2024 OASDI Trustees Report

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V. ASSUMPTIONS AND METHODS UNDERLYING
ACTUARIAL ESTIMATES
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 2023. 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).
Readers should interpret the estimates based on the three sets of alternative assumptions with care. These estimates are not specific predictions of the future financial status of the OASDI program. Rather, they are intended to provide a reasonable range of future income and cost.
All of the key demographic, economic, and program-specific assumptions reach their long-range ultimate values within the next 25 years. For extrapolations beyond the 75‑year long-range period, the ultimate levels or trends reached by the end of the 75‑year period remain unchanged. The assumed ultimate values represent average annual experience or growth rates. Actual future values will exhibit fluctuations or cyclical patterns, as in the past.
At this time, there is no consensus on what the lasting effects of the COVID‑19 pandemic on long-term demographic, economic, and program-specific trends will be. The Trustees continue to assume that the pandemic will have no significant net effect on most individual long-range ultimate assumptions.
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 METHODS
This section of the report provides a brief overview of the demographic historical data and the assumptions used for the projections.
1. Fertility Assumptions
Birth 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
Historically, birth rates in the United States have fluctuated widely. The total fertility rate decreased from 3.31 children per woman at the end of World War I (1918) to 2.15 during the Great Depression (1936). After 1936, the total fertility rate rose to 3.68 in 1957 and then fell to 1.74 by 1976. After 1976, the total fertility rate rose above 2.00 by 1990, where it generally remained through 2009, but it dropped below 1.90 for 2011 and has been at relatively low levels since then. It reached an all-time low of 1.64 for 2020 but went up slightly to 1.66 for 2021 and 2022.
The variations in the historical total fertility rate resulted from changes in many factors, including social attitudes, economic conditions, birth-control practices, and the racial/ethnic composition of the population. Since the baby-boom era (1946-65), women have had higher educational attainment, higher labor force participation, an older average age at first marriage, and a higher propensity to be unmarried. All of these factors are consistent with continued lower total fertility rates than those experienced during the baby-boom era. It is still too early to tell whether the Supreme Court’s 2022 decision in Dobbs v. Jackson Women’s Health Organization and changes being made and considered in states regarding abortion policy will have a significant effect on future fertility rates. However, there are many factors that indicate that the ultimate total fertility rate may be lower than the average level since the end of the baby-boom era, including results from recent surveys of birth expectations, continued lower total fertility rates in recent years, lower total fertility rates in high-immigrant source countries such as Mexico, increased utilization of more effective birth control, other societal changes including lower marriage rates, and possible concerns about economic opportunity for the future. Therefore, the Trustees assume ultimate total fertility rates of 2.10, 1.90, and 1.60 children per woman for the low-cost, intermediate, and high-cost assumptions, respectively. These rates are 0.1 child per woman lower than the ultimate rates assumed in last year’s report for each alternative.
For the intermediate assumptions, the projected total fertility rate gradually increases on a period (annual) basis through the year the ultimate period value is reached (2040). The assumed low-cost and high-cost total fertility rates trend away from the intermediate path, also reaching their ultimate period values in 2040. The ultimate period values were reached in 2056 in last year’s report. The Trustees continue to assume that recent low rates of period fertility are, in part, indicative of a gradual shift to older ages of childbearing for younger birth cohorts. At the same time, reaching the ultimate total fertility rate sooner than it was reached in last year’s report is consistent with the total fertility rate recovering to a lower ultimate value than it did in last year’s report.
2. Mortality Assumptions
Mortality projections are developed assuming ultimate average annual percentage reductions in future mortality rates by age group and cause of death. The assumptions are used to estimate future central death rates by age group, sex, and cause of death.
