2023 OASDI Trustees Report

C. ASSUMPTIONS ABOUT THE FUTURE

The future income and cost of the OASI and DI Trust Funds will depend on many factors, including the size and characteristics of the population receiving benefits, the level of monthly benefit amounts, the size of the workforce, and the level of covered workers’ earnings. These factors will depend in turn on future birth rates, death rates, immigration, marriage and divorce rates, retirement-age patterns, disability incidence and termination rates, employment rates, productivity gains, wage increases, inflation, interest rates, and many other demographic, economic, and program-specific factors.

The Trustees set key demographic, economic, and programmatic assumptions for three alternative scenarios. The intermediate assumptions reflect the Trustees’ best estimates of future experience. Therefore, most of the results presented in this overview indicate outcomes under the intermediate assumptions only. Any projection of the future is, of course, uncertain. For this reason, results are also presented under low-cost and high-cost alternatives to provide a range of possible future experience. The actual future costs are unlikely to be as extreme as those portrayed by the low-cost or high-cost projections. A separate section on the uncertainty of the projections, beginning on page 19, highlights the implications of these alternative scenarios.

The Trustees reexamine the assumptions each year in light of recent experience and new information. This annual review helps to ensure that the Trustees’ assumptions provide the best estimate of future possibilities.

There are several important assumptions about near-term growth rates and parameter levels that have significant effects over both the short-range (10‑year) and long-range (75-year) projection periods. The most significant change in the results presented in this year’s report derives from a change in the assumed levels of productivity and GDP in the first several years of the projection. Section IV.B.6 provides additional details about this change.

For each of the three alternative scenarios, Table II.C1 presents key demographic, economic, and programmatic assumptions used for projections beyond the tenth projection year.

Table II.C1.—Key Assumptions^a and Summary Measures
for the Last 65 Years of the Long-Range (75-Year) Projection Period

Assumption	Intermediate	Low-cost	High-cost
Demographic:
Average annual total fertility rate (children per woman)b	1.99	2.19	1.69
Average annual percentage reduction in total age‑sex‑adjusted death rates	.74	.28	1.24
Average annual net lawful permanent resident (LPR) immigration (in thousands)	788	1,000	595
Average annual net other-than-LPR immigration (in thousands)	457	683	234
Economic:
Average annual percentage change in:
Productivity (total U.S. economy)	1.63	1.93	1.33
Average wage in covered employment (nominal)	3.56	4.79	2.35
Average wage in covered employment (real)	1.14	1.74	.54
Consumer Price Index (CPI-W)	2.40	3.00	1.80
Unemployment rate (percent, age-sex-adjusted)	4.5	3.5	5.5
Annual trust fund real interest rate (percent)	2.3	2.8	1.8
Programmatic:
Average annual disability incidence rate (per 1,000 exposed, age-sex-adjusted)	4.8	3.8	5.8
Average annual disability recovery rate (per 1,000 beneficiaries, age-sex-adjusted)	10.4	12.5	8.3

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a

See chapter V for details, including historical and projected values.

b

The ultimate total fertility rate is 2.00 for the intermediate assumptions, 2.20 for the low-cost assumptions, and 1.70 for the high-cost assumptions. The ultimate rate is reached on a cohort basis over the lifetime of girls attaining age 14 in 2021 and later, so that the ultimate rate on an annual (or period) basis is reached in 2056. See section V.A.1 for additional details.