© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Breakout Session: 

Social Security and 

Financially Disadvantaged Groups

November 13, 2023

10:30 – 11:45am
© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Social Security Basics and Some Ways to 

Think about Equity Issues

Karen P. Glenn

Social Security Administration

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© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Social Security’s Benefit Formula is Progressive

For an individual who first becomes eligible for benefits in 2023, their primary 

insurance amount (PIA) is the sum of:

a) 90 percent of the first $1,115 of their average indexed monthly earnings (AIME)

b) 32 percent of their AIME over $1,115 and through $6,721

c) 15 percent of their AIME over $6,721

Note: the PIA is the benefit a person would receive if they begin receiving retirement benefits at 

normal retirement age—neither reduced for early retirement nor increased for delayed retirement

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Replacement 

Rates Based on 

the 2023 

Trustees Report

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See Recurring Actuarial Note #9: www.ssa.gov/OACT/NOTES/ran9/

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 ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected
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Payable Benefits 

Under the Law, 

After Trust Fund 

Reserves Are 

Depleted, Are 

Lower

See Recurring Actuarial Note #9: www.ssa.gov/OACT/NOTES/ran9/

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 ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected
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How About at 

Age 62, When 

Many Start 

Benefits?

See Recurring Actuarial Note #9: www.ssa.gov/OACT/NOTES/ran9/

0

10

20

30

40

50

60

70

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 62

Low Earner ($29,766 for 2023; 24th percentile)

Medium Earner ($66,147 for 2023; 56th percentile)

High Earner ($105,835 for 2023; 81st percentile)

Max Earner ($160,200 for 2023; 100th percentile)

Historical Projected
© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Death Rates Vary by Career Average Earnings Quintile 

Bosley, Morris, Glenn (2018): have the spreads stabilized? At ages 65 -69: 7

See Actuarial Study #124: www.ssa.gov/OACT/NOTES/pdf_studies/study124.pdf
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Money’s Worth 

Recurring 

Actuarial Notes

Answers the question: 

How much are workers 

and their dependents 

receiving in benefits, 

compared to what 

they paid in payroll tax 

contributions?

See Recurring Actuarial Note #7: www.ssa.gov/OACT/NOTES/ran7/
© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Money’s Worth Expansion: Coming Soon!

• Expand analysis to incorporate:

 Differences in mortality by earnings level

 Differences in disability incidence by earnings level

• These factors tend to have somewhat offsetting effects

• Adding them will provide a more accurate representation

• Similar expanded analysis also coming for the internal rate of return note 

 See Recurring Actuarial Note #5: www.ssa.gov/OACT/NOTES/ran5/

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© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Effects of Proposed Regulations

• We have recently added distributional results to our analysis of regulations 

affecting Social Security

• Allows comparison of estimated effects of a regulatory change on various groups

• We provide detailed analysis by:

 Race/ethnicity

 Sex

 Age group

• April 2021: proposed regulation affecting disability determinations involving 

musculoskeletal impairments (see our memo at 

www.ssa.gov/OACT/solvency/MSKRuleDistrib_20210416.pdf)

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© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

Potential Legislative Changes

• Policymakers have proposed many changes to the Social Security program

• Some address solvency of the program, others address the adequacy of benefits

• We update our estimates for about 140 individual provisions each year; fully 

updated for the 2023 Trustees Report baseline as of the end of September

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

• We also provide detailed letters analyzing bills proposed by members of 

Congress and others

 See www.ssa.gov/OACT/solvency/

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© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

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Example: 

Provision D1

Proposed by many 

(including in 2016 by 

the Bipartisan Policy 

Center’s Commission 

on Retirement Security 

and Personal Savings)

Note this provision 

improves benefits, and 

therefore increases the 

shortfall slightly
© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

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Example: The 

“Work Without 

Worry Act”

Proposed by Senators 

Wyden and Cassidy in 

June 2023

Bipartisan bill which is 

estimated to increase 

program cost by a 

negligible amount 

over 75 years
© 2023 American Academy of Actuaries. All rights reserved.

May not be reproduced without express permission.

For More Information Go To: www.ssa.gov/OACT/

There you will find:

• The 2023 and all prior OASDI Trustees Reports

• Detailed single-year tables for recent reports

• Our estimates for comprehensive proposals and individual provisions

• Actuarial notes—including replacement rates, money’s worth, and internal rate of return

• Actuarial studies—including mortality by career-average earnings level

• Extensive databases

• Congressional testimonies

• Presentations by OCACT employees

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