5 151.3 148.3 2.9 .1 6.2 101.9 63

2023. . 163.6 159.7 e 1.6 2.3 158.3 155.4 2.8 .1 5.3 107.1 64

2024. . 171.5 167.5 e 1.7 2.3 164.3 161.3 2.9 .1 7.1 114.3 65

2025. . 178.9 174.6 e 1.9 2.5 170.5 167.4 3.1 .1 8.4 122.7 67

2026. . 187.4 182.4 e 2.2 2.8 177.7 174.4 3.3 .1 9.7 132.4 69

2027. . 195.1 189.3 e 2.5 3.3 185.5 182.0 3.4 .1 9.6 142.0 71

2028. . 204.9 198.3 e 2.6 4.0 192.1 188.5 3.6 .1 12.8 154.8 74

2029. . 213.3 205.8 e 2.8 4.8 198.8 194.9 3.8 .1 14.5 169.3 78

2030. . 222.7 214.1 e 2.9 5.7 205.9 201.8 3.9 .1 16.8 186.0 82

Low-cost:

2021. . 144.8 141.7 e .4 2.7 144.6 141.7 2.7 .2 .2 97.3 67

2022. . 165.7 161.6 e 1.5 2.6 149.3 146.3 2.9 .1 16.4 113.7 65

2023. . 172.6 168.2 e 1.6 2.8 154.5 151.7 2.8 .1 18.1 131.8 74

2024. . 184.5 179.6 e 1.7 3.2 159.0 156.0 2.9 e 25.5 157.3 83

2025. . 196.5 190.4 e 1.8 4.3 163.5 160.3 3.1 e 33.0 190.3 96

2026. . 210.0 201.9 e 2.1 6.0 168.6 165.3 3.3 e 41.4 231.7 113

2027. . 223.5 212.7 e 2.3 8.5 174.4 170.8 3.5 .1 49.2 280.9 133

2028. . 240.6 226.3 e 2.4 11.9 179.0 175.2 3.7 .1 61.6 342.5 157

2029. . 257.0 238.6 e 2.5 15.9 183.9 179.9 3.9 .1 73.1 415.6 186

2030. . 275.4 252.0 e 2.7 20.7 189.5 185.3 4.1 .1 85.9 501.5 219

High-cost:

2021. . 143.1 140.0 e .4 2.7 145.6 142.7 2.7 .2 -2.4 94.6 67

2022. . 147.1 143.2 e 1.5 2.4 152.9 149.9 2.9 .1 -5.8 88.9 62

2023. . 150.2 146.6 e 1.7 1.8 161.6 158.7 2.8 .1 -11.5 77.4 55

2024. . 155.5 152.1 e 1.8 1.5 169.6 166.6 2.9 .1 -14.1 63.3 46

2025. . 160.4 157.2 e 1.9 1.3 177.4 174.3 3.0 .1 -17.0 46.3 36

2026. . 166.2 163.0 e 2.3 .9 186.3 183.0 3.2 .1 -20.1 26.3 25

2027. . 170.9 168.0 e 2.6 .3 196.0 192.6 3.3 .1 -25.1 1.2 13

2028. . f 174.4 e 2.8 f 204.2 200.6 3.5 .1 f f 1

2029. . f

f While the fund is depleted, values under current law would reflect permissible expenditures only, which are

inconsistent with the cost of scheduled benefits shown in this table.

178.6 e 3.0 f 212.2 208.5 3.6 .1 f ff

2030. . f 183.1 e 3.1 f 220.4 216.5 3.8 .1 f ff
183

Fiscal Year Operations and Projections

Table VI.C6.—Operations of the Combined OASI and DI Trust Funds,

Fiscal Years 2016-2030

[Dollar amounts in billions]

Fiscal

year

Income Cost Asset Reserves

Total

Net payroll tax

contributions

GF

reimbursementsa

a Includes reimbursements from the General Fund of the Treasury to the OASI and DI Trust Funds for: (1) the

cost of payroll tax credits provided to employees in 1984 and self-employed persons in 1984-89 by Public Law

98-21; (2) the cost in 2009-17 of excluding certain self-employment earnings from SECA taxes under Public

Law 110-246; and (3) payroll tax revenue forgone under the provisions of Public Laws 111-147, 111-312, 112-

78, and 112-96.

Taxation of

benefitsb

b Revenue from taxation of benefits is the amount that would be assessed on benefit amounts scheduled in the

law.

Net

interest Total

 Scheduled

benefits

Administrative

costs

RRB

interchange

Net

increase

during

year

Amount

at end

of year

Trust

fund

ratioc

c The “Trust fund ratio” column represents asset reserves at the beginning of a year (which are identical to

reserves at the end of the prior year shown in the “Amount at end of year” column) as a percentage of cost for

the year. 

Historical data:

2016 . . $950.2 $827.1 $0.2 $32.3 $90.6 $916.0 $905.2 $6.2 $4.7 $34.1 $2,842.4 307

2017 . . 991.9 868.0 d 37.4 86.5 944.7 934.0 6.2 4.5 47.2 2,889.5 301

2018 . . 992.7 873.2 d 35.7 83.8 988.0 976.7 6.4 4.9 4.7 2,894.2 292

2019 . . 1,051.1 932.4 d 36.1 82.5 1,044.5 1,033.0 6.6 4.9 6.5 2,900.7 277

2020 . . 1,103.0 984.6 d

d Between -$50 million and $50 million.

39.6 78.8 1,095.4 1,084.3 6.2 5.0 7.5 2,908.2 265

Intermediate:

2021 . . 1,075.7 968.3 d 34.2 73.3 1,139.5 1,127.5 6.8 5.2 -63.8 2,844.5 255

2022 . . 1,168.3 1,057.3 d 44.1 66.8 1,206.5 1,193.9 6.9 5.7 -38.2 2,806.3 236

2023 . . 1,209.2 1,099.8 d 47.8 61.6 1,280.8 1,268.4 6.9 5.5 -71.6 2,734.7 219

2024 . . 1,262.8 1,153.6 d 51.8 57.4 1,358.2 1,345.4 7.1 5.6 -95.4 2,639.3 201

2025 . . 1,313.9 1,202.7 d 56.4 54.8 1,439.0 1,425.9 7.4 5.7 -125.2 2,514.1 183

2026 . . 1,377.8 1,256.4 d 68.2 53.2 1,524.7 1,511.2 7.7 5.8 -146.9 2,367.2 165

2027 . . 1,435.2 1,303.9 d 76.4 54.9 1,614.5 1,600.7 8.0 5.8 -179.3 2,187.9 147

2028 . . 1,504.2 1,366.2 d 82.7 55.3 1,710.0 1,695.8 8.3 5.9 -205.8 1,982.1 128

2029 . . 1,559.9 1,417.8 d 89.2 52.9 1,808.8 1,794.2 8.6 6.0 -248.9 1,733.3 110

2030 . . 1,619.6 1,474.8 d 96.1 48.6 1,910.8 1,895.8 8.9 6.1 -291.2 1,442.1 91

Low-cost:

2021 . . 1,083.1 975.7 d 34.2 73.3 1,138.7 1,126.7 6.8 5.2 -55.5 2,852.7 255

2022 . . 1,224.6 1,113.0 d 44.2 67.4 1,206.7 1,194.1 6.9 5.7 17.9 2,870.6 236

2023 . . 1,270.9 1,159.0 d 48.1 63.8 1,284.4 1,272.1 6.9 5.5 -13.5 2,857.1 223

2024 . . 1,352.4 1,237.1 d 52.4 62.9 1,366.6 1,353.8 7.2 5.6 -14.2 2,842.9 209

2025 . . 1,432.6 1,311.6 d 57.2 63.8 1,452.8 1,439.5 7.6 5.7 -20.2 2,822.6 196

2026 . . 1,528.2 1,390.9 d 69.5 67.8 1,544.4 1,530.6 8.0 5.8 -16.2 2,806.4 183

2027 . . 1,619.0 1,465.4 d 78.2 75.4 1,641.0 1,626.8 8.4 5.8 -22.0 2,784.4 171

2028 . . 1,727.6 1,559.3 d 85.0 83.3 1,744.9 1,730.2 8.8 5.9 -17.3 2,767.1 160

2029 . . 1,825.4 1,643.3 d 92.2 89.9 1,853.8 1,838.6 9.2 6.0 -28.4 2,738.7 149

2030 . . 1,932.0 1,735.7 d 99.9 96.4 1,967.9 1,952.2 9.6 6.1 -35.9 2,702.8 139

High-cost:

2021 . . 1,071.5 964.1 d 34.2 73.3 1,140.2 1,128.2 6.8 5.2 -68.7 2,839.6 255

2022 . . 1,096.4 986.7 d 44.0 65.8 1,203.7 1,191.1 6.9 5.7 -107.3 2,732.3 236

2023 . . 1,116.2 1,010.2 d 47.4 58.6 1,272.3 1,259.8 6.9 5.6 -156.1 2,576.1 215

2024 . . 1,152.0 1,048.1 d 51.1 52.8 1,344.9 1,332.1 7.0 5.7 -192.9 2,383.2 192

2025 . . 1,186.4 1,083.0 d 55.3 48.0 1,420.5 1,407.6 7.2 5.7 -234.2 2,149.1 168

2026 . . 1,232.5 1,123.0 d 66.7 42.8 1,500.7 1,487.5 7.4 5.8 -268.2 1,880.8 143

2027 . . 1,270.5 1,157.0 d 74.4 39.1 1,584.3 1,570.8 7.7 5.8 -313.7 1,567.1 119

2028 . . 1,314.1 1,201.3 d 80.2 32.6 1,672.2 1,658.5 7.9 5.8 -358.1 1,209.0 94

2029 . . 1,340.3 1,230.5 d 86.1 23.6 1,762.0 1,748.0 8.1 5.9 -421.7 787.3 69

2030 . . 1,368.8 1,261.6 d 92.4 14.8 1,853.5 1,839.3 8.3 5.9 -484.7 302.6 42
Appendices

184

D. LONG-RANGE SENSITIVITY ANALYSIS

This appendix presents estimates that illustrate the sensitivity of the longrange actuarial status of the OASDI program to changes in selected individual assumptions. The estimates based on the three alternative sets of assumptions, which were presented earlier in this report, illustrate the effects of

varying all of the principal assumptions simultaneously, in order to portray a

significantly more optimistic or pessimistic future. For each sensitivity analysis presented in this appendix, the intermediate alternative II projection is

the reference point, and one assumption is varied within that alternative. The

variation used for each individual assumption is the same as the level used

for that assumption in the low-cost alternative I and high-cost alternative III

projections.

Each table in this section shows the effects of changing a particular assumption on the OASDI summarized income rates, summarized cost rates, and

actuarial balances for 25-year, 50-year, and 75-year valuation periods. Following each table is a discussion of the estimated changes in cost rates. The

change in each of the actuarial balances is approximately equal to the change

in the corresponding cost rate, but in the opposite direction. This appendix

does not discuss income rates following each table because income rates

vary only slightly with changes in assumptions that affect revenue from taxation of benefits.

1. Total Fertility Rate

Table VI.D1 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions for the future

paths of total fertility rates. Under the Trustees’ assumptions, the average

annual total fertility rate for the period 2031 through 2095 is 1.69, 1.99, and

2.19 children per woman under alternatives III, II, and I, respectively. The

ultimate total fertility rate is reached in 2056 under all three alternatives.
185

Long-Range Sensitivity Analysis

For the 25-year period, the cost rate for the three fertility assumptions varies

by only about 0.02 percent of taxable payroll. In contrast, the 75-year cost

rate varies over a wide range, decreasing from 18.10 to 16.80 percent, as the

average total fertility rate for the period 2031 through 2095 increases from

1.69 for alternative III to 2.19 for alternative I. Similarly, while the 25-year

actuarial balance varies by only 0.02 percent of taxable payroll, the 75-year

actuarial balance varies over a much wider range, from -4.26 to

-3.07 percent.

During the 25-year period, the very slight increases in the working-age population and tax income resulting from higher fertility (than that experienced in

an alternative scenario) are more than offset by the effects of decreases in

female labor force participation and increases in the number of child beneficiaries. Therefore, program cost as a percent of taxable payroll increases

slightly with higher fertility. For the 75-year long-range period, however,

changes in fertility have a relatively greater effect on the working-age population than on the beneficiary population. As a result, an increase in fertility

significantly reduces the cost rate. Each increase of 0.1 in the average total

fertility rate increases the long-range actuarial balance by about 0.24 percent

of taxable payroll.

Table VI.D1.—Sensitivity of OASDI Measures to Fertility Assumptions

[As a percentage of taxable payroll]

Valuation period

Average total fertility ratea b

a The total fertility rate for any year is the average number of children that would be born to a woman if she

were to experience, at each age of her life, the birth rate observed in, or assumed for, the selected year, and if

she were to survive the entire childbearing period. The average total fertility rate shown is for the period

2031 through 2095. The ultimate total fertility rate is reached in 2056 under all three alternatives.

b Total fertility rates used for this analysis are consistent with those assumed for the three alternative scenarios; the average total fertility rate for 2031 through 2095 is 1.69 under the alternative III assumptions, 1.99

under the alternative II assumptions, and 2.19 under the alternative I assumptions. All other assumptions

used for this analysis are from alternative II.

1.69 1.99 2.19

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.92 13.90

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.85 13.78 13.73

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.79 16.80 16.81

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.40 17.07 16.84

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.10 17.31 16.80

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.36 -2.37 -2.38

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.44 -3.14 -2.94

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.26 -3.54 -3.07

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.69 -4.34 -3.06

Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
Appendices

186

2. Death Rates

Table VI.D2 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions about future

reductions in death rates for the period from 2030 to 2095. These assumptions are described in section V.A.2. Under the Trustees’ assumptions, the

age-sex-adjusted death rates decline at average annual rates of 0.28 percent,

0.74 percent, and 1.25 percent for alternatives I, II, and III, respectively. 

The variation in cost for the 25-year period is less pronounced than the variation for the 75-year period because decreases in death rates have cumulative

effects. The 25-year cost rate increases from 16.64 percent (for an average

annual death-rate reduction of 0.28 percent from 2030 to 2095) to

17.00 percent (for an average annual death-rate reduction of 1.25 percent

from 2030 to 2095). The 75-year cost rate increases from 16.64 to

18.09 percent. The actuarial balance decreases from -2.21 to -2.58 percent

for the 25-year period, and from -2.89 to -4.28 percent for the 75-year

period.

Lower death rates raise both the income (through increased taxable payroll)

and the cost of the OASDI program. The relative increase in cost, however,

exceeds the relative increase in taxable payroll. For any given year, reducTable VI.D2.—Sensitivity of OASDI Measures to Death-Rate Assumptions

[As a percentage of taxable payroll]

Valuation period

Average annual death-rate reductiona b

a The average annual death-rate reduction is the average annual geometric rate of decline in the age-sexadjusted death rate for the period from 2030 to 2095. The overall age-sex-adjusted death rate decreases from

2030 to 2095 by 16 percent, 38 percent, and 56 percent for alternatives I, II, and III, respectively.

b The death-rate reductions used for this analysis are consistent with those assumed for the three alternative

scenarios; the average annual death-rate reduction from 2030 to 2095 is 0.28 percent from the alternative I

assumptions, 0.74 percent from the alternative II assumptions, and 1.25 percent from the alternative III

assumptions. All other assumptions used for this analysis are from alternative II.

0.28 percent 0.74 percent 1.25 percent

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.92 13.94

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.75 13.78 13.81

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 16.80 17.00

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 17.07 17.58

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.64 17.31 18.09

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.21 -2.37 -2.58

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.73 -3.14 -3.65

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.89 -3.54 -4.28

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -2.94 -4.34 -5.81

Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
187

Long-Range Sensitivity Analysis

tions in the death rates for people who are age 62 and over (ages at which

death rates are the highest) increase the number of retired-worker beneficiaries (and, therefore, the amount of retirement benefits paid) without adding

significantly to the number of covered workers (and, therefore, to the taxable

payroll). Reductions for people at age 50 to retirement eligibility age result

in significant increases to the taxable payroll. However, those increases are

not large enough to offset the sum of the additional retirement benefits mentioned above and the disability benefits paid to additional beneficiaries at

these pre-retirement ages, which are ages of high disability incidence. At

ages under 50, death rates are so low that even substantial reductions in death

rates do not result in significant increases in the numbers of covered workers

or beneficiaries. Consequently, if death rates decline by about the same relative amount for all ages, the cost increases faster than the rate of growth in

payroll, which results in higher cost rates and lower actuarial balances. Each

additional 0.1-percentage-point increase in the average annual rate of decline

in the death rate decreases the long-range actuarial balance by about

0.14 percent of taxable payroll.

3. Immigration

Table VI.D3 shows OASDI income rates, cost rates, and actuarial balances

under alternative II with three different assumptions about the magnitude of

total net immigration (sum of net lawful permanent resident (LPR) immigration and net other-than-LPR immigration). See section V.A.3 for more information on immigration assumptions and methods. Under the Trustees’

assumptions, total net annual immigration averages 830,000 persons,

1,248,000 persons, and 1,688,000 persons for the period 2031 through 2095

under alternatives III, II, and I, respectively. 
Appendices

188

For all three periods, when total net immigration increases, the cost rate

decreases. For the 25-year period, the cost rate decreases from 17.04 percent

of taxable payroll (for average annual total net immigration of 830,000 persons for 2031 through 2095) to 16.56 percent (for an average annual total net

immigration of 1,688,000 persons for 2031 through 2095). For the 50-year

period, it decreases from 17.43 percent to 16.71 percent, and for the 75-year

period, it decreases from 17.77 percent to 16.87 percent. The actuarial balance increases from -2.58 to -2.17 percent for the 25-year period, from -3.46

to -2.83 percent for the 50-year period, and from -3.95 to -3.14 percent for

the 75-year period.

The cost rate decreases with an increase in total net immigration because

immigration occurs at relatively young ages, thereby increasing the numbers

of covered workers earlier than the numbers of beneficiaries. Increasing

average annual total net immigration by 100,000 persons improves the longrange actuarial balance by about 0.09 percent of taxable payroll.

4. Real Wage Differential

Table VI.D4 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions about the real

wage differential. Under the Trustees’ assumptions, the average annual real

Table VI.D3.—Sensitivity of OASDI Measures to Total Net Immigration Assumptions

[As a percentage of taxable payroll]

Valuation period

Average annual total net immigrationa b

a Average annual total net immigration is the annual total net immigration to the Social Security area, including both LPR and other-than-LPR immigration, averaged for 2031 through 2095.

b The total net immigration assumptions used for this analysis are consistent with those assumed for the

three alternative scenarios; average annual total net immigration for 2031 through 2095 is 830,000 from the

alternative III assumptions, 1,248,000 from the alternative II assumptions, and 1,688,000 from the alternative I assumptions. All other assumptions used for this analysis are from alternative II.

830,000 1,248,000 1,688,000

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.46 14.43 14.39

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.96 13.92 13.88

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.83 13.78 13.73

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 16.80 16.56

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.43 17.07 16.71

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.77 17.31 16.87

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.58 -2.37 -2.17

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.46 -3.14 -2.83

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.95 -3.54 -3.14

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -5.16 -4.34 -3.65

Year of combined trust fund reserve depletion . . . . . . . . 2033 2034 2034
189

Long-Range Sensitivity Analysis

wage differential for the period 2031 through 2095 is 0.53 percentage point,

1.15 percentage points, and 1.77 percentage points under alternatives III, II,

and I, respectively. In each case, the ultimate annual increase in the CPI is

2.40 percent (consistent with alternative II). Therefore, the average annual

percentage increase in the average wage in covered employment for 2031

through 2095 is 2.93, 3.55, and 4.17 percent under alternatives III, II, and I,

respectively.

For the 25-year period, the cost rate decreases from 17.66 percent (for a real

wage differential of 0.53 percentage point) to 15.98 percent (for a differential

of 1.77 percentage points). For the 50-year period, it decreases from 18.31 to

15.88 percent, and for the 75-year period it decreases from 18.71 to

15.98 percent. The actuarial balance increases from -3.11 to -1.67 percent for

the 25-year period, from -4.23 to -2.11 percent for the 50-year period, and

from -4.76 to -2.36 percent for the 75-year period.

The cost rate decreases with increasing real wage differentials. Higher wages

increase taxable payroll immediately, but they increase benefit levels only

gradually as new beneficiaries become entitled. In addition, cost-of-living

adjustments (COLAs) to benefits depend not on changes in wages, but on

Table VI.D4.—Sensitivity of OASDI Measures to Real Wage Assumptions

[As a percentage of taxable payroll]

Valuation period

Average annual percentage increase in wagesCPI a b

a The first value in each pair is the average annual percentage increase in the average wage in covered

employment for 2031 through 2095. The second value is the ultimate annual percentage increase in the Consumer Price Index. The difference between the two values is the average annual real wage differential for

2031 through 2095.

b The real wage assumptions used for this analysis are consistent with those assumed for the three alternative

scenarios; the average annual real wage differential for 2031 through 2095 is 0.53 percentage point from the

alternative III assumptions, 1.15 percentage points from the alternative II assumptions, and 1.77 percentage

points from the alternative I assumptions. All other assumptions used for this analysis are from alternative II.

2.93-2.40 3.55-2.40 4.17-2.40

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.56 14.43 14.31

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.08 13.92 13.77

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.78 13.61

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.66 16.80 15.98

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.31 17.07 15.88

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18.71 17.31 15.98

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.11 -2.37 -1.67

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.23 -3.14 -2.11

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -4.76 -3.54 -2.36

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -6.40 -4.34 -2.58

Year of combined trust fund reserve depletion . . . . . . . . 2033 2034 2035
Appendices

190

changes in prices. Each 0.1-percentage-point increase in the real wage differential increases the long-range actuarial balance by about 0.19 percent of

taxable payroll.

5. Consumer Price Index

Table VI.D5 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions about the rate

of increase for the Consumer Price Index (CPI). Under the Trustees’ assumptions, the annual increase in the CPI is 3.00 percent, 2.40 percent, and

1.80 percent under alternatives I, II, and III, respectively.1 These ultimate

rates of increase are reached by 2024 under all three alternatives. In each

case, the average annual real wage differential for 2031 through 2095 is

1.15 percentage points (consistent with alternative II), yielding average

annual percentage increases in the average wage in covered employment for

2031 through 2095 of 4.15, 3.55, and 2.95 percent under alternatives I, II,

and III, respectively.

 1 Prior to the 2014 report, alternative I included a lower ultimate annual change in the CPI and alternative III

included a higher ultimate annual change in the CPI than was included for alternative II.

Table VI.D5.—Sensitivity of OASDI Measures to CPI-Increase Assumptions

[As a percentage of taxable payroll]

Valuation period

Average annual percentage increase in wagesCPIa b

a The first value in each pair is the average annual percentage increase in the average wage in covered

employment for 2031 through 2095. The second value is the ultimate annual percentage increase in the Consumer Price Index. The difference between the two values is the average annual real wage differential for

2031 through 2095.

b The CPI assumptions used for this analysis are consistent with those assumed for the three alternative scenarios; the ultimate CPI increase is 3.00 percent from the alternative I assumptions, 2.40 percent from the

alternative II assumptions, and 1.80 percent from the alternative III assumptions. These ultimate rates of

increase are reached by 2024 under all three alternatives. All other assumptions used for this analysis are

from alternative II.

4.15-3.00 3.55-2.40 2.95-1.80

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.41 14.43 14.45

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.91 13.92 13.94

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.76 13.78 13.79

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.70 16.80 16.91

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.93 17.07 17.21

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.17 17.31 17.47

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.29 -2.37 -2.46

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.03 -3.14 -3.27

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.40 -3.54 -3.68

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.18 -4.34 -4.52

Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
191

Long-Range Sensitivity Analysis

For all three periods, the cost rate increases when the assumed rates of

increase in the CPI are smaller. For the 25-year period, the cost rate increases

from 16.70 (for a CPI increase of 3.00 percent) to 16.91 percent (for a CPI

increase of 1.80 percent). For the 50-year period, it increases from 16.93 to

17.21 percent, and for the 75-year period, it increases from 17.17 to

17.47 percent. The actuarial balance decreases from -2.29 to -2.46 percent

for the 25-year period, from -3.03 to -3.27 percent for the 50-year period,

and from -3.40 to -3.68 percent for the 75-year period.

The time lag between the effects of the CPI changes on taxable payroll and

on scheduled benefits explains these patterns. When the rate of increase in

the CPI is greater and the real wage differential is constant, then: (1) the

effect on taxable payroll due to a greater rate of increase in average wages

occurs immediately and (2) the effect on benefits due to a larger COLA

occurs with a lag of about 1 year. As a result of these effects, the higher taxable payrolls have a stronger effect than the higher benefits, which results in

lower cost rates. Each 0.1-percentage-point decrease in the rate of the change

in the CPI decreases the long-range actuarial balance by about 0.02 percent

of taxable payroll.

6. Real Interest Rate

Table VI.D6 shows OASDI income rates, cost rates, and actuarial balances

under alternative II with three different assumptions about the annual real

interest rate (compounded semiannually) for special public-debt obligations

issuable to the trust funds. Under the Trustees’ assumptions, the ultimate

annual real interest rate is 1.8 percent, 2.3 percent, and 2.8 percent under

alternatives III, II, and I, respectively. These ultimate rates are reached by

2031 under all three alternatives. In each case, the ultimate annual increase in

the CPI is 2.40 percent, which is consistent with alternative II. Therefore, the

ultimate annual yields are 4.2, 4.8, and 5.3 percent, respectively.
Appendices

192

For the 25-year period, the cost rate decreases with increasing real interest

rates from 16.87 percent (for an ultimate real interest rate of 1.8 percent) to

16.74 percent (for an ultimate real interest rate of 2.8 percent). For the

50-year period, it decreases from 17.16 to 16.97 percent and, for the 75-year

period, it decreases from 17.44 to 17.19 percent. The actuarial balance

increases from -2.49 to -2.26 percent for the 25-year period, from -3.30 to

-2.99 percent for the 50-year period, and from -3.72 to -3.35 percent for the

75-year period. A relatively higher real interest rate has the effect of discounting more distant future years relatively more. To the extent that annual

cost rates and annual deficits are larger in later years, a higher interest rate

decreases the summarized rates, and a lower interest rate increases the summarized rates. Each 0.1-percentage-point increase in the real interest rate

increases the long-range actuarial balance by about 0.04 percent of taxable

payroll.

