Social Security Actuarial Status

Recent Experience and Prospects for the Future

Stephen C. Goss, Chief Actuary, SSA

Karen P. Glenn, Deputy Chief Actuary, SSA

Kansas City Actuarial Club

December 7, 2022
2

Three-Legged Stool: Basis for Retirement Planning

Common Wisdom: Aim for 75-80 Percent Replacement Rate

Retirement Income

Social 

Security
Defined Benefit Plans Replaced by DC Plans

And Lump Sum Options Increasing for DB Plans

3

0%

10%

20%

30%

40%

50%

60%

197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002200320042005200620072008200920102011201220132014

Private-Sector Workers Participating in Employment-Based Retirement 

Plans, by Plan Type, 1979-2014

Defined Benefit Total Defined Contribution Total

Both Either

Source: U.S. Department of Labor Form 5500 Summaries 1979-1998, Pension Benefit Guaranty Corporation,

Current Population Survey 1999-2013, EBRI estimates 1999-2014.
4

Social Security: What Does It Provide?

• Retirement and survivor monthly benefits started in 1940

– Never missed a payment!

• Eligible age lowered from 65 to 62 in 1957 for women, 1962 for 

men

• Monthly benefits are higher if start receipt after 62, up to age 70

• Disability benefits started in 1957

• Benefits rise with average wage across generations, and with 

CPI after initial eligibility

• Payroll taxes are the primary source of financing

– Rose from 2% in 1937 to 12.4% as system matured
5

Social Security Financing

• Basically “Pay-As-You-Go” 

– Current workers provide for current beneficiaries

– Trust Funds are a “contingency reserve” because cannot borrow

– Total spending to date cannot exceed income to date

• Current OASDI reserves (excess income) are $2.8 trillion

– Available to augment tax income as needed

• Reserves projected to deplete in 2035 under current law

– But 80 percent of scheduled benefits would still then be payable 

• Expect Congress to act—as it always has
Currently 

Scheduled Benefit 

Replacement 

Rates Based on 

the 2022 TR

But—15 percent higher if 

wait to start benefits until 

age 67, and 43 percent 

higher if wait until age 70.

6

Source: Annual Recurring Actuarial Note #9 at www.ssa.gov/oact/NOTES/ran9/index.html

0

10

20

30

40

50

60

70

1940 1960 1980 2000 2020 2040 2060 2080 2100

Calendar Year

Scheduled Monthly Benefit Levels as Percent of Career-Average 

Earnings by Year of Retirement at age 65

Low Earner ($28,162 for 2022; 24th percentile)

Medium Earner ($62,583 for 2022; 56th percentile)

High Earner ($100,133 for 2022; 81st percentile)

Max Earner ($147,000 for 2022; 100th percentile)

Historical Projected
7

Payable Benefits 

Under the Law, 

After Trust Fund 

Reserves Are 

Depleted, 

Would Be Lower

Source: Annual Recurring Actuarial Note #9 at www.ssa.gov/oact/NOTES/ran9/index.html

0

10

20

30

40

50

60

70

1940 1960 1980 2000 2020 2040 2060 2080 2100

Calendar Year

PAYABLE Monthly Benefit Levels as Percent of Career-Average Earnings 

by Year of Retirement at age 65

Low Earner ($28,162 for 2022; 24th percentile)

Medium Earner ($62,583 for 2022; 56th percentile)

High Earner ($100,133 for 2022; 81st percentile)

Max Earner ($147,000 for 2022; 100th percentile)

Historical Projected
What We Do—Office of the Chief Actuary

• Baseline projections of OASDI cost and revenue under current 

law

– For the Trustees Reports 

– For the President’s Budget (including SSI as well)

– SSA and Governmentwide Financial Statements

• Estimates for proposals to change law, regulations, and policy

– For Congress, the Administration, and others

• Actuarial notes and studies

8
Solvency: OASI+DI 

Trust Fund 

Reserve Depletion 

in 2035 (one year later 

than last year)

Reserve depletion date varied 

from 2029 to 2042 in reports 

over the past 30 years (1993-

2022).

DI Trust Fund: reserves do not 

deplete.

Due largely to continued low 

recent and near-term disability 

applications and awards, and a 

lower assumed ultimate 

disability incidence rate.

