SOCIAL SECURITY ADMINISTRATION BALTIMORE, MD 21235-0001

SOCIAL SECURITY

Office of the Chief Actuary

April 12, 2011

The Honorable Cynthia M. Lummis

House of Representatives

Washington, D.C. 20515

Dear Ms. Lummis:

I am writing in response to your letter of March 30, 2011 requesting estimates of the financial 

effects on Social Security of H.R. 867, “Retirement Security for Today's Four-Year-Olds Act of 

2011,” which was introduced on March 2, 2011. The estimates and analysis provided in this 

letter reflect clarification of the intent of the Bill based on discussion with your staff, and the 

chart prepared by the Congressional Research Service. All estimates are based on the 

intermediate assumptions of the 2010 Trustees Report. The estimates reflect the combined 

efforts of many in our office, but particularly Alice Wade and Christopher Chaplain. 

Under current law, the earliest eligibility age (EEA) for retired worker benefits and aged spouse 

benefits will remain at 62. Also under current law, the normal retirement age (NRA) is 

scheduled to increase from the present level of 66 at the rate of 2 months per year beginning for 

those reaching age 62 in 2017, and stops increasing at an NRA of 67 for those reaching age 62 in 

2022 and later. 

Under the Bill, both the EEA and the NRA will begin to increase at a rate of 36/47 of a month 

per year for those reaching age 62 in 2023, and will stop increasing at an EEA of 65 and an NRA 

of 70 for those reaching age 62 in 2069. For each year, the computed EEA and NRA would be 

rounded down to the next lower full month. For a worker who dies, becomes disabled, or 

becomes eligible for retired worker benefits after age 62, we assume the number of benefit 

computation years used in determining the primary insurance amount (PIA) would be:

• Increased by 1 year if EEA is at least age 63 and less than age 64 and age at benefit 

eligibility is 63 or higher;

• Increased by 2 years if EEA is at least age 64 and less than age 65 and age at benefit 

eligibility is 64 or higher; and 

• Increased by 3 years if both EEA and age at benefit eligibility are 65 or higher. 

The PIA formula used in each case would be the formula applicable for the year in which initial 

eligibility occurs, but not beyond the year that EEA is attained. In addition, we assume that the

quarters-of-coverage requirements for insured status would remain the same as in present law.

Increasing the NRA and EEA as specified in the Bill would reduce the long-range OASDI 

actuarial deficit by an estimated 0.62 percent of taxable payroll, thus eliminating about one third 

of the present-law actuarial deficit of 1.92 percent of payroll. In addition, the Bill would reduce 

the annual OASDI deficit for the 75th projection year (2084) by 1.99 percent of payroll, or by 

almost half of the present-law shortfall of 4.12 percent of payroll. The year in which the 
Page 2 – The Honorable Cynthia Lummis

combined OASDI trust funds would become exhausted is increased from present law by only 

one year, to 2038, under the Bill. This increase is only one year because the increase in 

retirement ages would be gradual, and would begin in 2023, just 14 years before the combined 

OASDI Trust Funds are projected to become exhausted under present law. Please see the 

attached table for more detailed estimates of annual cost, income, balance, and trust fund asset 

levels.

The figure below shows the projected annual level of OASDI cost and non-interest income as a 

percent of taxable payroll, both under present law and assuming enactment of the Bill through 

2085. 

We hope these estimates will be helpful. Please let me know if we may provide further 

assistance.

