Social Security: Future Financial Status and Accuracy of Projections

Social Security: Future Financial Status and Accuracy of Projections

Social Security: Future Financial Status and
August 16, 2023
Accuracy of Projections
Barry F. Huston
The Social Security program is facing a projected financial shortfall. Under the Social Security
Analyst Social Policy
Board of Trustees’ intermediate assumptions—their best guess as to the future experience—the

program will be unable to pay full scheduled benefits sometime in 2034. Said differently, trust
fund assets, which have been used in 2021 and 2022 to augment continuing tax revenues, are

projected to be depleted in 2034. At that time, the trustees estimate that continuing tax revenues
will be sufficient to support about 80% of scheduled benefits.
The Social Security program has faced financial shortfalls before. In the 1970s, adverse economic conditions stressed Social
Security’s finances. Congress responded by passing the Social Security Amendments of 1977 (P.L. 95-216), which, among
other things, decreased projected growth in benefit levels and increased revenues. When passed, the 1977 amendments were
projected to correct program imbalances between costs and revenues for about 50 years. However, the trustees’ 1980 annual
report notified Congress that the Old-Age and Survivors Insurance (OASI) program’s finances would not be able to support
the payment of full scheduled benefits by early 1982. In the 1980s, as the program’s financial status worsened, Congress took
many steps to address the issue, such as allowing the OASI program to temporarily borrow from other trust funds.
Ultimately, Congress passed the Social Security Amendments of 1983 (P.L. 98-21), which, among other things, decreased
benefits, increased revenues, and expanded coverage. The trustees’ 1983 annual report noted it was the first time in a decade
that Social Security was projected to be in actuarial balance for the entire 75-year projection period (1983-2058).
The inability of the 1977 amendments to provide the projected 50 years of adequate program financing created some
skepticism with the trustees’ assumptions and their projections for future financial status. In order to avoid this experience,
the 1983 legislation used pessimistic assumptions for the short-range time period and intermediate (best estimate)
assumptions for the long-range time period. Some skepticism on the projections remains, as evidenced by discussion during
an April 2023 House Ways and Means Subcommittee hearing on Social Security.
This report first summarizes the trustees’ projections for Social Security’s financial status before discussing the accuracy of
those projections. The trustees project that the combined trusts funds ratio will fall below 100% in the next 10 years and
remain below that level. Additional measures used to assess the program’s long-range financial adequacy—annual cash-flow
measures and actuarial balance—also reinforce the projections of a future financial shortfall.
Projections are inherently inexact. Some likely sources of projection error are discussed in this report. First, data used to
develop most demographic and economic assumptions undergo routine revisions. Second, models used to make projections
on the future financial status are enhanced over time. Third, the program itself has changed. For instance, one 1986 legislative
change allowed cost-of-living adjustments to be paid during periods of relatively low inflation, a situation that was not
permitted under prior law. Another source of inaccuracy is the impact of exogenous events. For example, the projections in
the trustees’ 2000 annual report could not account for the 2007-2009 recession, the pandemic-induced recession in 2020, or
legislative responses to each of those events. Given this, the uncertainty for projections for longer time horizons is higher.
Analysis of past projections in this report reinforces the expectation that relatively longer-term projections are more
inaccurate than relatively shorter-term projections. That is, a projection two years into the future is likely to be more accurate
than a projection 20 years into the future. Thus, under the current situation in which the value of reserve assets held in the
combined trust funds is decreasing, as the program moves closer toward the projected date of reserve depletion, the
projections are likely becoming more accurate. This is important to Congress for two reasons. First, the increased accuracy of
the projections will help indicate the magnitude of the projected shortfall and, therefore, the size of potential legislation that
would be needed to eliminate the shortfall. And second, the increased accuracy will help indicate the timing of any proposed
legislation.
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Contents
Introduction ..................................................................................................................................... 1
Background ..................................................................................................................................... 1
Annual Reports and Projection Periods .................................................................................... 2
Assumptions ........................................................................................................................ 3
The Trust Funds .................................................................................................................. 3
The Office of the Chief Actuary (OCACT) ........................................................................ 4
Short-Range Actuarial Estimates ..................................................................................................... 4
Long-Range Actuarial Estimates ..................................................................................................... 5
Annual Cash-Flow Measures .................................................................................................... 6
Summary Measures ................................................................................................................... 8
Uncertainty in Projections ............................................................................................................. 10
Accuracy of Projections ................................................................................................................ 12
Possible Causes of Inaccuracy ................................................................................................ 13
Congressional Budget Office and Projection Accuracy .................................................... 13
Measures of Projection Accuracy ............................................................................................ 14
Results ..................................................................................................................................... 15
Conclusion ..................................................................................................................................... 19

Figures
Figure 1. Social Security Trust Fund Ratio, 1975-2035 .................................................................. 5
Figure 2. Social Security Cash-Flow Measures as a Percentage of Taxable Payroll, 1975-
2097 .............................................................................................................................................. 6
Figure 3. Social Security Covered Workers to Beneficiaries, 1975-2097 ....................................... 7
Figure 4. Social Security Actuarial Balance as a Percentage of Taxable Payroll, 1982-
2023 .............................................................................................................................................. 9
Figure 5. Cumulative Present Value of the Social Security Projected Financial Shortfall,
2022-2097................................................................................................................................... 10
Figure 6. Social Security Trust Fund Ratios Under Alternative Scenarios, 1990-2100 ................. 11
Figure 7. Projected Social Security Trust Fund Ratios, 2023-2045 .............................................. 12
Figure 8. Projected Years Until Combined Social Security Trust Fund Depletion ........................ 19

Figure A-1. Historical and Projected Social Security Trust Fund Ratios, 1975-2035 ................... 21
Figure A-2. Social Security Cash Flow Measures as a Percent of Taxable Payroll, 1975-
2097 ............................................................................................................................................ 21
Figure A-3. Social Security Covered Workers to Beneficiaries, 1975-2097 ................................. 22
Figure A-4. Individual Social Security Trust Fund Ratios Under Alternative Scenarios,
1990-2100................................................................................................................................... 22

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Tables
Table 1. Statistics of Projection Accuracy for Selected Measures of Social Security
Financial Status .......................................................................................................................... 17

Table A-1. Sources of Changes in the Estimated Long-Range OASDI Actuarial Balance
Since the 1983 Trustees Report .................................................................................................. 23

Appendixes
Appendix. Supporting Information ............................................................................................... 20

Contacts
Author Information .......................................................................................................................... 3

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Social Security: Future Financial Status and Accuracy of Projections

Introduction
The Social Security Board of Trustees projects the combined trust funds’ assets of the program to be
depleted in 2034. After this, the program, barring congressional action, would operate as a strict pay-as-
you go system than can pay out in benefits only what it receives in revenue. Under current law and the
trustees’ best estimates, continuing program tax revenue will be sufficient to pay about 80% of scheduled
benefits after the asset reserves held in the trust funds are depleted.
As discussed later in this report, the trustees’ past 12 annual reports have projected the combined trust
funds to be depleted at some point during the 2033-2035 time period. The annual projections rely on a
wide range of economic, demographic, and program-specific factors. Economic factors include
productivity, price inflation, unemployment, and growth in gross domestic product (GDP); demographic
factors include fertility, mortality, and immigration; and program-specific factors include covered and
taxable earnings, revenues from the taxation of benefits, and average benefits indexed to growth in
average national wages. Assumptions across this wide range of factors are used in models to project the
program’s future financial status for the short-range and long-range time periods. The most recent 2023
annual report projects the program to fail both the short-range and long-range tests for financial adequacy.
Congress has demonstrated that Social Security’s financial status is of high concern. Social Security is
commonly referred to as the federal government’s largest program in terms of both the number of workers
covered (about 183 million in 2023) and the number of beneficiaries (over 66 million in June 2023).1
Monthly Social Security benefits constitute a substantial portion of income for a large segment of
recipients.2 Recognizing this, past Congresses have introduced a variety of bills to address the program’s
future financial status.
This report first provides background on the program before it presents Social Security’s short-range and
long-range actuarial estimates. Next, the report discusses uncertainty in those projections and alternative
scenarios provided by the trustees to illustrate the uncertainty of future conditions. Lastly, the report
analyzes the accuracy of past projections of the future financial status of the combined trust funds.
Background
Social Security is a self-financing program that provides monthly cash benefits to retired or disabled
workers and their family members and to the family members of deceased workers.3 As of June 2023,
there were approximately 66.6 million Social Security beneficiaries. Of those, 52.1 million (78.2%) were
retired workers and family members, 8.7 million (13.1%) were disabled workers and family members,
and 5.8 million (8.8%) were survivors of deceased workers.4
Social Security is financed primarily by payroll taxes paid by covered workers and their employers.
Employers and employees each pay 6.2% of covered earnings, up to an annual limit, and self-employed
individuals pay 12.4% of net self-employment income, up to an annual limit. The annual limit on taxable