7. Taxable Ratio

Table VI.D7 shows OASDI income rates, cost rates, and actuarial balances

under alternative II with three different assumptions about the ratio of taxable payroll to covered earnings (the taxable ratio). Note that covered earnings are the sum of wages and net self-employment earnings covered by

Table VI.D6.—Sensitivity of OASDI Measures to Real Interest Rate Assumptions

[As a percentage of taxable payroll]

Valuation period

Ultimate annual real interest ratea b

a The ultimate real interest rate is the effective annual yield on asset reserves held by the trust funds divided

by the annual rate of growth in the CPI.

b The real interest rate assumptions used for this analysis are consistent with those assumed for the three

alternative scenarios; the ultimate annual real interest rate is 1.8 percent from the alternative III assumptions,

2.3 percent from the alternative II assumptions, and 2.8 percent from the alternative I assumptions. These

ultimate rates are reached by 2031 under all three alternatives. All other assumptions used for this analysis

are from alternative II.

1.8 percent 2.3 percent 2.8 percent

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.38 14.43 14.48

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.87 13.92 13.98

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.72 13.78 13.84

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.87 16.80 16.74

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.16 17.07 16.97

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.44 17.31 17.19

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.49 -2.37 -2.26

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.30 -3.14 -2.99

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.72 -3.54 -3.35

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.34 -4.34 -4.34

Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
193

Long-Range Sensitivity Analysis

Social Security, and taxable payroll is essentially the amount of covered

earnings subject to the Social Security payroll tax up to the contribution and

benefit base ($142,800 for 2021). Under the Trustees’ assumptions, the taxable ratio at the end of the short-range period (2030) is 81.0 percent,

82.5 percent, and 84.0 percent under alternatives III, II, and I, respectively.

Because the combined employee-employer tax rate of 12.4 percent is

unchanged across all alternatives, the income rate changes a relatively small

amount as the taxable ratio increases, due to changes in taxation of benefits

and the initial fund as a percentage of taxable payroll.

For the 25-year period, the cost rate decreases with increasing taxable ratios,

from 17.04 percent (for a taxable ratio in 2030 of 81.0 percent) to

16.57 percent (for a taxable ratio in 2030 of 84.0 percent). For the 50-year

period, it decreases from 17.29 to 16.85 percent and, for the 75-year period,

it decreases from 17.51 to 17.12 percent. The actuarial balance increases

from -2.58 to -2.17 percent for the 25-year period, from -3.34 to

-2.95 percent for the 50-year period, and from -3.71 to -3.36 for the 75-year

period.

The cost rate decreases with an increase in taxable payroll because the

increase in taxable payroll occurs immediately. The increase in benefit

amounts occurs much more gradually as new beneficiaries become entitled.

In addition, the change in the taxable ratio does not affect COLAs or AWIs.

Each 1.0 percentage-point increase in the taxable ratio in 2030 increases

Table VI.D7.—Sensitivity of OASDI Measures to Taxable Ratio Assumptions

[As a percentage of taxable payroll]

Valuation period

Taxable ratio in 2030a b

a The taxable ratio is the ratio of taxable payroll to covered earnings. These concepts are described in further

detail in section V.C.6 of this report.

b The taxable ratio assumptions used for this analysis are consistent with those assumed for the three alternative scenarios; the taxable ratio at the end of the short-range period (2030) is 81.0 percent from the alternative III assumptions, 82.5 percent from the alternative II assumptions, and 84.0 percent from the alternative I

assumptions. All other assumptions used for this analysis are from alternative II. 

81.0 percent 82.5 percent 84.0 percent

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.46 14.43 14.40

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.95 13.92 13.90

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.80 13.78 13.76

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 16.80 16.57

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.29 17.07 16.85

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.51 17.31 17.12

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.58 -2.37 -2.17

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.34 -3.14 -2.95

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.71 -3.54 -3.36

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.46 -4.34 -4.23

Year of combined trust fund reserve depletion . . . . . . . . 2033 2034 2034
Appendices

194

(improves) the long-range actuarial balance by about 0.12 percent of taxable

payroll.

8. Disability Incidence Rates

Table VI.D8 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions about future

disability incidence rates. Under the Trustees’ assumptions, the average

annual age-sex-adjusted1 incidence rate for the period 2031 through 2095 is

4.0, 5.0, and 6.0 awards per thousand exposed for alternatives I, II, and III,

respectively. Under the Trustees’ assumptions, incidence rates by age and

sex for all three alternatives vary during the early years of the projection

period before reaching their long-term average values.

For the 25-year period, the cost rate increases with increasing disability incidence rates, from 16.59 percent (for the relatively low rates assumed for

alternative I) to 17.03 percent (for the relatively high rates assumed for alternative III). For the 50-year period, it increases from 16.81 to 17.32 percent,

and for the 75-year period, it increases from 17.06 to 17.57 percent. The

actuarial balance decreases from -2.16 to -2.60 percent for the 25-year

 1 Age-sex-adjusted to the disability-exposed population as of the year 2000.

Table VI.D8.—Sensitivity of OASDI Measures to Disability Incidence Assumptions

[As a percentage of taxable payroll]

Valuation period

Disability incidence ratea

a The disability incidence rates used for this analysis are consistent with those assumed for the three alternative scenarios; the average annual age-sex-adjusted incidence rate for 2031 through 2095 is 4.0 awards per

thousand exposed for the alternative I assumptions, 5.0 awards per thousand exposed for the alternative II

assumptions, and 6.0 awards per thousand exposed for the alternative III assumptions. All other assumptions

used for this analysis are from alternative II.

4.0 5.0 6.0

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.92 13.92 13.92

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.77 13.78 13.78

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.59 16.80 17.03

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.81 17.07 17.32

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.06 17.31 17.57

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.16 -2.37 -2.60

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.89 -3.14 -3.39

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.28 -3.54 -3.79

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.08 -4.34 -4.60

Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2033
195

Long-Range Sensitivity Analysis

period, from -2.89 to -3.39 percent for the 50-year period, and from -3.28 to

-3.79 percent for the 75-year period.

9. Disability Termination Rates

Table VI.D9 shows OASDI income rates, cost rates, and actuarial balances

on the basis of alternative II with three different assumptions about future

disability termination rates, including deaths and recoveries. 

Under the Trustees’ assumptions, death rates for disabled-worker beneficiaries for all three alternatives decline throughout the long-range period. The

age-sex-adjusted1 death rate of 28.2 deaths per thousand disabled-worker

beneficiaries in 2020 declines to 22.2, 12.8, and 6.2 deaths per thousand in

2095 for alternatives I, II, and III, respectively. These levels are about

21 percent, 55 percent, and 78 percent lower, respectively, than the level in

2020.

The average annual age-sex-adjusted1 recovery rate for the period 2031

through 2095 used for this analysis is 12.5 recoveries per thousand disabledworker beneficiaries for the alternative I assumptions, 10.4 recoveries per

thousand disabled-worker beneficiaries for the alternative II assumptions,

and 8.3 recoveries per thousand disabled-worker beneficiaries for the alternative III assumptions.

 1 Age-sex-adjusted to the disabled-worker population as of the year 2000.
Appendices

196

For the 25-year period, the cost rate increases with decreasing disability termination rates, from 16.78 percent (for the relatively high termination rates

assumed for alternative I) to 16.84 percent (for the relatively low termination

rates assumed for alternative III). For the 50-year period, it increases from

17.04 to 17.09 percent, and for the 75-year period, it increases from 17.29 to

17.32 percent. The actuarial balance decreases from -2.35 to -2.41 percent

for the 25-year period, from -3.11 to -3.17 percent for the 50-year period, and

from -3.51 to -3.55 percent for the 75-year period.

Table VI.D9.—Sensitivity of OASDI Measures to Disability Termination Assumptions

[As a percentage of taxable payroll]

Valuation period

Disability termination rates

(death; recovery)a

a The disability termination rates used for this analysis are consistent with those assumed for the three alternative scenarios; the age-sex-adjusted death rate for 2095 is 22.2 deaths per thousand disabled-worker beneficiaries for the alternative I assumptions, 12.8 deaths per thousand disabled-worker beneficiaries for the

alternative II assumptions, and 6.2 deaths per thousand disabled-worker beneficiaries for the alternative III

assumptions; the average annual age-sex-adjusted recovery rate for 2031 through 2095 is 12.5 recoveries per

thousand disabled-worker beneficiaries for the alternative I assumptions, 10.4 recoveries per thousand disabled-worker beneficiaries for the alternative II assumptions, and 8.3 recoveries per thousand disabledworker beneficiaries for the alternative III assumptions. All other assumptions used for this analysis are

from alternative II.

22.2; 12.5 12.8; 10.4 6.2; 8.3

Summarized income rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.43 14.43 14.43

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.92 13.92 13.92

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.78 13.78 13.77

Summarized cost rate:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.78 16.80 16.84

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.04 17.07 17.09

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.29 17.31 17.32

Actuarial balance:

25-year: 2021-45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -2.35 -2.37 -2.41

50-year: 2021-70 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.11 -3.14 -3.17

75-year: 2021-95 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . -3.51 -3.54 -3.55

Annual balance for 2095 . . . . . . . . . . . . . . . . . . . . . . . . . . -4.35 -4.34 -4.29

Year of combined trust fund reserve depletion . . . . . . . . 2034 2034 2034
197

Stochastic Projections 

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY

Significant uncertainty surrounds the estimates under the intermediate

assumptions, especially for a period as long as 75 years. This appendix presents stochastic projections, a way to illustrate the uncertainty of these estimates. The stochastic projections supplement the traditional methods of

examining such uncertainty.

1. Background

The Trustees have traditionally shown estimates using the low-cost and highcost sets of specified assumptions to illustrate the potential implications of

uncertainty. These low-cost and high-cost estimates provide a range of possible outcomes for the projections. However, they do not provide an indication

of the probability that actual future experience will be inside or outside this

range. This appendix presents the results of a stochastic model that estimates

a probability distribution of future outcomes of the financial status of the

combined OASI and DI Trust Funds. This model was introduced in the 2003

report, and has been enhanced for this year’s report to include parameter

uncertainty for the expected mean for the key variables described in the next

section. 

2. Stochastic Methodology

Other sections of this report provide estimates of the financial status of the

combined OASI and DI Trust Funds using a scenario-based model. For the

scenario-based model, the Trustees use three alternative scenarios (low-cost,

intermediate, and high-cost) that use specific assumptions for key variables,

including: levels of fertility, rates of change in mortality, lawful permanent

resident (LPR) and other-than-LPR immigration levels, legal emigration levels, other-than-LPR emigration rates, changes in the Consumer Price Index,

changes in average real wages, unemployment rates, trust fund real yield

rates, and disability incidence and recovery rates. In general, the Trustees

assume that each of these variables will reach an ultimate value at a specific

point during the long-range period, and will maintain that value throughout

the remainder of the period. The three alternative scenarios assume separate,

specified values for each of these variables. Chapter V contains more details

about each of these assumptions.

This appendix presents estimates of the probability that key measures of

OASDI solvency will fall in certain ranges, based on 5,000 independent stochastic simulations. Each simulation allows the above key variables to vary

throughout the long-range period. The fluctuation of each variable over time
Appendices

198

is simulated using historical data and standard time-series techniques. Generally, each variable is modeled using an equation that: (1) captures a relationship between current and prior years’ values of the variable, and

(2) introduces random variation based on variation observed in the historical

period. For some variables, the equations also reflect relationships with other

variables. The equations contain parameters that are estimated using historical data for periods from 20 years to over 110 years, depending on the nature

and quality of the available data. Each time-series equation is designed so

that, in the absence of random variation over time, the value of the variable

for each year equals its value for the intermediate scenario.1

For each equation in a given simulation, the stochastic model assigns random

variation to (1) year-by-year error term values and (2) simulation-specific

mean term levels that provide variation in the central tendency across simulations. Each simulation produces estimates for all key variables and for the

overall financial status of the combined OASI and DI Trust Funds. This

appendix shows the distribution of results from 5,000 simulations of the

model.

Readers should interpret the results from this model with an understanding of

the model’s limitations. Results are sensitive to equation specifications,

degrees of interdependence among variables, and the historical periods used

for estimating model coefficients. For some variables, recent historical variation may not provide a realistic representation of the potential variation for

the future. Also, results would differ if additional variables (such as labor

force participation rates, retirement rates, marriage rates, and divorce rates)

were also allowed to vary randomly. Time-series modeling reflects only what

occurred in the historical period. Future uncertainty exists not only for the

underlying central tendency but also for the frequency and size of occasional

longer-term shifts in the central tendency. Many experts predict, and history

suggests, that the future will likely bring substantial shifts that are not fully

reflected in the historical period used for the current model. As a result, readers should understand that the true range of uncertainty might be larger than

indicated in this appendix.

3. Stochastic Results

This section illustrates the results for the stochastic simulations of two fundamental measures of actuarial status: annual cost rates and trust fund ratios.

 1 More detail on this model, and stochastic modeling in general, is available at

www.ssa.gov/OACT/stochastic/index.html.
199

Stochastic Projections 

The latter measure is highlighted in section II.D of this report. Section 4 follows with a comparison of stochastic results to results from the alternative

scenarios for these and other measures, and an analysis of the differences. 

Figure VI.E1 displays the probability distribution of the year-by-year

OASDI cost rates (that is, cost as a percentage of taxable payroll). The range

of the annual cost rates widens as the projections move further into the

future, which reflects increasing uncertainty. Because there is relatively little

variation in income rates across the 5,000 stochastic simulations, the figure

includes only the income rate for the intermediate scenario. The two outermost cost rate lines in this figure indicate the range within which future

annual cost rates are projected to occur 95 percent of the time (i.e., a 95-percent confidence interval). In other words, the current model estimates that

there is a 2.5 percent probability that the cost rate for a given year will

exceed the upper end of this range and a 2.5 percent probability that it will

fall below the lower end of this range. Other lines in the figure delineate

additional confidence intervals (80-percent, 60-percent, 40-percent, and

20-percent) around future annual cost rates. The median (50th percentile)

cost rate for each year is the rate for which half of the simulated outcomes

are higher and half are lower for that year. These lines do not represent the

results of individual stochastic simulations. Instead, for each given year, they

represent the percentile distribution of annual cost rates based on all stochastic simulations for that year. 
Appendices

200

Figure VI.E2 presents the simulated probability distribution of the annual

trust fund ratios for the combined OASI and DI Trust Funds. The lines in this

figure display the median set (50th percentile) of estimated annual trust fund

ratios and delineate the 95-percent, 80-percent, 60-percent, 40-percent, and

20-percent confidence intervals estimated for future annual trust fund ratios.

Again, none of these lines represent the path of a single simulation. For each

given year, they represent the percentile distribution of trust fund ratios

based on all stochastic simulations for that year. 

Figure VI.E2 shows that the 95-percent confidence interval for the trust fund

reserve depletion year ranges from 2031 to 2041, and that there is a 50-percent probability of trust fund reserve depletion by the end of 2034 (the

median reserve depletion year). The median reserve depletion year is the

same as the Trustees project for the intermediate scenario. The figure also

shows confidence intervals for the trust fund ratio in each year. For example,

the 95-percent confidence interval for the trust fund ratio at the beginning of

2030 ranges from 39 to 138 percent of annual cost. 

 Figure VI.E1.—Long-Range OASDI Cost Rates From Stochastic Modeling

5%

10%

15%

20%

25%

30%

2021 2031 2041 2051 2061 2071 2081 2091

Calendar year

50%

97.5%

2.5%

90%

10%

Income Rate for the 

Intermediate Scenario
201

Stochastic Projections 

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

High-Cost Alternative Scenarios

This section compares results from two different approaches for illustrating

ranges of uncertainty in measures of trust fund actuarial status. One approach

uses results from the low-cost, intermediate, and high-cost alternative scenarios. The other approach uses distributions of results from the stochastic simulations. Each of these approaches provides insights into uncertainty.

Comparing the results requires an understanding of fundamental differences

in the approaches. 

One fundamental difference relates to the presentation of distributional

results. Figure VI.E3 shows projected OASDI annual cost rates for the lowcost, intermediate, and high-cost alternative scenarios along with the annual

cost rates at the 2.5th percentile, 50th percentile, and 97.5th percentile for the

stochastic simulations. While all values on each line for the alternative scenarios are results from a single specified scenario, the values on each stochastic line may be results from different simulations for different years. The

one stochastic simulation (from the 5,000 simulations) that yields results

 Figure VI.E2.—Long-Range OASDI Trust Fund Ratios From Stochastic Modeling

0%

100%

200%

300%

2021 2031 2041 2051 2061 2071 2081 2091

Calendar year

50%

97.5%

2.5%

90%

10%
Appendices

202

closest to a particular percentile for one projected year may yield results that

are distant from that percentile in another projected year. 

Because each stochastic simulation shows substantial variability from year to

year, the range shown between the 2.5th and 97.5th percentiles is broader

than would be seen if simulations followed a smooth trend like in the alternative scenarios. Furthermore, with the introduction of parameter uncertainty

for the expected mean for the stochastic simulations in this report, the range

of the 95-percent confidence interval is generally expanded from the range in

last year’s report. Nevertheless, the range defined by the 2.5th and 97.5th

percentiles for annual rates for the stochastic distribution is contained within

the range for the low-cost and high-cost alternative scenarios after the first

10 years of the projection period. Note that the range for the alternative scenarios was also expanded for this year’s report, due primarily to changes

made to the low-cost and high-cost demographic assumptions.

Both the alternative scenarios and the stochastic results suggest that the

range of potential cost rates above the central levels (those for the intermediate scenario and for the stochastic median, respectively) is larger than the

range below these central results. The difference between the central results

and the higher cost levels (the high-cost alternative scenario and the upper

end of the 95-percent confidence range, respectively) is about 1.7 to

1.8 times as large as the difference between the central and lower cost levels

for both models by the end of the projection period.
203

Stochastic Projections 

Another fundamental difference between the alternative scenarios and the

stochastic simulations is the method of assigning values for assumptions. For

the alternative scenarios, specific values are assigned for each of the key

demographic, economic, and program-specific variables. The high-cost alternative scenario uses parameter values that increase estimated annual cost as a

percent of payroll, while the low-cost alternative scenario uses parameter

values that decrease annual cost as a percent of payroll. (One parameter, the

interest rate, has no effect on annual cost as a percent of payroll for either the

alternative scenarios or the stochastic simulations.) In contrast, the stochastic

method independently assigns random variation to each of the key demographic and economic variables for each year in each of the 5,000 stochastic

simulations. For each of the stochastic simulations, the assigned values for

different variables result in varying and often offsetting effects on projected

cost as a percent of payroll, with some tending toward higher cost and some

tending toward lower cost. This difference tends to narrow the range of cost

as a percent of payroll across the 95-percent confidence interval. 

It is important to understand that the stochastic model’s 95-percent confidence intervals for any summary measure of trust fund finances would tend

 Figure VI.E3.—OASDI Cost Rates: Comparison of Stochastic to Low-Cost, Intermediate, 

and High-Cost Alternative Scenarios

[As a percentage of taxable payroll]

10%

15%

20%

25%

30%

2021 2031 2041 2051 2061 2071 2081 2091

Calendar year

Low-Cost

Intermediate

High-Cost

Stochastic 2.5%

Stochastic 50%

Stochastic 97.5%
Appendices

204

to be narrower than the range produced for the low-cost and high-cost alternative scenarios, even if the stochastic model’s 95-percent confidence interval for annual cost rates were identical to the range defined by the low-cost

and high-cost scenarios. This is true because summary measures of trust fund

finances depend on cost rates for many years, and the probability that annual

cost rates, on average for individual stochastic simulations, will be at least as

low (high) as the 2.5 (97.5) percentile line is significantly lower than

2.5 percent. As a result, the relationship between the ranges presented for

annual cost rates and summary measures of trust fund finances is fundamentally different for the stochastic model than it is for the low-cost and highcost alternative scenarios.

Figure VI.E4 compares the ranges of trust fund (unfunded obligation) ratios

for the alternative scenarios to the 95-percent confidence interval of the stochastic simulations. This figure extends figure VI.E2 to show unfunded obligation ratios, expressed as negative values below the zero percent line. An

unfunded obligation ratio is the ratio of the unfunded obligation accumulated

through the beginning of the year to the cost for that year.

 Figure VI.E4.—OASDI Trust Fund (Unfunded Obligation) Ratios: Comparison of 

Stochastic to Low-Cost, Intermediate, and High-Cost Alternative Scenariosa

[Trust fund reserves (unfunded obligation) as a percentage of annual cost]

a An unfunded obligation, shown as a negative value in this figure, is equivalent to the amount the trust

funds would need to have borrowed to date in order to pay all scheduled benefits (on a timely basis) after

trust fund reserves are depleted. Note that current law does not permit the trust funds to borrow.

-6,000%

-5,500%

-5,000%

-4,500%

-4,000%

-3,500%

-3,000%

-2,500%

-2,000%

-1,500%

-1,000%

-500%

0%

500%

1,000%

2021 2031 2041 2051 2061 2071 2081 2091

Calendar year

Low-Cost

Intermediate

High-Cost

Stochastic 2.5%

Stochastic 50%

Stochastic 97.5%

Trust fund reserves (positive)

Unfunded obligation (negative)
205

Stochastic Projections 

As mentioned above, a summary measure that accumulates annual values

tends to smooth the kind of annual fluctuations that occur in stochastic simulations. Therefore, one might expect the range across the stochastic confidence interval for trust fund (unfunded obligation) ratios to be narrower and

fall within the range seen across the high-cost and low-cost alternative scenarios, as it does for the actuarial balance measure. But this is not the case,

largely due to the way interest rates are assigned. 

For the stochastic model, real interest rates for each simulation are assigned

to be essentially independent of other variables, so the rate for compounding

of trust fund reserves (unfunded obligations) is essentially uncorrelated with

the level of cost as a percent of payroll. On the other hand, real interest rates

are assigned to be higher for the low-cost alternative scenario and lower for

the high-cost alternative scenario. High interest rates raise the level of the

positive trust fund ratio in the low-cost alternative scenario somewhat, but

this effect is limited because the magnitude of reserves is small. However,

low interest rates substantially reduce the magnitude of the unfunded obligation ratio for the high-cost alternative scenario because the magnitude of

unfunded obligations is relatively large. As a result, the trust fund (unfunded

obligation) ratios are shifted, albeit unevenly, higher (or less negative) for

both the high-cost and low-cost alternative scenarios relative to those of the

stochastic simulations. 

This interest rate effect on the alternative scenarios is not as evident for some

other summary measures of actuarial status, such as the actuarial balance.

Because the actuarial balance reflects the cumulative effects of interest in

both its numerator and denominator, the interest rate effect is much less pronounced. In contrast, cumulative interest affects only the numerator of the

trust fund (unfunded obligation) ratio. There is also no significant interest

rate effect on the trust fund depletion date.

Other factors also contribute, to varying degrees, to the difference in ranges

between the results of the alternative scenarios and the stochastic simulations. The contrasts in results and methods do not mean that either approach

to illustrating ranges of uncertainty is superior to the other. The ranges are

different and explainable. 

Table VI.E1 displays long-range actuarial estimates for the combined

OASDI program using the two methods of illustrating uncertainty: alternative scenarios and stochastic simulations. The table shows scenario-based

estimates for the intermediate, low-cost, and high-cost assumptions. It also

shows stochastic estimates for the median (50th percentile) and for the

80-percent and 95-percent confidence intervals. Each individual stochastic

estimate in the table is the level at that percentile from the distribution of the
Appendices

206

5,000 simulations. For each given percentile, the values in the table for each

long-range actuarial measure are generally from different stochastic simulations.

The median stochastic estimates displayed in table VI.E1 are similar to the

intermediate scenario-based estimates. The median estimate of the longrange actuarial balance is -3.50 percent of taxable payroll, about

0.04 percentage point higher (less negative) than projected in the intermediate scenario. The median estimate for the open-group unfunded obligation is

$19.5 trillion, about $0.3 trillion smaller than the $19.8 trillion estimate in

the intermediate scenario. The median first projected year for which cost

exceeds non-interest income (as it did in 2010 through 2020), and remains in

excess of non-interest income throughout the remainder of the long-range

period, is 2021. This is the same year as projected in the intermediate scenario. The median projected year in which trust fund reserves first become

depleted is 2034, also the same as projected in the intermediate scenario. The

median estimates of the annual cost rate for the 75th year of the projection

period are 18.11 percent of taxable payroll and 6.02 percent of gross domestic product (GDP). The comparable estimates in the intermediate scenario are

17.70 percent of payroll and 5.89 percent of GDP.