Adjustments were made to the assumed death rates for 2023 and 2024 to account for the effects of the pandemic period. The table below shows the multiplicative factors that were applied to the probabilities of death that would have been projected in the absence of the pandemic. Factors for 2020 through 2022 are not necessary, as actual data are available.
Actual death rates for 2022 exceeded those projected in the 2023 report. Factors for 2023 are based on partial, provisional data through July and assumptions about the remainder of the year. Compared to the death rates used for last year’s report, the factors in the table above result in higher total death rates in 2023 and 2024.
From the estimated central death rates, probabilities of death by single year of age and sex were calculated. Projected death rates for years after 2024 are unchanged from the levels that would have been projected in the absence of the pandemic, under the assumption that increased deaths from the residual effects of living through the pandemic (both physiological and psychological) will be roughly offset by decreased deaths that instead happened earlier (during the pandemic).
Historical death rates were calculated for years 1900 through 2022 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 2020 and preliminary data for 2021 and 2022 were used.5 Death rates by cause of death were produced for all ages for years 1979‑2022 using data from the NCHS. Note, however, that regressions used for the model projections do not include data for 2020 through 2022 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 0.86 percent per year.
Death rates have declined substantially in the U.S. since 1900, with rapid declines over some periods and slow or no improvement over the other periods. Many factors are responsible for historical reductions in death rates, including medical advances, increased availability of health-care services, and improvements in sanitation and nutrition. Historical death rates generally declined more slowly for older ages and more rapidly for children and infants than for the rest of the population. Between 1900 and 2019, the age-sex-adjusted death rate declined at an average rate of 0.78 percent per year for ages 65 and over, and 2.96 percent per year for ages under 15.
Mortality assumptions differ for the low-cost, intermediate, and high-cost scenarios. Throughout the projection period, the low-cost scenario contains annual percentage reductions that are smaller than those in the intermediate scenario, while those in the high-cost scenario are larger. The ultimate annual percentage reductions for each of the three alternatives are unchanged from last year’s report.
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 rates of reduction for alternative II. For alternatives I and III, 50 and 150 percent of the starting rates of reduction are used, respectively. These annual rates of reduction, by alternative, are assumed to transition rapidly from the starting rates of reduction until they reach the ultimate annual rates of reduction assumed for 2048 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. Under the intermediate assumptions, projected total age-sex-adjusted death rates are slightly lower than the rates in last year’s report after 2024. These changes result from incorporating updated population exposures under age 65 starting in 2010 to be consistent with the latest Census estimates.
The projected average annual rate of decline between 2023 and 2098 for the total age-sex-adjusted death rate is about 0.35 percent for alternative I, 0.82 percent for alternative II, and 1.35 percent for alternative III.8 In keeping with the patterns observed in the historical data, the assumed future rates of decline are greater for younger ages than for older ages, but to a substantially lesser degree than in the past. Accordingly, the projected age-sex-adjusted death rates for ages 65 and over decline between 2023 and 2098 at average annual rates of about 0.32 percent for alternative I, 0.74 percent for alternative II, and 1.19 percent for alternative III. The projected age-sex-adjusted death rates for ages under 15 decline between 2023 and 2098 at average annual rates of about 0.61 percent for alternative I, 1.61 percent for alternative II, and 3.04 percent for alternative III.
Demographers express a wide range of views on the likely rate of future decline in death rates. For example, some believe that the long-standing historical tendency for mortality to decline more slowly at the oldest ages will cease in the future. Others believe that biological factors, social factors, and limitations on health care spending may slow future rates of decline in mortality.
.
Table V.A1.—Fertility and Mortality Assumptions,a
Calendar Years 1940-2100 
Total
fertility
rateb
Age-sex-adjusted death rate c
per 100,000
d933.3
d4,915.9
e868.6
e295.8
e4,687.0
f1.64
g823.7
g273.9
g4,489.0