1 The Social Security program fact sheet estimates that 183 million people will work in Social Security–covered employment in
2023. This is about 94% of all workers. See Social Security Administration (SSA), “Social Security Program Fact Sheet,”
https://www.ssa.gov/OACT/FACTS/.
2 For more information, see CRS Report R47341, Income for the Population Aged 65 and Older: Evidence from the Health
Retirement Study (HRS).
3 A person may receive retired-worker benefits and continue to have earnings. However, under certain circumstances, earnings
may affect the amount of a person’s monthly benefit.
4 SSA, Monthly Statistical Snapshot, June 2023, Table 2. See the latest edition of the Monthly Statistical Snapshot at
http://www.socialsecurity.gov/policy/docs/quickfacts/stat_snapshot/index.html.
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earnings is $160,200 in 2023.5 Social Security is also credited with tax revenues from the federal income
taxes paid by some beneficiaries on a portion of their benefits. In addition, Social Security receives
interest income from Social Security trust fund investments. Social Security income and cost are
accounted for in two separate trust funds authorized under Title II of the Social Security Act: the Federal
Old-Age and Survivors Insurance (OASI) Trust Fund and the Federal Disability Insurance (DI) Trust
Fund.6 This report refers to the separate OASI and DI trust funds on a combined basis as the Social
Security trust funds.7 In 2022, the combined Social Security trust funds (OASDI) had total receipts of
$1.22 trillion, total expenditures of $1.24 trillion, and accumulated holdings (assets) of $2.83 trillion.8
Annual Reports and Projection Periods
The OASI trust fund and the DI trust fund are overseen by a board of trustees. The board is composed of
the Secretary of the Treasury (the managing trustee), the Secretary of Labor, the Secretary of Health and
Human Services, the commissioner of Social Security, and two public trustees.9
The trustees are required by law to report to Congress annually on the financial status of the Social
Security trust funds. Among other duties, Section 201(c)(2) of the Social Security Act requires the trustees
to
[r]eport to the Congress not later than the first day of April of each year on the operation and status
of the Trust Funds during the preceding fiscal year and on their expected operation and status during
the next ensuing five fiscal years.10
While the Social Security Act requires the trustees to report on the projected operations of the Social
Security trust funds for a five-year period, the trustees currently report 10-year (short-range) and 75-year
(long-range) projections of the financial status of the trust funds. Projections covering 75-year periods
first appeared in the 1965 Social Security trustees report.11
Although current law does not direct the trustees to perform long-range projections for 75-year periods,
all annual reports have used 75 years since the practice was first adopted in 1965.12 Additionally, statute

5 The annual limit on covered wages and net self-employment income that is subject to the Social Security payroll tax (the
taxable wage base) is adjusted annually based on average wage growth if a Social Security cost-of-living adjustment is payable.
6 42 U.S.C. §401.
7 Under current law, the OASI and DI trust funds cannot borrow from each other when faced with a funding shortfall. The
shifting of funds between OASI and DI can be done only with authorization from Congress. In the past, Congress has authorized
temporary interfund borrowing among the OASI, DI, and Medicare Hospital Insurance trust funds, as well as temporary payroll
tax reallocations between OASI and DI, to deal with funding shortfalls. Most recently, under the Bipartisan Budget Act of 2015
(P.L. 114-74), Congress authorized a temporary reallocation of payroll taxes from the OASI fund to the DI fund for calendar
years 2016-2018. Because of such actions, the OASI and DI trust funds are discussed on a combined basis. For more information,
see CRS Report R43318, The Social Security Disability Insurance (DI) Trust Fund: Background and Current Status.
8 SSA, “Trust Fund Data,” https://www.ssa.gov/cgi-bin/ops_period.cgi.
9 The public trustees are appointed by the President with advice and consent of the Senate. These positions have been vacant
since the 2015 annual report. The Social Security trustees also oversee Medicare’s trust funds. See Government Accountability
Office, Social Security and Medicare: Improved Schedule Management Needed for More Timely Trust Fund Reports, GAO-19-
596, July 2019, https://www.gao.gov/assets/gao-19-596.pdf. This report only focuses on the Social Security trust funds.
10 42 U.S.C. §401(c)(2).
11 The 1965 Social Security Advisory Council recommended using a 75-year valuation period because it would generally cover
the anticipated period of benefit receipt of workers covered by the system. 1965 Advisory Council on Social Security, The Status
of the Social Security Program and Recommendations for Its Improvement, 1965, pp. 16-17, http://www.socialsecurity.gov/
history/reports/65council/65report.html. For more information on the 75-year period used for long-range projections, see CRS In
Focus IF11851, Social Security Long-Range Projections: Why 75 Years?
12 The current chief actuary of the SSA wrote: “The 75-year period encompasses essentially the entire future life span of all
current workers and beneficiaries, even the youngest current workers, at the beginning of the 75-year period. It also provides a
(continued...)
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requires the trustees to include a statement of actuarial status and determine if the trust funds are in close
actuarial balance (as defined by the trustees and discussed in the sections below on short-range and long-
range actuarial estimates).13 Income rates and cost rates for a valuation period are used to calculate the
actuarial balance (discussed below). For this calculation, the trustees define the long-term valuation
period to be 75 years, which covers approximately the maximum remaining lifetime for virtually all
current Social Security participants (i.e., covered workers and beneficiaries).14
Assumptions15
In each annual report, the trustees present three alternative sets of assumptions for demographic,
economic, and program-specific factors.16 The low-cost set of assumptions represents a future experience
that is the most advantageous to the program’s financial status. The high-cost set of assumptions
represents a future experience that is the least advantageous to the program’s financial status. As the
trustees state: “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.”17
In actual experience, it is unlikely that all demographic, economic, and program-specific factors move in
a manner that is either favorable or unfavorable to the program’s financial status. Thus, the trustees use
the intermediate set of assumptions to illustrate their best guess as to the future experience. This report,
therefore, focuses on the intermediate set of assumptions.
The Trust Funds
In the context of federal program accounting, a trust fund is an accounting mechanism that allows a
program to track revenues and expenses. Additionally, a trust fund provides a means for a program (e.g.,
Social Security) to hold any accumulated assets—that is, money not immediately needed to pay
benefits—for the payment of future benefits.18
Under current law, there are two separate trust funds for the Social Security program: (1) the OASI trust
fund and (2) the DI trust fund. Monies credited to each trust fund cannot be lent or transferred to the other
trust fund without authorization from lawmakers. OASI benefits can be paid only from the OASI trust
fund, and DI benefits can be paid only from the DI trust fund.
For the purposes of this report, the trust funds—and other program information—will be considered on a
combined, hypothetical basis. Essentially, this suggests that data and measures presented illustrate a

