2026 OASDI Trustees Report

B. HISTORY OF ACTUARIAL STATUS ESTIMATES

This appendix chronicles the history of the long-range OASDI actuarial balance and the year of combined OASI and DI Trust Fund reserve depletion since 1982 under the intermediate assumptions. The actuarial balance is the principal summary measure of actuarial status for the 75-year long-range period as a whole. The year of trust fund reserve depletion is also critical, as it indicates the year by which legislative action would be needed in order to maintain timely payment of scheduled benefits.

The 1983 report was the last report for which the actuarial balance was positive for the OASDI program. The two basic components of actuarial balance are the summarized income rate and the summarized cost rate, both of which are expressed as percentages of taxable payroll over the period. Section IV.B.4 defines the summarized income rate, summarized cost rate, and actuarial balance in detail. For any given period, the actuarial balance includes the difference between the present value of non-interest income for the period and the present value of the cost for the period, each divided by the present value of taxable payroll for all years in the period. The computation of the actuarial balance also includes:

•	In the reports for 1988 and later, the amount of the trust fund reserves on hand at the beginning of the valuation period; and

•	In the reports for 1991 and later, the present value of a target trust fund reserve equal to 100 percent of the annual cost to be reached and maintained at the end of the valuation period.

The actuarial balance computations in the 1973-87 reports used the average-cost method, a simpler method which approximated the results of the present-value approach. Under the average-cost method, the sum of the annual cost rates over the 75-year projection period was divided by the total number of years, 75, to obtain the average cost rate per year. A similar computation produced the average income rate. The actuarial balance was the difference between the average income rate and the average cost rate.

When the 1973 report introduced the average-cost method, the financing of the program was closer to pay-as-you-go. Also, the long-range demographic and economic assumptions in that report produced an annual rate of growth in total taxable payroll which was about the same as the annual rate at which the trust funds earned interest. In either circumstance (i.e., pay-as-you-go financing, where the annual income rate is the same as the annual cost rate, or an annual rate of growth in total taxable payroll equal to the annual interest rate), the average-cost method produces the same result as the present-value method. However, by 1988, neither of these circumstances still existed.

After the 1977 and 1983 Social Security Amendments, projections indicated substantial increases in the trust fund reserves continuing well into the 21st century. These laws changed the program’s financing from essentially pay-as-you-go to partial advance funding through the 75-year period. Also, for the reports from 1973 through 1987, long-range fertility rates and average real wage growth assumptions were gradually reduced, resulting in an annual rate of growth in taxable payroll that was significantly lower than the assumed interest rate by 1987. As a result of the difference between this rate of growth and the assumed interest rate, the results of the average-cost method and the present-value method began to diverge in the reports for 1973 through 1987, and by 1988 they were quite different. While the average-cost method reflected most of the effects of assumed interest rates, it no longer reflected all interest effects. The present-value method, by contrast, accurately reflects the implications of assumed interest rates. As a result, the 1988 report through the current report use the present-value method of calculating the actuarial balance.

A positive actuarial balance¹ indicates that estimated income plus starting reserves is more than sufficient to meet estimated trust fund obligations plus the ending target fund for the period as a whole. Even with a positive actuarial balance, it is possible for reserves to become temporarily depleted within the long-range period. An actuarial balance of zero indicates that the estimated income plus starting reserves exactly matches estimated trust fund obligations plus the ending target fund for the period as a whole. A negative actuarial balance indicates that estimated income plus starting reserves is insufficient to meet estimated trust fund obligations plus the ending target fund for the entire period.

Table VI.B1 contains the long-range OASDI actuarial balances, summarized income rates, and summarized cost rates for the 1982 report through the current report. The reports presented these values under the intermediate assumptions, which reports from 1982 to 1990 referred to as alternative II-B and reports since then refer to as alternative II.

Table VI.B1.—Long-Range OASDI Actuarial Balances and Trust Fund Reserve Depletion Dates as Shown in the Trustees Reports for 1982-2026
under Intermediate Assumptions^a 

[As a percentage of taxable payroll]