a
This table contains basic assumptions along with key summary values that are derived from basic assumptions.

b
The total fertility rate for any year is the average number of children that would be born to a woman if she were to experience, at each age of her life, the birth rate observed in, or assumed for, the selected year, and if she were to survive the entire childbearing period.

c
Based on the enumerated total population as of April 1, 2010, if that population were to experience the death rates by age and sex observed in, or assumed for, the selected year.

d
Estimated using final data for ages below 65 and preliminary data for ages 65 and older.

e
Estimated using preliminary data.

f
Estimated using partial-year selected state data.

g
Estimated, intermediate alternative.

3. Immigration Assumptions
Projections of the total Social Security area population reflect assumptions for the following four immigration flows:
Lawful permanent resident (LPR) immigration: The flow of 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.9
Net LPR immigration is the difference between LPR immigration and legal emigration. Net other-than-LPR immigration is the difference between other-than-LPR immigration and other-than-LPR emigration. Total net immigration refers to the sum of net LPR immigration and net other-than-LPR immigration.
Immigration 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.
LPR immigration has increased significantly since World War II, due to various factors and legislative changes, including the Immigration Act of 1965 and the Immigration Act of 1990.
LPR new arrival immigration levels dropped significantly in the initial years of the COVID -19 pandemic and are estimated to be about 280,000 persons lower in 2020, 250,000 persons lower in 2021, and 51,000 persons lower in 2022 than would have been expected in the absence of the pandemic. The LPR new arrival immigration level for 2023 is assumed to be 681,000 persons under the low-cost alternative, 631,000 persons under the intermediate alternative, and 581,000 persons under the high-cost alternative. LPR new arrival immigration levels for 2024-26 are assumed to be higher than would have been assumed in the absence of the pandemic, fully making up for the lower levels in 2020-22. These pandemic effects on LPR new arrival immigration levels, both the lower levels in 2020-22 and the higher levels in 2024-26, are slightly larger in magnitude than the assumed pandemic effects in last year’s report.
For the intermediate alternative, the ultimate level of annual LPR immigration, which includes residents who adjust their status to become LPRs, is assumed to be 1,050,000 persons for 2027 and later. For alternative I, ultimate annual LPR immigration is assumed to be 1,250,000 persons for 2027 and later, and for alternative III, ultimate annual LPR immigration is assumed to be 850,000 persons for 2027 and later. The ultimate levels of LPR immigration are unchanged from last year’s report.
The assumed ratios of annual legal emigration to LPR immigration are 20, 25, and 30 percent for alternatives I, II, and III, respectively. This range is consistent with the limited historical data for legal emigration from the Social Security area. These ratios are unchanged from last year’s report. Under the intermediate alternative, by combining the ultimate annual LPR immigration and legal emigration assumptions, ultimate annual net LPR immigration is about 788,000 persons. Ultimate annual net LPR immigration is 1,000,000 persons for the low-cost scenario and 595,000 persons for the high-cost scenario.
The estimated number of other-than-LPR immigrants residing in the Social Security area and the annual level of other-than-LPR immigration were affected significantly by the economic recession of 2007-09. Although other-than-LPR immigration was greatly reduced during the economic downturn and immediate years thereafter, it returned to higher levels for most years from 2014 through 2019, reflecting a recovery from levels experienced during the recession. The COVID-19 pandemic began to affect other-than-LPR immigration in 2020; the estimated level of other-than-LPR immigration is about 458,000 persons lower in 2020 and 77,000 persons lower in 2021 than would have been estimated in the absence of the pandemic.
The Trustees assume that the pandemic will continue to affect other-than-LPR immigration in years 2023 through 2024. The other-than-LPR immigration levels for 2022 are assumed to be the same as would have been assumed in the absence of the pandemic. Other-than-LPR immigration levels for 2023 and 2024 are assumed to be higher than would have been assumed in the absence of the pandemic, fully making up for the lower levels in 2020 and 2021. These pandemic effects on other-than-LPR immigration levels, both the lower levels in 2020-21 and the higher levels in 2023-24, are all smaller in magnitude than the assumed pandemic effects in last year’s report.
The ultimate annual levels of other-than-LPR immigration are 1,350,000 persons for alternative II, 1,850,000 persons for alternative I, and 850,000 persons for alternative III. These ultimate levels are unchanged from those used in last year’s report. The ultimate levels are attained in 2025 for all three alternatives.
Emigration from the other-than-LPR immigrant population includes those who leave the Social Security area and those who adjust their status to become LPRs. This other-than-LPR immigrant population is highly mobile and far more likely to leave the Social Security area than is the citizen or LPR population. However, as other-than-LPR immigrants stay in the country for longer periods of time, they generally become less likely to leave the country.
Under the intermediate assumptions, the total annual number of other-than-LPR immigrants who leave the Social Security area averages about 427,000 through the 75‑year projection period. The ultimate annual number of other-than-LPR immigrants who adjust status to become LPRs is assumed to be 450,000 for the intermediate assumptions and is unchanged from last year’s report. The total annual number of other-than-LPR emigrants averages about 586,000 for the low-cost scenario and 267,000 for the high-cost scenario through the 75‑year projection period. The ultimate annual number of people adjusting status to LPR status is assumed to be 550,000 persons for the low-cost scenario and 350,000 persons for the high-cost scenario; these levels are unchanged from last year’s report.
The projected size of the other-than-LPR immigrant population grows substantially under the intermediate assumptions, from about 16.3 million by the end of 2024 to about 35.6 million by the end of 2098. This growth reflects the excess of annual immigration over the combined annual numbers of emigrants (including adjustments of status) and deaths that occur within the other-than-LPR immigrant population.
Under the intermediate assumptions, the projected levels of net other-than-LPR immigration gradually decrease over time. Because the projected number of other-than-LPR immigrants leaving the Social Security area is based on rates of departure, an increase in the number of other-than-LPR immigrants residing in the Social Security area results in an increase in the number who emigrate out of the area. All other components of net other-than-LPR immigration are assumed to be stable after 2024, and thus do not contribute toward any change in annual net other-than-LPR immigration. Under the intermediate assumptions, the projected average annual level of net other-than-LPR immigration over the 75-year projection period is about 476,000 persons. Projected average annual net other-than-LPR immigration is about 718,000 persons under the low-cost assumptions and 237,000 persons under the high-cost assumptions.
The projected average annual level of total net immigration (LPR and other-than-LPR, combined) is about 1,269,000 persons per year during the 75-year projection period under the intermediate assumptions. Projected average annual total net immigration is about 1,723,000 persons under the low-cost assumptions and about 837,000 persons under the high-cost assumptions.
Demographers express a wide range of views about the future course of immigration for the United States. Some believe that net immigration will increase substantially in the future. Others believe that potential immigrants may be increasingly attracted to other countries, that the number of potential immigrants may be lower due to lower birth rates in many countries, or that changes in the law or enforcement of the law will reduce immigration.
Table V.A2.—Immigration Assumptions,a Calendar Years 1940-2100 
Other-than-LPR immigrationb
Adjustments
of statusc d
296
e549
e255
e470
e764
f1,350
e236
e470
f645
f1,408
f631
f270
f450
f811
f1,618
f254
f450
f914
f1,725