projection period long enough to illustrate the complete and mature effects of past amendments and potential future changes to
the Social Security Act.” Stephen C. Goss, “Measuring Solvency in the Social Security System,” in Prospects for Social Security
Reform, ed. Olivia S. Mitchell, Robert J. Myers, and Howard Young (Philadelphia: University of Pennsylvania Press, 1997), pp.
16-36, https://repository.upenn.edu/entities/publication/a6096f33-efe8-4d09-aac2-5f2f65d1657b.
13 42 U.S.C. §401(c). The definition of close actuarial balance has changed over time. Under the current-law definition of close
actuarial balance, a trust fund must meet the short-range test of financial adequacy (see “Short-Range Actuarial Estimates”) and
have a trust fund ratio expected to remain above zero throughout the 75-year projection period. Prior to the current law definition
(established as part of P.L. 101-508), the test of close actuarial balance required that the summarized long-range income rate be
between 95% and 105% of the summarized long-range cost rate. The concept of “closeness” was intended to reflect the
uncertainty in long-range projections. Goss, “Measuring Solvency in the Social Security System,” p. 25.
14 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance
Trust Funds, March 31, 2023, p. 247, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf.
15 A glossary for key terms (e.g., assumptions) used in this report is provided in the Appendix.
16 In the annual reports, the low-cost set of assumptions is known as alternative I, the intermediate set of assumptions is known as
alternative II, and the high-cost set of assumptions is known as alternative III.
17 2023 annual report, p. 20.
18 For more information, see CRS Report RL33028, Social Security: The Trust Funds.
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weighted averaged of the two separate funds. Naturally, this implies that most data and measures will be
more weighted to OASI, as this program is larger in terms of annual costs, annual income, and asset
reserves held in its trust fund. At the end of 2022, the combined value of the trust funds was $2.83 trillion.
The OASI trust fund accounted for 95.8% of the combined OASDI trust fund value.19
The Office of the Chief Actuary (OCACT)
In practice, the trustees do not perform the modelling functions required to make projections for the status
of the trust funds. Rather, that function is performed by SSA’s Office of the Chief Actuary.20 OCACT’s
mission—including its support for the trustees—is outlined on SSA’s organization structure website:
The Office of the Chief Actuary (OCACT) plans and directs a program of actuarial estimates and
analyses pertaining to the SSA-administered retirement, survivors and disability insurance programs
and supplemental security income program and to projected changes in these programs. Evaluates
operations of the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability
Insurance Trust Fund; estimates future operations of the trust funds; conducts studies of program
financing; performs actuarial and demographic research on social insurance and related program
issues; and estimates future workloads. Provides technical and consultative services to the
Commissioner, the Board of Trustees of those two Trust Funds, and, as requested, congressional
committees. Appears before congressional committees to provide expert testimony on the actuarial
aspects of Social Security issues.21
Specifically, SSA’s organizational manual specifies that OCACT’s Office of Long-Range Actuarial
Estimates is responsible for planning, directing, and coordinating long-range cost estimates for the
retirement, survivors, and disability program (i.e., Social Security) both under current provisions and
proposed changes in law or regulation.22 OCACT’s website states that its Office of Long-Range Actuarial
Estimates is responsible for estimates for up to 75 years in the future.23
Short-Range Actuarial Estimates
For the short-range (10-year) period, the trustees measure the program’s financial adequacy using the
trust fund ratio—that is, the trust fund’s asset reserves at the beginning of a year expressed as a
percentage of the projected total cost for the year. For instance, a trust fund ratio of 200% indicates that
two years of projected benefits could be paid with asset reserves absent any additional income.24 The
trustees state that maintaining a trust fund ratio of at least 100% is a good indication that the trust funds
can cover most short-range contingencies.25 A test of the program’s short-range financial adequacy is
satisfied if (1) the projected trust fund ratio is at least 100% at the beginning of the 10-year period and
remains so for the 10-year period or (2) the ratio is below 100% at the beginning of the 10-year period but
is projected to reach at least 100% within five years and remain at least 100% for the remainder of the 10-
year period.26

19 SSA, “Trust Fund Data.”
20 42 U.S.C. §902(c).
21 See SSA, Organizational Structure of the Social Security Administration, https://www.ssa.gov/org/orgOCACT.htm.
22 See SSA, Organizational Structure of the Social Security Administration.
23 See SSA, Organization of the Office of the Chief Actuary, https://www.ssa.gov/oact/actuaries/organization.htm.
24 The Congressional Budget Office (CBO) states that the trust fund ratio indicates how much of recipients’ annual benefit
amounts could be paid from the balance at the beginning of a given year. See CBO, CBO’s 2023 Long-Term Projections for
Social Security, June 2023, https://www.cbo.gov/system/files/2023-06/59184-SocialSecurity.pdf.
25 2023 annual report, p. 11.
26 2023 annual report, p. 11.
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Figure 1 shows the most recent projections for the trust fund ratio on a combined basis under the
intermediate assumptions. The Social Security program does not meet the trustees’ criteria for short-range
financial adequacy for the current 10-year period. The trust fund ratio is projected to fall below 100% by
2029 and remain below 100% for the remainder of the current 10-year period.27
Figure 1. Social Security Trust Fund Ratio, 1975-2035
On a Combined Basis Under the 2023 Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Table IV.A3, pp. 49-50, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
supplemental single-year Table IV.B4, https://www.ssa.gov/OACT/TR/2023/lr4b4.html.
Notes: For comparison purposes, Figure A-1 includes the Congressional Budget Office’s 2023 Long-Term Projection for
Social Security’s estimates for combined trust fund ratios.
Long-Range Actuarial Estimates
For the long-range (75 year) period, the trustees assess the program’s financial adequacy using three
measures: (1) annual cash-flow measures (i.e., income rates, cost rates, balances); (2) trust fund ratios;
and (3) summary measures (i.e., actuarial balances). Cash-flow measures and summary measures are
commonly expressed as a percentage of taxable payroll or GDP.28 A test of the program’s long-range
close actuarial balance is satisfied if (1) the trust fund meets the definition of short-range financial
adequacy and (2) the trust fund ratio is projected to remain above zero throughout the long-range (75-
year) period. As shown in Figure 1, the first condition of the test is not satisfied (i.e., the trust fund ratio
falls below 100%), nor is the second condition (i.e., the trust fund ratio is projected to remain at 0%
throughout the 75-year projection period). The trust fund ratio is projected to fall below 100% in 2029
and fall below 0% (i.e., exhaustion of assets held in the trust funds) in 2034.29

27 2023 annual report, Table IV.A3, pp. 49-50, and supplemental single-year Table IV.B4, https://www.ssa.gov/OACT/TR/2023/
lr4b4.html.
28 2023 annual report, p. 12. Taxable payroll is a weighted sum of taxable wages and taxable self-employment income.
29 2023 annual report, Table IV.A3, pp. 49-50, and supplemental single-year Table IV.B4.
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Annual Cash-Flow Measures
Annual cash-flow measures are one set of measures the trustees use to assess the program’s long-range
financial adequacy. Figure 2 presents the historical and projected income rates, cost rates, and annual
balances as a percentage of taxable payroll under the trustees’ intermediate projections.30 As shown in
Figure 2, the projected income rate is relatively stable, whereas the projected cost rate is expected to
increase until the late 2070s before a relatively small decrease. Although the cost rate is projected to
stabilize, and partially decline, for the remainder of the long-range period, it is expected to remain larger
than the income rate.
As observed in Figure 2, the difference between income and cost rates—or balance—is largely driven by
increases in projected costs. The projected income rates, expressed as a percentage of taxable payroll, are
relatively more stable than the projected cost rates. Since the income rates are expressed as a percentage
of taxable payroll, and the combined Social Security payroll tax is fixed under current law at 12.4% of
taxable (i.e., covered) earnings, any remaining variation is caused by assumptions in taxation of benefits.
The taxation of benefits is a relatively small portion of income.31
Figure 2. Social Security Cash-Flow Measures as a Percentage of Taxable Payroll, 1975-2097
On a Combined Basis Under the 2023 Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 2023, Table IV.B1, p. 56-57, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and supplemental
single-year Table IV.B1, https://www.ssa.gov/OACT/TR/2023/lr4b1.html.
Note: For comparison purposes, Figure A-2 includes the Congressional Budget Office’s 2023 Long-Term Projection for
Social Security’s estimates for combined income rates, cost rates, and balances.
The trust fund ratio is expected to fall below 0% in 2034. Depletion of the trust fund reserves means that
the trust funds could no longer augment continuing income in the payment of scheduled benefits. As
shown in Figure 2, at the time of projected trust fund depletion, the program’s project cost rate exceeds

30 The income rate is the ratio of non-interest income to the taxable payroll for the year, the cost rate is the ratio of the cost of the
program to the taxable payroll for the year, and the balance is the difference between the two rates for the year. 2023 annual
report, pp. 241 and 246.
31 2023 annual report, p. 59.
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that of its projected income rate. Thus, in 2034, the program is not projected to have sufficient income to
support the payment of full scheduled costs (i.e., monthly benefit payments). Under the intermediate
assumptions, the trustees project that program income will be sufficient to cover about 80% of scheduled
benefits in 2034. (This percentage of payable benefits would fall to 74% by 2097.)32
The trustees attribute the projected rising costs to demographic factors: “Under the intermediate
assumptions, demographic factors by themselves cause the projected cost rate to rise rapidly for the next
two decades.”33 The historical and projected cost rates are, in effect, representative of the age distribution
of the Social Security population. As the trustees further state, “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.”34 To illustrate this relationship, the trustees present the
number of covered workers per beneficiary (i.e., the ratio of the number of people paying into Social
Security to the number of people getting paid by Social Security).
Figure 3 shows the historical and projected number of covered workers to Social Security beneficiaries
under the intermediate assumptions. As can be seen, the decline in this ratio reflects an inverse
relationship to the cost rate presented in Figure 2. Said differently, the projected increase in the cost rate
reflects a projected decrease in the number of covered workers to beneficiaries.
Figure 3. Social Security Covered Workers to Beneficiaries, 1975-2097
On a Combined Basis Under the 2023 Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Table IV.B3, p. 64-65, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
supplemental single-year Table IV.B3, https://www.ssa.gov/OACT/TR/2023/lr4b3.html.
Note: For comparison purposes, Figure A-3 includes the Congressional Budget Office’s 2023 Long-Term Projection for
Social Security’s estimates for the ratio of Social Security–covered workers to beneficiaries.