Year of report	Summarized income rate	Summarized cost rate	Actuarial balanceb	Change from previous yearc	Year of combined trust fund reserve depletion
1982	12.27	14.09	-1.82	d	1983
1983	12.87	12.84	+.02	+1.84	e
1984	12.90	12.95	-.06	-.08	e
1985	12.94	13.35	-.41	-.35	2049
1986	12.96	13.40	-.44	-.03	2051
1987	12.89	13.51	-.62	-.18	2051
1988	12.94	13.52	-.58	+.04	2048
1989	13.02	13.72	-.70	-.13	2046
1990	13.04	13.95	-.91	-.21	2043
1991	13.11	14.19	-1.08	-.17	2041
1992	13.16	14.63	-1.46	-.38	2036
1993	13.21	14.67	-1.46	d	2036
1994	13.24	15.37	-2.13	-.66	2029
1995	13.27	15.44	-2.17	-.04	2030
1996	13.33	15.52	-2.19	-.02	2029
1997	13.37	15.60	-2.23	-.03	2029
1998	13.45	15.64	-2.19	+.04	2032
1999	13.49	15.56	-2.07	+.12	2034
2000	13.51	15.40	-1.89	+.17	2037
2001	13.58	15.44	-1.86	+.03	2038
2002	13.72	15.59	-1.87	-.01	2041
2003	13.78	15.70	-1.92	-.04	2042
2004	13.84	15.73	-1.89	+.03	2042
2005	13.87	15.79	-1.92	-.04	2041
2006	13.88	15.90	-2.02	-.09	2040
2007	13.92	15.87	-1.95	+.06	2041
2008	13.94	15.63	-1.70	+.26	2041
2009	14.02	16.02	-2.00	-.30	2037
2010	14.01	15.93	-1.92	+.08	2037
2011	14.02	16.25	-2.22	-.30	2036
2012	14.02	16.69	-2.67	-.44	2033
2013	13.88	16.60	-2.72	-.05	2033
2014	13.89	16.77	-2.88	-.16	2033
2015	13.86	16.55	-2.68	+.20	2034
2016	13.84	16.50	-2.66	+.02	2034
2017	13.84	16.67	-2.83	-.17	2034
2018	13.84	16.69	-2.84	-.02	2034
2019	13.81	16.60	-2.78	+.06	2035
2020	13.85	17.06	-3.21	-.43	2035
2021	13.78	17.31	-3.54	-0.32	2034
2022	13.78	17.20	-3.42	+.12	2035
2023	13.78	17.38	-3.61	-.19	2034
2024	13.80	17.30	-3.50	+.11	2035
2025	13.79	17.61	-3.82	-.33	2034
2026	13.68	18.10	-4.42	-.60	2034

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a

The 1982-90 reports referred to the intermediate assumptions as alternative II-B; the 1991 and later reports refer to the intermediate assumptions as alternative II.

b

The definition and method of calculating the actuarial balance were changed in 1988 and 1991. See text for details.

c

A detailed year-by-year breakdown of the reasons for the changes in the actuarial balance since the 1983 Trustees Report may be found in Actuarial Note 2026.8 at www.ssa.gov/OACT/NOTES/ran8/.

d

Between -0.005 and 0.005 percent of taxable payroll.

e

Reserves were projected to remain positive throughout the 75-year projection period.

Note: Components may not sum to totals because of rounding.

For several of the years included in the table, significant legislative changes or definitional changes affected the actuarial balance. In addition, the change in the valuation period tends to decrease (worsen) the actuarial balance by a small amount for each successive report.

The Social Security Amendments of 1983 account for the largest single change shown in the table: the actuarial balance of ‑1.82 for the 1982 report improved to +0.02 for the 1983 report. In 1985, the actuarial balance changed largely because of an adjustment made to the method for estimating the age distribution of immigrants.

Rebenchmarking of the National Income and Product Accounts and changes in demographic assumptions contributed to the change in the actuarial balance for 1987. In 1989 and 1990, changes in economic assumptions accounted for most of the changes in the actuarial balance.

In 1991, the effect of legislation, changes in economic assumptions, and the introduction of the cost of reaching and maintaining an ending target trust fund level combined to decrease the actuarial balance. In 1992, changes in disability assumptions and the method for projecting average benefit levels accounted for most of the decrease in the actuarial balance. In 1994, changes in the real wage assumptions, disabled-worker incidence rates, and the earnings sample used for projecting average benefit levels accounted for most of the relatively large decrease in the actuarial balance. In 1995, numerous small changes had largely offsetting effects on the actuarial balance, including a substantial reallocation of the payroll tax rate, which reduced the OASI actuarial balance, but increased the DI actuarial balance.

In 1996, a change in the method of projecting dually-entitled beneficiaries produced a relatively large increase in the actuarial balance, which offset decreases produced by changes in the demographic and economic assumptions. In 1999, increases caused by changes in the economic assumptions (related to improvements in the CPI by the Bureau of Labor Statistics) accounted for most of the increase in the actuarial balance. For the 2000 report, changes in economic assumptions and methodology increased the actuarial balance, although changes in demographic assumptions partially offset these increases.