Sincerely,

Stephen C. Goss

Chief Actuary

Enclosures
Year Cost Rate

Income

Rate

Annual

Balance Cost Rate

Income

Rate

Annual

Balance

2010 13.09 12.33 -0.76 355 0.00 0.00 0.00

2011 13.04 12.91 -0.12 353 0.00 0.00 0.00

2012 12.84 12.87 0.03 350 0.00 0.00 0.00

2013 12.82 12.90 0.08 346 0.00 0.00 0.00

2014 12.86 12.92 0.06 341 0.00 0.00 0.00

2015 12.98 12.94 -0.04 335 0.00 0.00 0.00

2016 13.10 12.96 -0.14 330 0.00 0.00 0.00

2017 13.30 12.99 -0.32 324 0.00 0.00 0.00

2018 13.55 13.01 -0.53 317 0.00 0.00 0.00

2019 13.84 13.03 -0.81 309 0.00 0.00 0.00

2020 14.15 13.05 -1.10 299 0.00 0.00 0.00

2021 14.45 13.07 -1.39 289 0.00 0.00 0.00

2022 14.75 13.08 -1.66 277 0.00 0.00 0.00

2023 15.03 13.10 -1.93 264 0.00 0.00 0.00

2024 15.28 13.12 -2.16 251 -0.01 0.00 0.01

2025 15.51 13.13 -2.38 237 -0.02 0.00 0.02

2026 15.72 13.15 -2.57 222 -0.04 0.00 0.04

2027 15.91 13.16 -2.74 206 -0.05 0.00 0.05

2028 16.07 13.17 -2.89 190 -0.06 0.00 0.07

2029 16.21 13.19 -3.02 173 -0.08 0.00 0.08

2030 16.31 13.20 -3.12 156 -0.09 0.00 0.10

2031 16.39 13.20 -3.18 139 -0.12 0.00 0.12

2032 16.44 13.21 -3.23 121 -0.15 0.00 0.15

2033 16.48 13.22 -3.26 103 -0.18 0.00 0.18

2034 16.49 13.22 -3.27 85 -0.21 0.00 0.21

2035 16.49 13.22 -3.26 66 -0.24 0.00 0.24

2036 16.46 13.23 -3.24 48 -0.27 0.00 0.27

2037 16.43 13.23 -3.20 29 -0.31 0.00 0.31

2038 16.38 13.23 -3.15 11 -0.34 0.00 0.34

2039 16.30 13.23 -3.08 ---- -0.38 0.00 0.37

2040 16.23 13.23 -3.01 ---- -0.41 0.00 0.41

2041 16.15 13.23 -2.93 ---- -0.44 0.00 0.44

2042 16.07 13.22 -2.85 ---- -0.48 0.00 0.48

2043 15.99 13.22 -2.77 ---- -0.52 0.00 0.52

2044 15.92 13.22 -2.70 ---- -0.56 0.00 0.55

2045 15.85 13.22 -2.63 ---- -0.59 0.00 0.59

2046 15.79 13.22 -2.57 ---- -0.63 0.00 0.62

2047 15.73 13.22 -2.51 ---- -0.67 -0.01 0.66

2048 15.67 13.22 -2.45 ---- -0.71 -0.01 0.70

2049 15.60 13.22 -2.39 ---- -0.75 -0.01 0.74

2050 15.54 13.22 -2.32 ---- -0.79 -0.01 0.79

2051 15.48 13.22 -2.26 ---- -0.85 -0.01 0.84

2052 15.43 13.22 -2.21 ---- -0.89 -0.01 0.89

2053 15.40 13.22 -2.18 ---- -0.94 -0.01 0.93

2054 15.37 13.22 -2.15 ---- -0.98 -0.01 0.97

2055 15.35 13.22 -2.13 ---- -1.01 -0.01 1.00

2056 15.35 13.23 -2.12 ---- -1.04 -0.01 1.03

2057 15.34 13.23 -2.12 ---- -1.07 -0.01 1.06

2058 15.33 13.23 -2.11 ---- -1.11 -0.01 1.10

2059 15.32 13.23 -2.09 ---- -1.14 -0.01 1.13

2060 15.31 13.23 -2.08 ---- -1.17 -0.01 1.16

2061 15.31 13.23 -2.08 ---- -1.20 -0.01 1.19

2062 15.30 13.24 -2.07 ---- -1.23 -0.01 1.22

2063 15.29 13.24 -2.05 ---- -1.27 -0.01 1.25

2064 15.28 13.24 -2.04 ---- -1.31 -0.01 1.29

2065 15.27 13.24 -2.03 ---- -1.35 -0.01 1.33

2066 15.26 13.24 -2.02 ---- -1.39 -0.01 1.37

2067 15.26 13.24 -2.01 ---- -1.43 -0.01 1.41

2068 15.26 13.25 -2.01 ---- -1.47 -0.02 1.45

2069 15.26 13.25 -2.01 ---- -1.51 -0.02 1.49

2070 15.26 13.25 -2.01 ---- -1.55 -0.02 1.53

2071 15.26 13.25 -2.01 ---- -1.58 -0.02 1.57

2072 15.27 13.26 -2.01 ---- -1.62 -0.02 1.60

2073 15.28 13.26 -2.02 ---- -1.66 -0.02 1.64

2074 15.28 13.26 -2.03 ---- -1.70 -0.02 1.68

2075 15.29 13.26 -2.03 ---- -1.73 -0.02 1.71

2076 15.30 13.26 -2.04 ---- -1.77 -0.02 1.74

2077 15.31 13.26 -2.05 ---- -1.80 -0.03 1.78

2078 15.32 13.26 -2.06 ---- -1.84 -0.03 1.81

2079 15.34 13.26 -2.07 ---- -1.87 -0.03 1.84

2080 15.35 13.26 -2.08 ---- -1.90 -0.03 1.87

2081 15.36 13.27 -2.09 ---- -1.93 -0.03 1.90

2082 15.37 13.27 -2.11 ---- -1.97 -0.04 1.93

2083 15.39 13.27 -2.12 ---- -2.00 -0.04 1.96

2084 15.40 13.27 -2.13 ---- -2.03 -0.04 1.99

2085 15.41 13.27 -2.14 ---- -2.05 -0.04 2.01

Cost Rate Income Rate

Actuarial 

Balance

Change in 

Cost rate

Change in 

Income Rate

Change in 

Actuarial

Balance

15.30% 14.00% -1.30% 2038 -0.63% -0.01% 0.62%

1 Under present law the year of exhaustion is 2037

April 12, 2011

Summarized Rates: OASDI

Year of 

Exhaustion1

Summarized Rates: OASDI

2010 - 2084

Based on Intermediate Assumptions of the 2010 Trustees Report Office of the Chief Actuary

Social Security Administration

Table 1 - OASDI Cost Rate, Income Rate, Annual Balance, and Trust Fund Ratio

Representative Lummis Bill to Raise Retirement Ages by 3 Years over the Period 2023 through 2069: H.R. 867

Proposal Change in Present Law

Expressed as a percentage of present-law

taxable payroll Trust Fund

Ratio

1-1-year

Expressed as a percentage of present-law

taxable payroll