32 2023 annual report, p. 13.
33 2023 annual report, p. 13.
34 2023 annual report, p. 65.
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Summary Measures
The trustees use two summary measures to assess the program’s long-range financial adequacy. The first
measure is the actuarial balance. The actuarial balance is the difference between the summarized income
rate and the summarized cost rate, expressed as a percentage of taxable payroll.35 In this context, the
summarized income rate is the ratio of the present value of non-interest income to the present value of
taxable payroll for the 75-year period.36 Similarly, the summarized cost rate is the ratio of the present
value of cost to the present value of taxable payroll for the 75-year period. Alternatively, the actuarial
balance can also be thought of as the summarized balance. That is, the actuarial balance is the sum of the
differences between the projected income and projected cost in Figure 2, discounted to present values.
Or, more simply, it is the difference between the summarized income and cost rates.
Under the 2023 intermediate assumptions, the trustees estimate the actuarial balance to be -3.61 percent
of taxable payroll (see Figure 4).37 This measure represents the change in income or cost that would be
required to achieve program balance over the 75-year projection period and to achieve a trust fund reserve
equal to one year’s projected cost by the end of the period (i.e., a trust fund ratio of 100%). For instance,
the program being in balance would require program costs to decrease by 3.61% of taxable payroll or
program revenues to increase by 3.61% of taxable payroll.

35 Taxable payroll is the weighted sum of taxable wages and taxable self-employment income. When this sum is multiplied by the
OASDI program payroll tax rate, it results in the total amount of payroll taxes. See 2023 annual report, p. 253.
36 This measure of the cost rate also includes a target trust fund level equal to one year of projected annual cost. The summarized
income rate also includes asset reserves on hand at the beginning of a period. The present value is the equivalent value, at the
present time, of a stream of future values. Present values are discounted using the effective yields on combined trust fund asset
reserves. 2023 annual report, pp. 249-252. Alternatively, CBO defines present value as a single number that expresses a flow of
current and future income (in taxes) or payments (in benefits) in terms of an equivalent lump sum received or paid at a specific
time. The value depends on the rate of interest, known as the discount rate, used to translate past and future cash flows into
dollars at that time. See CBO, CBO’s 2016 Long-Term Projections for Social Security: Additional Information, December 2016,
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/52298-socialsecuritychartbook.pdf.
37 2023 annual report, p. 17.
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Figure 4. Social Security Actuarial Balance as a Percentage of Taxable Payroll, 1982-2023
On a Combined Basis Under the 2023 Intermediate Assumptions

Source: Sharon Chu and Kyle Burkhalter, Disaggregation of Changes in the Long-Range Actuarial Balance for the Old-Age,
Survivors, and Disability Insurance (OASDI) Program Since 1983, Social Security Administration, Office of the Chief Actuary,
March 2023, https://www.ssa.gov/OACT/NOTES/ran8/an2023-8.pdf.
The second measure the trustees use to assess the program’s long-range financial adequacy is the
cumulative present value of the projected financial shortfall (i.e., program income less cost). A positive
measure for this statistic represents a positive trust fund balance, whereas a negative measure for this
statistic represents an unfunded obligation.38 As discussed earlier, the value of the trust fund is projected
to remain positive through 2033. Under the intermediate assumptions, the trustees project the trust funds
to be exhausted sometime in 2034. The trustees state: “Through the end of 2097, the combined funds have
a present value unfunded obligation of $22.4 trillion.”39

38 The unfunded obligation is a measure of the shortfall of trust fund income to fully cover program cost through a specified date
(i.e., 2097) after depletion of trust fund asset reserves. 2023 annual report, p. 254.
39 2023 annual report, p. 17.
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Figure 5. Cumulative Present Value of the Social Security Projected Financial Shortfall,
2022-2097
Projected on a Combined Basis Under the 2023 Intermediate Assumptions and in Trillions of Dollars

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Figure II.D5, p. 19, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
https://www.ssa.gov/OACT/TR/2023/LD_figIID5.html.
Notes: Present values as of January 1, 2023.
Uncertainty in Projections
Taken together, Figure 2, Figure 4, and Figure 5 show that under the trustees’ latest intermediate
assumptions, the program’s financial adequacy is projected to decline under current law. All projections
come with a degree of uncertainty. To help illustrate the uncertainty, the trustees use three different sets of
assumptions in their annual reports. For example, Figure 6 shows the historical trust fund ratio and
projected trust fund ratios under the low-cost, intermediate, and high-cost alternative scenarios. As
discussed, the intermediate projections represent the trustees’ best estimate, while the low-cost and high-
cost scenarios help to present a range of possible outcomes. To accomplish this range, assumptions are
presumed to all be either advantageous or disadvantageous to the financial position. As the trustees state:
The low-cost alternative includes a higher ultimate total fertility rate, slower improvement in
mortality, higher real wage growth, a higher ultimate real interest rate, a higher ultimate annual
change in the CPI [consumer price index], and a lower unemployment rate. The high-cost
alternative, in contrast, includes a lower ultimate total fertility rate, more rapid improvement in
mortality, lower real wage growth, a lower ultimate real interest rate, a lower ultimate annual change
in the CPI, and a higher unemployment rate.40

40 2023 annual report, p. 19-20. Annual reports do include sensitivity analyses. These analyses illustrate the sensitivity to
individual assumptions as opposed to the set of assumptions.
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Figure 6. Social Security Trust Fund Ratios Under Alternative Scenarios, 1990-2100
On a Combined Basis Under the 2023 Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Figure II.D6, p. 20, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
https://www.ssa.gov/OACT/TR/2023/LD_figIID6.html.
Note: The above figured is replicated on an individual trust fund basis in Figure A-4.
While the three sets of long-range projections highlight the uncertainty in these estimates, this approach
does not provide any indication of the probability that the future financial status of the trust fund is within
or outside the range of these estimates. That is, this deterministic modelling approach does not indicate
the likelihood for each set of assumptions.
In order to help assign probabilities to possible outcomes, annual reports include outcomes from 5,000
stochastic simulations. The stochastic approach is built on thousands of independent simulations where
the values of the assumptions are allowed to vary. The distribution of these simulation outcomes is then
used to determine the probability of solvency occurring within a range of years or the probability of key
trust fund indicators falling within a particular numerical range. The stochastic results for the combined
trust fund ratios are presented in Figure 7. The results suggest that, with 95% confidence, the combined
trust funds would be exhausted between 2031 and 2040.41 Furthermore, they suggest that the low-cost and
high-cost scenarios are “very unlikely.”42 Figure 7 shows lines for the 2.5th, 50.0th, and 97.5th percentiles
of the estimated annual combined trust fund ratios. For example, the line representing the 2.5th percentile
reaches zero in 2031, which indicates that 97.5% of the 5,000 simulations resulted in combined trust fund
ratios that remained positive through at least 2031, whereas 2.5% of the 5,000 simulations result in trust
fund ratios that reached zero before 2031. Alternatively, the line representing the 97.5th percentile reaches
zero in 2040, which indicates that 2.5% of the 5,000 simulations resulted in combined trust fund ratios
that remained positive beyond 2040, while 97.5% of the 5,000 simulations resulted in combined trust
fund ratios that reached zero before 2040. The line representing the 50th percentile indicates the median
combined reserve depletion date (2033). For comparison purposes, the intermediate projection for the

41 2023 annual report, Table VI.E1, p. 207.
42 2023 annual report, p. 21.
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combined trust fund ratio is added to Figure 7. Under the intermediate assumptions, the projected date for
combined trust fund depletion is “mid-2034.”43
Figure 7. Projected Social Security Trust Fund Ratios, 2023-2045
Using Stochastic Simulations

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Figure II.D7, p. 22, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
https://www.ssa.gov/OACT/TR/2023/LD_figVIE2.html.
Accuracy of Projections
The accuracy of future projections of Social Security’s financial status is unknown. However, the
accuracy of some past projections is calculated and presented in this section. For instance, the actual trust
fund ratio for 2030 is unknown at this point. This value will be published in the eventual 2031 annual
report. The actual trust fund ratio for 2020 is known, and (intermediate) projections from prior annual
reports can be used to determine how accurately the 2020 trust fund ratio was projected. Moreover, using
prior annual reports from 1983 through 2023 allow the projections to be assessed over time. For example,
in the 1990 annual report, the intermediate projection for the 2020 trust fund ratio was 30 years in the
future, in the 2000 annual report it was 20 years in the future, and in the 2010 annual report it was 10
years in the future. In general, uncertainty increases for projections further in the future. That is, it could
be expected that the projections for the 2020 trust fund ratio was more accurate in 2010, less accurate in
2000, and even less accurate in 1990. This report assesses the projection accuracy for selected measures
of Social Security’s financial status starting with the 1983 annual report.44