The actuarial balances changed very little for the 2001 through 2005 reports, mainly due to relatively small and often offsetting changes in assumptions and methods.

In 2006, decreases in the actuarial balance due to a reduction in the ultimate annual real interest rate and improvements in calculating mortality for disabled workers were greater in aggregate than the increases in the actuarial balance due to a change in the ultimate total fertility rate. For the 2007 report, the actuarial balance increased due to revised disabled-worker incidence rate assumptions, improvements in average benefit level projections, and changes in near-term economic assumptions. For the 2008 report, the relatively large increase in the actuarial balance was primarily due to changes in immigration projection methods and assumptions. In 2009, changes in starting values and near-term economic assumptions due to the economic recession and faster ultimate rates of decline in death rates for ages 65-84 accounted for most of the relatively large decrease in the actuarial balance. Legislative changes, in particular the estimated effects of the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010, were the main reason for the increase in the actuarial balance for the 2010 report.

For the 2011 report, changes in mortality projections, due to new starting values and revised methods, were the most significant of several factors contributing to the decrease in the actuarial balance. In 2012, changes in economic assumptions and starting values accounted for about half of the decrease in actuarial balance; changes to starting demographic values, a change in the ultimate disabled-worker incidence assumption, and other methodology changes also contributed. For the 2013 report, the effects of substantially lower death rates than previously projected and the American Taxpayer Relief Act of 2012 (which lowered the Federal marginal income tax rates) were offset by a number of methodology improvements. In 2014, changes in economic data and assumptions accounted for the majority of the net decrease in the actuarial balance. For the 2015 report, methodological improvements and updates of programmatic data accounted for most of the net increase in the actuarial balance.

For the 2016 report, the actuarial balance increased primarily due to the effects of the Bipartisan Budget Act of 2015 and improvements made to immigration methods, largely offset by a lower ultimate real interest rate and a lower ultimate annual increase in the rate of price inflation. In 2017, a lower real wage growth assumption, an assumed weaker recovery from the recession, and various methodology improvements accounted for most of the net reduction in the actuarial balance. Changes for the 2018 report had a relatively small net effect. For the 2019 report, the actuarial balance increased primarily due to higher-than-expected death rates and lower near-term and ultimate disabled-worker incidence rate assumptions. For the 2020 report, the actuarial balance decreased primarily due to the repeal of the Affordable Care Act’s excise tax on employer-sponsored group health insurance premiums, which reduced projected earnings as a share of employee compensation, and lower assumed values for the ultimate total fertility rate, the ultimate rate of price inflation, and the ultimate real interest rate.

In 2021, the actuarial balance decreased due to several factors: economic assumptions were updated to reflect experience during and following the COVID-19 pandemic (in particular, the levels of productivity and potential GDP were assumed to be roughly 1 percent lower beginning with the second quarter of 2020) and the data and methodology used for projecting average benefit levels were updated and improved. For the 2022 report, the actuarial balance increased primarily due to a decrease in the assumed ultimate disabled-worker incidence rate, incorporating recent economic data, and changes in near-term economic assumptions. Notably, employment, earnings, and GDP following the 2020 recession recovered much faster than had been assumed in the 2021 report. In 2023, the actuarial balance decreased primarily due to economic experience, changes in near-term economic assumptions (in particular, the level of potential GDP was assumed to be about 3 percent lower by 2026 and for all years thereafter in response to then-recent economic developments), and several methodology updates. The actuarial balance for the 2024 report increased primarily due to changes in economic factors and a lower assumed ultimate disabled-worker incidence rate, partially offset by a lower assumed ultimate total fertility rate.

In 2025, the actuarial balance decreased mainly due to three factors. First, the Social Security Fairness Act of 2023 (enacted in early 2025) increased total projected benefits by repealing the Windfall Elimination Provision and Government Pension Offset. Second, the year the ultimate total fertility rate is reached was extended 10 years, lowering assumed birth rates for the first 25 years of the projection. Third, the assumption for the ultimate labor share of GDP was reduced, leading to slower average earnings growth over the first ten projection years and a lower level of average earnings in the longer-term.

Section IV.B.6 describes changes affecting the actuarial balance shown for the 2026 report.

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1

As noted above, the definition and method of calculating the actuarial balance differed prior to the 1991 report.