Summary of Provisions That Would Change the Social Security Program
Estimates based on the intermediate assumptions of
the 2024 Trustees Report
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| Description of proposed provisions |
Change from current law [percent of payroll] |
Shortfall eliminated | ||||
|---|---|---|---|---|---|---|
|
Long-range actuarial balance |
Annual balance in 75th year |
Long-range actuarial balance |
Annual balance in 75th year |
|||
| Category: Provisions Affecting Cost-of-Living Adjustment (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| A1 |
Starting December 2025, reduce the annual COLA by 1 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
1.95 | 2.54 | 56% | 55% | |
| A2 |
Starting December 2025, reduce the annual COLA by 0.5 percentage point.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
1.01 | 1.33 | 29% | 29% | |
| A3 |
Starting December 2025, compute the COLA using a chained version of the consumer
price index for wage and salary workers (CPI-W). We estimate this new computation
will reduce the annual COLA by about 0.3 percentage point, on average.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) | memo (FY 2014 Budget) | memo (Chaffetz 2011) | memo (Becerra 2011) | memo (Fiscal Commission 2010) | memo (Bipartisan Policy Center 2010) | memo (Social Security Advisory Board 2005) |
0.62 | 0.82 | 18% | 18% | |
| A4 |
Starting December 2027, compute the COLA using a chained version of the consumer
price index for wage and salary workers (CPI-W). We estimate this new computation
will reduce the annual COLA by about 0.3 percentage point, on average. The new COLA
will not apply to DI benefits. It will apply to OASI benefits, except for those
of formerly disabled-workers who converted to retired-worker status.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA 2010) |
0.49 | 0.66 | 14% | 14% | |
| A5 |
Starting December 2025, add 1 percentage point to the annual COLA for beneficiaries
who have lived past a "specified age". The "specified age" is the sum of: (1) 65 and
(2) the unisex cohort life expectancy at age 65.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging 2010) |
-0.13 | -0.14 | -4% | -3% | |
| A6 |
Starting December 2026, compute the COLA using the Consumer Price Index for the Elderly
(CPI-E). We estimate this new computation will increase the annual COLA by about 0.2 percentage
point, on average.
graph | table | pdf-graph | pdf-table | memo (Hirono, Tokuda 2024) | memo (Sanders 2023) | memo (Deutch, Hirono 2022) | memo (Sanders, DeFazio 2022) | memo (Lawson 2021) | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Deutch, Hirono 2019) | memo (Sanders, DeFazio 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Deutch, Hirono 2017) | memo (Lawson 2017) | memo (Larson 2017) | memo (Sanders, DeFazio 2017) | memo (Sanchez 2016) | memo (Sanders 2016) | memo (Schatz 2015) | memo (Deutch 2015) | memo (DeFazio 2015) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (Harkin 2013) | memo (Harkin 2012) | memo (Becerra 2011) | memo (Deutch 2010) |
-0.42 | -0.57 | -12% | -12% | |
| A7 |
Starting December 2025, reduce the annual COLA by 1 percentage point, but
not to less than zero. In cases where the unreduced COLA is less than 1 percentage
point, do not carry over the unused reduction into future years.