For four measures in table VI.E1 (the actuarial balance, the first projected

year cost exceeds non-interest income and remains in excess through 2095,

the first year trust fund reserves become depleted, and the annual cost in the

75th year as a percent of taxable payroll), the 95-percent stochastic confidence interval falls within the range defined by the low-cost and high-cost

scenarios. For the remaining two measures (the open-group unfunded obligation, and the annual cost in the 75th year as a percent of GDP), one or both of

the bounds of the 95-percent stochastic confidence interval fall outside the

range defined by the low-cost and high-cost scenarios.
207

Stochastic Projections 

Table VI.E1.—Long-Range Estimates Relating to the Actuarial Status of

the Combined OASDI Program

[Comparison of scenario-based and stochastic results]

Traditional

scenario-based model Stochastic model

IntermediateLowcostHighcost

Median

50th

percentile

80-percent

confidence interval

95-percent

confidence interval

10th

percentile

90th

percentile

2.5th

percentile

97.5th

percentile

Actuarial balance . . . . . . -3.54 -0.12 -8.25 -3.50 -5.51 -1.96 -6.85 -1.12

Open-group unfunded 

obligation 

(in trillions) . . . . . . . . . $19.8 -$.3 $36.3 $19.5 $8.8 $37.6 $4.9 $51.4

First projected year cost 

exceeds non-interest 

income and remains

in excess 

through 2095. . . . . . . . 2021 a

a Cost less non-interest income is projected to be negative for a temporary period, returning to positive levels

before the end of the projection period.

2021 2021 2021 2021 2021 a

First year trust fund 

reserves become 

depleted b . . . . . . . . . .

b For the low-cost scenario and for some stochastic simulations, the first year in which trust fund reserves

become depleted does not indicate a permanent depletion of reserves.

2034 2061 2031 2034 2032 2038 2031 2041

Annual cost in 75th year 

(percent of taxable

payroll) . . . . . . . . . . . . 17.70 12.32 27.54 18.11 14.27 23.60 12.51 27.46

Annual cost in 75th year 

(percent of GDP). . . . . 5.89 4.46 8.56 6.02 4.77 7.77 4.20 9.01
Appendices

208

F. INFINITE HORIZON PROJECTIONS

Another measure of trust fund financial status is the infinite horizon

unfunded obligation, which takes account of all past and future annual balances, even those after the next 75 years. The extension of the time period

past 75 years assumes that the current law for the OASDI program and the

demographic and economic trends used for the 75-year projection continue

indefinitely.

Table VI.F1 shows that the OASDI open-group unfunded obligation over the

infinite horizon is $59.8 trillion in present value, which is $40.0 trillion

larger than for the 75-year period. The $40.0 trillion increment reflects a significant financing gap projected for OASDI for years after 2095 into perpetuity. Of course, the degree of uncertainty associated with estimates increases

substantially for years further in the future.

The $59.8 trillion infinite horizon open-group unfunded obligation is equivalent to 4.6 percent of taxable payroll or 1.4 percent of GDP. These relative

measures of the unfunded obligation over the infinite horizon express its

magnitude in relation to the resources potentially available to finance the

shortfall.

The summarized shortfalls for the 75-year period and through the infinite

horizon both reflect annual cash-flow shortfalls for all years after trust fund

reserve depletion. The annual shortfalls after trust fund reserve depletion rise

slowly and reflect increases in life expectancy. The summarized shortfalls

over the infinite horizon, as percentages of taxable payroll and GDP, are

larger than the shortfalls for the 75-year period.

To illustrate the magnitude of the projected infinite horizon shortfall, consider that it could be eliminated with additional revenue equivalent to an

immediate increase in the combined payroll tax rate from 12.4 percent to

about 17.0 percent,1 or with cost reductions equivalent to an immediate and

permanent reduction in benefits for all current and future beneficiaries by

about 27 percent. 

 1 While an increase in the payroll tax rate would cause some behavioral changes in earnings and ensuing

changes in benefit levels, such changes are not included in the calculations because they are assumed to have

roughly offsetting effects on OASDI actuarial status over the infinite horizon.
209

Infinite Horizon Projections 

Notes:

1. The present values of future taxable payroll for 2021-95 and for 2021 through the infinite horizon are

$591.5 trillion and $1,296.7 trillion, respectively.

2. The present values of GDP for 2021-95 and for 2021 through the infinite horizon are $1,698.0 trillion and

$4,237.0 trillion, respectively. Present values of GDP shown in the Medicare Trustees Report differ slightly

due to the use of discount rates that are specific to each program’s trust fund holdings.

Last year, the Trustees projected that the infinite horizon unfunded obligation

was $53.0 trillion in present value. If the assumptions, methods, and starting

values had not changed, moving the valuation date forward by 1 year would

have increased the unfunded obligation by about $1.4 trillion, to

$54.4 trillion. The net effects of changes in assumptions, methods, law, and

starting values increased the infinite horizon unfunded obligation by

$5.4 trillion. Significant reasons for the increase in the infinite horizon

unfunded obligation include reductions in near-term interest rates and

updates to methods and programmatic data. See section IV.B.6 for details

regarding changes in law, data, methods, and assumptions.

Although the unrounded 75-year unfunded obligation expressed as a share of

taxable payroll and of GDP increased by 0.3 percentage point and

0.1 percentage point respectively, compared to last year’s report, the infinite

horizon unfunded obligation expressed as a share of these measures is higher

than in last year’s report by less than 0.05 percentage point. The relatively

small increase over the infinite horizon, expressed as a share of taxable payroll and GDP, is largely due to the extended long-term effects of the increase

in the total ultimate fertility rate from 1.95 to 2.0 births per woman, which

includes all years beyond the 75-year long-range projection period. 

a. Unfunded Obligations for Past, Current, and Future Participants

Table VI.F2 separates the components of the infinite horizon unfunded obligation (with the exception of General Fund reimbursements) among past,

current, and future participants. The table does not separate past General

Table VI.F1.—Unfunded OASDI Obligations Through the Infinite Horizon and 

the 75-Year Projection Period, Based on Intermediate Assumptions

[Present values as of January 1, 2021; dollar amounts in trillions]

Present

value

Expressed as a percentage

of future payroll and GDP

Taxable

payroll GDP

Unfunded obligation through the infinite horizona . . . . . . . . . . . . 

a Present value of future cost less future non-interest income, reduced by the amount of trust fund asset

reserves at the beginning of 2021. Expressed as a percentage of payroll and GDP for the period 2021 through

the infinite horizon.

$59.8 4.6 1.4

Unfunded obligation through 2095b . . . . . . . . . . . . . . . . . . . . . . . 

b Present value of future cost less future non-interest income through 2095, reduced by the amount of trust

fund reserves at the beginning of 2021. Expressed as a percentage of payroll and GDP for the period 2021

through 2095.

19.8 3.4 1.2
Appendices

210

Fund reimbursements among participants because there is no clear basis for

attributing the reimbursements across generations.

Past participants are defined as those no longer alive as of the valuation date.

Current participants are those age 15 and older as of 2021. Future participants are those under age 15 or not yet born. 

The excess of the present value of cost for past and current participants over

the present value of dedicated tax income for past and current participants

produces an unfunded obligation for past and current participants of

$44.0 trillion. Table VI.F2 also shows an unfunded obligation of

$43.4 trillion for past and current participants, including past and future General Fund reimbursements. Future participants are scheduled to pay dedicated taxes of $16.4 trillion less into the system than the cost of their

scheduled benefits ($134.2 trillion of dedicated tax income as compared to

$150.6 trillion of cost). The unfunded obligation for all participants through

the infinite horizon thus equals $59.8 trillion.

Making Social Security solvent over the infinite horizon requires some combination of increased revenue or reduced benefits for current and future participants amounting to $59.8 trillion in present value, 4.6 percent of future

taxable payroll, or 1.4 percent of future GDP.
211

Infinite Horizon Projections 

Notes:

1. The present value of future taxable payroll for 2021 through the infinite horizon is $1,296.7 trillion.

2. The present value of GDP for 2021 through the infinite horizon is $4,237.0 trillion.

3. Components may not sum to totals because of rounding.

Table VI.F2.—Present Values Through the Infinite Horizon 

for Various Categories of Program Participants, Based on Intermediate Assumptions

[Present values as of January 1, 2021; dollar amounts in trillions]

Present

value

Expressed as a 

percentage of future 

payroll and GDP

Taxable

payroll GDP

Present value of past cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $70.5 5.4 1.7

Less present value of past dedicated tax income . . . . . . . . . . . . . . . . . . 72.7 5.6 1.7

Plus present value of future cost for current participants . . . . . . . . . . . 85.5 6.6 2.0

Less present value of future dedicated tax income for current 

participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39.3 3.0 .9

Equals unfunded obligation for past and current participants 

excluding General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 44.0 3.4 1.0

Less present value of past General Fund reimbursementsa . . . . . . . . . . .7 .1 b

Less present value of future General Fund reimbursements through 

the infinite horizona . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . cdb

Equals unfunded obligation for past and current participants 

including General Fund reimbursements . . . . . . . . . . . . . . . . . . . . . 43.3 3.3 1.0

Plus present value of cost for future participants through the infinite 

horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150.7 11.6 3.6

Less present value of dedicated tax income for future participants 

through the infinite horizon. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134.2 10.3 3.2

Equals unfunded obligation for all participants through the infinite 

horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59.8 4.6 1.4

a Distribution of General Fund reimbursements among past, current, and future participants cannot be determined.

b Less than 0.05 percent of GDP.

c Less than $50 billion.

d Less than 0.05 percent of taxable payroll.
Appendices

212

G. ESTIMATES FOR OASDI AND HI, SEPARATE AND COMBINED

In this appendix, the Trustees present long-range actuarial estimates for the

OASDI and Hospital Insurance (HI) programs both separately and on a combined basis. These estimates facilitate analysis of the adequacy of the income

and asset reserves of these programs relative to their cost under current law.

This appendix does not include estimates for the Supplementary Medical

Insurance (SMI) program because adequate financing is guaranteed in the

law and because the SMI program is not financed through a payroll tax. For

more information on Medicare estimates, please see the 2021 Medicare

Trustees Report.

The information in this appendix on combined operations, while significant,

should not obscure the analysis of the financial status of the individual trust

funds, which are legally separate and cannot be commingled. In addition, the

factors which determine the costs of the OASI, DI, and HI programs differ

substantially.

1. Estimates as a Percentage of Taxable Payroll

Comparing cost and income rates for the OASDI and HI programs as percentages of taxable payroll requires a note of caution. The taxable payrolls

for the HI program are larger than those for the OASDI program because:

(1) a larger maximum taxable amount was established for the HI program in

1991, with the maximum eliminated altogether for the HI program in 1994;

(2) larger proportions of Federal, State, and local government employees are

covered under the HI program; and (3) the earnings of railroad workers are

included directly in the HI taxable payroll but are not included in the OASDI

taxable payroll. (Railroad worker contributions for the equivalent of OASDI

benefits are accounted for in a net interchange that occurs annually between

the OASDI and Railroad Retirement programs.) As a result, the HI taxable

payroll is about 25 percent larger than the OASDI taxable payroll on average

over the long-range period.

As with the OASI and DI Trust Funds, income to the HI Trust Fund comes

primarily from contributions paid by employees, employers, and selfemployed persons. Table VI.G1 shows the OASDI and HI contribution rates

that are authorized in the Federal Insurance Contributions Act.
213

OASDI and HI: Percent of Payroll

Table VI.G2 shows the Trustees’ estimates of annual income rates and cost

rates for the OASDI program and the HI program under the intermediate,

low-cost, and high-cost sets of assumptions described earlier in this report.

The income rates reflect the payroll tax rates shown in table VI.G1, revenue

from taxation of scheduled OASDI benefits for both the OASDI and HI

Table VI.G1.—Payroll Tax Contribution Rates for the OASDI and HI Programs

[In percent]

Calendar years

Employees and employers, 

combineda

a Except as noted below, the combined employee/employer rate is divided equally between employees and

employers.

Employees 

only Self employedb

b Beginning in 1990, self-employed persons receive a deduction, for purposes of computing their net earnings, equal to half of the combined OASDI and HI contributions that would be payable without regard to the

contribution and benefit base. The OASDI contribution rate then applies to net earnings after this deduction,

but subject to the OASDI base.

OASDI

up to basec

c The payroll tax on earnings for the OASDI program applies to annual earnings up to a contribution and

benefit base indexed to the average wage level. The base is $142,800 for 2021.

HI

all earningsd

d Prior to 1994, the payroll tax on earnings for the HI program applied to annual earnings up to a contribution base. The HI contribution base was eliminated beginning in 1994.

HI

over limite

e Starting with Federal personal income tax returns for tax year 2013, earned income exceeding $200,000 for

individual filers and $250,000 for married couples filing jointly is subject to an additional HI tax of

0.9 percent. These income limits are not indexed after 2013.

OASDI

up to basec HIall earningsd HIover limite

1966 . . . . . . . . . . . . . 7.70 0.70 — 5.80 0.35 —

1967 . . . . . . . . . . . . . 7.80 1.00 — 5.90 .50 —

1968 . . . . . . . . . . . . . 7.60 1.20 — 5.80 .60 —

1969-70 . . . . . . . . . . 8.40 1.20 — 6.30 .60 —

1971-72 . . . . . . . . . . 9.20 1.20 — 6.90 .60 —

1973 . . . . . . . . . . . . . 9.70 2.00 — 7.00 1.00 —

1974-77 . . . . . . . . . . 9.90 1.80 — 7.00 .90 —

1978 . . . . . . . . . . . . . 10.10 2.00 — 7.10 1.00 —

1979-80 . . . . . . . . . . 10.16 2.10 — 7.05 1.05 —

1981 . . . . . . . . . . . . . 10.70 2.60 — 8.00 1.30 —

1982-83 . . . . . . . . . . 10.80 2.60 — 8.05 1.30 —

1984f. . . . . . . . . . . . .

f In 1984 only, employees received an immediate credit of 0.3 percent of taxable wages against their OASDI

payroll tax contributions. The self-employed received similar credits of 2.7 percent, 2.3 percent, and

2.0 percent against their combined OASDI and Hospital Insurance (HI) contributions on net earnings from

self-employment in 1984, 1985, and 1986-89, respectively. The General Fund of the Treasury reimbursed

the trust funds for these credits. 

11.40 2.60 — 11.40 2.60 —

1985f . . . . . . . . . . . . 11.40 2.70 — 11.40 2.70 —

1986-87f. . . . . . . . . . 11.40 2.90 — 11.40 2.90 —

1988-89f. . . . . . . . . . 12.12 2.90 — 12.12 2.90 —

1990-2010g. . . . . . . .

g Public Law 111-147 exempted most employers from paying the employer share of OASDI payroll tax on

wages paid during the period March 19, 2010 through December 31, 2010 to certain qualified individuals

hired after February 3, 2010. The General Fund of the Treasury reimbursed the trust funds for the payroll tax

revenue forgone under this law.

12.40 2.90 — 12.40 2.90 —

2011-2012h. . . . . . . .

h Public Law 111-312, Public Law 112-78, and Public Law 112-96 reduced the OASDI payroll tax rate for

2011 and 2012 by 2 percentage points for employees and for self-employed workers. The General Fund of

the Treasury reimbursed the trust funds for the payroll tax revenue forgone under these laws.

10.40 2.90 — 10.40 2.90 —

2013 and later. . . . . . 12.40 2.90 0.90 12.40 2.90 0.90
Appendices

214

Trust Funds, and any reimbursements from the General Fund of the Treasury.

For the HI program, the income rates also reflect: (1) the additional 0.9-percent tax on employees for relatively high earnings and the portion of total

payroll to which the 0.9-percent rate applies, (2) premium revenues, and

(3) monies from fraud and abuse control activities. Annual income and cost

rates indicate the cash-flow operation of the programs. Therefore, income

rates exclude interest earned on trust fund asset reserves. Table VI.G2 also

shows annual balances, which are the differences between annual income

rates and cost rates.

The Trustees project that the OASDI and HI cost rates will rise generally

above current levels under the intermediate and high-cost sets of assumptions. The greatest increase occurs from 2021 to about 2038 under the intermediate assumptions for OASDI and HI, from 2021 to 2046 under the highcost assumptions for OASDI, and from 2021 to 2078 under the high-cost

assumptions for HI. Under the intermediate assumptions, the OASDI cost

rate increases by 25 percent from its current level by 2095, while under the

high-cost assumptions, the cost rate increases by 92 percent by 2095. For HI,

cost rates increase by 32 percent and 173 percent from 2021 to 2095 under

the intermediate and high-cost assumptions, respectively. Under the low-cost

assumptions, the OASDI and HI cost rates decrease from 2021 to 2095 by

11 percent and 37 percent, respectively. 

The Trustees project annual deficits for every year of the projection period

under the intermediate and high-cost assumptions for both the OASDI and

HI programs. Under the low-cost assumptions, OASDI annual balances are

negative through 2080, and are positive thereafter, increasing to 0.76 percent

of payroll for 2093, and then decreasing to 0.74 percent through 2095. HI

annual balances as a percent of payroll are negative for 2021 and 2022, and

are positive and mostly increasing from 2023 through the remainder of the

projection period under the low-cost assumptions.
215

OASDI and HI: Percent of Payroll

Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2021-2095

[As a percentage of taxable payrolla]

Calendar year

OASDI HI

Income

rate

Cost

rateb Balanceb Incomerate

Cost

rate Balance

Intermediate:

2021 . . . . . . . . . . 12.31 14.11 -1.81 3.38 3.64 -0.26

2022 . . . . . . . . . . 12.93 14.30 -1.38 3.40 3.67 -.27

2023 . . . . . . . . . . 12.91 14.43 -1.52 3.42 3.68 -.27

2024 . . . . . . . . . . 12.94 14.64 -1.69 3.43 3.73 -.30

2025 . . . . . . . . . . 12.96 14.86 -1.90 3.45 3.81 -.35

2026 . . . . . . . . . . 13.08 15.10 -2.03 3.53 3.89 -.36

2027 . . . . . . . . . . 13.10 15.36 -2.26 3.56 3.97 -.42

2028 . . . . . . . . . . 13.14 15.62 -2.49 3.58 4.06 -.48

2029 . . . . . . . . . . 13.17 15.87 -2.70 3.60 4.14 -.54

2030 . . . . . . . . . . 13.19 16.11 -2.92 3.63 4.20 -.57

2035 . . . . . . . . . . 13.24 16.74 -3.49 3.72 4.61 -.88

2040 . . . . . . . . . . 13.27 16.98 -3.71 3.80 4.81 -1.01

2045 . . . . . . . . . . 13.28 17.05 -3.77 3.86 4.92 -1.06

2050 . . . . . . . . . . 13.29 17.14 -3.85 3.92 4.92 -1.01

2055 . . . . . . . . . . 13.31 17.29 -3.99 3.98 4.90 -.91

2060 . . . . . . . . . . 13.33 17.55 -4.22 4.05 4.89 -.84

2065 . . . . . . . . . . 13.35 17.80 -4.45 4.13 4.92 -.80

2070 . . . . . . . . . . 13.37 18.07 -4.70 4.19 4.97 -.78

2075 . . . . . . . . . . 13.39 18.32 -4.93 4.26 5.00 -.75

2080 . . . . . . . . . . 13.40 18.35 -4.96 4.31 5.00 -.70

2085 . . . . . . . . . . 13.38 18.14 -4.75 4.34 4.97 -.62

2090 . . . . . . . . . . 13.36 17.81 -4.45 4.37 4.90 -.53

2095 . . . . . . . . . . 13.36 17.70 -4.34 4.40 4.81 -.42

Low-cost:

2021 . . . . . . . . . . 12.22 13.77 -1.55 3.38 3.50 -.13

2022 . . . . . . . . . . 13.00 13.69 -.69 3.39 3.44 -.05

2023 . . . . . . . . . . 12.88 13.70 -.81 3.40 3.35 .05

2024 . . . . . . . . . . 12.89 13.66 -.77 3.41 3.32 .09

2025 . . . . . . . . . . 12.91 13.71 -.80 3.43 3.33 .10

2026 . . . . . . . . . . 13.01 13.78 -.77 3.50 3.33 .17

2027 . . . . . . . . . . 13.02 13.85 -.83 3.52 3.34 .18

2028 . . . . . . . . . . 13.05 13.93 -.87 3.54 3.35 .19

2029 . . . . . . . . . . 13.07 13.99 -.92 3.56 3.35 .21

2030 . . . . . . . . . . 13.09 14.06 -.97 3.58 3.32 .26

2035 . . . . . . . . . . 13.12 14.15 -1.04 3.68 3.31 .37

2040 . . . . . . . . . . 13.12 14.00 -.88 3.75 3.13 .63

2045 . . . . . . . . . . 13.11 13.71 -.60 3.82 2.90 .92

2050 . . . . . . . . . . 13.10 13.49 -.38 3.89 2.65 1.24

2055 . . . . . . . . . . 13.10 13.39 -.28 3.96 2.45 1.51

2060 . . . . . . . . . . 13.11 13.41 -.30 4.03 2.33 1.70

2065 . . . . . . . . . . 13.12 13.42 -.31 4.10 2.27 1.82

2070 . . . . . . . . . . 13.12 13.42 -.30 4.15 2.27 1.88

2075 . . . . . . . . . . 13.12 13.37 -.25 4.20 2.29 1.91

2080 . . . . . . . . . . 13.11 13.13 -.03 4.23 2.29 1.94

2085 . . . . . . . . . . 13.08 12.73 .35 4.25 2.27 1.98

2090 . . . . . . . . . . 13.06 12.36 .70 4.27 2.24 2.03

2095 . . . . . . . . . . 13.06 12.32 .74 4.31 2.20 2.10
Appendices

216

Notes:

1. The income rate excludes interest income.

2. The Trustees show income and cost estimates generally on a cash basis for the OASDI program and on an

incurred basis for the HI program.

3. Components may not sum to totals because of rounding.

Table VI.G3 shows summarized values over the 25-year, 50-year, and

75-year valuation periods. For each of those periods, the summarized income

rates include beginning trust fund asset reserves, and the summarized cost

rates include the cost of accumulating an ending fund reserve equal to

100 percent of annual cost at the end of the period.

High-cost:

2021 . . . . . . . . . . 12.28 14.36 -2.07 3.39 3.77 -0.38

2022 . . . . . . . . . . 13.01 15.38 -2.37 3.42 3.98 -.56

2023 . . . . . . . . . . 12.96 15.64 -2.68 3.44 4.03 -.59

2024 . . . . . . . . . . 13.00 16.00 -3.00 3.46 4.15 -.69

2025 . . . . . . . . . . 13.01 16.29 -3.28 3.48 4.32 -.83

2026 . . . . . . . . . . 13.15 16.66 -3.50 3.57 4.49 -.92

2027 . . . . . . . . . . 13.18 17.02 -3.84 3.60 4.68 -1.08

2028 . . . . . . . . . . 13.23 17.42 -4.19 3.62 4.87 -1.24

2029 . . . . . . . . . . 13.27 17.86 -4.59 3.66 5.07 -1.41

2030 . . . . . . . . . . 13.30 18.32 -5.01 3.69 5.23 -1.55

2035 . . . . . . . . . . 13.39 19.67 -6.28 3.79 6.33 -2.53

2040 . . . . . . . . . . 13.44 20.56 -7.12 3.87 7.27 -3.39

2045 . . . . . . . . . . 13.49 21.38 -7.88 3.95 8.20 -4.25

2050 . . . . . . . . . . 13.54 22.17 -8.63 4.02 8.99 -4.97

2055 . . . . . . . . . . 13.59 22.96 -9.37 4.09 9.59 -5.50

2060 . . . . . . . . . . 13.65 23.78 -10.13 4.17 10.07 -5.90

2065 . . . . . . . . . . 13.70 24.61 -10.90 4.25 10.44 -6.19

2070 . . . . . . . . . . 13.76 25.51 -11.75 4.32 10.63 -6.31

2075 . . . . . . . . . . 13.83 26.48 -12.65 4.41 10.71 -6.30

2080 . . . . . . . . . . 13.88 27.25 -13.37 4.48 10.71 -6.23

2085 . . . . . . . . . . 13.91 27.66 -13.74 4.54 10.63 -6.09

2090 . . . . . . . . . . 13.91 27.64 -13.73 4.57 10.48 -5.90

2095 . . . . . . . . . . 13.91 27.54 -13.63 4.61 10.30 -5.69

a The taxable payroll for HI is significantly larger than the taxable payroll for OASDI because the HI taxable

maximum amount was eliminated beginning in 1994, and because HI covers all Federal civilian employees,

all State and local government employees hired after April 1, 1986, and railroad employees.

b OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years

were actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset

reserves reflect the 12 months of benefits scheduled for payment each year.

Table VI.G2.—OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2021-2095 (Cont.)

[As a percentage of taxable payrolla]

Calendar year

OASDI HI

Income

rate

Cost

rateb Balanceb Incomerate

Cost

rate Balance
217

OASDI and HI: Percent of Payroll

Note: Components may not sum to totals because of rounding.

The Trustees project that the OASDI and HI programs will each experience

large actuarial deficits for the 25-year, 50-year, and 75-year valuation periods

under the high-cost assumptions. Actuarial deficits under the intermediate

assumptions are smaller than those for the high-cost assumptions for all three

valuation periods. Under the low-cost assumptions, the OASDI program has

relatively small actuarial deficits for all three valuation periods, while the HI

program has positive actuarial balances for all three valuation periods.