9

0%

50%

100%

150%

200%

250%

300%

350%

400%

450%

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

Calendar Year

Social Security Trust Fund Ratios

Assets as a Percent of Annual Cost

Trustees Report Intermediate Projections

2022 TR DI

2021 TR DI

2022 TR OASI

2021 TR OASI

2022 TR OASDI

2021 TR OASDI

Historical Projected

Tax Rate

Reallocation
OASDI Annual 

Cost and NonInterest Income as 

Percent of Taxable 

Payroll

Persistent negative annual 

cash-flow balance starting in 

2010.

80 percent of scheduled 

benefits still payable at trust 

fund reserve depletion.

Annual deficit in 2096: 4.25 

percent of payroll: 0.09 

percent smaller than last 

year.

10

0%

5%

10%

15%

20%

25%

2005 2015 2025 2035 2045 2055 2065 2075 2085 2095

Calendar Year

OASDI Non-Interest Income, Cost and Expenditures 

as Percentages of Taxable Payroll

Cost: Scheduled and 

payable benefits

Cost: Scheduled but not 

fully payable benefits

Non-interest Income Expenditures: Payable benefits = income 

after trust fund depletion in 2035

Payable benefits as percent 

of scheduled benefits:

2022-34: 100%

2035: 80%

2096: 74%

Historical Projected
SUSTAINABILITY: 

Cost as percent 

of GDP

Rises from a 4.2 percent 

average in 1990-2008, to a 

peak of about 6.2 percent 

for 2077, and then declines 

to 5.9 percent by 2096.

11

0%

1%

2%

3%

4%

5%

6%

7%

8%

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

Calendar Year

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

Historical Projected

Cost

Non-interest Income
Why the Big Increase in Cost 

as Percent of GDP and 

Earnings?

12
Aging - Change 

in Age 

Distribution

Mainly due to drop in 

birth rates.

13

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

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

Aged Dependency Ratio 2022 TR

Population 65+/(20-64) 

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964

Historical Projected

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

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

Aged Dependency Ratio 2022 TR

Population 65+/(20-64) 

Actual and TR Intermediate

TFR remains at 3.0 after 1964

TFR remains at 3.3 after 1964

Historical Projected
Birth Rates Have 

Been Dropping for 

Women Under 30, 

but Rising for 

Older Ages

We are projecting some 

continuing shift toward 

childbearing at older 

ages, maintaining lifetime 

births at around 2 per 

woman on average, as 

birth expectation surveys 

suggest. 

14
Birth Rates by 

Cohort

Has been rising for 

women born since 1951. 

Projected to dip below 

2.0 for women born 

between 1990 and 2006, 

based on low rates since 

2008.

15

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

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

Distribution Over 

Last 20 and Next 

20 Years Mainly 

Due to Macro 

Aging

Permanent level shifts–

after fluctuations 

between 1970 and 

2030.

16

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

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

Percent of Population at Ages 25+

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

25-44

45-64

65-84

85+

Boomers 

become 

25-44

Boomers 

become 

45-64

Boomers 

become 

65-84
Disability Experience Has 

Been Changing

17
Disabled Worker Receipt (Application) Rates Have Been 

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

18

0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020

Receipts per 1,000 exposed

Fiscal year

Male Title II Disabled Worker DDS Receipt Rates

by 5-Year Age Groups per 1,000 exposed

60-64

55-59

50-54

45-49

35-44

25-34

Under 25

0

1

2

3

4

5

6

7

1990 1995 2000 2005 2010 2015 2020

Receipts per 1,000 exposed

Fiscal year

Female Title II Disabled Worker DDS Receipt Rates 

by 5-Year Age Groups per 1,000 exposed

60-64

55-59

50-54

45-49

35-44

25-34

Under 25
Disability 

Incidence Rate 

Remains 

Historically Low

DI disabled worker 

incidence rate rose sharply 

in the 2008 recession, and 

has declined since the peak 

in 2010 to extraordinarily 

low levels in 2016 through 

2021.

What will be the NET effect 

of COVID and post-COVID 

conditions? 

19

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

1990 1995 2000 2005 2010 2015 2020 2025 2030

DI Age-Sex-Adjusted Incidence Rates:

Historical and Intermediate Assumptions for 2012 through 2022 Trustees Report

2012TR

2013TR

2014TR

2015TR

2016TR

2017TR

Average 1990-2021 5.04

Ultimate Assumption 4.80

2018TR

2019TR

2020TR

2021TR

2022TR
Fewer Disabled 

Worker 

Beneficiaries

Fewer now and in near 

term based on recent 

applications and 

incidence rates.