43 2023 annual report, p. 201.
44 The Social Security Amendments of 1983 (P.L. 98-21) were the last major reforms to the Social Security program. For more
information, see CRS Report R47040, Social Security: Trust Fund Status in the Early 1980s and Today and the 1980s Greenspan
Commission.
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Possible Causes of Inaccuracy
This section discusses several, albeit non-exhaustive, possible causes for projection inaccuracy. The
annual reports reflect the trustees’ understanding at the beginning of a calendar year. For instance, the
2020 annual report was published on April 22, 2020, and the intermediate assumptions reflected the
trustees’ best guess as to the future experience starting at the beginning of the year. Therefore, the 2020
annual report did not reflect the potential changes from the COVID-19 pandemic (e.g., the pandemic-
induced recession).45 Said differently, the projections reflect a best guess at a specific date. The spectrum
of events that may have significant effects on the Social Security program after the specific date of said
best guess is unknown. For example, the projections in the 2000 annual report could not account for the
2007-2009 recession, the pandemic-induced recession in 2020, or legislative responses to each of those
events. Given this, the uncertainty for projections further into the future is higher.
Although time may be the most obvious source of projection inaccuracy, it is not the only reason. One
major source of projection inaccuracy is changes in legislation or regulations. Furthermore, these laws
need not change the specific laws and regulations governing Social Security. For instance, the 1991
annual report credits the Immigration Act of 1990 (P.L. 101-649)—a law modifying the general
immigration policy—with having a “significant effect” on Social Security.46 However, there have been
changes in law that directly affect Social Security. For instance, as part of the Omnibus Budget
Reconciliation Act of 1986 (P.L. 99-509), lawmakers changed the cost-of-living adjustment (COLA) rules
to effectively allow COLAs smaller than 3% to be payable. Since then, the change has accounted for 21
annual COLAs that would not have otherwise increased benefits (i.e., program costs).47 Another source of
projection inaccuracy is changes in methods and data collection. For instance, the 2021 annual report
highlighted several changes in methods and data that contributed to a change in projected financial status.
First, a new fertility model resulted in the ultimate fertility rate being reached 25 years later than projected
in the prior year’s report. Second, updates to the civilian labor force model to reflect new economic data
lowered projected labor force participation rates. Third, updates to the methodology for projecting
average benefit levels and Treasury tax information indicated future lower levels of revenue from the
taxation of Social Security benefits. In this case, all three changes resulted in a worsening financial
status.48
Congressional Budget Office and Projection Accuracy
Since 2005, the Congressional Budget Office (CBO) has published its Long-Term Projections for Social
Security. CBO’s estimates use internally developed assumptions and utilize the CBO Long-Term Model,49
which is used to produce projections for the economy and federal budget that extend beyond CBO’s usual
10-year projection period.50 CBO’s assumptions and modeling process generally result in cost projections
that are higher than the trustees’ annual reports (see Figure A-2).51 This characteristic, among others,

45 2020 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, April 22, 2020, p. 1, https://www.ssa.gov/OACT/TR/2020/tr2020.pdf.
46 1991 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, May 22, 1991, p. 18, https://www.ssa.gov/OACT/TR/historical/1991TR.pdf.
47 See SSA, “Cost-of-Living Adjustments,” https://www.ssa.gov/oact/cola/colaseries.html.
48 For more information, see CRS In Focus IF11939, Social Security: Selected Findings of the 2021 Annual Report.
49 For more information on the Congressional Budget Office Long-Term Model, see CBO, An Overview of CBOLT: The
Congressional Budget Office Long-Term Model, April 2018, https://www.cbo.gov/system/files/115th-congress-2017-2018/
reports/53667-cbolt.pdf.
50 CBO, An Overview of CBOLT.
51 CBO estimates that its assumptions for population (longer life expectancies and higher disability rates), earnings inequality
(continued...)
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typically results in CBO projecting fewer years until depletion of the asset reserves held in the trust funds
(see Figure A-1).
The structure of CBO’s Long-Term Projections for Social Security has changed over time. For instance,
many of the measures used to assess short-term and long-term actuarial status of the trust funds (e.g.,
income and cost rates as a percentage of taxable payroll) did not appear in the annual outlooks until
2015.52 Given this, CBO’s projections are not analyzed in this report. However, in early 2023, CBO
evaluated its projections for Social Security outlays and attributed differences between forecasted and
experienced costs to “misestimates of future COLAs.”53 Similar to the trustees’ estimates, CBO noted that
misestimates were generally higher for relatively longer-term projections than for shorter-term
projections. Also, the CBO analysis found that their projections were more likely to overestimate than
underestimate Social Security outlays.
Measures of Projection Accuracy
For each intermediate projection of income rate, cost rate, worker-to-benefit ratio, and trust fund ratio—
the past projections can be measured against historical (actual) values—this report presents and examines
three measures of forecast accuracy. The measures are the mean absolute deviation (MAD), mean squared
error (MSE), and mean absolute percentage error (MAPE). Although there are many measures of
prediction (i.e., projection) error, these three were chosen for their relative simplicity in interpretation.
The MAD is the sum of the absolute differences between the actual value and the projected value, divided
by the number of observations. This statistic measures how the projected values have deviated from actual
values on average. The lower the MAD, the better the projection accuracy. However, one drawback to
using the MAD to assess forecast accuracy is that possible large errors—actual value less projected
value—may be averaged out over a larger number of observations.
The MSE helps to add context for this issue. The MSE is the sum of squared differences between actual
value and projected value, divided by the number of observations. Because this calculation involves
squared error terms, larger differences between actual and projected values have a greater impact than do
smaller differences. Similarly, the lower the MSE, the better the projection accuracy. Additionally, the
closer the MSE is to the MAD, the less likely relatively large errors were experienced. Conversely, a large
difference between MSE and MAD suggests that large errors played a role.
Lastly, the MAPE is calculated as the average of absolute percentage differences between the actual value
and projected value. Similarly, a lower MAPE reflects more accurate projections, whereas a higher
MAPE reflected less accurate projections. Expressing an error in percentage terms also accounts for the
relative size of the projected measure. The formulas for each statistical measure of projection accuracy
can be found in Table 1.

(lower amount of aggregate covered earnings subject to the payroll tax), lower long-term real interest rates, slower growth in
nominal economic output, and differences in analytical approaches account for the difference in the projected actuarial balance as
compared to OCACT. For more information see CBO, CBO’s Long-Term Social Security Projections: Changes Since 2017 and
Comparisons with the Social Security Trustees’ Projections, December 2018, https://www.cbo.gov/system/files/2018-12/54711-
SSProjections-Dec2018.pdf; CBO, An Overview of CBOLT; and CBO, Answers to Questions for the Record, August 4, 2023,
https://www.cbo.gov/system/files/2023-08/59378-soc-sec-qfrs.pdf.
52 An American Enterprise Institute article contrasted the short-term (three- and five-year) projections of income, cost, and net
cash flow for CBO and the trustees’ annual reports over the 2011-2021 time period. In this context, the article concludes,
“Neither organization is clearly superior in its projection accuracy.” Mark Warshawsky, “Trustees v. CBO: Projection Accuracy
for Social Security,” American Enterprise Institute, August 3, 2023, https://www.aei.org/economics/trustees-v-cbo-projection-
accuracy-for-social-security/.
53 CBO, An Evaluation of CBO’s Projections of Outlays from 1984 to 2021, April 2023, p. 8, https://www.cbo.gov/system/files/
2023-04/58613-Outlays.pdf.
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Results
Table 1 shows the three statistical measures—MAD, MSE, and MAPE—for selected intermediate
projections for the Social Security financial status. The table includes statistical measures for those where
past projections can be measured against actual values: income rate, cost rate, worker-to-beneficiary ratio,
and trust fund ratio. Additionally, the statistical measures of projection accuracy are shown by year. That
is, accuracy is assessed for projections one year in the future, two years in the future, three years in the
future, and so on.
As shown in Table 1, the number of observations (i.e., projections) available for analysis decrease further
out in the future. This first annual report analyzed is the 1983 annual report, which presented a projected
combined trust fund ratio for 2060. However, only that report’s projection through 2022 can be assessed
with a (now) historical value.54 The table shows fewer projections for more long-range projections. Also,
not all annual reports presented single-year projections. For instance, the 1985 annual report projected a
combined trust fund ratio for the next 25-year period and then every five years until projected trust fund
exhaustion, whereas the 1986 annual report projected a combined trust fund ratio for the next 10-year
period and then every five years until projected trust fund exhaustion. The following discussion will focus
on projection accuracy for those projections less than 15 years in the future. (As discussed, the 2023
annual report has projected the combined trust fund depletion in 2034.)
The first set of columns in Table 1 shows the statistics for the income rate. This report analyzed 40
predictions for income rates one year in the future (e.g., the 1983 annual report’s projections for 1984, the
1984 annual report’s projections for 1985, etc.). Over these 40 observations, the MAD was 0.10 and the
MSE was 0.02. This suggests that the income rate projections one year in the future were relatively close
to the actual values and relatively consistent. Since the MSE uses squared error terms, an MSE less than
the MAD implies that most of the error terms were less than one. The MAPE for one-year income rate
projections was 0.80%. This report analyzed 15 predictions for income rates 14 years in the future (e.g.,
the 1983 annual report’s projections for 1997, the 1984 annual report’s projections for 1998, etc.). As one
might suspect, the forecast accuracy for the income rate declines the further into the future. Over 15
instances of projections for 14 years into the future, the MAD and MSE were 0.26 and 0.11, respectively.
This suggests that income rate projections for 15 years in the future were also relatively close to actual
values and relatively consistent (i.e., no large errors). The MAPE for 15-year income rate projections was
2.05%.
The second set of columns in Table 1 shows the statistics for the cost rate. This report analyzed 40
predictions for cost rates one year in the future. Over these 40 observations, the MAD was 0.17 and the
MSE was 0.05. This suggests that the cost rate projections one year in the future were relatively close to
the actual values and relatively consistent. The MAPE for one-year cost rate projections was 1.37%.
Although this MAPE is relatively higher than the income rate MAPE, it does suggest a relatively high
projection accuracy for cost rates one year in the future. As suspected, the forecast accuracy for cost rates
declines the further into the future. Over 14 instances of projections for 15 years into the future, the MAD
and MSE were 0.63 and 0.49, respectively. This suggests that cost rate projections for 15 years in the
future were also relatively close to actual values and relatively consistent (i.e., no large errors). The
MAPE for 15-year income rate projections was 4.86%.
Table 1 also shows that the projection errors for the worker-to-beneficiary ratio are relatively small and
relatively consistent over time. For instance, over 40 observations for projections one year in the future,
the MAD and MSE were 0.03 and 0.00, respectively. As stated previously, a lower MSE than MAD

