The Office of the Chief Actuary of Social Security makes projections about Social Security finances that are used by the Board of Trustees in their annual report to Congress. The report uses assumptions about population growth—including births, deaths, and net immigration—and the performance of the economy with regard to wages, prices, productivity, and unemployment. These projections are educated guesses about an unpredictable future. The Trustees offer three scenarios: high cost, low cost, and intermediate. According to the 2017 intermediate projection, assuming no changes are made in law:
- In 2022, spending for benefits would exceed revenues plus interest on the securities. The funds would begin redeeming the Treasury securities. The cash to redeem the bonds may come from several sources: increased taxes, reductions in other federal government spending, or borrowing through the public sale of Treasury securities. If the money is borrowed, it will increase the federal budget deficit.
- In 2034, the trust fund assets would be depleted; all Treasury securities would be redeemed. Taxes coming in from workers and employers would be sufficient to pay 77 percent of the benefits promised under current law.
- By 2091, the end of the 75-year projection period, incoming taxes would pay about 73 percent of scheduled benefits.
Under the high-cost scenario, the trust funds would be depleted in 2029 instead of 2034. Under the low-cost scenario, the trust funds would be fully financed through the 75-year projection period. The difference among estimates shows the great uncertainty about the long-term future.
For more information on Social Security finances, see:
- Social Security Finances: Findings of the 2015 Trustees Report, Social Security Brief No. 45
- Social Security Benefits, Finances, and Policy Options: A Primer
- Social Security Disability Insurance: Action Needed to Address Finances, Social Security Brief No. 41
- How Would Seniors Fare – by Age, Gender, Race and Ethnicity, and Income – Under the Bowles-Simpson Social Security Proposals by 2070?, Social Security Brief No. 38
- Social Security Beneficiaries Face 19% Cut; New Revenue Can Restore Balance, Social Security Brief No. 37
- Strengthening Social Security for the Long Run, Social Security Brief No. 35
- The Role of the Chief Actuary of Social Security, Social Security Brief No.17
- Why Do We Have a Social Security Trustees Report? What Should We Make of It?, April 1, 2005 Policy Seminar
Read what some Academy members think:*
- Janice Gregory: “Social Security: Some Key Facts to Keep in Mind” (2012)
- Virginia Reno, Lee Goldberg, and Tom Bethell: “Social Insurance Programs and the President’s Budget” (2011)
- Alex Stone: “Improving Social Security’s Benefits is Critical to Economic Recovery and Security” (2011)
- Alicia Munnell: “A Bright Light in a Dismal Landscape” (2009)
* The views of Academy members are their own and not an official position of the National Academy of Social Insurance or its funders.