a
This table contains basic assumptions along with key summary values that are derived from basic assumptions.

b
Historical other-than-LPR immigration and emigration estimates depend on a residual method. The Office of the Chief Actuary developed these estimates, as well as the resulting other-than-LPR January 1 stock estimates, for years through 2000. For years 2001 and later, the residual method uses stock estimates. For 2001 through 2004, the stock is set to values that linearly grade from the 2000 stock estimate to the 2005 stock estimate. Stock estimates are developed by the Office of the Chief Actuary, based on the latest methods used by DHS.

c
Estimates include persons who attained LPR status under the special one-time provisions of the Immigration Reform and Control Act of 1986.

d
Adjustments of status are a positive for net LPR immigration and a negative for net other-than-LPR immigration.

e
Estimated.

f
Estimated, intermediate alternative.
Note: Components may not sum to totals because of rounding.

4. Total Population Estimates
The starting Social Security area population for December 31, 2021, is derived from the Census Bureau’s estimate of the residents of the 50 States and D.C. and U.S. Armed Forces overseas. Adjustments are made to reflect mortality assumptions for the aged population since 2020 that are consistent with Medicare and Social Security data, net immigration assumptions for the aged population since 2020, estimates of the net undercount in the 2020 census, inclusion of U.S. citizens living abroad (including residents of U.S. territories), and inclusion of non-citizens living abroad who are insured for Social Security benefits. The Office of the Chief Actuary projects the Social Security area population by age, sex, and marital status for December 31 of each year from 2022 through 2098 by combining the assumptions for future fertility, mortality, and immigration with assumptions for marriage and divorce. Previous sections of this chapter present the assumptions for future fertility, mortality, and immigration. Assumptions for future rates of marriage and divorce reflect historical data from the National Center for Health Statistics, the Census Bureau, and selected individual States.
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
2021c