Table VI.G3.—Summarized OASDI and HI Income Rates and Cost Rates for Valuation 

Periods,a Calendar Years 2021-2095

[As a percentage of taxable payrollb]

Valuation

period 

OASDI HI

Income

rate

 Cost

ratec Actuarialbalance

Income

rate

 Cost

rate

Actuarial

balance

Intermediate:

25-year:

2021-45 . . . . . . 14.43 16.80 -2.37 3.73 4.54 -0.81

50-year:

2021-70 . . . . . . 13.92 17.07 -3.14 3.86 4.70 -.83

75-year:

2021-95 . . . . . . 13.78 17.31 -3.54 3.99 4.76 -.77

Low-cost:

25-year:

2021-45 . . . . . . 14.15 14.52 -.37 3.69 3.37 .32

50-year:

2021-70 . . . . . . 13.65 13.96 -.31 3.84 2.91 .93

75-year:

2021-95 . . . . . . 13.48 13.60 -.12 3.96 2.70 1.26

High-cost:

25-year:

2021-45 . . . . . . 14.76 19.42 -4.66 3.79 6.13 -2.34

50-year:

2021-70 . . . . . . 14.27 21.07 -6.79 3.94 7.65 -3.71

75-year:

2021-95 . . . . . . 14.18 22.43 -8.25 4.07 8.32 -4.25

a Income rates include beginning trust fund asset reserves and cost rates include the cost of reaching an ending target trust fund equal to 100 percent of annual cost at the end of the period.

b The taxable payroll for HI is significantly larger than the taxable payroll for OASDI because the HI taxable

maximum amount was eliminated beginning 1994, and because HI covers all Federal civilian employees, all

State and local government employees hired after April 1, 1986, and railroad employees.

c OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years

were actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset

reserves reflect the 12 months of benefits scheduled for payment each year.
Appendices

218

2. Estimates as a Percentage of Gross Domestic Product

This section presents long-range projections of the operations of the combined Old-Age and Survivors Insurance and Disability Insurance (OASI and

DI) Trust Funds and of the Hospital Insurance (HI) Trust Fund, expressed as

a percentage of gross domestic product (GDP). While expressing fund operations as a percentage of taxable payroll is a very useful approach for assessing the financial status of the programs (see section IV.B.1), expressing them

as a percentage of the total value of goods and services produced in the

United States provides an additional perspective.

Table VI.G4 shows non-interest income, total cost, and the resulting balance

of the combined OASI and DI Trust Funds, of the HI Trust Fund, and of the

combined OASI, DI, and HI Trust Funds, expressed as percentages of GDP

on the basis of each of the three alternative sets of assumptions. Table VI.G4

also contains estimates of GDP. For OASDI, non-interest income consists of

payroll tax contributions, proceeds from taxation of scheduled OASDI benefits, and any reimbursements from the General Fund of the Treasury. Cost

consists of scheduled benefits, administrative expenses, financial interchange

with the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries. For HI, non-interest income consists of payroll tax contributions (including contributions from railroad

employment), up to an additional 0.9 percent tax on earned income for relatively high earners, proceeds from taxation of scheduled OASDI benefits,

premium revenues, monies from fraud and abuse control activities, and any

reimbursements from the General Fund of the Treasury. Cost consists of outlays (benefits and administrative expenses) for beneficiaries. The Trustees

show income and cost estimates generally on a cash basis for the OASDI

program1 and on an incurred basis for the HI program.

The Trustees project the OASDI annual balance (non-interest income less

cost) as a percentage of GDP to be negative throughout the projection period

under the intermediate and high-cost assumptions. Under the low-cost

assumptions, the OASDI annual deficit as a percentage of GDP decreases

from 2021 to 2022, fluctuates through 2025, and then slightly decreases in

2026, in part because of a permanent level shift upward in taxation of benefits income due to the expiration of the personal income tax provisions in

Public Law 115-97, the Tax Cuts and Jobs Act. After 2026, deficits increase

 1 OASDI benefits paid for entitlement for a particular month are generally paid in the succeeding month.

There are two primary exceptions to this general rule. First, payments can occur with a greater delay when a

benefit award is made after the month of initial benefit entitlement. At the time of benefit award, benefits

owed for months of prior entitlement are then also paid to the beneficiary. For the projections in this report,

such retroactive payments are included in the period where they are paid (at time of award). Second, when

benefit payments scheduled for January 3 are paid on the prior December 31, because January 3 falls on a

Sunday, such payments are shown in this report for the period they were scheduled to be paid.
219

OASDI and HI: Percent of GDP

to a peak in 2033 and then decrease through 2056. After 2056, the annual

deficits slightly increase through 2063 and then decrease through 2080

before becoming positive for 2081 and later. Under the intermediate assumptions, the annual deficits decrease from 2021 to 2022, primarily because of a

negative adjustment made in 2021 to payroll tax contributions, reflecting

excess amounts credited in 2020. Annual deficits then mostly increase

through 2078, and decrease thereafter. Under the high-cost assumptions,

annual deficits mostly increase through 2085, and then slightly decrease

through the end of the projection period.

The Trustees project that the HI annual balance as a percentage of GDP will

be negative in 2021 and 2022, and then positive and mostly increasing

throughout the rest of the projection period, under the low-cost assumptions.

Under the intermediate and the high-cost assumptions, the HI annual balance

is negative for all years of the projection period. Under the intermediate

assumptions, annual deficits generally increase through 2045, and then

decline thereafter. Under the high-cost assumptions, annual deficits reach a

peak in 2068 and decline thereafter.

The combined OASDI and HI annual balance as a percentage of GDP is negative throughout the projection period under both the intermediate and highcost assumptions. Under the low-cost assumptions, the combined OASDI

and HI annual balance is negative through 2041, and then positive and rising

thereafter. Under the intermediate assumptions, the combined OASDI and HI

annual deficits decrease from 2021 to 2022, increase from 2022 through

2043, slightly decrease through 2054, increase through 2077, and then

decline thereafter, reaching 1.62 percent of GDP by 2095. Under the highcost assumptions, combined annual deficits rise to a peak of 6.86 percent in

2082 and decrease thereafter.

By 2095, the combined OASDI and HI annual balances as percentages of

GDP range from a positive annual balance of 1.21 percent for the low-cost

assumptions to an annual deficit of 6.50 percent for the high-cost assumptions. Annual balances differ by a much smaller amount for the tenth projection year, 2030, ranging from an annual deficit of 0.24 percent for the lowcost assumptions to an annual deficit of 2.51 percent for the high-cost

assumptions.

The summarized long-range (75-year) actuarial balance as a percentage of

GDP for the combined OASDI and HI programs varies among the three

alternatives by a relatively large amount, from a positive actuarial balance of

0.52 percent under the low-cost assumptions to an actuarial deficit of

4.66 percent under the high-cost assumptions. The 25-year summarized actuarial balance varies by a smaller amount, from a positive actuarial balance of

less than 0.005 percent of GDP to an actuarial deficit of 2.74 percent. Sum-
Appendices

220

marized rates are calculated on a present-value basis. They include the trust

fund reserve balances on January 1, 2021 and the cost of reaching a target

trust fund level equal to 100 percent of the following year’s annual cost at

the end of the period. (See section IV.B.4 for further explanation.)

Table VI.G4.—OASDI and HI Annual and Summarized Income, Cost, and Balance

as a Percentage of GDP, Calendar Years 2021-2095

Calendar year

Percentage of GDP GDP in

dollars

(billions)

OASDI HI Combined

Incomea Costb Balanceb Incomea Cost Balance Incomea Costb Balanceb

Intermediate:

2021 . . . . . 4.48 5.14 -0.66 1.56 1.68 -0.12 6.04 6.82 -0.78 $22,382

2022 . . . . . 4.67 5.17 -.50 1.56 1.68 -.12 6.23 6.85 -.62 23,714

2023 . . . . . 4.69 5.24 -.55 1.57 1.69 -.12 6.25 6.93 -.67 24,815

2024 . . . . . 4.71 5.32 -.62 1.57 1.71 -.14 6.28 7.03 -.75 25,895

2025 . . . . . 4.71 5.40 -.69 1.58 1.74 -.16 6.29 7.14 -.85 27,041

2026 . . . . . 4.75 5.49 -.74 1.61 1.77 -.16 6.36 7.26 -.90 28,190

2027 . . . . . 4.76 5.58 -.82 1.62 1.81 -.19 6.38 7.39 -1.01 29,353

2028 . . . . . 4.77 5.67 -.90 1.63 1.85 -.22 6.40 7.52 -1.12 30,571

2029 . . . . . 4.78 5.76 -.98 1.64 1.88 -.25 6.42 7.64 -1.23 31,836

2030 . . . . . 4.78 5.84 -1.06 1.65 1.91 -.26 6.43 7.75 -1.32 33,151

2035 . . . . . 4.76 6.01 -1.25 1.68 2.07 -.40 6.43 8.09 -1.65 40,505

2040 . . . . . 4.72 6.04 -1.32 1.69 2.14 -.45 6.41 8.18 -1.77 49,247

2045 . . . . . 4.68 6.00 -1.33 1.70 2.17 -.47 6.38 8.17 -1.80 59,903

2050 . . . . . 4.64 5.99 -1.34 1.71 2.15 -.44 6.36 8.14 -1.78 73,006

2055 . . . . . 4.61 6.00 -1.38 1.73 2.13 -.40 6.35 8.13 -1.78 89,182

2060 . . . . . 4.59 6.05 -1.45 1.75 2.11 -.36 6.35 8.16 -1.82 108,977

2065 . . . . . 4.58 6.10 -1.53 1.77 2.11 -.34 6.35 8.21 -1.87 132,996

2070 . . . . . 4.56 6.16 -1.60 1.79 2.12 -.33 6.35 8.28 -1.93 162,027

2075 . . . . . 4.54 6.21 -1.67 1.81 2.13 -.32 6.35 8.34 -1.99 197,375

2080 . . . . . 4.52 6.19 -1.67 1.82 2.12 -.29 6.34 8.30 -1.97 241,032

2085 . . . . . 4.49 6.08 -1.59 1.83 2.09 -.26 6.32 8.17 -1.86 295,310

2090 . . . . . 4.46 5.95 -1.49 1.83 2.05 -.22 6.29 8.00 -1.71 362,422

2095 . . . . . 4.44 5.89 -1.44 1.83 2.01 -.17 6.28 7.90 -1.62 444,359

Summarized rates: c

25-year:

 2021-45 . . 5.19 6.04 -.85 1.67 2.05 -.38 6.86 8.09 -1.23

50-year:

 2021-70 . . 4.92 6.03 -1.11 1.71 2.08 -.37 6.62 8.11 -1.48

75-year:

 2021-95 . . 4.80 6.03 -1.23 1.74 2.08 -.34 6.54 8.11 -1.57

Low-cost:

2021 . . . . . 4.45 5.02 -.57 1.56 1.62 -.06 6.01 6.64 -.62 22,906

2022 . . . . . 4.71 4.96 -.25 1.56 1.59 -.02 6.28 6.55 -.27 24,706

2023 . . . . . 4.69 4.99 -.30 1.56 1.54 .02 6.26 6.53 -.27 26,140

2024 . . . . . 4.73 5.01 -.28 1.57 1.52 .04 6.29 6.54 -.24 27,688

2025 . . . . . 4.74 5.04 -.29 1.57 1.52 .05 6.31 6.56 -.25 29,286

2026 . . . . . 4.79 5.07 -.28 1.60 1.52 .08 6.39 6.59 -.20 30,925

2027 . . . . . 4.80 5.11 -.30 1.61 1.53 .08 6.41 6.64 -.22 32,616

2028 . . . . . 4.83 5.15 -.32 1.62 1.53 .09 6.44 6.68 -.23 34,406

2029 . . . . . 4.84 5.18 -.34 1.63 1.53 .10 6.47 6.71 -.24 36,289

2030 . . . . . 4.86 5.22 -.36 1.63 1.52 .12 6.49 6.74 -.24 38,262

2035 . . . . . 4.84 5.22 -.38 1.67 1.50 .17 6.50 6.72 -.22 49,759

2040 . . . . . 4.80 5.13 -.32 1.69 1.41 .28 6.49 6.54 -.04 64,426

2045 . . . . . 4.77 4.99 -.22 1.71 1.30 .41 6.48 6.28 .20 83,756

2050 . . . . . 4.75 4.89 -.14 1.73 1.18 .55 6.48 6.06 .41 109,341

2055 . . . . . 4.73 4.84 -.10 1.76 1.09 .67 6.49 5.92 .57 143,081

2060 . . . . . 4.73 4.84 -.11 1.79 1.03 .76 6.52 5.87 .65 187,087

2065 . . . . . 4.73 4.84 -.11 1.81 1.01 .81 6.54 5.85 .70 244,148

2070 . . . . . 4.73 4.84 -.11 1.84 1.01 .83 6.57 5.84 .73 318,198

2075 . . . . . 4.73 4.82 -.09 1.86 1.01 .85 6.59 5.84 .76 415,164

2080 . . . . . 4.73 4.74 -.01 1.88 1.01 .86 6.61 5.75 .85 543,683

2085 . . . . . 4.72 4.60 .13 1.89 1.01 .88 6.61 5.60 1.01 714,686

2090 . . . . . 4.72 4.47 .25 1.90 .99 .90 6.62 5.46 1.16 939,774

2095 . . . . . 4.73 4.46 .27 1.92 .98 .94 6.65 5.44 1.21 1,231,982
221

OASDI and HI: Percent of GDP

Notes:

1. The Trustees show income and cost estimates generally on a cash basis for the OASDI program and on an

incurred basis for the HI program.

2. Components may not sum to totals because of rounding.

Low-cost (Cont.):

Summarized rates: c

25-year:

 2021-45 . . 5.20 5.34 -0.14 1.67 1.53 0.14 6.87 6.86 d

50-year:

 2021-70 . . 4.97 5.09 -.11 1.72 1.30 .41 6.69 6.39 .30

75-year:

 2021-95 . . 4.90 4.94 -.04 1.77 1.21 .56 6.67 6.15 .52

High-cost:

2021 . . . . . 4.56 5.32 -.77 1.59 1.76 -.18 6.14 7.09 -.95 $21,635

2022 . . . . . 4.75 5.61 -.86 1.57 1.83 -.26 6.32 7.44 -1.12 21,774

2023 . . . . . 4.73 5.71 -.98 1.58 1.85 -.27 6.31 7.55 -1.25 22,598

2024 . . . . . 4.73 5.82 -1.09 1.59 1.91 -.32 6.32 7.73 -1.41 23,431

2025 . . . . . 4.74 5.93 -1.19 1.60 1.98 -.38 6.34 7.92 -1.58 24,278

2026 . . . . . 4.77 6.05 -1.27 1.64 2.07 -.43 6.42 8.11 -1.70 25,155

2027 . . . . . 4.78 6.17 -1.39 1.66 2.15 -.50 6.43 8.32 -1.89 26,041

2028 . . . . . 4.78 6.30 -1.52 1.67 2.24 -.57 6.45 8.54 -2.09 26,905

2029 . . . . . 4.79 6.45 -1.66 1.68 2.33 -.65 6.47 8.78 -2.31 27,688

2030 . . . . . 4.79 6.59 -1.80 1.69 2.40 -.71 6.48 8.99 -2.51 28,478

2035 . . . . . 4.76 6.99 -2.23 1.72 2.87 -1.15 6.48 9.86 -3.38 32,698

2040 . . . . . 4.72 7.22 -2.50 1.73 3.25 -1.52 6.45 10.47 -4.02 37,313

2045 . . . . . 4.68 7.41 -2.73 1.75 3.62 -1.88 6.42 11.03 -4.61 42,342

2050 . . . . . 4.64 7.59 -2.96 1.76 3.93 -2.17 6.39 11.52 -5.13 47,945

2055 . . . . . 4.60 7.77 -3.17 1.77 4.15 -2.38 6.37 11.92 -5.55 54,348

2060 . . . . . 4.57 7.97 -3.40 1.78 4.31 -2.53 6.36 12.28 -5.92 61,654

2065 . . . . . 4.54 8.16 -3.61 1.80 4.42 -2.62 6.34 12.58 -6.24 69,839

2070 . . . . . 4.51 8.37 -3.85 1.81 4.46 -2.65 6.33 12.83 -6.50 78,889

2075 . . . . . 4.49 8.59 -4.10 1.83 4.44 -2.62 6.31 13.03 -6.72 88,890

2080 . . . . . 4.45 8.74 -4.29 1.84 4.39 -2.56 6.29 13.14 -6.85 100,171

2085 . . . . . 4.41 8.77 -4.36 1.84 4.31 -2.47 6.25 13.08 -6.83 113,114

2090 . . . . . 4.37 8.67 -4.31 1.84 4.21 -2.37 6.20 12.88 -6.68 128,029

2095 . . . . . 4.32 8.56 -4.24 1.83 4.10 -2.27 6.16 12.66 -6.50 145,093

Summarized rates: c

25-year:

 2021-45 . . 5.27 6.94 -1.67 1.71 2.79 -1.07 6.99 9.72 -2.74

50-year:

 2021-70 . . 4.97 7.34 -2.37 1.74 3.40 -1.65 6.71 10.73 -4.02

75-year:

 2021-95 . . 4.83 7.65 -2.81 1.76 3.62 -1.85 6.60 11.26 -4.66

a Income for individual years excludes interest on the trust funds. Interest is implicit in all summarized values.

b OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years were

actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when

the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset reserves reflect the

12 months of benefits scheduled for payment each year.

c Summarized rates are calculated on a present-value basis. They include the value of the trust funds on

January 1, 2021 and the cost of reaching a target trust fund level equal to 100 percent of annual cost at the end

of the period.

d Between 0 and 0.005 percent of GDP.

Table VI.G4.—OASDI and HI Annual and Summarized Income, Cost, and Balance

as a Percentage of GDP, Calendar Years 2021-2095 (Cont.)

Calendar year

Percentage of GDP GDP in

dollars

(billions)

OASDI HI Combined

Incomea Costb Balanceb Incomea Cost Balance Incomea Costb Balanceb
Appendices

222

Table VI.G5 displays annual ratios of OASDI taxable payroll to GDP. These

ratios facilitate comparisons of trust fund operations expressed as percentages of taxable payroll and those expressed as percentages of GDP. HI taxable payroll is about 25 percent larger than the OASDI taxable payroll on

average over the long-range period; see section 1 of this appendix for a

detailed description of the difference. For each year, the cost as a percentage

of GDP is equal to the cost as a percentage of taxable payroll multiplied by

the ratio of taxable payroll to GDP.

Projections of GDP reflect projected increases in U.S. employment, labor

productivity, average hours worked, and the GDP price index (GDP deflator). Projections of taxable payroll reflect the components of growth in GDP

along with assumed changes in the ratio of total labor compensation to GDP,

the ratio of earnings to total labor compensation, the ratio of OASDI covered

earnings to total earnings, and the ratio of taxable to total covered earnings.

Over the long-range period, the ratio of OASDI taxable payroll to GDP is

projected to decline mostly due to a projected decline in the ratio of wages

and salaries to employee compensation. Over the last six complete economic

cycles, the ratio of wages and salaries to employee compensation declined at

an average annual rate of 0.17 percent. Over the 65-year period ending in

2095, the ratio of wages and salaries to employee compensation is projected

to decline at an average annual rate of 0.12, 0.02, and 0.22 percent for the

intermediate, low-cost, and high-cost assumptions, respectively.

Table VI.G5.—Ratio of OASDI Taxable Payroll to GDP, Calendar Years 2021-2095 

Calendar year Intermediate Low-cost High-cost

2021 . . . . . . . . . . . . . . . . . . . . . . . . . 0.364 0.365 0.371

2022 . . . . . . . . . . . . . . . . . . . . . . . . . .361 .363 .365

2023 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .364 .365

2024 . . . . . . . . . . . . . . . . . . . . . . . . . .364 .367 .364

2025 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .367 .364

2026 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .368 .363

2027 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .369 .362

2028 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .370 .362

2029 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .371 .361

2030 . . . . . . . . . . . . . . . . . . . . . . . . . .363 .371 .360

2035 . . . . . . . . . . . . . . . . . . . . . . . . . .359 .369 .356

2040 . . . . . . . . . . . . . . . . . . . . . . . . . .356 .366 .351

2045 . . . . . . . . . . . . . . . . . . . . . . . . . .352 .364 .347

2050 . . . . . . . . . . . . . . . . . . . . . . . . . .349 .362 .342

2055 . . . . . . . . . . . . . . . . . . . . . . . . . .347 .361 .339

2060 . . . . . . . . . . . . . . . . . . . . . . . . . .345 .361 .335

2065 . . . . . . . . . . . . . . . . . . . . . . . . . .343 .361 .332

2070 . . . . . . . . . . . . . . . . . . . . . . . . . .341 .360 .328

2075 . . . . . . . . . . . . . . . . . . . . . . . . . .339 .361 .324

2080 . . . . . . . . . . . . . . . . . . . . . . . . . .337 .361 .321

2085 . . . . . . . . . . . . . . . . . . . . . . . . . .335 .361 .317

2090 . . . . . . . . . . . . . . . . . . . . . . . . . .334 .361 .314

2095 . . . . . . . . . . . . . . . . . . . . . . . . . .333 .362 .311
223

OASDI and HI: Estimates in Dollars

3. Estimates in Dollars

This section presents long-range projections, in dollars, of the operations of

the combined OASI and DI Trust Funds and in some cases the HI Trust

Fund. Comparing current dollar values over long periods of time is difficult

because of the effect of inflation. In order to compare dollar values in a

meaningful way, table VI.G6 provides several economic series or indices

which can be used to adjust current dollars for changes in prices, wages, or

other aspects of economic growth during the projection period. Any series of

values can be adjusted by dividing the value for each year by the corresponding index value for the year.

One of the most common forms of standardization is price indexing, which

uses some measure of change in the prices of consumer goods. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W,

hereafter referred to as CPI), published by the Bureau of Labor Statistics,

Department of Labor, is one such price index. Consistent with the law, the

Social Security Administration (SSA) uses this index to determine the annual

cost-of-living increases for OASDI monthly benefits. The ultimate annual

rate of increase in the CPI is assumed to be 2.4, 3.0, and 1.8 percent for the

intermediate, low-cost, and high-cost sets of assumptions, respectively.

Table VI.G7 provides CPI-indexed dollar values (those adjusted using the

CPI in table VI.G6), which indicate the relative purchasing power of the values over time.

Wage indexing is another type of standardization. It combines the effects of

price inflation and real wage growth. The wage index presented here is the

national average wage index, as defined in section 209(k)(1) of the Social

Security Act. SSA uses this index to annually adjust the contribution and

benefit base and other earnings-related program amounts. The average wage

is assumed to grow by an average rate of 3.6, 4.8, and 2.3 percent under the

intermediate, low-cost, and high-cost assumptions, respectively, between

2030 and 2095. Wage-indexed values indicate the level of a series of values

relative to the changing standard of living of workers over time.

The taxable payroll series is used as an index to adjust for the effects of

changes in the number of workers and changes in the proportion of earnings

that are taxable, as well as for the effects of price inflation and real wage

growth. The OASDI taxable payroll consists of all earnings subject to

OASDI taxation, with an adjustment for the lower effective tax rate on multiple-employer excess wages. A series of values, divided by the taxable payroll, indicates the percentage of payroll that each value represents, and thus
Appendices

224

the extent to which the series of values increases or decreases as a percent of

payroll over time.

The GDP series is used as an index to adjust for the growth in the aggregate

amount of goods and services produced in the United States. Values adjusted

by GDP (see section 2 of this appendix) indicate their relative share of the

total output of the economy. No direct assumption is made about growth in

taxable payroll or GDP. These series reflect the basic demographic and economic assumptions, as discussed in sections V.A and V.B, respectively.

