The future income and cost of the OASDI program will depend on many demographic, economic, and program-specific factors. Trust fund income will depend on how these factors affect the size and composition of the working population as well as the level and distribution of earnings. Similarly, program cost will depend on how these factors affect the size and composition of the beneficiary population as well as the general level of benefits.The Trustees make basic assumptions for several of these factors based on analysis of historical trends, historical conditions, and expected future conditions. These factors include fertility, mortality, immigration, marriage, divorce, productivity, inflation, average earnings, unemployment, real interest rates, and disability incidence and termination. Other factors depend on these basic assumptions. These other, often interdependent, factors include total population, life expectancy, labor force participation, gross domestic product, and program-specific factors. Each year, the Trustees reexamine these assumptions and methods in light of new information and make appropriate revisions.Future levels of these factors and their interrelationships are inherently uncertain. To address these uncertainties, this report uses three sets of assumptions, designated as intermediate (alternative II), low-cost (alternative I), and high-cost (alternative III). The intermediate set represents the Trustees’ best estimate of the future course of the population and the economy as of the time assumptions were set in December 2022. With regard to the net effect on the actuarial status of the OASDI program, the low-cost set is more optimistic and the high-cost set is more pessimistic. The low-cost and high-cost sets of assumptions reflect significant potential changes in the interrelationships among factors, as well as changes in the values for individual factors.While it is unlikely that all of the factors and interactions will differ in the specified directions from the intermediate values, many combinations of individual differences in the factors could have a similar overall effect. Outcomes with overall long-range cost as low as the low-cost scenario or as high as the high-cost scenario are very unlikely. This report also includes a section on sensitivity analysis, where factors are changed one at a time (see appendix D), and a section on stochastic projections, which provides a probability distribution of possible future outcomes, with most of the key factors being varied around the intermediate alternative (see appendix E).The following sections briefly discuss the various assumptions and methods used in making the estimates of trust fund actuarial status, which are the focus of this report.1 There are, of course, many interrelationships among these factors that are important but are beyond the scope of this discussion.A. DEMOGRAPHIC ASSUMPTIONS AND METHODSBirth rates by single year of age, for girls and women aged 14 to 49,2 are the basis for the fertility assumptions. These rates apply to the total number of women, across all marital statuses, in the midyear population at each age. Table V.A1 displays the historical and projected total fertility rates.3
a 1.18 a 1.08
Historical death rates were calculated for years 1900 through 2020 for ages below 65 (and for all ages for years prior to 1968) using data from the National Center for Health Statistics (NCHS).4 For ages 65 and over, final Medicare data on deaths for years 1968 through 2019 and preliminary data for 2020 and 2021 were used.5 Death rates by cause of death were produced for all ages for years 1979‑2020 using data from the NCHS. Note, however, that regressions used for the model projections do not include data for 2020 and 2021 due to the elevated death rates caused by COVID-19.The total age-sex-adjusted death rate6 declined at an average annual rate of 1.02 percent between 1900 and 2019. Between 1979 and 2019, the period for which death rates were analyzed by cause, the total age-sex-adjusted death rate, for all causes combined, declined at an average rate of 0.85 percent per year.The trends in the annual reductions in central death rates were calculated for the period from 2008 to 2019 for both the NCHS and Medicare data, by age group, sex, and cause of death.7 These trends are the starting reductions for alternative II. For alternatives I and III, 50 and 150 percent of the starting reductions are used, respectively. These annual reductions, by alternative, are assumed to transition rapidly from the starting reductions until they reach the ultimate annual percentage reductions assumed for 2047 and later.Table V.A1 contains historical and projected age-sex-adjusted death rates for the total population (all ages), for ages under 65, and for ages 65 and over. Age-sex adjustment eliminates the effect of a changing distribution of population by age and sex, allowing the pure effects of changes in death rates to be observed. Under the intermediate assumptions, projected age-sex-adjusted death rates are very slightly higher than the rates in last year’s report after 2024. These changes result from incorporating final 2019 Medicare data and a method improvement to use single-year-of-age data instead of five-year age group data.
d922.4 d5,034.2 e937.6 f341.5 e4,912.0 f1.69 f860.3 f285.7 f4,691.2
• Lawful permanent resident (LPR) immigration: Persons who enter the Social Security area and are granted LPR status, or who are already in the Social Security area and adjust their status to become LPRs.8Immigration assumptions differ for the low-cost, intermediate, and high-cost scenarios. The low-cost scenario includes higher annual net immigration and the high-cost scenario includes lower annual net immigration. Table V.A2 contains historical and projected levels of various immigration flows.
Other-than-LPR immigrationb e365 e209 e471 e627 f950 e229 e471 f 250 f877 f600 f263 f450 f788 f1,350 f236 f450 f664 f1,452
This report presents a July 1 (i.e., midyear) population for each year, which is derived from surrounding December populations. Table V.A3 shows the historical and projected population for July 1 by broad age group, for the three alternatives. It also shows the aged and total dependency ratios (see table footnotes for definitions).
Aged a Total b 2020c