graph | table | pdf-graph | pdf-table | memo (Hutchison 2011) |
1.83 | 2.39 | 52% | 52% | |
| A8 |
Starting December 2025, for OASI beneficiaries only (DI beneficiaries would
only be affected when their benefit converts to OASI at NRA), the annual COLA
would be based on the chain-weighted version of the CPI-U.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.55 | 0.71 | 16% | 15% | |
| A9 |
For single/head-of-household/married-filing-separate taxpayers with modified
adjusted gross income (MAGI) below $110,800 and for joint filers with MAGI below
$221,500 for December 2026 ($85,000 and $170,000 multiplied by estimated CPI-U
for 2018-2026), use the chain-weighted version of the Consumer Price Index for
All Urban Consumers (C-CPI-U) to calculate the cost-of-living adjustment (COLA),
beginning with the December 2026 COLA. For those beneficiaries whose MAGI is
above these thresholds, provide no COLA. Use prior tax year income data for
this determination. Use the chain-weighted CPI for the COLA for years prior to
benefit receipt. Index the eligibility income threshold amounts to the CPI-U
after December 2026.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.30 | 2.27 | 37% | 49% | |
| Category: Provisions Affecting Level of Monthly Benefits (PIA) (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| B1.1 |
Price indexing of PIA factors beginning with those newly eligible for OASDI
benefits in 2031: Reduce factors so that initial benefits grow by inflation
rather than by the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
2.96 | 7.79 | 85% | 168% | |
| B1.2 |
Progressive price indexing (30th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2031: Create a new bend
point at the 30th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 30th percentile and below. Reduce
the 32 and 15 percent factors above the 30th percentile such that the initial
benefit for a worker with AIME equal to the taxable maximum grows by inflation
rather than the growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
1.64 | 4.34 | 47% | 94% | |
| B1.3 |
Progressive price indexing (40th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2031: Create a new bend
point at the 40th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 40th percentile and below. Reduce
the 32 and 15 percent factors above the 40th percentile such that the initial
benefit for a worker with AIME equal to the taxable maximum grows by inflation
rather than the growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
1.40 | 3.71 | 40% | 80% | |
| B1.4 |
Progressive price indexing (50th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2031: Create a new bend
point at the 50th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 50th percentile and below.
Reduce the 32 and 15 percent factors above the 50th percentile such that the
initial benefit for a worker with AIME equal to the taxable maximum grows by
inflation rather than the growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
1.17 | 2.91 | 33% | 63% | |
| B1.5 |
Progressive price indexing (60th percentile) of PIA factors beginning with
individuals newly eligible for OASDI benefits in 2031: Create a new bend
point at the 60th percentile of the AIME distribution of newly retired workers.
Maintain current-law benefits for earners at the 60th percentile and below. Reduce
the 32 and 15 percent factors above the 60th percentile such that the initial
benefit for a worker with AIME equal to the taxable maximum grows by inflation
rather than the growth in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.88 | 1.99 | 25% | 43% | |
| B2.1 |
Beginning with those newly eligible for OASI benefits in 2034, multiply the PIA
factors by the ratio of life expectancy at 67 for 2029 to the life expectancy at
age 67 for the 4th year prior to the year of benefit eligibility. Unisex life expectancies,
based on period life tables as computed by SSA's Office of the Chief Actuary, are
used to determine the ratio. Disabled workers are: (a) not affected prior to normal
retirement age; and (b) subject to a proportional reduction in benefits, based on
the worker's years of disability, upon conversion to retired-worker beneficiary status.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) | memo (Bennett 2009) |
0.56 | 1.72 | 16% | 37% | |
| B3.8 |
Beginning with those newly eligible for OASDI benefits in 2031, create a new bend
point at the 50th percentile of the AIME distribution of newly retired workers and
gradually reduce all PIA factors except for the 90 percent factor. By 2064: a) the
32 percent PIA factor below the new bend point reduces to 30 percent; b) the 32 percent
PIA factor above the new bend point reduces to 10 percent; and c) the 15 percent
PIA factor reduces to 5 percent.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) |
1.02 | 2.43 | 29% | 52% | |
| B3.9 |
Beginning with those newly eligible for OASDI benefits in 2037, gradually reduce
the 15 percent PIA factor in each year so that it reaches 10 percent for those newly
eligible in 2066 and later.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.10 | 0.27 | 3% | 6% | |
| B3.10 |
Beginning with those newly eligible for OASDI benefits in 2031, gradually increase
the first PIA bend point in each year so that it is 15 percent higher for those newly
eligible in 2045 and later.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio 2019) | memo (Sanders, DeFazio 2017) | memo (Sanchez 2016) | memo (Sanders 2016) | memo (Schatz 2015) | memo (Sanders 2015) | memo (Harkin 2013) | memo (Harkin 2012) |
-0.39 | -0.71 | -11% | -15% | |
| B3.11 |
Increase the first PIA factor from 90 percent to 93 percent for all beneficiaries
eligible as of January 2026 and for those newly eligible for benefits after 2025.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) | memo (Larson 2015) | memo (Larson 2014) |
-0.24 | -0.26 | -7% | -6% | |
| B3.12 |
Use an annualized "mini-PIA" formula beginning with retired workers newly eligible in
