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Social Security Board of Trustees: Projected Trust Fund Exhaustion Three Years Sooner Than Last Year
Social Security Board of Trustees: Projected Trust Fund Exhaustion Three Years Sooner Than Last Year
Source: Social Security Administration
The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds. The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2033, three years sooner than projected last year. The DI Trust Fund will be exhausted in 2016, two years earlier than last year’s estimate. The Trustees also project that OASDI program costs will exceed non-interest income in 2012 and will remain higher throughout the remainder of the 75-year period.
In the 2012 Annual Report to Congress, the Trustees announced:
- The projected point at which the combined Trust Funds will be exhausted comes in 2033 – three years sooner than projected last year. At that time, there will be sufficient non-interest income coming in to pay about 75 percent of scheduled benefits.
- The projected actuarial deficit over the 75-year long-range period is 2.67 percent of taxable payroll — 0.44 percentage point larger than in last year’s report.
- Over the 75-year period, the Trust Funds would require additional revenue equivalent to $8.6 trillion in present value dollars to pay all scheduled benefits.
Income of the Aged Chartbook, 2010
Since 1941, the Social Security Administration (SSA) has periodically surveyed the aged to determine their economic status. The first national survey was conducted in 1963. In 1976, SSA’s Office of Research and Statistics began compiling a biennial series of reports on the income of the aged based on data collected by the U.S. Census Bureau in its Current Population Survey. These SSA reports are published under the title Income of the Population 55 or Older.The most recent edition of that publication is based on 2010 data, which, along with special tabulations, form the basis of this chartbook. This publication covers the population aged 65 or older. The unit of analysis here, with the exception of measures of poverty and family income of persons, is the aged unit, which is a married couple living together or a person who does not live with a spouse. A married couple’s age is defined as the age of the husband—unless he is under age 55 and the wife is 55 or older, in which case it is the age of the wife. The race and Hispanic origin of a married couple are determined by the husband. The unit of analysis for poverty is persons aged 65 or older. The 2010 sample represented 12,162,000 couples and 17,478,000 single units. The single unit may be a widow(er), a divorced or separated person, a legally married person who does not live with a spouse, or a person who never married. This unit of analysis allows one to measure the economic status of the entire noninstitutionalized aged population separately from that of the family or household in which the unit may live.
Behavioral and Psychological Aspects of the Retirement Decision
The majority of research on the retirement decision has focused on the health and wealth aspects of retirement. Such research concludes that people in better health and those enjoying a higher socioeconomic status tend to work longer than their less healthy and less wealthy counterparts. While financial and health concerns are a major part of the retirement decision, there are other issues that may affect the decision to retire that are unrelated to an individual’s financial and health status. Judgment and decision-making and behavioral-economics research suggests that there may be a number of behavioral factors influencing the retirement decision. The author reviews and highlights such factors and offers a unique perspective on potential determinants of retirement behavior, including anchoring and framing effects, affective forecasting, hyperbolic discounting, and the planning fallacy. The author then describes findings from previous research and draws novel connections between existing decision-making research and the retirement decision.
The Evolution of Social Security’s Taxable Maximum Wage Threshold
The Evolution of Social Security’s Taxable Maximum Wage Threshold
Source: Social Security Administration
Major Findings
- The tax max has been in place since Social Security’s founding, but Congress has modified it over time to address several policy goals, such as improving system financing and maintaining meaningful benefits for middle and higher earners.
- Although the nominal value of the tax max has grown from $3,000 in 1937 to $106,800 today, in inflation-adjusted dollars the tax max declined from 1937 until the late 1960s, and then grew once it was indexed to wage growth in 1975. In wage-adjusted dollars, the tax max has remained roughly constant since the mid-1980s.
- The percentage of workers with earnings above the tax max (“above-max earners”) fell from 15 percent in 1975 to about 6 percent in 1983 and has remained at that level since.
- Historically, an average of roughly 83 percent of covered earnings have been subject to the payroll tax. In 1983, this figure reached 90 percent, but it has declined since then. As of 2010, about 86 percent of covered earnings fall under the tax max.
- The percentage of earnings covered by the tax max has fallen since the early 1980s because earnings among above-max earners have grown faster than earnings among the rest of the working population.
Fast Facts & Figures About Social Security, 2011
Fast Facts & Figures About Social Security, 2011
Source: Social Security Administration
Fast Facts & Figures answers the most frequently asked questions about the programs SSA administers. It highlights basic program data for the Social Security (retirement, survivors, and disability) and Supplemental Security Income programs. Most of the data come from the Annual Statistical Supplement to the Social Security Bulletin, which contains more than 240 detailed tables. The information on the income of the aged is from the data series Income of the Population 55 or Older. Data on trust fund operations are from the 2011 Trustees Report.
The tables and charts illustrate the range of program beneficiaries, from the country’s oldest to its youngest citizens. In all, about 59.2 million people receive some type of benefit or assistance.
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Social Security Board of Trustees: Projected Trust Fund Exhaustion: One Year Sooner
Social Security Board of Trustees: Projected Trust Fund Exhaustion: One Year Sooner
Source: Social Security Administration
The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds. The combined assets of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds will be exhausted in 2036, one year sooner than projected last year. The DI Trust Fund, while unchanged from last year, will be exhausted in 2018 and legislative action will be needed soon. At a minimum, a reallocation of the payroll tax rate between OASI and DI would be necessary, as was done in 1994. The Trustees also project that OASDI program costs will exceed non-interest income in 2011 and will remain higher throughout the remainder of the 75-year period.
In the 2011 Annual Report to Congress, the Trustees announced:
- The projected point at which the combined Trust Funds will be exhausted comes in 2036 — one year sooner than projected last year. At that time, there will be sufficient non-interest income coming in to pay about 77 percent of scheduled benefits.
- The point at which non-interest income fell below program costs was 2010. Program costs are projected to exceed non-interest income throughout the remainder of the 75-year period.
- The projected actuarial deficit over the 75-year long-range period is 2.22 percent of taxable payroll — 0.30 percentage point larger than in last year’s report.
- Over the 75-year period, the Trust Funds would require additional revenue equivalent to $6.5 trillion in present value dollars to pay all scheduled benefits.