54 That year’s report did not project a combined trust fund ratio for all years. 1983 Annual Report of the Board of Trustees of the
Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, June 27, 1983, p. 80,
at https://www.ssa.gov/OACT/TR/historical/1983TR.pdf.
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suggests no large errors. The MAPE for projections one year in the future is also relatively low. As
suspected, the projection accuracy is lower for projections 15 years in the future. Over 11 observations for
worker-to-beneficiary ratios 15 years in the future, the MAD was 0.12 and the MSE was 0.02. The MAPE
for the worker-to-beneficiary ratio 15 years in the future was 4.09%.
Lastly, Table 1 displays the projection accuracy statistics for the trust fund ratio. Over 40 observations for
the ratio one year in the future, the MAD is 3.43 and the MSE is 22.38. For all projection periods, the
MSE is larger than the MAD. For the 14 projections for the trust fund ratio 15 years in the future, the
MAD is 105.57 and the MSE is 13,402.85. This suggests that for the trust fund ratio projections, the
accuracy has been affected by larger errors. Given this, it is not surprising that the MAPE for one year and
15 years in the future is 2.50% and 39.59%, respectively.
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Table 1. Statistics of Projection Accuracy for Selected Measures of Social Security Financial Status
Observations (n), Mean Absolute Deviation (MAD), Mean Square Error (MSE), and Mean Absolute Percentage Error (MAPE) for Projections Under
Intermediate Projections by Year of Projection
Social Security Worker-to-

Social Security Income Rate
Social Security Cost Rate
Beneficiary Ratio
Social Security Trust Fund Ratio
Yeara
nb
MAD
MSE
MAPE
nb
MAD
MSE
MAPE
nb
MAD
MSE
MAPE
nb
MAD
MSE
MAPE
1 YR
40
0.10
0.02
0.80%
40
0.17
0.05
1.37%
40
0.03
0.00
0.88%
40
3.43
22.38
2.50%
2 YR
39
0.14
0.04
1.10%
39
0.33
0.21
2.76%
25
0.04
0.00
1.29%
39
7.97
97.61
5.04%
3 YR
38
0.16
0.05
1.23%
38
0.52
0.49
4.29%
24
0.08
0.01
2.67%
38
13.66
260.70
7.94%
4 YR
37
0.15
0.04
1.16%
37
0.67
0.76
5.54%
22
0.08
0.01
2.76%
37
20.27
560.47
10.82%
5 YR
36
0.15
0.04
1.18%
36
0.78
0.96
6.38%
21
0.12
0.02
4.09%
36
27.14
1.027.34
13.45%
6 YR
35
0.15
0.04
1.15%
35
0.86
1.15
6.99%
21
0.13
0.02
4.45%
35
34.80
1.661.21
16.03%
7 YR
34
0.15
0.05
1.21%
34
0.90
1.27
7.33%
20
0.15
0.03
4.98%
34
42.00
2.472.06
18.00%
8 YR
33
0.17
0.05
1.32%
33
0.93
1.33
7.50%
19
0.16
0.03
5.62%
33
49.24
3.391.88
19.81%
9 YR
32
0.18
0.05
1.40%
32
0.92
1.32
7.35%
17
0.18
0.03
6.09%
32
56.31
4.454.03
21.52%
10YR
31
0.19
0.07
1.52%
31
0.91
1.28
7.19%
16
0.18
0.03
6.10%
19
64.16
6.126.33
22.40%
11 YR
18
0.24
0.09
1.88%
18
1.09
1.70
8.16%
16
0.17
0.03
5.88%
18
72.61
8.070.59
25.99%
12 YR
17
0.23
0.09
1.81%
17
0.99
1.44
7.47%
15
0.16
0.03
5.53%
17
81.47
9.194.63
29.57%
13 YR
16
0.23
0.09
1.79%
16
0.91
1.17
6.88%
14
0.14
0.02
4.66%
16
88.56
10.559.40
32.38%
14 YR
15
0.24
0.10
1.91%
15
0.77
0.78
5.87%
12
0.14
0.03
4.85%
15
92.67
12.030.79
34.64%
15 YR
14
0.26
0.11
2.05%
14
0.63
0.49
4.86%
11
0.12
0.02
4.09%
14
105.57
13.402.85
39.59%
16 YR
13
0.26
0.11
2.05%
13
0.59
0.40
4.59%
11
0.11
0.01
3.83%
13
109.38
14.269.08
41.31%
17 YR
12
0.25
0.11
1.96%
12
0.53
0.34
4.20%
10
0.13
0.02
4.57%
12
100.92
13.175.55
39.13%
18 YR
11
0.26
0.12
2.04%
11
0.62
0.54
4.96%
9
0.14
0.02
5.07%
11
100.18
12.632.20
39.46%
19 YR
10
0.24
0.11
1.91%
10
0.77
0.82
6.28%
7
0.20
0.04
7.03%
10
98.70
11.134.67
39.25%
20 YR
9
0.29
0.15
2.26%
9
0.98
1.26
8.00%
6
0.18
0.03
6.53%
9
101.78
9.976.38
40.22%
21 YR
8
0.30
0.15
2.36%
8
1.12
1.58
8.89%
6
0.20
0.03
7.14%
8
98.63
9.162.57
36.88%
22 YR
7
0.20
0.08
1.54%
7
1.24
1.93
9.86%
5
0.20
0.03
7.06%
7
72.57
5,974.50
25.23%
CRS-17

