2025 OASDI Trustees Report

II. OVERVIEW

A. HIGHLIGHTS

Since last year’s report, one law was enacted that is projected to have a substantial effect on Social Security’s financial status.

•

Social Security Fairness Act of 2023: Enacted on January 5, 2025, this law repeals the Windfall Elimination Provision and Government Pension Offset, which reduced or eliminated the Social Security benefits of individuals receiving a pension based on work that was not covered by Social Security. Therefore, implementation of this law increases Social Security benefits for people who worked in jobs that were not covered by Social Security.

In addition, the Trustees have reassessed their expectations and have made changes to the intermediate assumptions in two primary areas.

•	Total fertility rate (TFR): The ultimate TFR is 1.9 children per woman, unchanged from last year’s report. For last year’s report, the ultimate rate was reached in 2040. In this year’s report, the ultimate rate is reached ten years later, in 2050.

•

Ratio of total labor compensation to Gross Domestic Product (GDP): The ratio of total labor compensation to GDP (that is, the labor share of output) is assumed to increase gradually to 61.2 percent in 2034 and to remain nearly constant thereafter. In last year’s report, this ratio was assumed to reach 62.8 percent in 2033 and to stay at about that level.

Section IV.B.6 of this report includes a detailed explanation of the long-range financial effects of the changes since last year’s report, by category.

The intermediate (best estimate) assumptions for this report were set in December 2024. The Trustees will continue to monitor developments, reevaluate the assumptions, and modify the projections in later reports.

In 2024

The OASDI program was providing benefit payments¹ to about 68 million people at the end of 2024:

•	54 million retired workers and dependents of retired workers,

•	6 million survivors of deceased workers, and

•	8 million disabled workers and dependents of disabled workers.

During the year, an estimated 184 million people had earnings covered by Social Security and paid payroll taxes on those earnings.

Total program cost in 2024 was $1,485 billion. Total income was $1,418 billion, which consisted of $1,349 billion in non-interest income and $69 billion in interest earnings. Trust fund reserves held in special issue U.S. Treasury securities declined from $2,788 billion at the beginning of the year to $2,721 billion at the end of the year.

Short-Range Results (2025-34)

Under the Trustees’ intermediate assumptions, Social Security’s total cost is projected to be higher than its total income in 2025 and all later years. Total cost began to be higher than total income in 2021. Social Security’s cost has exceeded its non-interest income since 2010.

To illustrate the Social Security program’s actuarial status as a whole, the OASI and DI Trust Funds’ operations are often shown on a combined basis as OASDI. However, the two funds are separate entities by law, and therefore the combined fund operations and reserves are hypothetical. The combined reserves are projected to decrease from $2,721 billion at the beginning of 2025 to $214 billion at the beginning of 2034, and are then expected to become depleted during 2034, the last year of the short-range period.

The OASDI reserves along with projected program income are sufficient to cover projected program cost over the next 9 years under the intermediate assumptions. The ratio of reserves to annual cost is projected to decline from 169 percent at the beginning of 2025, falling below 100 percent to 95 percent at the beginning of 2029. It is projected to remain below 100 percent until reserves become depleted during 2034.

Because this ratio falls below 100 percent by the end of the 10th projection year, and remains below 100 percent, the hypothetical OASDI fund fails the Trustees’ test of short-range financial adequacy. For last year’s report, the combined reserves were projected to be 188 percent of annual cost at the beginning of 2024, falling below 100 percent to 84 percent at the beginning of 2030.

Considered separately, the OASI Trust Fund fails the test of short-range financial adequacy, but the DI Trust Fund satisfies the test. The OASI reserves are projected to become depleted during 2033 under the intermediate assumptions. The DI reserves along with projected program income are sufficient to cover projected program cost over the next 10 years.

Long-Range Results (2025-99)

Under the Trustees’ intermediate assumptions, OASDI cost exceeds total income in every year of the long-range period, which runs from 2025 through 2099. The hypothetical combined trust fund reserves decline until reserves become depleted in 2034, one year earlier than projected in last year’s report. Figure II.D2 shows the implications of reserve depletion for the combined OASI and DI Trust Funds.

Considered separately, the OASI reserves become depleted in 2033, which is the same year projected in last year’s report. As in last year’s report, the DI reserves do not become depleted within the 75-year long-range projection period.²

The DI program continued to have low levels of disability applications and benefit awards through 2024. Disability applications have declined substantially since 2010, and the total number of disabled-worker beneficiaries in current payment status has been falling since 2014.

Over the 75-year long-range period, the projected OASDI annual cost rate³ increases from 15.15 percent of taxable payroll for 2025 to 18.96 percent for 2081, and then decreases generally to 18.34 percent for 2099. The projected cost rate for 2099 is 4.84 percent of taxable payroll more than the projected income rate⁴ for 2099. For last year’s report, projected OASDI cost for 2099 was 18.16 percent, or 4.67 percent of payroll more than the annual income rate.

When expressed as a share of GDP, OASDI cost generally rises from 5.3 percent of GDP for 2025 to a peak of about 6.4 percent for 2079. It then declines to 6.1 percent by 2099.

OASDI cost has generally increased much more rapidly than taxable payroll since 2008 and is projected to continue to do so through about 2040. In this period, the baby-boom generation is aging and increasing the number of beneficiaries much faster than the increase in the number of covered workers, as subsequent lower-birth-rate generations replace the baby-boom generation at working ages. Between about 2040 and 2080, the OASDI cost rate continues to grow, but at a slower pace. After 2080, the OASDI cost rate declines and then stabilizes.

