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).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
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.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.
d933.3 d4,915.9 e868.6 e295.8 e4,687.0 f1.64 g823.7 g273.9 g4,489.0
• 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.9Immigration 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 e549 e255 e470 e764 f1,350 e236 e470 f645 f1,408 f631 f270 f450 f811 f1,618 f254 f450 f914 f1,725
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