Discounting at the rate of interest is another way of standardizing current

dollars. The compound new-issue interest factor shown in table VI.G6

increases each year by the assumed effective annual nominal yield for special public-debt obligations issuable to the trust funds in the 12 months of the

prior year. The compound effective trust-fund interest factor shown in

table VI.G6 uses the effective annual yield on all currently-held securities in

the combined OASI and DI Trust Funds. The reciprocal of the compound

effective trust-fund interest factor approximates the cumulative discount factor used to convert nominal dollar values to present values as of the start of

the valuation period in order to create summarized values for this report.
225

OASDI and HI: Estimates in Dollars

Table VI.G6.—Selected Economic Variables, Calendar Years 2020-2095

[GDP and taxable payroll in billions]

Calendar year

Adjusted

CPIa Averagewage index

Taxable

payrollb

Gross

domestic

product

Compound

new-issue

interest

factorc

Compound

effective

trust-fund

interest

factord

Intermediate:

2020. . . . . . . . 97.03 $55,576.94 $7,705 $20,937 0.9902 0.9870

2021. . . . . . . . 100.00 59,064.67 8,155 22,382 1.0000 1.0123

2022. . . . . . . . 102.40 61,600.90 8,572 23,714 1.0154 1.0363

2023. . . . . . . . 104.85 63,849.67 9,005 24,815 1.0340 1.0594

2024. . . . . . . . 107.37 66,000.86 9,415 25,895 1.0550 1.0821

2025. . . . . . . . 109.95 68,383.15 9,826 27,041 1.0804 1.1049

2026. . . . . . . . 112.59 70,873.78 10,239 28,190 1.1132 1.1291

2027. . . . . . . . 115.29 73,475.22 10,660 29,353 1.1551 1.1559

2028. . . . . . . . 118.06 76,170.31 11,100 30,571 1.2060 1.1857

2029. . . . . . . . 120.89 78,951.37 11,554 31,836 1.2619 1.2186

2030. . . . . . . . 123.79 81,801.34 12,021 33,151 1.3210 1.2547

2035. . . . . . . . 139.38 97,827.83 14,555 40,505 1.6663 1.5109

2040. . . . . . . . 156.92 116,851.62 17,515 49,247 2.1020 1.9025

2045. . . . . . . . 176.68 138,872.19 21,098 59,903 2.6517 2.3997

2050. . . . . . . . 198.92 164,898.71 25,500 73,006 3.3450 3.0272

2055. . . . . . . . 223.97 196,130.90 30,932 89,182 4.2196 3.8188

2060. . . . . . . . 252.17 233,491.30 37,570 108,977 5.3230 4.8173

2065. . . . . . . . 283.91 278,165.31 45,583 132,996 6.7148 6.0768

2070. . . . . . . . 319.66 331,313.42 55,224 162,027 8.4705 7.6658

2075. . . . . . . . 359.90 394,448.33 66,921 197,375 10.6853 9.6701

2080. . . . . . . . 405.21 469,352.35 81,281 241,032 13.4792 12.1986

2085. . . . . . . . 456.23 558,173.45 99,039 295,310 17.0037 15.3882

2090. . . . . . . . 513.67 664,200.32 120,985 362,422 21.4497 19.4118

2095. . . . . . . . 578.34 790,959.99 147,837 444,359 27.0582 24.4875

Low-cost:

2020. . . . . . . . 96.79 55,741.04 7,726 20,937 .9902 .9870

2021. . . . . . . . 100.00 59,648.50 8,351 22,906 1.0000 1.0123

2022. . . . . . . . 103.03 63,755.58 8,956 24,706 1.0159 1.0363

2023. . . . . . . . 106.12 66,712.89 9,523 26,140 1.0377 1.0597

2024. . . . . . . . 109.30 69,647.48 10,155 27,688 1.0652 1.0832

2025. . . . . . . . 112.58 72,991.20 10,758 29,286 1.1005 1.1078

2026. . . . . . . . 115.96 76,531.70 11,377 30,925 1.1456 1.1349

2027. . . . . . . . 119.44 80,275.57 12,030 32,616 1.2012 1.1656

2028. . . . . . . . 123.02 84,217.83 12,719 34,406 1.2675 1.2005

2029. . . . . . . . 126.71 88,345.11 13,445 36,289 1.3404 1.2399

2030. . . . . . . . 130.51 92,646.16 14,205 38,262 1.4185 1.2842

2035. . . . . . . . 151.30 117,663.23 18,356 49,759 1.8880 1.5927

2040. . . . . . . . 175.39 149,057.24 23,588 64,426 2.5128 2.0976

2045. . . . . . . . 203.33 187,654.61 30,473 83,756 3.3443 2.7900

2050. . . . . . . . 235.72 236,256.49 39,609 109,341 4.4510 3.7133

2055. . . . . . . . 273.26 298,123.58 51,697 143,081 5.9239 4.9421

2060. . . . . . . . 316.78 376,654.98 67,510 187,087 7.8843 6.5775

2065. . . . . . . . 367.24 476,105.30 88,026 244,148 10.4933 8.7541

2070. . . . . . . . 425.73 601,499.91 114,696 318,198 13.9658 11.6510

2075. . . . . . . . 493.54 759,356.70 149,714 415,164 18.5873 15.5065

2080. . . . . . . . 572.14 957,970.84 196,153 543,683 24.7382 20.6379

2085. . . . . . . . 663.27 1,207,986.36 257,982 714,686 32.9245 27.4674

2090. . . . . . . . 768.91 1,523,912.53 339,674 939,774 43.8199 36.5569

2095. . . . . . . . 891.38 1,924,287.31 446,347 1,231,982 58.3207 48.6543
Appendices

226

Table VI.G7 shows the operations of the combined OASI and DI Trust Funds

in CPI-indexed 2021 dollars—that is, adjusted by the CPI indexing series as

discussed above. The following items are presented in the table: (1) noninterest income, (2) interest income, (3) total income, (4) cost, and (5) asset

reserves at the end of the year. Non-interest income consists of payroll tax

contributions, income from taxation of scheduled OASDI benefits, and any

reimbursements from the General Fund of the Treasury. Cost consists of

scheduled benefits, administrative expenses, financial interchange with the

Railroad Retirement program, and payments for vocational rehabilitation

services for disabled beneficiaries. Table VI.G7 shows trust fund operations

under the intermediate, low-cost, and high-cost sets of assumptions.

High-cost:

2020. . . . . . . . 97.52 $55,467.53 $7,691 $20,937 0.9902 0.9870

2021. . . . . . . . 100.00 58,429.26 8,025 21,635 1.0000 1.0123

2022. . . . . . . . 101.44 59,127.30 7,947 21,774 1.0130 1.0362

2023. . . . . . . . 103.29 61,216.49 8,246 22,598 1.0282 1.0590

2024. . . . . . . . 105.15 62,482.94 8,524 23,431 1.0480 1.0813

2025. . . . . . . . 107.04 63,944.74 8,836 24,278 1.0728 1.1036

2026. . . . . . . . 108.97 65,675.50 9,134 25,155 1.1053 1.1266

2027. . . . . . . . 110.93 67,545.75 9,436 26,041 1.1447 1.1509

2028. . . . . . . . 112.92 69,439.08 9,728 26,905 1.1866 1.1763

2029. . . . . . . . 114.96 71,137.10 9,991 27,688 1.2307 1.2021

2030. . . . . . . . 117.03 72,816.93 10,245 28,478 1.2757 1.2285

2035. . . . . . . . 127.94 81,983.28 11,627 32,698 1.5249 1.4571

2040. . . . . . . . 139.88 92,331.59 13,098 37,313 1.8227 1.7417

2045. . . . . . . . 152.93 103,623.41 14,674 42,342 2.1787 2.0818

2050. . . . . . . . 167.20 116,040.38 16,418 47,945 2.6042 2.4884

2055. . . . . . . . 182.80 130,050.96 18,404 54,348 3.1128 2.9744

2060. . . . . . . . 199.85 145,802.66 20,660 61,654 3.7207 3.5553

2065. . . . . . . . 218.50 163,590.46 23,155 69,839 4.4473 4.2497

2070. . . . . . . . 238.89 183,549.49 25,876 78,889 5.3159 5.0796

2075. . . . . . . . 261.17 205,926.68 28,844 88,890 6.3541 6.0717

2080. . . . . . . . 285.54 230,969.71 32,140 100,171 7.5951 7.2575

2085. . . . . . . . 312.18 258,923.64 35,874 113,114 9.0784 8.6749

2090. . . . . . . . 341.31 290,592.58 40,169 128,029 10.8515 10.3691

2095. . . . . . . . 373.15 326,282.25 45,094 145,093 12.9708 12.3942

a CPI-W indexed to calendar year 2021.

b Total earnings subject to OASDI contribution rates, adjusted to reflect the lower effective contribution

rates (compared to the combined employee-employer rate) that apply to multiple-employer “excess

wages.”

c For each alternative, incorporates the average of the assumed annual yield for special public-debt obligations issuable to the trust funds in the 12 months of the prior year.

d For each alternative, incorporates the annual effective yield for all outstanding special public-debt obligations held by the trust fund, with a half-year’s interest effect in each row. The effective yield for a period

equals total interest earned during the period divided by the total exposure to interest on asset reserves and

all income and cost items during the period. The reciprocals of the factors approximate the discounting/

accumulation factors that are used to calculate summarized rates and balances in this report.

Table VI.G6.—Selected Economic Variables, Calendar Years 2020-2095 (Cont.)

[GDP and taxable payroll in billions]

Calendar year

Adjusted

CPIa Average

wage index

Taxable

payrollb

Gross

domestic

product

Compound

new-issue

interest

factorc

Compound

effective

trust-fund

interest

factord
227

OASDI and HI: Estimates in Dollars

Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2021 Dollars,a Calendar Years 2021-2095

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costb

Asset

reserves at

end of yearb

Intermediate:

2021 . . . . . . . . . . . . . $1,003.7 $70.1 $1,073.8 $1,151.0 $2,831.0

2022 . . . . . . . . . . . . . 1,082.1 62.6 1,144.7 1,197.4 2,712.0

2023 . . . . . . . . . . . . . 1,109.0 56.6 1,165.5 1,239.3 2,574.7

2024 . . . . . . . . . . . . . 1,134.8 52.0 1,186.8 1,283.4 2,417.7

2025 . . . . . . . . . . . . . 1,158.1 48.8 1,206.9 1,327.7 2,240.3

2026 . . . . . . . . . . . . . 1,189.4 48.0 1,237.4 1,373.7 2,051.5

2027 . . . . . . . . . . . . . 1,211.3 47.8 1,259.1 1,420.6 1,842.0

2028 . . . . . . . . . . . . . 1,235.2 45.9 1,281.1 1,468.9 1,611.0

2029 . . . . . . . . . . . . . 1,258.7 42.2 1,300.9 1,516.9 1,357.3

2030c . . . . . . . . . . . . 1,281.0 37.4 1,318.4 1,564.3 1,079.6

Low-cost: 

2021 . . . . . . . . . . . . . 1,020.2 70.2 1,090.4 1,149.9 2,848.9

2022 . . . . . . . . . . . . . 1,130.3 63.6 1,193.9 1,190.4 2,768.7

2023 . . . . . . . . . . . . . 1,156.2 59.1 1,215.4 1,229.0 2,674.4

2024 . . . . . . . . . . . . . 1,197.8 57.3 1,255.1 1,269.5 2,582.1

2025 . . . . . . . . . . . . . 1,233.6 58.2 1,291.8 1,310.0 2,488.7

2026 . . . . . . . . . . . . . 1,276.8 61.5 1,338.3 1,352.0 2,402.5

2027 . . . . . . . . . . . . . 1,311.9 66.2 1,378.1 1,395.0 2,315.6

2028 . . . . . . . . . . . . . 1,349.5 70.3 1,419.8 1,439.9 2,228.1

2029 . . . . . . . . . . . . . 1,387.3 73.5 1,460.9 1,484.9 2,139.1

2030 . . . . . . . . . . . . . 1,424.3 76.4 1,500.8 1,530.1 2,047.5

2035 . . . . . . . . . . . . . 1,591.2 81.7 1,672.9 1,717.0 1,573.5

2040 . . . . . . . . . . . . . 1,764.6 68.6 1,833.1 1,883.4 1,136.1

2045 . . . . . . . . . . . . . 1,964.8 47.3 2,012.2 2,054.1 756.4

2050 . . . . . . . . . . . . . 2,201.9 31.9 2,233.8 2,266.5 484.6

2055 . . . . . . . . . . . . . 2,479.0 19.9 2,498.9 2,532.7 267.4

2060 . . . . . . . . . . . . . 2,794.0 6.4 2,800.4 2,857.8 10.7

2065 . . . . . . . . . . . . . ddddd

2070 . . . . . . . . . . . . . ddddd

2075 . . . . . . . . . . . . . ddddd

2080 . . . . . . . . . . . . . ddddd

2085 . . . . . . . . . . . . . ddddd

2090 . . . . . . . . . . . . . ddddd

2095 . . . . . . . . . . . . . 6,538.1 83.3 6,621.4 6,166.8 1,520.0
Appendices

228

Note: Components may not sum to totals because of rounding.

Figure VI.G1 compares annual cost with annual total income and annual

non-interest income. The figure shows only the OASDI program under intermediate assumptions, and presents values in CPI-indexed 2021 dollars, consistent with table VI.G7. The difference between the income values for each

year is equal to the trust fund interest earnings. The figure illustrates that,

under intermediate assumptions, annual cost exceeds both total income and

non-interest income for 2021 until trust fund reserves are depleted in 2034.

Estimates after reserve depletion are not shown. For 2021 through 2033 (the

year preceding the year of trust fund reserve depletion), annual cost is covered by drawing down combined trust fund reserves.

High-cost:

2021 . . . . . . . . . . . . . $985.8 $69.8 $1,055.6 $1,152.0 $2,811.9

2022 . . . . . . . . . . . . . 1,019.6 61.3 1,081.0 1,205.0 2,647.9

2023 . . . . . . . . . . . . . 1,034.3 53.8 1,088.1 1,248.4 2,440.4

2024 . . . . . . . . . . . . . 1,053.8 47.7 1,101.5 1,296.9 2,201.8

2025 . . . . . . . . . . . . . 1,074.4 42.2 1,116.6 1,345.2 1,934.3

2026 . . . . . . . . . . . . . 1,102.3 37.7 1,140.0 1,396.1 1,644.0

2027 . . . . . . . . . . . . . 1,121.1 32.5 1,153.6 1,447.7 1,320.8

2028 . . . . . . . . . . . . . 1,139.3 25.3 1,164.6 1,500.5 961.7

2029 . . . . . . . . . . . . . 1,153.2 16.9 1,170.1 1,552.4 562.3

2030c . . . . . . . . . . . . 1,164.5 8.1 1,172.6 1,603.5 121.5

a CPI-indexed 2021 dollars equal current dollars adjusted by the CPI indexing series in table VI.G6.

b Benefit payments which were scheduled to be paid on January 3 for some past and future years were actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when

the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the

values for historical years and the projections in this report, all trust fund operations and asset reserves

reflect the 12 months of benefits scheduled for payment each year.

c The combined OASI and DI Trust Funds become depleted in 2034 under the intermediate assumptions and

in 2031 under the high-cost assumptions, so estimates for later years are not shown.

d The combined OASI and DI Trust Funds become depleted in 2061 under the low-cost assumptions, but

combined asset reserves become positive again by the beginning of 2093 and remain positive through the

remainder of the projection period. Estimates are not shown for years in which asset reserves are negative.

Table VI.G7.—Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2021 Dollars,a Calendar Years 2021-2095 (Cont.)

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costb

Asset

reserves at

end of yearb
229

OASDI and HI: Estimates in Dollars

Table VI.G8 presents the operations of the combined OASI and DI Trust

Funds in current, or nominal, dollars—that is, in dollars unadjusted for inflation. The following items are presented in the table: (1) non-interest income,

(2) interest income, (3) total income, (4) cost, and (5) asset reserves at the

end of the year. These estimates are presented using the intermediate, lowcost, and high-cost sets of demographic and economic assumptions to facilitate independent analysis.

 Figure VI.G1.—Estimated OASDI Income and Cost in CPI-indexed 2021 Dollars,

Based on Intermediate Assumptions

[In billions]

2025 2030

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800

Calendar year

Cost

Total income

Non-interest income
Appendices

230

Note: Components may not sum to totals because of rounding.

Table VI.G8.—Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2021-2095

[In billions]

Calendar year

Non-interest

income

Interest

income

Total

income Costa

a Benefit payments which were scheduled to be paid on January 3 for some past and future years were actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when

the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the

values for historical years and the projections in this report, all trust fund operations and asset reserves

reflect the 12 months of benefits scheduled for payment each year.

Asset

reserves at

end of yeara

Intermediate:

2021 . . . . . . . . . . . . . $1,003.7 $70.1 $1,073.8 $1,151.0 $2,831.0

2022 . . . . . . . . . . . . . 1,108.0 64.1 1,172.1 1,226.1 2,777.1

2023 . . . . . . . . . . . . . 1,162.8 59.3 1,222.1 1,299.5 2,699.7

2024 . . . . . . . . . . . . . 1,218.5 55.8 1,274.2 1,378.0 2,595.9

2025 . . . . . . . . . . . . . 1,273.4 53.6 1,327.0 1,459.7 2,463.2

2026 . . . . . . . . . . . . . 1,339.1 54.0 1,393.1 1,546.6 2,309.8

2027 . . . . . . . . . . . . . 1,396.5 55.1 1,451.6 1,637.8 2,123.6

2028 . . . . . . . . . . . . . 1,458.2 54.2 1,512.5 1,734.2 1,901.9

2029 . . . . . . . . . . . . . 1,521.6 51.1 1,572.7 1,833.8 1,640.8

2030b . . . . . . . . . . . .

b The combined OASI and DI Trust Funds become depleted in 2034 under the intermediate assumptions and

in 2031 under the high-cost assumptions, so estimates for later years are not shown.

1,585.8 46.3 1,632.1 1,936.5 1,336.4

Low-cost:

2021 . . . . . . . . . . . . . 1,020.2 70.2 1,090.4 1,149.9 2,848.9

2022 . . . . . . . . . . . . . 1,164.5 65.6 1,230.1 1,226.4 2,852.5

2023 . . . . . . . . . . . . . 1,227.0 62.8 1,289.7 1,304.2 2,838.0

2024 . . . . . . . . . . . . . 1,309.2 62.6 1,371.9 1,387.6 2,822.3

2025 . . . . . . . . . . . . . 1,388.7 65.5 1,454.3 1,474.8 2,801.7

2026 . . . . . . . . . . . . . 1,480.5 71.3 1,551.9 1,567.7 2,785.8

2027 . . . . . . . . . . . . . 1,566.9 79.0 1,645.9 1,666.2 2,765.6

2028 . . . . . . . . . . . . . 1,660.2 86.4 1,746.6 1,771.3 2,740.9

2029 . . . . . . . . . . . . . 1,757.9 93.2 1,851.1 1,881.5 2,710.4

2030 . . . . . . . . . . . . . 1,858.9 99.8 1,958.7 1,996.9 2,672.2

2035 . . . . . . . . . . . . . 2,407.5 123.6 2,531.1 2,597.7 2,380.6

2040 . . . . . . . . . . . . . 3,095.0 120.3 3,215.2 3,303.3 1,992.7

2045 . . . . . . . . . . . . . 3,995.1 96.2 4,091.3 4,176.5 1,538.0

2050 . . . . . . . . . . . . . 5,190.3 75.1 5,265.4 5,342.4 1,142.3

2055 . . . . . . . . . . . . . 6,774.1 54.3 6,828.4 6,920.8 730.6

2060 . . . . . . . . . . . . . 8,851.0 20.2 8,871.2 9,053.1 34.0

2065 . . . . . . . . . . . . . c

c The combined OASI and DI Trust Funds become depleted in 2061 under the low-cost assumptions, but

combined asset reserves become positive again by the beginning of 2093 and remain positive through the

remainder of the projection period. Estimates are not shown for years in which asset reserves are negative.

cccc

2070 . . . . . . . . . . . . . ccccc

2075 . . . . . . . . . . . . . ccccc

2080 . . . . . . . . . . . . . ccccc

2085 . . . . . . . . . . . . . ccccc

2090 . . . . . . . . . . . . . ccccc

2095 . . . . . . . . . . . . . 58,279.2 742.7 59,021.9 54,969.4 13,549.1

High-cost:

2021 . . . . . . . . . . . . . 985.8 69.8 1,055.6 1,152.0 2,811.9

2022 . . . . . . . . . . . . . 1,034.3 62.2 1,096.5 1,222.3 2,686.1

2023 . . . . . . . . . . . . . 1,068.3 55.5 1,123.9 1,289.4 2,520.6

2024 . . . . . . . . . . . . . 1,108.0 50.1 1,158.1 1,363.6 2,315.1

2025 . . . . . . . . . . . . . 1,150.0 45.2 1,195.2 1,439.8 2,070.4

2026 . . . . . . . . . . . . . 1,201.1 41.0 1,242.2 1,521.2 1,791.4

2027 . . . . . . . . . . . . . 1,243.6 36.1 1,279.6 1,605.8 1,465.2

2028 . . . . . . . . . . . . . 1,286.6 28.6 1,315.2 1,694.4 1,085.9

2029 . . . . . . . . . . . . . 1,325.7 19.4 1,345.1 1,784.6 646.4

2030b . . . . . . . . . . . . 1,362.8 9.5 1,372.3 1,876.5 142.2
231

OASDI and HI: Estimates in Dollars

Table VI.G9 presents values in CPI-indexed 2021 dollars—that is, adjusted

by the CPI indexing series discussed at the beginning of this section. This

table contains the annual non-interest income and cost of the combined

OASI and DI Trust Funds, of the HI Trust Fund, and of the combined OASI,

DI, and HI Trust Funds, based on the intermediate, low-cost, and high-cost

sets of assumptions. For OASDI, non-interest income consists of payroll tax

contributions, proceeds from taxation of scheduled OASDI benefits, and any

reimbursements from the General Fund of the Treasury. Cost consists of

scheduled benefits, administrative expenses, financial interchange with the

Railroad Retirement program, and payments for vocational rehabilitation

services for disabled beneficiaries. For HI, non-interest income consists of

payroll tax contributions (including contributions from railroad employment), up to an additional 0.9 percent tax on earned income for relatively

high earners, proceeds from the taxation of scheduled OASDI benefits, premium revenues, monies from fraud and abuse control activities, and any

reimbursements from the General Fund of the Treasury. Total cost consists of

scheduled benefits and administrative expenses. The Trustees show income

and cost estimates generally on a cash basis for the OASDI program1 and on

an incurred basis for the HI program. Table VI.G9 also shows the annual balance, which equals the difference between non-interest income and cost.

 1 OASDI benefits paid for entitlement for a particular month are generally paid in the succeeding month.

There are two primary exceptions to this general rule. First, payments can occur with a greater delay when a

benefit award is made after the month of initial benefit entitlement. At the time of benefit award, benefits

owed for months of prior entitlement are then also paid to the beneficiary. For the projections in this report,

such retroactive payments are included in the period where they are paid (at time of award). Second, when

benefit payments scheduled for January 3 are paid on the prior December 31, because January 3 falls on a

Sunday, such payments are shown in this report for the period they were scheduled to be paid.
Appendices

232

Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2021 Dollars,a Calendar Years 2021-2095

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costb Balanceb

Noninterest

income Cost Balance

Noninterest

income Costb Balanceb

Intermediate:

2021 . . . . . $1,004 $1,151 -$147 $349 $375 -$27 $1,352 $1,526 -$174

2022 . . . . . 1,082 1,197 -115 361 390 -29 1,443 1,587 -144

2023 . . . . . 1,109 1,239 -130 370 400 -29 1,479 1,639 -159

2024 . . . . . 1,135 1,283 -149 379 412 -33 1,514 1,695 -181

2025 . . . . . 1,158 1,328 -170 388 428 -40 1,546 1,755 -209

2026 . . . . . 1,189 1,374 -184 403 444 -41 1,593 1,818 -225

2027 . . . . . 1,211 1,421 -209 413 461 -48 1,624 1,882 -258

2028 . . . . . 1,235 1,469 -234 422 479 -57 1,657 1,948 -290

2029 . . . . . 1,259 1,517 -258 432 496 -65 1,690 2,013 -323

2030 . . . . . 1,281 1,564 -283 441 510 -69 1,722 2,075 -352

2035 . . . . . 1,383 1,748 -365 487 602 -116 1,870 2,350 -480

2040 . . . . . 1,481 1,895 -414 531 672 -142 2,012 2,567 -556

2045 . . . . . 1,586 2,036 -450 577 736 -159 2,162 2,771 -609

2050 . . . . . 1,704 2,197 -493 629 791 -162 2,333 2,987 -655

2055 . . . . . 1,838 2,388 -551 689 847 -158 2,527 3,235 -709

2060 . . . . . 1,986 2,614 -629 757 913 -156 2,743 3,527 -785

2065 . . . . . 2,143 2,858 -715 830 990 -160 2,973 3,848 -875

2070 . . . . . 2,310 3,121 -812 908 1,076 -168 3,218 4,197 -980

2075 . . . . . 2,490 3,406 -916 992 1,167 -174 3,482 4,572 -1,090

2080 . . . . . 2,687 3,681 -994 1,083 1,258 -175 3,770 4,940 -1,169

2085 . . . . . 2,906 3,938 -1,032 1,182 1,352 -170 4,088 5,290 -1,202

2090 . . . . . 3,148 4,196 -1,048 1,290 1,446 -156 4,438 5,642 -1,204

2095 . . . . . 3,415 4,525 -1,110 1,410 1,543 -133 4,824 6,068 -1,243

Low-cost:

2021 . . . . . 1,020 1,150 -130 357 370 -13 1,377 1,520 -143

2022 . . . . . 1,130 1,190 -60 375 380 -6 1,505 1,571 -66

2023 . . . . . 1,156 1,229 -73 385 379 6 1,541 1,608 -67

2024 . . . . . 1,198 1,269 -72 397 386 11 1,595 1,656 -61

2025 . . . . . 1,234 1,310 -76 409 396 12 1,643 1,707 -64

2026 . . . . . 1,277 1,352 -75 427 407 21 1,704 1,759 -55

2027 . . . . . 1,312 1,395 -83 440 417 23 1,752 1,812 -60

2028 . . . . . 1,350 1,440 -90 452 428 25 1,802 1,868 -66

2029 . . . . . 1,387 1,485 -98 466 438 28 1,853 1,923 -70

2030 . . . . . 1,424 1,530 -106 479 445 34 1,903 1,975 -71

2035 . . . . . 1,591 1,717 -126 548 493 55 2,139 2,210 -71

2040 . . . . . 1,765 1,883 -119 621 517 103 2,385 2,400 -15

2045 . . . . . 1,965 2,054 -89 704 534 170 2,668 2,588 80

2050 . . . . . 2,202 2,266 -65 803 546 257 3,005 2,813 192

2055 . . . . . 2,479 2,533 -54 921 570 351 3,400 3,102 297

2060 . . . . . 2,794 2,858 -64 1,056 610 446 3,850 3,467 383

2065 . . . . . 3,144 3,217 -73 1,207 669 537 4,350 3,886 464

2070 . . . . . 3,534 3,614 -80 1,375 753 622 4,909 4,367 542

2075 . . . . . 3,979 4,055 -75 1,566 854 712 5,545 4,908 637

2080 . . . . . 4,493 4,503 -10 1,784 964 819 6,277 5,467 810

2085 . . . . . 5,088 4,952 137 2,034 1,086 948 7,122 6,038 1,084

2090 . . . . . 5,769 5,460 309 2,320 1,216 1,104 8,089 6,676 1,413

2095 . . . . . 6,538 6,167 371 2,649 1,354 1,294 9,187 7,521 1,666
233

OASDI and HI: Estimates in Dollars

Note: Components may not sum to totals because of rounding.

Table VI.G10 shows values in current, or nominal, dollars—that is, in dollars

unadjusted for inflation. This table presents the annual non-interest income,

cost, and balance of the combined OASI and DI Trust Funds, of the HI Trust

Fund, and of the combined OASI, DI, and HI Trust Funds, based on the

intermediate, low-cost, and high-cost sets of assumptions.