These patterns in the cost rate are largely driven by the effect of birth rates on the adult population’s age distribution. Birth rates are assumed to increase from recent very low levels to an ultimate level of 1.9 children per woman for 2050 and thereafter. In last year’s report, the same ultimate total fertility rate of 1.9 children per woman was assumed for 2040 and later.

The OASDI actuarial deficit is 3.82 percent of taxable payroll for the 75-year projection period 2025-99, which is larger than the value of 3.50 percent for 2024-98 in last year’s report. The open-group unfunded obligation for OASDI is 3.64 percent of taxable payroll for 2025-99, which is larger than the value of 3.32 percent of payroll for 2024-98 in last year’s report.

Expressed in present-value dollars discounted to January 1, 2025, the open-group unfunded obligation for OASDI is $25.1 trillion over the 75-year projection period 2025-99. This is $2.5 trillion more than the measured level in last year’s report of $22.6 trillion over 2024-98, discounted to January 1, 2024.

The actuarial deficit and unfunded obligation measures are reported separately for the OASI and DI funds in section IV.B of this report. The OASDI actuarial deficit and unfunded obligation both round to 1.3 percent of GDP over the 75-year projection period 2025-99, compared to 1.2 percent for both the actuarial deficit and the unfunded obligation over 2024-98 in last year’s report.

If the assumptions, methods, starting values, and the law had all remained unchanged, the actuarial deficit would have increased to 3.56 percent of taxable payroll, and the unfunded obligation would have risen to 3.38 percent of taxable payroll and $23.5 trillion in present value. This is due to the change in the valuation date and the extension of the valuation period through an additional year, 2099.

The actuarial deficit increased significantly in this year’s report primarily due to: (1) the implementation of the Social Security Fairness Act, (2) the extension in the assumed year the ultimate total fertility rate is reached, and (3) the reduction in the ultimate assumption for the ratio of total labor compensation to GDP. These changes are described in detail in section IV.B.6 of this report.

To illustrate the magnitude of the 75-year actuarial deficit, consider that for the combined OASI and DI Trust Funds to remain fully solvent throughout the 75-year projection period ending in 2099:

•	revenue would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 3.65 percentage points5 to 16.05 percent beginning in January 2025;

•

scheduled benefits would have to either be reduced by an amount equivalent to an immediate and permanent reduction of 22.4 percent applied to all current and future beneficiaries effective in January 2025, or by 26.8 percent if the reductions were applied only to those who become initially eligible for benefits in 2025 or later; or

•	some combination of these approaches would have to be adopted.

If substantial actions are deferred for several years, the changes necessary to maintain solvency for the combined OASI and DI Trust Funds would be concentrated on fewer years and fewer generations. Significantly larger changes would be necessary if action is deferred until the combined trust fund reserves become depleted in 2034. For example, maintaining 75-year solvency through 2099 with changes that begin in 2034 would require:

•	an increase in revenue by an amount equivalent to a permanent 4.27 percentage point payroll tax rate increase to 16.67 percent starting in 2034,

•	a reduction in scheduled benefits by an amount equivalent to a permanent 25.8 percent reduction in all benefits starting in 2034, or

•	some combination of these approaches.

Conclusion

Under the intermediate assumptions, the projected hypothetical combined OASI and DI Trust Fund reserves become depleted and unable to pay scheduled benefits in full on a timely basis in 2034. At the time of reserve depletion, continuing income to the combined trust funds would be sufficient to pay 81 percent of scheduled benefits.

The OASI Trust Fund reserves are projected to become depleted in 2033, at which time OASI income would be sufficient to pay 77 percent of OASI scheduled benefits. DI Trust Fund reserves are not projected to become depleted during the 75-year period ending in 2099.

The Trustees recommend that lawmakers address the projected trust fund shortfalls in a timely way in order to phase in necessary changes gradually and give workers and beneficiaries time to adjust. Implementing changes sooner rather than later would allow more generations to share in the needed revenue increases or reductions in scheduled benefits.

Social Security will play a critical role in the lives of 70 million beneficiaries and 185 million covered workers and their families during 2025. With informed discussion, creative thinking, and timely legislative action, Social Security can continue to protect future generations.

---

1

The definitions of “benefit payments” and other terms appear in the Glossary.

2

If the OASI Trust Fund reserves were to become depleted in 2033 as is currently projected, the operations of the hypothetical combined OASI and DI Trust Funds would not reflect the aggregated operation of the OASI Trust Fund and the DI Trust Fund because part of the OASI benefits could not be paid without a change in the law. The values shown for the hypothetical combined trust funds assume the law will have been changed to permit the transfer of resources between funds as needed.

3

The cost rate is defined as the ratio of program cost to taxable payroll.

4

The income rate is defined as the ratio of non-interest income to taxable payroll.

5

The 3.65 percentage point increase in the payroll tax rate required to achieve 75-year solvency through 2099 differs somewhat from the 3.82 percent actuarial deficit. This is primarily because the rate increase required to achieve 75-year solvency reflects a zero trust fund reserve at the end of the period in 2099, whereas the 3.82 percent actuarial deficit incorporates an ending trust fund reserve equal to one year’s cost. While such an increase in the payroll tax rate would cause some behavioral changes in earnings and ensuing changes in benefit levels, such changes are not included in these calculations because they are assumed to have roughly offsetting effects on actuarial status over the 75-year long-range period as a whole.