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Social Security Worker-to-

Social Security Income Rate
Social Security Cost Rate
Beneficiary Ratio
Social Security Trust Fund Ratio
Yeara
nb
MAD
MSE
MAPE
nb
MAD
MSE
MAPE
nb
MAD
MSE
MAPE
nb
MAD
MSE
MAPE
23 YR
6
0.18
0.07
1.36%
6
1.34
2.13
10.67%
4
0.15
0.03
5.29%
6
79.83
7,897.50
23.94%
24 YR
6
0.17
0.07
1.32%
6
1.42
2.54
11.28%
3
0.23
0.08
8.47%
6
104.83
11,406.50
31.64%
25 YR
6
0.22
0.08
1.71%
6
1.71
3.55
13.32%
3
0.17
0.04
6.04%
3
118.67
15,926.00
37.57%
26 YR
3
0.33
0.16
2.53%
3
1.67
3.53
12.17%
3
0.17
0.04
6.04%
3
153.33
27,466.00
48.97%
27 YR
3
0.30
0.13
2.28%
3
1.85
4.44
13.52%
3
0.17
0.04
6.04%
3
122.00
22,166.67
37.62%
28 YR
3
0.27
0.10
2.06%
3
1.84
4.76
13.45%
3
0.20
0.05
7.19%
2
136.00
28,100.00
44.87%
29 YR
2
0.27
0.14
2.00%
2
1.13
2.34
8.11%
2
0.35
0.15
12.83%
2
170.00
30,925.00
58.42%
30 YR
2
0.31
0.14
2.27%
2
1.27
2.37
9.05%
2
0.20
0.05
7.34%
2
179.00
32,066.00
62.79%
31 YR
2
0.31
0.14
2.31%
2
1.21
1.98
8.64%
2
0.20
0.05
7.34%
2
238.00
56,669.00
83.83%
32 YR
2
0.31
0.15
2.27%
2
1.51
3.02
10.78%
2
0.20
0.05
7.34%
2
234.00
54,757.00
82.31%
33 YR
2
0.30
0.15
2.23%
2
1.68
3.46
11.98%
2
0.20
0.05
7.34%
1
250.00
62,500.00
95.42%
34 YR
1
0.59
0.35
4.37%
1
0.92
0.85
6.41%
1
0.40
0.16
14.81%
1
231.00
53,361.00
88.17%
35 YR
1
0.53
0.28
3.92%
1
0.95
0.90
6.62%
1
0.40
0.16
14.81%
1
201.00
40,401.00
76.72%
36 YR
1
0.52
0.27
3.85%
1
0.84
0.71
5.85%
1
0.30
0.09
11.11%
1
268.00
71,824.00
102.29%
37 YR
1
0.55
0.30
4.07%
1
1.43
2.04
9.97%
1
0.30
0.09
11.11%
1
276.00
76,176.00
105.34%
38 YR
1
0.56
0.31
4.15%
1
1.59
2.53
11.08%
1
0.30
0.09
11.11%
0
0.00
0.00
0.00%
39 YR
0
—
—
—
0
—
—
—
0
—
—
—
0
—
—
—
40 YR
0
—
—
—
0
—
—
—
0
—
—
—
0
—
—
—
Source: CRS.
Note: The formulas for the MAD, MSE, and MAPE are shown in the Appendix. As shown in the table, the number of projections for each time horizon is not uniform.
In some annual reports, projections are shown for individual years over the projection period, in some reports the projections are shown every five years over the
projection period, and some reports are mixed (e.g., projections are shown for individual years over the nearest 10-year period and every five years thereafter).
a. This represents the time horizon of the projection.
b. In this analysis, n is used to represent the number of observations analyzed. For instance, since the 1983 annual report, the trustees have made 40 projections for
the income rate one year in the future (e.g., the 2000 annual report’s projection for 2001). Alternatively, since the 1983 annual report, the trustees have made 15
projections for the income rate 15 years in the future (e.g., the 2000 annual report’s projection for 2014).
CRS-18

link to page 23
Social Security: Future Financial Status and Accuracy of Projections

Conclusion
The Social Security system is facing a projected financial shortfall. Under the 2023 intermediate
assumptions, the program’s financial status fails the trustees’ tests for both short-range and long-range
financial adequacy. This failure is largely reflective of the program’s projected rising costs and the related
imbalance between covered workers (i.e., those paying into the system) and beneficiaries (i.e., those
receiving payments from the system).
Although uncertainty exists in the magnitude of the projected shortfall, past trustees’ projections are
shown in this report to be more accurate in the short-run than in the long-run. That is, as the program
approaches depletion of the asset reserves held in the trust funds, the projections of the magnitude of the
shortfall become more accurate. In the trustees’ 2023 annual report, the depletion of trust fund assets
results in a de facto benefit reduction of about 20%. Additionally, as the program approaches the depletion
date, the projections of the date itself become more accurate. As shown in Figure 8, the projected year of
combined trust fund depletion has become more concentrated on the 2033-2035 window. In the past 10
annual reports, most have projected 2034 as the year for asset depletion.
Figure 8. Projected Years Until Combined Social Security Trust Fund Depletion
Under the Trustees’ Intermediate Assumptions, 1984-2023

Source: Congressional Research Service (CRS).

Congressional Research Service

19

Social Security: Future Financial Status and Accuracy of Projections

Appendix. Supporting Information
Formulas for Statistical Measures of Projection Accuracy

∑ |𝐴𝑐𝑡𝑢𝑎𝑙 − 𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑|
𝑀𝑒𝑎𝑛 𝐴𝑏𝑠𝑜𝑙𝑢𝑡𝑒 𝐷𝑒𝑣𝑖𝑎𝑡𝑖𝑜𝑛 (𝑀𝐴𝐷) =

𝑛

∑(𝐴𝑐𝑡𝑢𝑎𝑙 − 𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑)2
𝑀𝑒𝑎𝑛 𝑆𝑞𝑢𝑎𝑟𝑒𝑑 𝐸𝑟𝑟𝑜𝑟 (𝑀𝑆𝐸) =

𝑛

𝐴𝑐𝑡𝑢𝑎𝑙 − 𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑
∑ |
𝑃𝑟𝑜𝑗𝑒𝑐𝑡𝑒𝑑
|
𝑀𝑒𝑎𝑛 𝐴𝑏𝑠𝑜𝑙𝑢𝑡𝑒 𝑃𝑒𝑟𝑐𝑒𝑛𝑡𝑎𝑔𝑒 𝐸𝑟𝑟𝑜𝑟 (𝑀𝐴𝑃𝐸) =
× 100
𝑛

Congressional Research Service

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Social Security: Future Financial Status and Accuracy of Projections

Figure A-1. Historical and Projected Social Security Trust Fund Ratios, 1975-2035
The 2023 Congressional Budget Office (CBO) and Social Security Trustees Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Table IV.A3, pp. 49-50, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
supplemental single-year Table IV.B4, https://www.ssa.gov/OACT/TR/2023/lr4b4.html; and CBO, CBO’s 2023 Long-Term
Projections for Social Security, June 29, 2023, supplemental Information, table 8, https://www.cbo.gov/publication/59184.
Figure A-2. Social Security Cash Flow Measures as a Percent of Taxable Payroll, 1975-2097
The 2023 Congressional Budget Office (CBO) and Social Security Trustees Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds, March 31, 2023, Table IV.B1, pp. 56-57, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf
and supplemental single-year Table IV.B1, https://www.ssa.gov/OACT/TR/2023/lr4b1.html; and CBO, CBO’s 2023 Long-
Term Projections for Social Security, June 29, 2023, supplemental Information, table 8, https://www.cbo.gov/publication/
59184.
Congressional Research Service

21

Social Security: Future Financial Status and Accuracy of Projections

Figure A-3. Social Security Covered Workers to Beneficiaries, 1975-2097
The 2023 Congressional Budget Office (CBO) and Social Security Trustees Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Table IV.B3, pp. 64-65, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf and
supplemental single-year Table IV.B3, https://www.ssa.gov/OACT/TR/2023/lr4b3.html; and CBO, CBO’s 2023 Long-Term
Projections for Social Security, June 29, 2023, Projections Underlying Social Security Estimates, https://www.cbo.gov/
publication/59184.
Figure A-4. Individual Social Security Trust Fund Ratios
Under Alternative Scenarios, 1990-2100
On a Combined Basis Under the 2023 Intermediate Assumptions

Source: 2023 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability
Insurance Trust Funds, March 31, 2023, Figure II.D7, p. 21, https://www.ssa.gov/OACT/TR/2023/tr2023.pdf.
Congressional Research Service

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Table A-1. Sources of Changes in the Estimated Long-Range OASDI Actuarial Balance Since the 1983 Trustees Report
As a Percentage of Taxable Payroll
Total
Long-Range
Demographic
Economic
Disability
Methods and
(Change from
Actuarial Balance
Legislation/
Valuation
Data and
Data and
Data and
Programmatic
Previous
(Cumulative
Year of Report
Regulation
Period
Assumptions
Assumptions
Assumptions
Data
Year)
Change)
1982

-1.82
1983

0.02
1984
a
-0.03
0.04
-0.01
-0.11
0.03
-0.08
-0.06
1985
-0.01
-0.03
-0.02
0.09
-0.04
-0.33
-0.35
-0.41
1986
a
-0.04
0.19
-0.1
-0.05
-0.03
-0.03
-0.44
1987
-0.05
-0.04
-0.09
0.02
-0.02
a
-0.18
-0.62
1988
a
-0.05
0.17
-0.13
0.02
0.03
0.04
-0.58
1989
a
-0.04
0.07
-0.11
-0.04
a
-0.13
-0.70
1990
-0.01
-0.05
0.03
-0.17
-0.01
a
-0.21
-0.91
1991
0.17
-0.05
0.04
-0.11
-0.01
-0.22
-0.17
-1.08
1992
a
-0.05
0.17
-0.1
-0.2
-0.19
-0.38
-1.46
1993
a
-0.05
0.11
-0.01
-0.08
0.03
a
-1.46
1994
a
-0.05
a
-0.18
-0.11
-0.31
-0.66
-2.13
1995
a
-0.07
0.12
0.02
-0.05
-0.07
-0.05
-2.17
1996
0.03
-0.08
-0.03
-0.04
-0.03
0.14
-0.02
-2.19
1997
0.03
-0.08
-0.03
0.06
-0.02
a
-0.03
-2.23
1998
a
-0.08
-0.05
0.16
0.01
a
0.04
-2.19
1999
a
-0.08
0.03
0.15
a
0.02
0.12
-2.07
2000
a
-0.07
-0.07
0.14
a
0.17
0.17
-1.89
2001
a
-0.07
0.09
0.02
0.02
-0.02
0.03
-1.86
CRS-23