20

6,000

7,000

8,000

9,000

10,000

11,000

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

Calendar Year

Disabled Worker Beneficiaries

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

2008 TR (no recession)

2021 TR

2022 TR
Disabled Worker 

Prevalence Rates

Cease declining, and rise 

to level above that 

before the 2007-09 

recession?

21

DI Disability Prevalence Rates, 1970-2100
Mortality Trends: 

Past and Future

22
Mortality 

Experience: All 

Ages

Increased mortality in the 

near-term to reflect the 

effects of the COVID-19 

pandemic.

23

700

750

800

850

900

950

1,000

1,050

1,100

1990 1995 2000 2005 2010 2015 2020 2025

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

Total, All Ages

2014TR

2017TR

2020TR

2021TR

2022TR

Actual
Mortality 

Experience: 

Ages 65 and 

Older

Increased mortality in the 

near-term to reflect the 

effects of the COVID-19 

pandemic.

24

4,000

4,200

4,400

4,600

4,800

5,000

5,200

5,400

5,600

5,800

6,000

1990 1995 2000 2005 2010 2015 2020 2025

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

Ages 65 and Older

2014TR

2017TR

2020TR

2021TR

2022TR

Actual
Age-Adjusted Death Rates Due to Selected Leading Causes of Death:

United States, 1900-2021 (courtesy Bob Anderson, CDC)

Notes: Data are from the National Vital Statistics System. Prior to 1933, data are for death-registration States only. Data for 2021 are provisional.
Is There an Omega?

Highest attained age has changed little; it appears we are rectangularizing the survival curve

26
Level of Mortality Depends on Exposed Population

Example: U.S. death rates vary by career average earnings quintile: lifetime consistent measure

Bosley, Morris, Glenn (2018): Have the spreads roughly stabilized? At ages 65-69:

27
Experience Under COVID

28
COVID-19 Current and Long-Term Implications

• Raised death rates in US roughly 16% in 2020 and 18% in 2021

• Reduced life expectancy for affected cohorts

◦ Many died earlier, disproportionately those with other conditions

◦ Most survived infection, but will carry some residual compromise

◦ Thus, possibly no net implication for “trend rate” in mortality 

• However, this is the second coronavirus in 20 years

◦ Expect periodically in a now mobile world population?

• If deaths are raised by 16% in 2 of every 20 years:

◦ Average level of mortality will be 1.6% above “trend”

29
Excess Weekly Deaths for US—Estimated Complete

30
Hospitalizations Reported to CDC Are Rising, 

Even as “Reported” Cases Appear Stable

31
Evolving Variants, BQ Rising in US(CDC COVID Data Tracker: Variant Proportions)

32
Age

-Adjusted 

Death Rates Have 

Been Elevated in 

the Pandemic for 

Essentially All 

Causes 

NCHS Provisional 

Age-Adjusted Death Rates

2021Q1/

2019Q1

2021Q2/

2019Q2

2021Q3/

2019Q3

Alzheimer disease 1.076 0.979 1.076

COVID-19 #N/A #N/A #N/A

Cancer 0.975 1.000 1.021

Chronic liver disease and cirrhosis 1.286 1.241 1.315

Chronic lower respiratory diseases 0.793 0.850 1.030

Diabetes 1.149 1.108 1.253

Drug overdose 1.542 1.605 1.496

Falls, ages 65 and over 1.119 1.167 1.179

Firearm-related injury 1.204 1.244 1.250

Heart disease 1.039 1.033 1.128

HIV disease 0.933 0.857 1.000

Homicide 1.327 1.400 1.359

Hypertension 1.175 1.115 1.256

Influenza and pneumonia 0.629 0.774 1.135

Kidney disease 1.044 1.024 1.120

Parkinson disease 1.097 1.084 1.157

Pneumonitis due to solids and liquids 0.925 1.022 1.195

Septicemia 1.000 1.000 1.172

Stroke 1.098 1.095 1.144

Suicide 0.985 0.979 1.000

Unintentional injuries 1.307 1.355 1.318

Total 1.282 1.132 1.321

Total w/o COVID 1.058 1.079 1.142

To what extent will 

generations living 

through the pandemic be 

compromised in the 

future? 

33
How About Inflation and Interest Rates?

• Price inflation has increased due largely to supply issues that 

are expected to ease

• Interest rates are being increased in order to counter price 

inflation, by slowing demand

• Will these factors induce the next recession, or a period of 

slower but still positive growth? 