High-cost:

2021 . . . . . $986 $1,152 -$166 $343 $382 -$39 $1,329 $1,534 -$205

2022 . . . . . 1,020 1,205 -185 337 392 -55 1,357 1,597 -240

2023 . . . . . 1,034 1,248 -214 346 404 -59 1,380 1,653 -273

2024 . . . . . 1,054 1,297 -243 354 425 -71 1,408 1,722 -314

2025 . . . . . 1,074 1,345 -271 363 450 -87 1,438 1,795 -358

2026 . . . . . 1,102 1,396 -294 379 477 -98 1,481 1,873 -392

2027 . . . . . 1,121 1,448 -327 389 505 -117 1,510 1,953 -443

2028 . . . . . 1,139 1,500 -361 398 534 -137 1,537 2,035 -498

2029 . . . . . 1,153 1,552 -399 405 561 -156 1,558 2,114 -556

2030 . . . . . 1,165 1,604 -439 412 584 -173 1,576 2,188 -612

2035 . . . . . 1,216 1,788 -571 439 733 -294 1,656 2,521 -865

2040 . . . . . 1,259 1,925 -666 463 868 -405 1,722 2,793 -1,072

2045 . . . . . 1,295 2,051 -756 484 1,003 -520 1,778 3,054 -1,276

2050 . . . . . 1,330 2,177 -847 504 1,126 -622 1,834 3,303 -1,470

2055 . . . . . 1,368 2,312 -943 526 1,233 -707 1,894 3,544 -1,650

2060 . . . . . 1,411 2,458 -1,047 550 1,329 -779 1,961 3,788 -1,826

2065 . . . . . 1,452 2,608 -1,155 575 1,413 -838 2,027 4,020 -1,993

2070 . . . . . 1,491 2,763 -1,273 599 1,472 -874 2,089 4,235 -2,146

2075 . . . . . 1,527 2,924 -1,397 622 1,512 -890 2,149 4,436 -2,287

2080 . . . . . 1,562 3,067 -1,505 645 1,541 -897 2,207 4,609 -2,401

2085 . . . . . 1,599 3,178 -1,579 667 1,563 -896 2,266 4,741 -2,475

2090 . . . . . 1,637 3,253 -1,616 689 1,578 -889 2,326 4,832 -2,505

2095 . . . . . 1,681 3,328 -1,647 713 1,593 -881 2,393 4,921 -2,528

a CPI-indexed 2021 dollars equal current dollars adjusted by the CPI indexing series in table VI.G6.

b OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years

were actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset

reserves reflect the 12 months of benefits scheduled for payment each year.

Table VI.G9.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2021 Dollars,a Calendar Years 2021-2095 (Cont.)

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costb Balanceb

Noninterest

income Cost Balance

Noninterest

income Costb Balanceb
Appendices

234

Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2021-2095

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costa Balancea

Noninterest

income Cost Balance

Noninterest

income Costa Balancea

Intermediate:

2021 . . . . . $1,004 $1,151 -$147 $349 $375 -$27 $1,352 $1,526 -$174

2022 . . . . . 1,108 1,226 -118 370 399 -29 1,478 1,625 -148

2023 . . . . . 1,163 1,299 -137 388 419 -31 1,551 1,718 -167

2024 . . . . . 1,218 1,378 -160 407 442 -35 1,625 1,820 -195

2025 . . . . . 1,273 1,460 -186 427 470 -43 1,700 1,930 -230

2026 . . . . . 1,339 1,547 -207 454 500 -46 1,793 2,047 -253

2027 . . . . . 1,397 1,638 -241 476 532 -56 1,872 2,169 -297

2028 . . . . . 1,458 1,734 -276 498 565 -67 1,957 2,299 -343

2029 . . . . . 1,522 1,834 -312 522 600 -78 2,043 2,434 -390

2030 . . . . . 1,586 1,936 -351 546 632 -85 2,132 2,568 -436

2035 . . . . . 1,928 2,436 -508 679 840 -161 2,606 3,276 -669

2040 . . . . . 2,324 2,974 -649 833 1,055 -223 3,157 4,029 -872

2045 . . . . . 2,802 3,597 -795 1,019 1,300 -281 3,820 4,896 -1,076

2050 . . . . . 3,389 4,370 -981 1,251 1,573 -321 4,640 5,943 -1,302

2055 . . . . . 4,116 5,349 -1,233 1,543 1,898 -354 5,659 7,246 -1,587

2060 . . . . . 5,007 6,592 -1,585 1,909 2,303 -394 6,916 8,895 -1,979

2065 . . . . . 6,085 8,115 -2,030 2,357 2,811 -454 8,442 10,926 -2,484

2070 . . . . . 7,383 9,978 -2,595 2,903 3,440 -537 10,286 13,417 -3,131

2075 . . . . . 8,960 12,257 -3,297 3,572 4,199 -627 12,532 16,455 -3,924

2080 . . . . . 10,888 14,917 -4,030 4,390 5,099 -709 15,278 20,016 -4,739

2085 . . . . . 13,256 17,965 -4,709 5,393 6,168 -775 18,649 24,133 -5,484

2090 . . . . . 16,169 21,552 -5,383 6,626 7,429 -803 22,795 28,981 -6,187

2095 . . . . . 19,748 26,169 -6,420 8,152 8,924 -771 27,901 35,092 -7,192

Low-cost:

2021 . . . . . 1,020 1,150 -130 357 370 -13 1,377 1,520 -143

2022 . . . . . 1,164 1,226 -62 386 392 -6 1,550 1,618 -68

2023 . . . . . 1,227 1,304 -77 409 403 6 1,636 1,707 -71

2024 . . . . . 1,309 1,388 -78 434 422 12 1,743 1,810 -67

2025 . . . . . 1,389 1,475 -86 460 446 14 1,849 1,921 -72

2026 . . . . . 1,481 1,568 -87 495 471 24 1,976 2,039 -63

2027 . . . . . 1,567 1,666 -99 525 498 27 2,092 2,164 -72

2028 . . . . . 1,660 1,771 -111 557 526 30 2,217 2,297 -81

2029 . . . . . 1,758 1,882 -124 590 555 35 2,348 2,436 -88

2030 . . . . . 1,859 1,997 -138 625 580 45 2,484 2,577 -93

2035 . . . . . 2,407 2,598 -190 829 746 83 3,237 3,344 -107

2040 . . . . . 3,095 3,303 -208 1,088 907 181 4,183 4,210 -27

2045 . . . . . 3,995 4,177 -181 1,431 1,086 345 5,426 5,262 163

2050 . . . . . 5,190 5,342 -152 1,893 1,288 605 7,083 6,630 453

2055 . . . . . 6,774 6,921 -147 2,516 1,556 959 9,290 8,477 813

2060 . . . . . 8,851 9,053 -202 3,345 1,931 1,414 12,196 10,984 1,212

2065 . . . . . 11,545 11,815 -270 4,431 2,457 1,973 15,976 14,272 1,704

2070 . . . . . 15,047 15,388 -341 5,853 3,205 2,648 20,899 18,592 2,307

2075 . . . . . 19,640 20,012 -372 7,728 4,213 3,515 27,368 24,225 3,143

2080 . . . . . 25,708 25,764 -56 10,206 5,517 4,688 35,914 31,281 4,633

2085 . . . . . 33,750 32,845 906 13,489 7,203 6,286 47,240 40,047 7,192

2090 . . . . . 44,358 41,986 2,373 17,837 9,349 8,488 62,195 51,334 10,861

2095 . . . . . 58,279 54,969 3,310 23,610 12,073 11,537 81,890 67,043 14,847
235

OASDI and HI: Estimates in Dollars

Note: Components may not sum to totals because of rounding.

High-cost:

2021 . . . . . $986 $1,152 -$166 $343 $382 -$39 $1,329 $1,534 -$205

2022 . . . . . 1,034 1,222 -188 342 398 -56 1,377 1,620 -244

2023 . . . . . 1,068 1,289 -221 357 418 -61 1,425 1,707 -282

2024 . . . . . 1,108 1,364 -256 373 447 -74 1,481 1,811 -330

2025 . . . . . 1,150 1,440 -290 389 482 -93 1,539 1,922 -383

2026 . . . . . 1,201 1,521 -320 413 520 -107 1,614 2,041 -427

2027 . . . . . 1,244 1,606 -362 431 561 -129 1,675 2,166 -492

2028 . . . . . 1,287 1,694 -408 449 603 -154 1,736 2,297 -562

2029 . . . . . 1,326 1,785 -459 465 645 -180 1,791 2,430 -639

2030 . . . . . 1,363 1,877 -514 482 684 -202 1,844 2,560 -716

2035 . . . . . 1,556 2,287 -731 562 938 -376 2,118 3,225 -1,106

2040 . . . . . 1,761 2,693 -932 647 1,215 -567 2,408 3,907 -1,499

2045 . . . . . 1,980 3,137 -1,157 740 1,534 -795 2,719 4,671 -1,952

2050 . . . . . 2,223 3,640 -1,417 843 1,883 -1,040 3,066 5,523 -2,457

2055 . . . . . 2,501 4,225 -1,724 962 2,253 -1,292 3,463 6,479 -3,016

2060 . . . . . 2,820 4,913 -2,093 1,100 2,657 -1,557 3,920 7,570 -3,650

2065 . . . . . 3,173 5,697 -2,525 1,256 3,087 -1,831 4,429 8,785 -4,356

2070 . . . . . 3,561 6,601 -3,040 1,430 3,517 -2,087 4,991 10,118 -5,127

2075 . . . . . 3,988 7,637 -3,649 1,625 3,949 -2,325 5,613 11,587 -5,974

2080 . . . . . 4,461 8,758 -4,297 1,841 4,401 -2,560 6,302 13,159 -6,857

2085 . . . . . 4,991 9,921 -4,931 2,082 4,878 -2,796 7,073 14,799 -7,726

2090 . . . . . 5,589 11,104 -5,516 2,352 5,387 -3,035 7,940 16,491 -8,551

2095 . . . . . 6,272 12,418 -6,146 2,659 5,946 -3,287 8,931 18,364 -9,433

a OASDI benefit payments which were scheduled to be paid on January 3 for some past and future years

were actually paid on December 31 as required by the statutory provision for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday, or legal public holiday. For comparability with the values for historical years and the projections in this report, all trust fund operations and asset

reserves reflect the 12 months of benefits scheduled for payment each year.

Table VI.G10.—OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2021-2095 (Cont.)

[In billions]

Calendar

year

OASDI HI Combined

Noninterest

income Costa Balancea

Noninterest

income Cost Balance

Noninterest

income Costa Balancea
Appendices

236

H. ANALYSIS OF BENEFIT PAYMENTS FROM THE OASI 

TRUST FUND WITH RESPECT TO DISABLED BENEFICIARIES

(Required by section 201(c) of the Social Security Act)

Effective January 1957, the OASI Trust Fund pays monthly benefits to disabled children aged 18 and over of retired and deceased workers if the disability began before age 18. The age by which disability must have begun

was later changed to age 22. Effective February 1968, the OASI Trust Fund

pays reduced monthly benefits to disabled widows and widowers at ages 50

and over. Effective January 1991, the requirements for the disability of the

widow or widower were made less restrictive.

At the end of 2020, the OASI Trust Fund was providing monthly benefit payments to about 1,147,000 people because of their disabilities or the disabilities of children. This total includes approximately 23,000 mothers and

fathers (wives or husbands under normal retirement age of retired-worker

beneficiaries and widows or widowers of deceased insured workers) who

met all other qualifying requirements and were receiving unreduced benefits

solely because they had disabled-child beneficiaries (or disabled children

aged 16 or 17) in their care. In calendar year 2020, the OASI Trust Fund paid

a total of $12,351 million to the people described above. Table VI.H1 shows

OASI scheduled benefits for disability for selected calendar years during

1960 through 2020 and estimates for 2021 through 2030 based on the intermediate set of assumptions.
237

OASI Benefits for the Disabled

Note: Components may not sum to totals because of rounding.

Table VI.H1.—Scheduled Benefit Payments From the OASI Trust Fund

With Respect to Disabled Beneficiaries

[Beneficiaries in thousands; scheduled benefits in millions]

Calendar year

Disabled beneficiaries, end of year Amount of scheduled benefitsa b

a Beginning in 1966, includes payments for vocational rehabilitation services.

b Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly

scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as

required by the statutory provision for early benefit payments when the normal delivery date is on a weekend

or holiday. Such shifts in payments across calendar years have occurred in the past, including in 2016, and

will occur periodically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent

perspective on trust fund operations over time, all trust fund operations in each year reflect the 12 months of

benefits that are regularly scheduled for payment in that year.

Total Children c

c Also includes certain mothers and fathers (see text).

Widowswidowers d

d In 1984 and later years, includes only disabled widows and widowers aged 50-59, because disabled widows and widowers age 60 and older are eligible for the same benefit as a nondisabled aged widow or widower. Therefore, they are not receiving benefits solely because of a disability.

Total Childrenc Widowswidowers e

e In 1983 and prior years, includes the offsetting effect of lower benefits payable to disabled widows and

widowers who continued to receive benefits after attaining age 60 (62, for disabled widowers prior to 1973),

compared to the higher nondisabled widow’s and widower’s benefits that would otherwise be payable. In

1984 and later years, includes only scheduled benefits to disabled widows and widowers aged 50-59 (see

footnote d).

Historical data:

1960 . . . . . . . . . 117 117 — $59 $59 —

1965 . . . . . . . . . 214 214 — 134 134 —

1970 . . . . . . . . . 316 281 36 301 260 $41

1975 . . . . . . . . . 435 376 58 664 560 104

1980 . . . . . . . . . 519 460 59 1,223 1,097 126

1985 . . . . . . . . . 594 547 47 2,072 1,885 187

1990 . . . . . . . . . 662 613 49 2,882 2,649 233

1995 . . . . . . . . . 772 681 91 4,202 3,672 531

2000 . . . . . . . . . 811 707 104 5,203 4,523 680

2005 . . . . . . . . . 836 728 108 6,449 5,556 834

2010 . . . . . . . . . 996 879 117 8,671 7,662 1,008

2011 . . . . . . . . . 1,020 899 121 8,937 7,885 1,050

2012 . . . . . . . . . 1,045 920 125 9,513 8,410 1,102

2013 . . . . . . . . . 1,065 939 126 9,815 8,703 1,109

2014 . . . . . . . . . 1,079 954 125 10,242 9,133 1,108

2015 . . . . . . . . . 1,096 972 124 10,640 9,528 1,109

2016 . . . . . . . . . 1,109 988 121 10,909 9,818 1,087

2017 . . . . . . . . . 1,124 1,006 117 11,222 10,156 1,061

2018 . . . . . . . . . 1,139 1,027 112 11,767 10,729 1,031

2019 . . . . . . . . . 1,144 1,041 103 12,148 11,152 983

2020 . . . . . . . . . 1,147 1,051 95 12,351 11,403 934

Estimates under the intermediate assumptions:

2021 . . . . . . . . . 1,160 1,067 94 12,769 11,828 926

2022 . . . . . . . . . 1,174 1,081 92 13,429 12,464 946

2023 . . . . . . . . . 1,184 1,096 88 13,986 13,041 931

2024 . . . . . . . . . 1,197 1,111 87 14,606 13,649 943

2025 . . . . . . . . . 1,208 1,126 82 15,249 14,306 928

2026 . . . . . . . . . 1,222 1,141 81 15,954 15,000 939

2027 . . . . . . . . . 1,235 1,156 79 16,702 15,733 954

2028 . . . . . . . . . 1,249 1,170 79 17,475 16,478 982

2029 . . . . . . . . . 1,263 1,184 79 18,294 17,262 1,016

2030 . . . . . . . . . 1,276 1,198 78 19,124 18,072 1,036
Appendices

238

Under the intermediate assumptions, estimated total scheduled benefits paid

from the OASI Trust Fund with respect to disabled beneficiaries will

increase from $12,769 million in calendar year 2021 to $19,124 million in

calendar year 2030.

In calendar year 2020, benefit payments (including payments for vocational

rehabilitation services) with respect to disabled persons from the OASI Trust

Fund and from the DI Trust Fund (including payments from the DI fund to

all children and spouses of disabled-worker beneficiaries) totaled

$155,933 million. Of this amount, $12,351 million, or 7.9 percent, represented payments from the OASI Trust Fund. Table VI.H2 contains these and

similar figures for selected calendar years during 1960 through 2020 and

estimates for calendar years 2021 through 2030.
239

OASI Benefits for the Disabled

Note: Components may not sum to totals because of rounding.

Table VI.H2.—Scheduled Benefit Paymentsa Under the OASDI Program

With Respect to Disabled Beneficiaries

[Amounts in millions]

a Amounts for 2020 and 2021 are adjusted to include in 2021 operations those benefit payments regularly

scheduled in the law to be paid on January 3, 2021, which were actually paid on December 31, 2020 as

required by the statutory provision for early benefit payments when the normal delivery date is on a weekend

or holiday. Such shifts in payments across calendar years have occurred in the past, including in 2016, and

will occur periodically in the future whenever January 3rd falls on a Sunday. In order to provide a consistent

perspective on trust fund operations over time, all trust fund operations in each year reflect the 12 months of

benefits that are regularly scheduled for payment in that year.

Calendar year Totalb

b Beginning in 1966, includes payments for vocational rehabilitation services.

DI Trust Fund c

c Scheduled benefits for disabled workers and their children and spouses.

OASI Trust Fund

Amount d

d Scheduled benefits for disabled children aged 18 and over, for certain mothers and fathers (see text), and

for disabled widows and widowers (see footnote e, table VI.H1).

Percentage of total

Historical data:

1960 . . . . . . . . . $627 $568 $59 9.4

1965 . . . . . . . . . 1,707 1,573 134 7.9

1970 . . . . . . . . . 3,386 3,085 301 8.9

1975 . . . . . . . . . 9,169 8,505 664 7.2

1980 . . . . . . . . . 16,738 15,515 1,223 7.3

1985 . . . . . . . . . 20,908 18,836 2,072 9.9

1990 . . . . . . . . . 27,717 24,835 2,882 10.4

1995 . . . . . . . . . 45,140 40,937 4,202 9.3

2000 . . . . . . . . . 60,204 55,001 5,203 8.6

2005 . . . . . . . . . 91,835 85,386 6,449 7.0

2010 . . . . . . . . . 132,916 124,245 8,671 6.5

2011 . . . . . . . . . 137,916 128,979 8,937 6.5

2012 . . . . . . . . . 146,438 136,925 9,513 6.5

2013 . . . . . . . . . 149,970 140,155 9,815 6.5

2014 . . . . . . . . . 151,947 141,705 10,242 6.7

2015 . . . . . . . . . 154,028 143,388 10,640 6.9

2016 . . . . . . . . . 153,709 142,800 10,909 7.1

2017 . . . . . . . . . 154,048 142,826 11,222 7.3

2018 . . . . . . . . . 155,526 143,760 11,767 7.6

2019 . . . . . . . . . 157,289 145,141 12,148 7.7

2020 . . . . . . . . . 155,933 143,582 12,351 7.9

Estimates under the intermediate assumptions:

2021 . . . . . . . . . 155,569 142,800 12,769 8.2

2022 . . . . . . . . . 164,038 150,610 13,429 8.2

2023 . . . . . . . . . 171,018 157,032 13,986 8.2

2024 . . . . . . . . . 177,632 163,026 14,606 8.2

2025 . . . . . . . . . 184,026 168,777 15,249 8.3

2026 . . . . . . . . . 192,130 176,176 15,954 8.3

2027 . . . . . . . . . 200,555 183,853 16,702 8.3

2028 . . . . . . . . . 207,530 190,055 17,475 8.4

2029 . . . . . . . . . 214,938 196,644 18,294 8.5

2030 . . . . . . . . . 222,749 203,625 19,124 8.6
Appendices

240

I. GLOSSARY

Actuarial balance. The difference between the summarized income rate and

the summarized cost rate as a percentage of taxable payroll over a given valuation period.

Actuarial deficit. A negative actuarial balance.

Administrative expenses. Expenses incurred by the Social Security Administration and the Department of the Treasury in administering the OASDI

program and the provisions of the Internal Revenue Code relating to the collection of contributions. Such administrative expenses are paid from the

OASI and DI Trust Funds.

Advance tax transfers. Amounts representing the estimated total OASDI

tax contributions for a given month. From May 1983 through

November 1990, such amounts were credited to the OASI and DI Trust

Funds at the beginning of each month. The trust funds reimbursed the General Fund of the Treasury for the associated loss of interest. Advance tax

transfers are no longer made unless needed in order to pay benefits.

Alternatives I, II, or III. See “Assumptions.”

Annual balance. The difference between the income rate and the cost rate

for a given year.

Asset reserves. See “Trust fund reserves”.

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

trust funds. Demographic assumptions include fertility, mortality, net immigration, marriage, and divorce. Economic assumptions include unemployment rates, average earnings, inflation, interest rates, and productivity.

Program-specific assumptions include retirement patterns, and disability

incidence and termination rates. This report presents three sets of demographic, economic, and program-specific assumptions:

 • Alternative II is the intermediate set of assumptions, and represents the

Trustees’ best estimates of likely future demographic, economic, and

program-specific conditions.

 • Alternative I is a low-cost set of assumptions—it assumes relatively

rapid economic growth, high inflation, and favorable (from the standpoint of program financing) demographic and program-specific conditions.

 • Alternative III is a high-cost set of assumptions—it assumes relatively

slow economic growth, low inflation, and unfavorable (from the standpoint of program financing) demographic and program-specific conditions.

See tables V.A2, V.B1, and V.B2.

Automatic cost-of-living benefit increase. The annual increase in benefits,

effective for December, reflecting the increase, if any, in the cost of living. A
241

Glossary

benefit increase is applicable only after a beneficiary becomes eligible for

benefits. In general, the benefit increase equals the percentage increase in the

Consumer Price Index for Urban Wage Earners and Clerical Workers

(CPI-W) measured from the third quarter of the previous year to the third

quarter of the current year. If there is no increase in the CPI-W, there is no

cost-of-living benefit increase. See table V.C1.

Auxiliary benefits. Monthly benefits payable to a spouse or child of a

retired or disabled worker, or to a survivor of a deceased worker.

Average indexed monthly earnings—AIME. The measure of lifetime

earnings used in determining the primary insurance amount (PIA) for most

workers who attain age 62, become disabled, or die after 1978. A worker’s

actual past earnings are adjusted by changes in the average wage index, in

order to bring them up to their approximately equivalent value at the time of

retirement or other eligibility for benefits.

Average wage index—AWI. A series that generally increases with the average amount of total wages for each year after 1950, including wages in noncovered employment and wages in covered employment in excess of the

OASDI contribution and benefit base. (See Title 20, Chapter III,

section 404.211(c) of the Code of Federal Regulations for a more precise

definition.) These average wage amounts are used to index the taxable earnings of most workers first becoming eligible for benefits in 1979 or later, and

for automatic adjustments in the contribution and benefit base, bend points,

earnings test exempt amounts, and other wage-indexed amounts. See

tables V.C1 and VI.G6.

Award. An administrative determination that an individual is entitled to

receive a specified type of OASDI benefit. Awards can represent not only

new entrants to the benefit rolls but also persons already on the rolls who

become entitled to a different type of benefit. Awards usually result in the

immediate payment of benefits, although payments may be deferred or withheld depending on the individual’s particular circumstances.

Baby boom. The period from the end of World War II (1946) through 1965

marked by unusually high birth rates.

Bend points. The dollar amounts defining the AIME or PIA brackets in the

benefit formulas. For the bend points for years 1979 and later, see

table V.C2.

Beneficiary. A person who has been awarded benefits on the basis of his or

her own or another’s earnings record. The benefits may be either in currentpayment status or withheld.

Benefit award. See “Award.”

Benefit conversion. See “Disability conversion.”
Appendices

242

Benefit payments. The amounts disbursed for OASI and DI benefits by the

Department of the Treasury.

Benefit termination. See “Termination.”

Best estimate assumptions. See “Assumptions.”

Board. See “Board of Trustees.”

Board of Trustees. A Board established by the Social Security Act to oversee the financial operations of the Federal Old-Age and Survivors Insurance

Trust Fund and the Federal Disability Insurance Trust Fund. The Board is

composed of six members. Four members serve by virtue of their positions

in the Federal Government: the Secretary of the Treasury, who is the Managing Trustee; the Secretary of Labor; the Secretary of Health and Human Services; and the Commissioner of Social Security. The President appoints and

the Senate confirms the other two members to serve as public representatives. Also referred to as the “Board” or the “Trustees.”

Cash flow. Actual or projected revenue and costs reflecting the levels of

payroll tax contribution rates and benefits scheduled in the law. Net cash

flow is the difference between non-interest income and cost.

Consumer Price Index—CPI. An official measure of inflation in consumer

prices. In this report, CPI refers to the Consumer Price Index for Urban Wage

Earners and Clerical Workers (CPI-W). The Bureau of Labor Statistics,

Department of Labor, publishes historical values for the CPI-W.

Contribution and benefit base. Annual dollar amount above which earnings in employment covered under the OASDI program are neither taxable

nor creditable for benefit-computation purposes. (Also referred to as maximum contribution and benefit base, annual creditable maximum, taxable

maximum, and maximum taxable.) See tables V.C1 and V.C6. See “Hospital

Insurance (HI) contribution base.”

Contributions. See “Payroll tax contributions.”

Conversion. See “Disability conversion.”

Cost. The cost shown for a year includes benefits scheduled for payment in

the year, administrative expenses, financial interchange with the Railroad

Retirement program, and payments for vocational rehabilitation services for

disabled beneficiaries.

Cost-of-living adjustment. See “Automatic cost-of-living benefit increase.”

Cost rate. The cost rate for a year is the ratio of the cost of the program to

the taxable payroll for the year.

Covered earnings. Wages or earnings from self-employment covered by the

OASDI program.
243

Glossary

Covered employment. All employment for which earnings are creditable

for Social Security purposes. The program covers almost all employment.

Some exceptions are:

 • State and local government employees whose employer has not elected

to be covered under Social Security and who are participating in an

employer-provided pension plan.

 • Current Federal civilian workers hired before 1984 who have not

elected to be covered.

 • Self-employed workers earning less than $400 in a calendar year.