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Total
Long-Range
Demographic
Economic
Disability
Methods and
(Change from
Actuarial Balance
Legislation/
Valuation
Data and
Data and
Data and
Programmatic
Previous
(Cumulative
Year of Report
Regulation
Period
Assumptions
Assumptions
Assumptions
Data
Year)
Change)
2002
a
-0.07
-0.05
0.12
0.03
-0.04
-0.01
-1.87
2003
a
-0.07
-0.04
a
a
0.06
-0.04
-1.92
2004
a
-0.07
0.02
-0.04
0.04
0.08
0.03
-1.89
2005
a
-0.07
0.03
-0.06
-0.01
0.07
-0.04
-1.92
2006
a
-0.06
0.03
-0.06
-0.04
0.04
-0.09
-2.02
2007
a
-0.06
-0.03
0.02
0.06
0.08
0.06
-1.95
2008
a
-0.06
a
a
a
0.32
0.26
-1.70
2009
a
-0.05
-0.11
-0.15
-0.01
0.03
-0.3
-2.00
2010
0.14
-0.06
-0.05
a
-0.02
0.07
0.08
-1.92
2011
a
-0.05
-0.14
-0.06
-0.01
-0.05
-0.3
-2.22
2012
a
-0.05
-0.05
-0.21
-0.04
-0.08
-0.44
-2.67
2013
-0.15
-0.06
-0.17
-0.03
0.01
0.35
-0.05
-2.72
2014
-0.01
-0.06
0.04
-0.1
0.02
-0.05
-0.16
-2.88
2015
0.02
-0.06
-0.03
0.1
a
0.17
0.2
-2.68
2016
0.03
-0.06
a
-0.07
a
0.11
0.02
-2.66
2017
a
-0.05
-0.03
-0.08
0.03
-0.04
-0.17
-2.83
2018
a
-0.06
-0.01
-0.01
0.01
0.05
-0.02
-2.84
2019
a
-0.05
0.06
-0.04
0.07
0.01
0.06
-2.78
2020
-0.12
-0.05
-0.13
-0.18
0.05
a
-0.43
-3.21
2021
-0.01
-0.06
0.07
a
a
-0.33
-0.32
-3.54
2022
a
-0.06
-0.04
0.13
0.07
0.01
0.12
-3.42
2023
a
-0.05
-0.03
-0.04
0.01
-0.06
-0.19
-3.61
CRS-24

Total
Long-Range
Demographic
Economic
Disability
Methods and
(Change from
Actuarial Balance
Legislation/
Valuation
Data and
Data and
Data and
Programmatic
Previous
(Cumulative
Year of Report
Regulation
Period
Assumptions
Assumptions
Assumptions
Data
Year)
Change)
Total Since 1983
0.06
-2.32
0.11
-1.07
-0.45
0.05
-3.62

Report
Percent of Total
-2%
64%
-3%
30%
13%
-1%
100%

Source: Sharon Chu and Kyle Burkhalter, Disaggregation of Changes in the Long-Range Actuarial Balance for the Old-Age, Survivors, and Disability Insurance (OASDI) Program
Since 1983, Social Security Administration, Office of the Chief Actuary, March 2023, https://www.ssa.gov/OACT/NOTES/ran8/an2023-8.pdf.
Notes: Each row of data is based on the annual report of that year. Totals may not necessarily equal the sum of rounded components.
a. Value is between -0.005 and 0.005 percent of taxable payrol .

CRS-25

Social Security: Future Financial Status and Accuracy of Projections

Glossary for Selected Terms as Defined by the Social Security Trustees and the
Congressional Budget Office (CBO)

Trustees
CBO
Actuarial
The difference between the summarized
The difference between a trust fund’s income
balance
income rate and the summarized cost rate as a rate and its cost rate.
percentage of taxable payrol over a given
valuation period.
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.
Cash flow
Actual or projected revenue (other than

interest paid to the trust funds) and costs
reflecting the levels of payrol tax contribution
rates and benefits scheduled in the law. Net
cash flow is the difference between non-
interest income and cost.
Cost
The cost shown for a year includes benefits

scheduled for payment in the year (without
regard to the ability to make the payments in
ful ), administrative expenses, financial
interchange with the Railroad Retirement
program, and payments for vocational
rehabilitation services for disabled
beneficiaries.
Cost rate
The cost rate for a year is the ratio of the cost The present value of outlays for a period, plus
of the program to the taxable payrol for the
the present value of a year’s worth of benefits
year.
at the end of the period divided by the present
value of gross domestic product (GDP) or
taxable payrol over the same period.
Income
Income for a given year is the sum of tax

revenue on a cash basis (payrol 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
The present value of tax revenues for a period,
taxable payrol for the year.
plus the trust funds’ initial balance, divided by
the present value of taxable payrol or GDP
over the same period.
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.
Present
The equivalent value, at the present time, of a
A single number that expresses a flow of
value
stream of values (either income or cost, past
current and future income (in taxes) or
or future). Present value is used widely in
payments (in benefits) in terms of an
Congressional Research Service

1

Social Security: Future Financial Status and Accuracy of Projections

Trustees
CBO
calculations involving financial transactions
equivalent lump sum received or paid at a
over long periods of time to account for the
specific time. The value depends on the rate of
time value of money by discounting or
interest, known as the discount rate, used to
accumulating these transactions at the rate of
translate past and future cash flows into dol ars
interest. Present-value calculations for this
at that time.
report use the effective yield on combined
OASI and DI trust fund asset reserves.
Short-range
The first 10 projection years. The Social

Security Act requires estimates for five years;
the trustees prepare estimates for an
additional five years to help clarify trends that
are only starting to develop in the mandated
first five-year period.
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.
Summarized The difference between the summarized

balance
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
payrol is referred to as the actuarial balance.
Summarized The ratio of the present value of cost to the

cost rate
present value of the taxable payrol (or GDP)
for the years in a given period, expressed as a
percentage.
Summarized The ratio of the present value of scheduled

income rate
non-interest income to the present value of
taxable payrol (or GDP) for the years in a
given period, expressed as a percentage.
Taxable
A weighted sum of taxable wages and taxable
The total amount of earnings (wages and self-
payroll
self-employment income. When multiplied by
employment income) from employment
the combined employee-employer payrol tax
covered by Social Security that is below the
rate, taxable payrol yields the total amount of
applicable annual taxable maximum.
payrol taxes incurred by employees,
employers, and the self-employed for work
during the period.
Trust funds
Separate accounts in the United States
The accounts to which Social Security taxes
Treasury that hold the payrol taxes received
are credited and from which benefits are paid.
under the Federal Insurance Contributions Act Interest on the funds’ balances is also credited
and the Self-Employment Contributions Act,
to the trust funds, and administrative expenses
payrol taxes resulting from coverage of state
are withdrawn from them.
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.
Congressional Research Service

2

Social Security: Future Financial Status and Accuracy of Projections

Trust fund
A measure of trust fund adequacy. The asset
At any given time, the balance in a program’s
balance
reserves at the beginning of a year (equal to
trust fund is an indicator of the historical
the reserves at the end of the prior year),
relationship between receipts and
which do not include advance tax transfers,
expenditures. Trust funds have an important
expressed as a percentage of the cost for the
legal meaning in that their balances are a
year. The trust fund ratio represents the
measure of the amounts that the government
proportion of a year’s cost that could be paid
is permitted to spend for certain purposes
solely with the reserves at the beginning of the under current law. In a given year, the receipts
year.
credited to a trust fund, along with any
interest credited on previous balances, minus
spending for benefits and administrative costs
constitute its surplus or deficit.
Trust fund

The year in which a trust fund’s balance wil
exhaustion
reach zero.
date
Trust fund

The balance in a trust fund at the beginning of
ratio
the year divided by projected outlays for that
year.
Trust fund
The cumulative excess of trust fund income

reserve
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.
Trust fund
The point at which reserves in a trust fund

reserve
are insufficient to pay scheduled benefits in ful
depletion
and on time.

Author Information

Barry F. Huston

Analyst Social Policy

Disclaimer
This document was prepared by the Congressional Research Service (CRS). CRS serves as nonpartisan
shared staff to congressional committees and Members of Congress. It operates solely at the behest of and
under the direction of Congress. Information in a CRS Report should not be relied upon for purposes other
than public understanding of information that has been provided by CRS to Members of Congress in
connection with CRS’s institutional role. CRS Reports, as a work of the United States Government, are not
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Congressional Research Service
R47650 · VERSION 1 · NEW
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