34
Trends in Employment and 

Retirement

35
Ratio of 

Employment 

to Population

Recovered more strongly 

from the brief but steep 

recession in 2020. 

Projected to exceed the 

level seen at the peak of 

the last economic cycle 

by 2022 for women and 

by 2023 for men.

36

0.45

0.50

0.55

0.60

0.65

0.70

0.75

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

Ratio of Employment to Population 

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

2021 TR

2022 TR

Age-sex-adjusted

Men (age-adjusted)

Women (age-adjusted)

Historical Projected
Ratio of 

Employment 

to Population 

vs. Quits Rate

Ratio of employment to 

population has recovered 

rapidly since the Trustees 

Report projections were 

developed.

Quits rate indicates a 

“great job churn”, and 

not a “great resignation”.

37

0

0.5

1

1.5

2

2.5

3

3.5

0.5

0.55

0.6

0.65

0.7

2000Q12000Q32001Q12001Q32002Q12002Q32003Q12003Q32004Q12004Q32005Q12005Q32006Q12006Q32007Q12007Q32008Q12008Q32009Q12009Q32010Q12010Q32011Q12011Q32012Q12012Q32013Q12013Q32014Q12014Q32015Q12015Q32016Q12016Q32017Q12017Q32018Q12018Q32019Q12019Q32020Q12020Q32021Q12021Q32022Q1

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

(16 and older, age-sex-adjusted)

Quits Rate

E/Pop 
Age of Starting Social Security Retirement Benefits

Note significant shift in recent years

38

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Male Retired Worker Beneficiaries In Current Payment Status 

as Percent of Insured Population 

(excluding those receiving only some other OASDI benefit)

62.5 63.5 64.5 65.5 66.5 67.5 68.5 69.5 70.5

Recession

Eliminate Earnings 

Test Over NRA

NRA starts

increase 

over 66

0

10

20

30

40

50

60

70

80

90

100

1975 1980 1985 1990 1995 2000 2005 2010 2015 2020

Female Retired Worker Beneficiaries In Current Payment Status 

as Percent of Insured Population 

(excluding those receiving only some other OASDI benefit)

62.5 63.5 64.5 65.5 66.5 67.5 68.5 69.5 70.5

Recession

Eliminate Earnings 

Test Over NRA

Deemed Filing 

applies to all 

Retired Workers
Big Picture...

39

• How will we address the future financial challenges for Social 

Security—and all retirement systems?

• Our population and that of other nations is shifting toward an 

older age distribution
The Bottom Line for Social Security

• Long-term projections provide information to assess solvency and 

changes needed to eliminate shortfalls

• If trust fund reserves were to become depleted:

• Full benefits could not be paid timely

• NO pressure on the Budget or Federal Debt

• So Congress must act, as it always has

• Straightforward solutions:

• Add revenue and/or lower cost for OASDI

• Comprehensive changes implemented by 2035

40
41

Some Ways to Lower Cost

• Lower benefits for retirees – not disabled?

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

• Can exempt long-career low earners (Simpson Bowles 2010)

• Lower benefits mainly for high earners?

• Reduce PIA above some level

• Noting that higher earners generally live longer

• Lower benefits mainly for the oldest old?

• Reduce the COLA

• Others say increase it with the CPI-E (based on purchases of consumers over 

age 62)
42

Some Ways to Increase Revenue

• Raise the 12.4 percent OASDI payroll tax rate?

• Raise tax on highest earners?

• Increase taxable maximum amount

• Some tax on all earnings above the maximum

• Provide additional benefit credit?

• Tax employer group health insurance premiums?

• Affects only middle class if taxable maximum remains

• Tax investment income?

• Or potentially a wealth tax?
43

Finally, Timing for Changes

• Historically, Congress has waited until reserve depletion is 

imminent 

• Given uncertainties, difficult to lower benefits or raise taxes until necessary

• Enacting “sooner” allows more options, more gradual phase in, 

and more advance notice

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

amendments

• OASDI reserve depletion now projected for 2035

• The date has varied between 2029 and 2042 over the past 30 years
For More Information: 

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

There you will find:

• Current and all prior OASDI Trustees Reports

• Detailed single-year tables for recent reports

• Our estimates for comprehensive proposals

• Actuarial notes, including replacement rates

• Actuarial studies, including stochastic

• Extensive databases

• Congressional testimonies

• Presentations by OCACT employees

44