Covered worker. A person who has earnings creditable for Social Security

purposes based on services for wages in covered employment or income

from covered self-employment.

CPI-indexed dollars. Amounts adjusted by the CPI to the value of the dollar

in a particular year.

Creditable earnings. Wages or self-employment earnings posted to a

worker’s earnings record. Such earnings determine eligibility for benefits

and the amount of benefits on that worker’s record. The contribution and

benefit base is the maximum amount of creditable earnings for each worker

in a calendar year.

Current-cost financing. See “Pay-as-you-go financing.”

Current dollars. Amounts expressed in nominal dollars with no adjustment

for inflation.

Currently insured status. A worker is currently insured when he or she has

accumulated six quarters of coverage during the 13-quarter period ending

with the current quarter.

Current-payment status. Status of a beneficiary to whom a benefit is being

paid for a given month (with or without deductions, provided the deductions

add to less than a full month’s benefit).

Deemed filing. Under certain circumstances, a person applying for or receiving either an aged-spouse benefit or a retired-worker benefit is required to

also file for the other of these two types of benefits. For those first eligible

for benefits before 2016, this requirement applies to any person under normal

retirement age who is eligible for the other benefit as of the starting month

for the first benefit. For those first eligible for benefits in 2016 and later, this

requirement applies whenever the person is eligible for the other benefit.

This can occur at any age, and in months after the starting month of the first

benefit.

Deemed wage credit. See “Military service wage credits.”

Delayed retirement credits. Increases in the benefit amount for certain individuals who did not receive benefits for months after attaining normal retirement age but before age 70. Delayed retirement credits apply to benefits for
Appendices

244

January of the year following the year they are earned or for the month of

attainment of age 70, whichever comes first. See table V.C3.

Demographic assumptions. See “Assumptions.”

Disability. For Social Security purposes, the inability to engage in any substantial gainful activity (see “Substantial gainful activity—SGA”) by reason

of any medically determinable physical or mental impairment that can be

expected to result in death or to last for a continuous period of not less than

12 months. Special rules apply for workers at ages 55 and over whose disability is based on blindness.

The law generally requires that a person be disabled continuously for

5 months before he or she can qualify for a disabled-worker benefit.

Disability conversion ratio. For a given year, the ratio of the number of disability conversions to the average number of disabled-worker beneficiaries at

all ages during the year.

Disability conversion. Upon attainment of normal retirement age, a disabled-worker beneficiary is automatically converted to retired-worker status.

Disability incidence rate. The proportion of workers in a given year,

insured for but not receiving disability benefits, who apply for and are

awarded disability benefits.

Disability Insurance (DI) Trust Fund. See “Trust fund.”

Disability insured status. A worker is disability insured if he or she is: (1) a

fully insured worker who has accumulated 20 quarters of coverage during

the 40-quarter period ending with the current quarter, (2) a fully insured

worker aged 24-30 who has accumulated quarters of coverage during onehalf of the quarters elapsed after the quarter of attainment of age 21 and up to

and including the current quarter, or (3) a fully insured worker under age 24

who has accumulated six quarters of coverage during the 12-quarter period

ending with the current quarter.

Disability prevalence rate. The proportion of persons insured for disability

benefits who are disabled-worker beneficiaries in current-payment status.

Disability termination rate. The proportion of disabled-worker beneficiaries in a given year whose disability benefits terminate as a result of their

recovery or death.

Disabled-worker benefit. A monthly benefit payable to a disabled worker

under normal retirement age and insured for disability. Before

November 1960, disability benefits were limited to disabled workers

aged 50-64.

Dual entitlement. A person may be entitled to more than one benefit at the

same time. For example, a person may be entitled as a retired worker on his

or her own record and as a spouse on another record. However, a person's

benefit amount can never exceed the highest single benefit to which that per-
245

Glossary

son is entitled. Some benefits are calculated independently with the larger

benefit being paid or the smaller benefit being paid plus the excess amount of

the larger one.

Earnings. Unless otherwise qualified, all wages from employment and net

earnings from self-employment, whether or not they are taxable or covered.

Earnings test. The provision requiring the withholding of benefits if beneficiaries under normal retirement age have earnings in excess of certain

exempt amounts. See table V.C1.

Economic assumptions. See “Assumptions.”

Effective interest rate. See “Interest rate.”

Excess wages. Wages in excess of the contribution and benefit base on

which a worker initially makes payroll tax contributions, usually as a result

of working for more than one employer during a year. Employee payroll

taxes on excess wages are refundable to affected employees, while the

employer taxes are not refundable.

Expenditures. Actual payments made or expected to be made under current

law, including benefits paid or payable, administrative expenses, financial

interchange with the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries.

Federal Insurance Contributions Act—FICA. Provision authorizing payroll taxes on the wages of employed persons to provide for Old-Age, Survivors, and Disability Insurance, and for Hospital Insurance. Workers and their

employers generally pay the tax in equal amounts.

File and suspend. The ability to apply for a retired-worker benefit at or after

normal retirement age, then voluntarily suspend it, allowing the worker to

earn delayed retirement credits and a spouse or child to receive benefits on

the worker’s record. Voluntary suspensions requested after April 29, 2016 no

longer allow spouses (other than divorced spouses) and children to receive

benefits while the worker’s benefit is suspended. 

Financial interchange. Provisions of the Railroad Retirement Act providing

for transfers between the trust funds and the Social Security Equivalent Benefit Account of the Railroad Retirement program in order to place each trust

fund in the same financial position it would have been had railroad employment always been covered under Social Security.

Fiscal year. The accounting year of the United States Government. Starting

in 1976, a fiscal year is the 12-month period ending September 30. For

example, fiscal year 2021 began October 1, 2020, and will end September

30, 2021.

Full advance funding. A financing method in which contributions are established to match the full cost of future benefits as these costs are incurred

through current service. Such financing methods also provide for amortiza-
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246

tion over a fixed period of any financial obligation that is incurred at the

beginning of the program (or subsequent modification) as a result of granting

credit for past service.

Fully insured status. A worker is fully insured when his or her total number

of quarters of coverage is greater than or equal to the number of years

elapsed after the year of attainment of age 21 (but not less than six). Once a

worker has accumulated 40 quarters of coverage, he or she remains permanently fully insured.

General Fund of the Treasury. Funds held by the Treasury of the United

States, other than income collected for a specific purpose (such as Social

Security), and maintained in a separate account for that purpose.

General Fund reimbursements. Payments from the General Fund of the

Treasury to the trust funds for specific purposes defined in the law, including:

 • The cost of noncontributory wage credits for military service before

1957, and periodic adjustments of previous determinations.

 • The cost in 1971-82 of deemed wage credits for military service performed after 1956.

 • The cost of benefits to certain uninsured persons who attained age 72

before 1968.

 • The cost of payroll tax credits provided to employees in 1984 and selfemployed persons in 1984-89 by Public Law 98-21.

 • The cost in 2009-17 of excluding certain self-employment earnings

from SECA taxes under Public Law 110-246.

 • Payroll tax revenue forgone under the provisions of Public Laws 111-

147, 111-312, 112-78, and 112-96.

The General Fund also reimburses the trust funds for various other items,

including interest on checks which are not negotiated 6 months after the

month of issue and costs incurred in performing certain legislatively mandated activities not directly related to administering the OASI and DI programs.

Gross domestic product—GDP. The total dollar value of all goods and services produced by labor and property located in the United States, regardless

of who supplies the labor or property.

Hospital Insurance (HI) contribution base. Annual dollar amount above

which earnings in employment covered under the HI program are not taxable. (Also referred to as maximum contribution base, taxable maximum,

and maximum taxable.) Beginning in 1994, the HI contribution base was

eliminated.

High-cost assumptions. See “Assumptions.”

Hospital Insurance (HI) Trust Fund. See “Trust fund.”
247

Glossary

Immigration. See “Lawful permanent resident (LPR) immigration” and

“Other-than-LPR immigration.”

Income. Income for a given year is the sum of tax revenue on a cash basis

(payroll tax contributions and income from the taxation of scheduled benefits), reimbursements from the General Fund of the Treasury, if any, and

interest credited to the trust funds.

Income rate. Ratio of non-interest income to the OASDI taxable payroll for

the year.

Infinite horizon. The period extending indefinitely into the future.

Inflation. An increase in the general price level of goods and services.

Insured status. The state or condition of having sufficient quarters of coverage to meet the eligibility requirements for retired-worker or disabled-worker

benefits, or to permit the worker’s spouse and children or survivors to establish eligibility for benefits in the event of his or her disability, retirement, or

death. See “Quarter of coverage.”

Interest. A payment in exchange for the use of money during a specified

period.

Interest rate. Interest rates on new public-debt obligations issuable to Federal trust funds (see “Special public-debt obligation”) are determined

monthly. Such rates are equal to the average market yield on all outstanding

marketable U.S. securities not due or callable until after 4 years from the date

the rate is determined. See table V.B2 for historical and assumed future interest rates on new special-issue securities. The effective interest rate for a trust

fund is the ratio of the interest earned by the fund over a given period of time

to the average level of asset reserves held by the fund during the period. The

effective rate of interest thus represents a measure of the overall average

interest earnings on the fund’s portfolio of investments. See table VI.G6 for

projected compound new-issue interest factors and compound effective trustfund interest factors.

Interfund borrowing. The borrowing of asset reserves by a trust fund

(OASI, DI, or HI) from another trust fund when the first fund is in danger of

depletion. The Social Security Act permitted interfund borrowing only

during 1982 through 1987, and required all amounts borrowed to be repaid

prior to the end of 1989. The only exercise of this authority occurred in 1982,

when the OASI Trust Fund borrowed from the DI and HI Trust Funds. The

final repayment of borrowed amounts occurred in 1986.

Intermediate assumptions. See “Assumptions.”

Lawful permanent resident (LPR) immigration. Persons who enter the

Social Security area population and are granted LPR status, or who are

already in the Social Security area population and adjust their status to

become LPRs. Persons who enter the country with legal visas but without

LPR status, such as temporary foreign workers and students, are not included

in the “LPR immigration” category.
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248

Legal emigration. Lawful permanent residents and citizens who leave the

Social Security area population.

Life expectancy. Average remaining number of years expected prior to

death. Period life expectancy is calculated for a given year using the actual or

expected death rates at each age for that year. Cohort life expectancy, sometimes referred to as generational life expectancy, is calculated for individuals

at a specific age in a given year using actual or expected death rates from the

years in which the individuals would actually reach each succeeding age if

they survive.

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

actuarial estimates for this period because it covers approximately the maximum remaining lifetime for virtually all current Social Security participants.

Low-cost assumptions. See “Assumptions.”

Lump-sum death payment. A lump sum, generally $255, payable on the

death of a fully or currently insured worker. The lump sum is payable to the

surviving spouse of the worker, under most circumstances, or to the worker’s

children.

Maximum family benefit. The maximum monthly amount that can be paid

on a worker’s earnings record. Whenever the total of the individual monthly

benefits payable to all the beneficiaries entitled on one earnings record

exceeds the maximum, each dependent’s or survivor’s benefit is proportionately reduced. Benefits payable to divorced spouses or surviving divorced

spouses are not reduced under the family maximum provision.

Medicare. A nationwide, Federally administered health insurance program

authorized in 1965 under Title XVIII of the Social Security Act to cover the

cost of hospitalization, medical care, and some related services for most persons age 65 and over. In 1972, lawmakers extended coverage to persons

receiving Social Security Disability Insurance payments for 2 years and persons with End-Stage Renal Disease. (For beneficiaries whose primary or secondary diagnosis is Amyotrophic Lateral Sclerosis, the 2-year waiting period

is waived.) In 2010, persons exposed to environmental health hazards within

areas under a corresponding emergency declaration became Medicare-eligible. In 2006, prescription drug coverage was added as well. Medicare consists of two separate but coordinated trust funds—Hospital Insurance (HI,

Part A) and Supplementary Medical Insurance (SMI). The SMI Trust Fund is

composed of two separate accounts—the Part B account and the Part D

account. Almost all persons who are aged 65 and over or disabled and who

are entitled to HI are eligible to enroll in Part B and Part D on a voluntary

basis by paying monthly premiums.

Military service wage credits. Credits toward OASDI earnings records for

benefit computation purposes, recognizing that military personnel receive

non-wage compensation (such as food and shelter) in addition to their basic
249

Glossary

pay and other cash payments. Military personnel do not pay payroll taxes on

these credits. Noncontributory wage credits of $160 were provided for each

month of active military service from September 16, 1940, through December 31, 1956. For years after 1956, the basic pay of military personnel is covered under the Social Security program on a contributory basis. In addition to

the contributory credits for basic pay, noncontributory wage credits of $300

were granted for each calendar quarter, from January 1957 through December 1977, in which a person received pay for military service. Noncontributory wage credits of $100 were granted for each $300 of military wages, up

to a maximum credit of $1,200 per calendar year, from January 1978 through

December 2001.

National average wage index—AWI. See “Average wage index—AWI.”

Non-interest income. Non-interest income for a given year is the sum of tax

revenue on a cash basis (payroll tax contributions and income from the taxation of scheduled benefits) and reimbursements from the General Fund of the

Treasury, if any.

Nonresident alien beneficiary. An OASDI beneficiary who is not a U.S.

citizen and who is living abroad while receiving benefits.

Normal retirement age—NRA. The age at which a person may first

become entitled to retirement benefits without reduction based on age. For

persons reaching age 62 before 2000, the normal retirement age is 65. It

increases gradually to 67 for persons reaching age 62 in 2022 or later, beginning with an increase to 65 years and 2 months for persons reaching age 62

in 2000. See table V.C3.

Old-Age and Survivors Insurance (OASI) Trust Fund. See “Trust fund.”

Old-law base. Amount the contribution and benefit base would have been if

the 1977 amendments had not provided for ad hoc increases. The Social

Security Amendments of 1972 provided for automatic annual indexing of the

contribution and benefit base. The Social Security Amendments of 1977

specified ad hoc bases for 1978-81, with subsequent bases updated in accordance with the normal indexing procedure. See table V.C2.

Open-group unfunded obligation. See “Unfunded obligation.”

Other-than-LPR emigration. Other-than-LPR immigrants who leave the

Social Security area population or who adjust their status to become LPRs.

Other-than-LPR immigration. Persons who enter the Social Security area

population and stay to the end of the year without being granted LPR status,

such as undocumented immigrants, and foreign workers and students entering with temporary visas.

Par value. The value printed on the face of a bond. For both public and special issues held by the trust funds, par value is also the redemption value at

maturity.
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250

Partial advance funding. A financing method in which contributions are

established to provide a substantial accumulation of trust fund asset reserves,

thereby generating additional interest income to the trust funds and reducing

the need for payroll tax increases in periods when costs are relatively high.

Higher general contributions or additional borrowing may be required, however, to support the payment of such interest. While substantial, the trust

fund buildup under partial advance funding is much smaller than it would be

with full advance funding.

Pay-as-you-go financing. A financing method in which contributions are

established to produce just as much income as required to pay current benefits, with trust fund asset reserves built up only to the extent needed to prevent depletion of the fund by random economic fluctuations.

Payroll tax contributions. The amount based on a percent of earnings, up to

an annual maximum, that must be paid by:

 • employers and employees on wages from employment under the Federal Insurance Contributions Act,

 • the self-employed on net earnings from self-employment under the

Self-Employment Contributions Act, and

 • States on the wages paid in 1986 and earlier to State and local government employees covered under the Social Security Act through voluntary agreements under section 218 of the act.

Also referred to as payroll taxes.

Population in the Social Security area. See “Social Security area population.”

Present value. The equivalent value, at the present time, of a stream of values (either income or cost, past or future). Present values are used widely in

calculations involving financial transactions over long periods of time to

account for the time value of money, by discounting or accumulating these

transactions at the rate of interest. Present-value calculations for this report

use the effective yield on trust fund asset reserves.

Primary insurance amount—PIA. The monthly amount payable to a

retired worker who begins to receive benefits at normal retirement age or,

generally, to a disabled worker. This amount, which is typically related to the

worker’s average monthly wage or average indexed monthly earnings, is also

used as a base for computing all types of benefits payable on an individual’s

earnings record.

Primary-insurance-amount formula. The mathematical formula relating

the PIA to the AIME for workers who attain age 62, become disabled, or die

after 1978. The PIA is equal to the sum of 90 percent of AIME up to the first

bend point, plus 32 percent of AIME above the first bend point up to the second bend point, plus 15 percent of AIME in excess of the second bend point.
251

Glossary

Automatic benefit increases are applied beginning with the year of eligibility.

See table V.C2 for historical and assumed future bend points and table V.C1

for historical and assumed future benefit increases.

Quarter of coverage. Basic unit of measurement for determining insured

status. For 1978, a worker earned one quarter of coverage, up to four, for

each $250 of that worker’s annual covered earnings. After 1978, the $250

amount increases automatically with increases in the national average wage

index. See table V.C2. 

Railroad Retirement. A Federal insurance program, similar to Social Security, designed for workers in the railroad industry. The provisions of the Railroad Retirement Act provide for a system of coordination and financial

interchange between the Railroad Retirement program and the Social Security program.

Reallocation of payroll tax rates. An increase in the payroll tax rate for

either the OASI or DI Trust Fund, with a corresponding reduction in the rate

for the other fund, so that the total OASDI payroll tax rate is not changed. 

Real wage differential. The difference between the percentage increases in:

(1) the average annual wage in covered employment and (2) the average

annual Consumer Price Index. See table V.B1.

Recession. A period of adverse economic conditions, generally defined as

two or more successive calendar quarters of negative real growth in gross

domestic product.

Reserves. See “Trust fund reserves.”

Retired-worker benefit. A monthly benefit payable to a fully insured retired

worker aged 62 or older or to a person entitled under the transitionally

insured status provision in the law.

Retirement earnings test. See “Earnings test.”

Retirement eligibility age. The age, currently age 62, at which a fully

insured individual first becomes eligible to receive retired-worker benefits.

Scheduled benefits. The level of benefits specified under current law.

Scenario-based model. A model with specified assumptions for and relationships among variables. Under such a model, any specified set of assumptions determines a single outcome directly reflecting the specifications.

Self-employment. Operation of a trade or business by an individual or by a

partnership in which an individual is a member.

Self-Employment Contributions Act–SECA. Provision authorizing Social

Security payroll taxes on the net earnings of most self-employed persons.

Short-range. The first 10 projection years. The Social Security Act requires

estimates for 5 years; the Trustees prepare estimates for an additional 5 years
Appendices

252

to help clarify trends that are only starting to develop in the mandated first 5-

year period. 

Social Security Act. Provisions of the law governing most operations of the

Social Security program. The original Social Security Act is Public

Law 74-271, enacted August 14, 1935. With subsequent amendments, the

Social Security Act consists of 21 titles, of which three have been repealed.

Title II of the Social Security Act authorizes the Old-Age, Survivors, and

Disability Insurance program.

Social Security area population. The population composed of: (1) residents

of the 50 States and the District of Columbia (adjusted for net census undercount); (2) civilian residents of Puerto Rico, the Virgin Islands, Guam,

American Samoa, and the Northern Mariana Islands; (3) Federal civilian

employees and persons in the U.S. Armed Forces abroad and their dependents; (4) non-citizens living abroad who are insured for Social Security benefits; and (5) all other U.S. citizens abroad.

Solvency. A program is solvent at a point in time if it is able to pay scheduled benefits when due with scheduled financing. For example, the OASDI

program is solvent over any period for which the trust funds maintain a positive level of asset reserves.

Special public-debt obligation. Securities of the United States Government

issued exclusively to the OASI, DI, HI, and SMI Trust Funds and other Federal trust funds. Section 201(d) of the Social Security Act provides that the

public-debt obligations issued for purchase by the OASI and DI Trust Funds

shall have maturities fixed with due regard for the needs of the funds. The

usual practice has been to spread the holdings of special issues, as of each

June 30, so that the amounts maturing in each of the next 15 years are

approximately equal. Special public-debt obligations are redeemable at par

value at any time and carry interest rates determined by law (see “Interest

rate”). See tables VI.A4 and VI.A5 for a listing of the obligations held by the

OASI and DI Trust Funds, respectively.

Stochastic model. A model used for projecting a probability distribution of

potential outcomes. Such models allow for random variation in one or more

variables through time. The random variation is generally based on fluctuations observed in historical data for a selected period. A large number of simulations, each of which reflects random variation in the variable(s), produce

a distribution of potential outcomes.

Substantial gainful activity—SGA. The level of work activity used to

establish disability. A finding of disability requires that a person be unable to

engage in substantial gainful activity. A person who earns more than a certain monthly amount (net of impairment-related work expenses) is ordinarily

considered to be engaging in SGA. The amount of monthly earnings considered as SGA depends on the nature of a person’s disability. The Social Security Act specifies a higher SGA amount for statutorily blind individuals;
253

Glossary

Federal regulations specify a lower SGA amount for non-blind individuals.

Both SGA amounts increase with increases in the national average wage

index.

Summarized balance. The difference between the summarized income rate

and the summarized cost rate, expressed as a percentage of GDP. The difference between the summarized income rate and cost rate as a percentage of

taxable payroll is referred to as the actuarial balance.

Summarized cost rate. The ratio of the present value of cost to the present

value of the taxable payroll (or GDP) for the years in a given period,

expressed as a percentage. To evaluate the financial adequacy of the program, the summarized cost rate is adjusted to include the cost of reaching

and maintaining a target trust fund level. A trust fund level of about 1 year’s

cost is considered to be an adequate reserve for unforeseen contingencies;

therefore, the targeted trust fund ratio is 100 percent of annual cost. Accordingly, the adjusted summarized cost rate is equal to the ratio of: (1) the sum

of the present value of the cost during the period plus the present value of the

targeted ending trust fund level to (2) the present value of the taxable payroll

(or GDP) during the projection period.

Summarized income rate. The ratio of the present value of scheduled noninterest income to the present value of taxable payroll (or GDP) for the years

in a given period, expressed as a percentage. To evaluate the financial adequacy of the program, the summarized income rate is adjusted to include

asset reserves on hand at the beginning of the period. Accordingly, the

adjusted summarized income rate equals the ratio of: (1) the sum of the trust

fund reserve at the beginning of the period plus the present value of noninterest income during the period to (2) the present value of the taxable payroll (or GDP) for the years in the period.

Supplemental Security Income—SSI. A Federally administered program

(often with State supplementation) of cash assistance for needy aged, blind,

or disabled persons. The General Fund of the Treasury funds Federal expenditures for the SSI program. The Social Security Administration administers

it.

Supplementary Medical Insurance (SMI) Trust Fund. See “Trust fund.”

Survivor benefit. Benefit payable to a survivor of a deceased worker.

Sustainable solvency. Sustainable solvency for the financing of the program

under a specified set of assumptions is achieved when the projected trust

fund ratio is positive throughout the 75-year projection period and is either

stable or rising at the end of the period.

Taxable earnings. Wages or self-employment income, in employment covered by the OASDI or HI programs, that is under the applicable annual maxi-
Appendices

254

mum taxable limit. For 1994 and later, no maximum taxable limit applies to

the HI program.

Taxable payroll. A weighted sum of taxable wages and taxable self-employment income. When multiplied by the combined employee-employer payroll

tax rate, taxable payroll yields the total amount of payroll taxes incurred by

employees, employers, and the self-employed for work during the period.

Taxable self-employment income. The maximum amount of net earnings

from self-employment by an earner which, when added to any taxable

wages, does not exceed the contribution and benefit base. For HI beginning

in 1994, all net earnings from self-employment.

Taxable wages. See “Taxable earnings.”

Taxation of benefits. Beginning in 1984, Federal law subjected up to

50 percent of an individual’s or a couple’s OASDI benefits to Federal income

taxation under certain circumstances. Treasury allocates the revenue derived

from this provision to the OASI and DI Trust Funds on the basis of the

income taxes paid on the benefits from each fund. Beginning in 1994, the

law increased the maximum percentage from 50 percent to 85 percent. The

HI Trust Fund receives the additional tax revenue resulting from the increase

to 85 percent.

Taxes. See “Payroll tax contributions” and “Taxation of benefits.”

Termination. Cessation of payment because the beneficiary is no longer

entitled to receive a specific type of benefit. For example, benefits might terminate as a result of the death of the beneficiary, the recovery of a disabled

beneficiary, or the attainment of age 18 by a child beneficiary. In some cases,

an individual may cease one benefit and this is not a termination because

they become immediately entitled to another type of benefit, such as the conversion of a disabled-worker beneficiary at normal retirement age to a

retired-worker beneficiary.

Test of long-range close actuarial balance. The conditions required to

meet this test are: 

 • The trust fund satisfies the test of short-range financial adequacy; and 

 • The trust fund ratio stays above zero throughout the 75-year projection

period, such that benefits would be payable in a timely manner throughout the period. 

The Trustees apply the test to OASI, DI, and the combined OASDI program

based on the intermediate set of assumptions.

Test of short-range financial adequacy. The conditions required to meet

this test are:

 • If the trust fund ratio is at least 100 percent at the beginning of the 10-

year projection period, then it must remain at or above 100 percent

throughout the entire projection period;
255

Glossary

 • If the ratio is initially less than 100 percent, then it must reach at least

100 percent within 5 years (without reserve depletion at any time during

this period) and then remain at or above 100 percent throughout the

remainder of the 10-year period. 

The Trustees apply the test to OASI, DI, and the combined OASDI program

based on the intermediate set of assumptions.

Total-economy productivity. The ratio of real GDP to hours worked by all

workers. Also referred to as “labor productivity.”

Total fertility rate. The sum of the single-year-of-age birth rates for girls

and women aged 14 through 49, where the rate for age 14 includes births to

girls aged 14 and under, and the rate for age 49 includes births to women

aged 49 and over. The total fertility rate may be interpreted as the average

number of children that would be born to a woman if she were to experience,

at each age of her life, the birth rate observed in, or assumed for, a specified

year, and if she were to survive the entire childbearing period.

Trust fund. Separate accounts in the United States Treasury which hold the

payroll taxes received under the Federal Insurance Contributions Act and the

Self-Employment Contributions Act; payroll taxes resulting from coverage

of State and local government employees; any sums received under the

financial interchange with the railroad retirement account; voluntary hospital

and medical insurance premiums; and reimbursements or payments from the

General Fund of the Treasury. As required by law, the Department of the

Treasury invests funds not required to meet current expenditures in interestbearing securities backed by the full faith and credit of the U.S. Government.

The interest earned is also deposited in the trust funds.

 • Old-Age and Survivors Insurance (OASI). The trust fund used for

paying monthly benefits to retired-worker (old-age) beneficiaries, their

spouses and children, and to survivors of deceased insured workers.

 • Disability Insurance (DI). The trust fund used for paying monthly benefits to disabled-worker beneficiaries, their spouses and children, and

for providing rehabilitation services to the disabled.

 • Hospital Insurance (HI). The Medicare trust fund that covers specified

inpatient hospital services, posthospital skilled nursing care, home

health services, and hospice care for aged and disabled individuals who

meet the eligibility requirements. Also known as Medicare Part A.

 • Supplementary Medical Insurance (SMI). The Medicare trust fund

composed of the Part B Account, the Part D Account, and the Transitional Assistance Account. The Part B Account pays for a portion of the

costs of physicians’ services, outpatient hospital services, and other

related medical and health services for voluntarily enrolled aged and

disabled individuals. The Part D Account pays private plans to provide
Appendices

256

prescription drug coverage, beginning in 2006. The Transitional Assistance Account paid for transitional assistance under the prescription

drug card program in 2004 and 2005.

The trust funds are distinct legal entities which operate independently. Fund

operations are sometimes combined on a hypothetical basis.

Trust fund ratio. A measure of trust fund adequacy. The asset reserves at

the beginning of a year (equal to the reserves at the end of the prior year),

which do not include advance tax transfers, expressed as a percentage of the

cost for the year. The trust fund ratio represents the proportion of a year’s

cost which could be paid solely with the reserves at the beginning of the year.

Trust fund reserve depletion. The point at which reserves in a trust fund are

insufficient to pay scheduled benefits in full and on time.

Trust fund reserves. The cumulative excess of trust fund income over trust

fund cost over all years to date. These reserves are held by the trust funds in

the form of Treasury notes and bonds, other securities guaranteed by the Federal Government, certain Federally sponsored agency obligations, and cash.

Trustees. See “Board of Trustees.”

Undisbursed balances. In general, refers to the cumulative differences

between the actual cash payments for a month compared to security redemptions from the trust fund reserves made on a preliminary basis to cover such

cash payments during the same month. On a monthly basis, the Social Security Administration (SSA) pays benefits and makes payments for other programmatic expenses associated with the trust funds. During each month,

SSA draws cash from the trust funds on a preliminary basis, which results in

Treasury redeeming invested securities to cover such payments. This

monthly difference can be either positive or negative depending on net

monthly activity, and is added to the balance at the end of the prior month. 

A net positive undisbursed balance represents a situation where cumulative

redemptions from the trust fund’s securities are more than was needed to

cover actual program cash payments through the end of the month. A net

negative balance represents a situation where cumulative program cash payments exceeded the amount redeemed from the invested securities. A negative value requires future redemption of additional invested securities. 

In addition, about every seven years, when January 3 falls on a Sunday, benefit payments scheduled to be paid on January 3rd are actually paid on

December 31 of the preceding year, as required by the statutory provision

included in the 1977 Social Security Amendments for early delivery of benefit payments when the normal payment delivery date is a Saturday, Sunday,

or legal public holiday. Consistent with practice in prior reports and for comparability with other historical years and the projections in this report, all

trust fund operations and asset reserves reflect the 12 months of benefits

scheduled for payment in each year. Therefore, such advance payments are
257

Glossary

included as positive values in the undisbursed balance at the end of the calendar years in which the advance payments are made.

Unfunded obligation. A measure of the shortfall of trust fund income to

fully cover program cost through a specified date after depletion of trust fund

asset reserves. This measure can be expressed in present value dollars, discounted to the beginning of the valuation period, by computing the excess of

the present value of the projected cost of the program through a specified

date over the sum of: (1) the value of trust fund reserves at the beginning of

the valuation period; and (2) the present value of the projected non-interest

income of the program through a specified date, assuming scheduled tax

rates and benefit levels. This measure can apply for all participants through a

specified date, i.e., the open group, or be limited to a specified subgroup of

participants.

Unfunded obligation ratio. The unfunded obligation accumulated through

the beginning of a year expressed as a percentage of the cost for the year.

Unnegotiated check. A check which has not been cashed 6 months after the

end of the month in which the check was issued. When a check has been outstanding for a year, the Department of the Treasury administratively cancels

the check and reimburses the issuing trust fund separately for the amount of

the check and interest for the period the check was outstanding. The appropriate trust fund also receives an interest adjustment for the time the check

was outstanding if it is cashed 6 to 12 months after the month of issue. If a

check is presented for payment after it has been administratively canceled, a

replacement check is issued.

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

Vocational rehabilitation (VR). Services provided to disabled persons to

help them to return to gainful employment. VR services are designed to provide an individual with the training or other services that are needed to return

to work, to begin working, or to enter a new line of work. The trust funds,

and the General Fund in the case of individuals also receiving Supplemental

Security Income disability benefits, reimburse the providers of such services

only in those cases where the services contributed to the successful rehabilitation of the beneficiaries.
List of Tables

258

LIST OF TABLE

II. OVERVIEW

II.B1 Summary of 2020 Trust Fund Financial Operations . . . . . . . . 7

II.B2 Payroll Tax Contribution Rates for 2020 . . . . . . . . . . . . . . . . 7

II.C1 Key Assumptions and Summary Measures 

for the Long-Range (75-year) Projection Period . . . . . . . . . . . 10

II.D1 Projected Maximum Trust Fund Ratios During the Long-Range 

Period and Trust Fund Reserve Depletion Dates. . . . . . . . . . . 16

II.D2 Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 22

III. FINANCIAL OPERATIONS OF THE TRUST FUNDS AND

LEGISLATIVE CHANGES IN THE LAST YEAR

III.A1 Operations of the OASI Trust Fund, Calendar Year 2020 . . . . 29

III.A2 Operations of the DI Trust Fund, Calendar Year 2020 . . . . . . . 33

III.A3 Operations of the Combined OASI and DI Trust Funds, 

Calendar Year 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

III.A4 Comparison of Actual Calendar Year 2020 Trust Fund 

Operations With Estimates Made in Prior Reports, Based on 

Intermediate Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 36

III.A5 Distribution of Benefit Payments by Type of Beneficiary or 

Payment, Calendar Years 2019 and 2020 . . . . . . . . . . . . . . . . 37

III.A6 Administrative Expenses as a Percentage of Total Income and 

of Total Cost, Calendar Years 2016-2020 . . . . . . . . . . . . . . . . 38

III.A7 Trust Fund Investment Transactions, Calendar Year 2020 . . . . 38

IV. ACTUARIAL ESTIMATES

IV.A1 Operations of the OASI Trust Fund, 

Calendar Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 43

IV.A2 Operations of the DI Trust Fund, 

Calendar Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 47

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

Calendar Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 49

IV.A4 Reasons for Change in Trust Fund (Unfunded Obligation) Ratios 

at the Beginning of the Tenth Year of Projection Under 

Intermediate Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . 52

IV.B1 Annual Income Rates, Cost Rates, and Balances,

Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 57

IV.B2 Components of Annual Income Rates, 

Calendar Years 1990-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 62
List of Tables

259

IV.B3 Covered Workers and Beneficiaries, 

Calendar Years 1945-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 64

IV.B4 Trust Fund Ratios, Calendar Years 2021-2095 . . . . . . . . . . . . 69

IV.B5 Components of Summarized Income Rates and Cost Rates, 

Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 73

IV.B6 Components of 75-Year Actuarial Balance and 

Unfunded Obligation Under Intermediate Assumptions . . . . . 76

IV.B7 Reasons for Change in the 75-Year Actuarial Balance,

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 77

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

V.A1 Fertility and Mortality Assumptions, 

Calendar Years 1940-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 90

V.A2 Immigration Assumptions, Calendar Years 1940-2095 . . . . . . 96

V.A3 Social Security Area Population on July 1 and 

Dependency Ratios, Calendar Years 1945-2095 . . . . . . . . . . . 99

V.A4 Period Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102

V.A5 Cohort Life Expectancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

V.B1 Principal Economic Assumptions . . . . . . . . . . . . . . . . . . . . . 111

V.B2 Additional Economic Factors . . . . . . . . . . . . . . . . . . . . . . . . 117

V.C1 Cost-of-Living Benefit Increases, Average Wage Index, 

Contribution and Benefit Bases, and Retirement Earnings Test 

Exempt Amounts, 1975-2030 . . . . . . . . . . . . . . . . . . . . . . . . 122

V.C2 Values for Selected Wage-Indexed Program Parameters, 

Calendar Years 1978-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . 126

V.C3 Legislated Changes in Normal Retirement Age and Delayed 

Retirement Credits for Persons Attaining Age 62 in Each Year 

1986 and Later. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128

V.C4 OASI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1945-2095 . . . . . . . . . . . . . . . . 136

V.C5 DI Beneficiaries With Benefits in Current-Payment Status

at the End of Calendar Years 1960-2095 . . . . . . . . . . . . . . . . 145

V.C6 Contribution and Benefit Base and 

Payroll Tax Contribution Rates . . . . . . . . . . . . . . . . . . . . . . 152

V.C7 Annual Scheduled Benefit Amounts for Retired Workers 

With Various Pre-Retirement Earnings Patterns 

Based on Intermediate Assumptions, 

Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 156
List of Tables

260

VI. APPENDICES

A. HISTORY OF OASI AND DI TRUST FUND OPERATIONS

VI.A1 Operations of the OASI Trust Fund, 

Calendar Years 1937-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . 162

VI.A2 Operations of the DI Trust Fund, 

Calendar Years 1957-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . 164

VI.A3 Operations of the Combined OASI and DI Trust Funds,

Calendar Years 1957-2020 . . . . . . . . . . . . . . . . . . . . . . . . . . 166

VI.A4 OASI Trust Fund Asset Reserves, End of 

Calendar Years 2019 and 2020 . . . . . . . . . . . . . . . . . . . . . . . 168

VI.A5 DI Trust Fund Asset Reserves, End of 

Calendar Years 2019 and 2020 . . . . . . . . . . . . . . . . . . . . . . . 169

B. HISTORY OF ACTUARIAL STATUS ESTIMATES

VI.B1 Long-Range OASDI Actuarial Balances and Trust Fund 

Reserve Depletion Dates as Shown in the Trustees Reports 

for 1982-2021 under Intermediate Assumptions . . . . . . . . . . . 172

C. FISCAL YEAR HISTORICAL AND PROJECTED TRUST FUND OPERATIONS THROUGH 2030

VI.C1 Operations of the OASI Trust Fund, Fiscal Year 2020 . . . . . . . 178

VI.C2 Operations of the DI Trust Fund, Fiscal Year 2020 . . . . . . . . . 179

VI.C3 Operations of the Combined OASI and DI Trust Funds, 

Fiscal Year 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180

VI.C4 Operations of the OASI Trust Fund, Fiscal Years 2016-2030 . . 181

VI.C5 Operations of the DI Trust Fund, Fiscal Years 2016-2030 . . . . 182

VI.C6 Operations of the Combined OASI and DI Trust Funds,

Fiscal Years 2016-2030 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

D. LONG-RANGE SENSITIVITY ANALYSIS

VI.D1 Sensitivity of OASDI Measures to Fertility Assumptions . . . . 185

VI.D2 Sensitivity of OASDI Measures to Death-Rate Assumptions . . 186

VI.D3 Sensitivity of OASDI Measures to 

Total Net Immigration Assumptions . . . . . . . . . . . . . . . . . . . 188

VI.D4 Sensitivity of OASDI Measures to Real Wage Assumptions . . 189

VI.D5 Sensitivity of OASDI Measures to 

CPI-Increase Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . 190

VI.D6 Sensitivity of OASDI Measures to 

Real Interest Rate Assumptions. . . . . . . . . . . . . . . . . . . . . . . 192

VI.D7 Sensitivity of OASDI Measures to 

Taxable Ratio Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . 193
List of Tables

261

VI.D8 Sensitivity of OASDI Measures to 

Disability Incidence Assumptions . . . . . . . . . . . . . . . . . . . . . 194

VI.D9 Sensitivity of OASDI Measures to 

Disability Termination Assumptions . . . . . . . . . . . . . . . . . . . 196

E. STOCHASTIC PROJECTIONS AND UNCERTAINTY

VI.E1 Long-Range Estimates Relating to the Actuarial Status of

the Combined OASDI Program. . . . . . . . . . . . . . . . . . . . . . . 207

F. INFINITE HORIZON PROJECTIONS

VI.F1 Unfunded OASDI Obligations Through the Infinite Horizon

and the 75-Year Projection Period, 

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 209

VI.F2 Present Values Through the Infinite Horizon 

for Various Categories of Program Participants, 

Based on Intermediate Assumptions . . . . . . . . . . . . . . . . . . . 211

G. ESTIMATES FOR OASDI AND HI, SEPARATE AND COMBINED

VI.G1 Payroll Tax Contribution Rates for 

the OASDI and HI Programs . . . . . . . . . . . . . . . . . . . . . . . . 213

VI.G2 OASDI and HI Annual Income Rates, Cost Rates, and Balances,

Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 215

VI.G3 Summarized OASDI and HI Income Rates and Cost Rates for 

Valuation Periods, Calendar Years 2021-2095 . . . . . . . . . . . . 217

VI.G4 OASDI and HI Annual and Summarized Income, Cost, and 

Balance as a Percentage of GDP, 

Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 220

VI.G5 Ratio of OASDI Taxable Payroll to GDP, 

Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 222

VI.G6 Selected Economic Variables, Calendar Years 2020-2095 . . . . 225

VI.G7 Operations of the Combined OASI and DI Trust Funds,

in CPI-indexed 2021 Dollars, Calendar Years 2021-2095 . . . . 227

VI.G8 Operations of the Combined OASI and DI Trust Funds, 

in Current Dollars, Calendar Years 2021-2095 . . . . . . . . . . . . 230

VI.G9 OASDI and HI Annual Non-interest Income, Cost, and

Balance in CPI-Indexed 2021 Dollars, 

Calendar Years 2021-2095 . . . . . . . . . . . . . . . . . . . . . . . . . . 232

VI.G10 OASDI and HI Annual Non-interest Income, Cost, and

Balance in Current Dollars, Calendar Years 2021-2095. . . . . . 234
List of Tables

262

H. ANALYSIS OF BENEFIT PAYMENTS FROM THE OASI 

TRUST FUND WITH RESPECT TO DISABLED BENEFICIARIES

VI.H1 Scheduled Benefit Payments From the OASI Trust Fund

With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 237

VI.H2 Scheduled Benefit Payments Under the OASDI Program

With Respect to Disabled Beneficiaries . . . . . . . . . . . . . . . . . 239
List of Figures

263

LIST OF FIGURES

II. OVERVIEW

II.D1 Short-Range OASI and DI Combined Trust Fund Ratio . . . . . 12

II.D2 OASDI Income, Cost, and Expenditures as Percentages 

of Taxable Payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

II.D3 Number of Covered Workers Per OASDI Beneficiary. . . . . . . 15

II.D4 OASDI Cost and Non-interest Income 

as a Percentage of GDP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

II.D5 Cumulative Scheduled OASDI Income Less Cost,

From Program Inception Through Years 2020-2095 . . . . . . . . 18

II.D6 Long-Range OASI and DI Combined Trust Fund Ratios 

Under Alternative Scenarios . . . . . . . . . . . . . . . . . . . . . . . . . 20

II.D7 Long-Range OASI and DI Combined Trust Fund Ratios 

From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 21

II.D8 OASDI Annual Balances: 2020 and 2021 Trustees Reports. . . 23

IV. ACTUARIAL ESTIMATES

IV.A1 Short-Range OASI and DI Trust Fund Ratios. . . . . . . . . . . . . 45

IV.B1 Long-Range OASI and DI Annual Income Rates 

and Cost Rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61

IV.B2 Number of OASDI Beneficiaries Per 100 Covered Workers . . 66

IV.B3 Long-Range OASI and DI Trust Fund Ratios . . . . . . . . . . . . . 70

IV.B4 OASDI Annual Balances: 2020 and 2021 Trustees Reports. . . 83

V. ASSUMPTIONS AND METHODS UNDERLYING

ACTUARIAL ESTIMATES

V.C1 Primary-Insurance-Amount Formula 

for Those Newly Eligible in 2021 . . . . . . . . . . . . . . . . . . . . . 124

V.C2 OASI Maximum-Family-Benefit Formula 

for Those Newly Eligible in 2021 . . . . . . . . . . . . . . . . . . . . . 125

V.C3 DI Disability Incidence Rates, 1970-2095 . . . . . . . . . . . . . . . 141

V.C4 DI Disability Termination Rates, 1970-2095 . . . . . . . . . . . . . 143

V.C5 Comparison of DI Disability Incidence Rates, 

Termination Rates and Conversion Ratios 

Under Intermediate Assumptions, 1970-2095 . . . . . . . . . . . . . 144

V.C6 DI Disability Prevalence Rates, 1970-2095 . . . . . . . . . . . . . . 147
List of Figures

264

VI. APPENDICES

VI.E1 Long-Range OASDI Cost Rates From Stochastic Modeling . . 200

VI.E2 Long-Range OASDI Trust Fund Ratios 

From Stochastic Modeling . . . . . . . . . . . . . . . . . . . . . . . . . . 201

VI.E3 OASDI Cost Rates: Comparison of Stochastic to Low-Cost, 

Intermediate, and High-Cost Alternative Scenarios. . . . . . . . . 203

VI.E4 OASDI Trust Fund (Unfunded Obligation) Ratios: 

Comparison of Stochastic to Low-Cost, Intermediate, 

and High-Cost Alternative Scenarios . . . . . . . . . . . . . . . . . . . 204

VI.G1 Estimated OASDI Income and Cost in CPI-indexed 

2021 Dollars, Based on Intermediate Assumptions . . . . . . . . . 229
265

Index

INDEX

A

Actuarial balance 12, 17, 53, 170, 184

Actuarial deficit 5, 17, 25, 73, 217

Actuarial estimates, LR 53

Actuarial estimates, SR 41

Adjusted program amounts 120

Administrative expenses 7, 37, 54, 157, 161, 178, 218, 226

Advance tax transfers 41, 67, 163

Amendments 39

Annual balance 22, 53, 77

Asset reserves 2, 7, 11, 31, 178, 192, 212

Assumptions 84, 104, 120, 170, 184, 213, 218, 223, 236

Automatic cost-of-living benefit increase 46, 105, 120

Auxiliary benefits 130

Average benefits 154

Average earnings assumptions 107

Average indexed monthly earnings (AIME) 123

Average wage index 120, 223

Award 132

B

Baby-boom generation 24, 55, 64, 113, 139

Bend points 123

Beneficiaries, DI 138

Beneficiary 14, 46, 64, 84, 121, 173, 185, 218, 226, 236

Beneficiary, OASI 132

Benefit payments 7, 54, 155, 161, 178

Benefit termination 9

Best estimate 9, 41, 84

Board of Trustees 41, 104, 159

C

Constant dollars 228

Consumer Price Index 105, 190, 223, 241

Contribution and benefit base 45, 107, 121, 241

Contributions 7, 159, 178, 212, 218, 226, 240

Cost 3, 7, 32, 49

Cost rate 4, 54, 212

Cost-of-living adjustment 120

Covered earnings 7, 120, 222

Covered employment 10, 45, 107, 128, 159, 189

Covered worker 66, 187

Creditable earnings 243

Current dollars 223
Index

266

Current-payment status 48, 143, 144, 145, 241

D

Deemed wage credit 54

Delayed retirement credit 127

Demographic assumptions 9, 22, 41, 85, 113, 120, 170, 224, 240

Deterministic model 197

DI beneficiaries 138

Disability 159, 187, 236

Disability conversion ratio 143

Disability incidence rate 84, 138, 141, 187, 194, 240

Disability Insurance Trust Fund 242

Disability prevalence rate 145, 147

Disability termination rate 195

Disabled-worker benefit 141, 244

Disbursements 41

E

Earnings 2, 7, 54, 107, 121, 159, 171, 212, 222, 223, 240

Earnings test 107, 121, 241

Economic assumptions 9, 22, 41, 51, 104, 113, 120, 170, 224, 240

Excess wages 54, 223

Expenditures 41, 245

F

Federal Insurance Contributions Act 212, 250

Fertility assumptions 85

Financial interchange 7, 158, 161

Fiscal year 163, 177

Full advance funding 245

G

General Fund of the Treasury 44, 46, 48, 50, 163, 165, 167, 181, 182, 183,

240

General fund reimbursement 246

Gross domestic product 4, 12, 61, 84, 105, 115, 218

Gross domestic product projections 115

H

High-cost assumptions 10, 19, 41, 55, 84, 104, 142, 184, 205, 213, 223, 240

Hospital Insurance program 151, 212, 248

Hospital Insurance Trust Fund 218

I

Immigration 9, 84, 91, 187, 197, 240, 247

Immigration assumptions 91
267

Index

Income rate 4, 13, 54, 212

Infinite horizon 12

Inflation 9, 84, 105, 223, 240

Inflation assumptions 105

Insured population 9, 129

Insured status 125

Interest 116, 160, 170, 178, 214, 240

Interest rate 84, 170, 191, 240

Interest rate projections 116

Interest rates 9

Interfund borrowing 163, 247

Intermediate assumptions 10, 41, 46, 55, 84, 142, 184, 214, 219, 223, 228,

230, 236, 240

L

Labor force projections 112

Lawful Permanent Resident (LPR) immigration 92

Legal immigration 247, 248

Life expectancy 84, 101, 113, 248

Life expectancy estimates 100

Long range 12, 53, 85, 132, 170, 212, 218

Low-cost assumptions 10, 19, 41, 55, 84, 104, 142, 184, 205, 213, 223, 240

Lump-sum death payment 155

M

Medicare 87, 248

Military service 54, 159, 163, 165, 167

N

National average wage index 223

Normal retirement age 121, 138, 155, 243

O

OASI beneficiaries 132

Old-Age and Survivors Insurance Trust Fund 159, 242

Old-law base 125

Other immigration 249

Other-than-LPR immigration 92

P

Par value 160

Partial advance funding 250

Pay-as-you-go financing 170

Payroll taxes 2, 120, 148, 173, 208, 212, 226

Population estimates 98

Population in the Social Security area 45, 66, 98, 128, 188
Index

268

Present value 170

Primary insurance amount (PIA) 123

Productivity assumptions 105

Q

Quarters of coverage 129

R

Railroad Retirement 54, 71, 125, 158, 161, 178, 179, 180, 212, 218, 226,

242

Reallocation of tax rates 251

Real-wage differential 109, 188

Retired-worker benefit 132, 187, 236

Retirement age 121, 155, 243

Retirement earnings test 107, 121

Retirement eligibility age 187

S

Scenario-based model 251

Scheduled benefits 191, 218, 226, 238, 251

Self-employment 54, 105, 213, 250

Self-Employment Contributions Act 250, 251

Sensitivity analysis 184

Short range 11, 41, 132

Social Security Act 120, 160, 223, 236, 242

Social Security amendments 39

Solvency 252

Special public-debt obligation 119, 160, 191

Stochastic projections 197

Substantial gainful activity 138, 244

Summarized balance 219

Summarized income and cost rates 71, 170, 184, 216, 240

Supplemental Security Income 178

Supplementary Medical Insurance program 212, 248

Survivor benefit 2, 8, 135, 241

Sustainable solvency 67, 68

T

Taxable earnings 45, 66, 121, 171, 241

Taxable payroll 5, 25, 54, 106, 129, 170, 185, 212, 218, 223, 242

Taxable ratio 192

Taxable self-employment income 253

Taxable wages 153, 213, 254

Taxation of benefits 7, 153, 218, 226, 247

Taxes 7, 120, 213
269

Index

Termination 84

Termination rate 9, 132, 195, 240

Test of long-range close actuarial balance 53, 67, 69

Test of short-range financial adequacy 11, 12, 42, 43, 70, 254

Total fertility rate 86, 184

Trust fund financial operations 7, 27, 42, 159

Trust fund ratio 11, 41, 53, 67, 163, 181, 256

Trust fund reserves 41

U

Unemployment projections 112

Unfunded obligation 5, 12, 17, 19, 53, 74, 75, 209, 210, 249, 256, 257

Unnegotiated check 178

V

Valuation period 17, 51, 53, 170, 184, 216, 240

Vocational rehabilitation 54, 161, 179, 218, 226, 238, 242

Y

Year of depletion 13, 16, 53, 69
270

STATEMENT OF ACTUARIAL OPINION

It is my opinion that: (1) the techniques and methodology used herein to

evaluate the actuarial status of the Federal Old-Age and Survivors Insurance

and Disability Insurance Trust Funds are based upon sound principles of

actuarial practice and are generally accepted within the actuarial profession;

and (2) the assumptions used and the resulting actuarial estimates are, individually and in the aggregate, reasonable for the purpose of evaluating the

actuarial status of the trust funds, taking into consideration the past experience and future expectations for the population, the economy, and the program. I am a member of the American Academy of Actuaries and I meet the

Qualification Standards of the American Academy of Actuaries to render the

actuarial opinion contained herein.

Stephen C. Goss

Associate, Society of Actuaries

Member, American Academy of Actuaries

Chief Actuary, Social Security Administration