2031. For each indexed earnings year, compute an individual AIME and an individual PIA.
Sum these individual PIAs for the 40 highest years of indexed earnings and divide that
total amount by 37 to get the PIA for this provision. Phase-in over five years, meaning
that in 2031, 80 percent of the benefit would be based on the old 35-year average PIA
formula and 20 percent on the new mini-PIA formula, shifting by 20 percentage points
each year until 100 percent is based on the new mini-PIA formula for those attaining
age 62 in 2035. Disabled worker benefits are unchanged under this provision.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.23 | 0.37 | 7% | 8% | |
| B3.13 |
For retired worker beneficiaries newly eligible in 2031 (excluding disabled workers),
add a new bend point at the wage-indexed equivalent of the 50th percentile of the AIME
distribution minus $100 (for 2015 eligibility) and change the PIA factors to 95/32/15/5.
Also move the current-law first bend point from the wage-indexed equivalent of $1,174
in 2023 to $1,493 in 2024. Phase this provision in over 10 years (2031-2040). The phase-in
would work on a weighted-average basis: 90% of CL formula + 10% of proposal formula for
2031, 80% of CL formula + 20% of proposal formula for 2032, and so on.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.10 | 0.21 | 3% | 5% | |
| B3.14 |
Beginning with those newly eligible for OASDI benefits in 2026, reduce the 15 percent
PIA factor by 2 percentage points per year so that it reaches 5 percent for those newly
eligible in 2030 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) |
0.37 | 0.55 | 11% | 12% | |
| B3.15 |
Increase the 90 percent PIA formula factor to 91 percent for beneficiaries newly
eligible in 2029, 92 percent for those newly eligible in 2030, ..., reaching 95
percent for those newly eligible in 2033 and later.
graph | table | pdf-graph | pdf-table | memo (Sanchez 2016) |
-0.28 | -0.44 | -8% | -10% | |
| B3.16 |
For retired worker and disabled worker beneficiaries becoming initially eligible in
January 2031 or later, phase in a new benefit formula (from 2031 to 2040). Replace
the existing two primary insurance amount (PIA) bend points with three new bend points
as follows: (1) 25% AWI/12 from 2 years prior to initial eligibility; (2) 100% AWI/12
from 2 years prior to initial eligibility; and (3) 125% AWI/12 from 2 years prior to
initial eligibility. The new PIA factors are 95%, 27.5%, 5% and 2%. During the phase
in, those becoming newly eligible for benefits will receive an increasing portion of
their benefits based on the new formula, reaching 100% of the new formula in 2040.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.00 | 1.75 | 28% | 38% | |
| B3.17 |
Increase the current-law first bend point by 22 percent and increase the 90 percent
PIA factor to 95 percent for all beneficiaries eligible for benefits as of January
2025 and for those newly eligible for benefits after 2024. This provision will result
in an approximate $230 increase in PIA for most workers newly eligible for retirement
or disability benefits in 2025.
graph | table | pdf-graph | pdf-table | memo (Sanders 2023) | memo (Sanders, DeFazio 2022) |
-1.48 | -1.57 | -42% | -34% | |
| B4.1 |
Increase the number of years used to calculate benefits for retirees and survivors
(but not for disabled workers) from 35 to 38, phased in over the years 2025-2029.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.28 | 0.39 | 8% | 8% | |
| B4.2 |
Increase the number of years used to calculate benefits for retirees and survivors
(but not for disabled workers) from 35 to 40, phased in over the years 2025-2033.
graph | table | pdf-graph | pdf-table | memo (Chaffetz 2011) | memo (Social Security Advisory Board 2005) |
0.45 | 0.66 | 13% | 14% | |
| B4.3 |
For the OASI and DI computation of the PIA, gradually reduce the maximum
number of drop-out years from 5 to 0, phased in over the years 2026-2034.
graph | table | pdf-graph | pdf-table | memo (Warshawsky 2008) |
0.59 | 0.89 | 17% | 19% | |
| B4.4 |
Reduce the number of computation years (increase dropout years) for parents
having a child in care under the age of 6. The parent must have no earnings
(covered or non-covered) for the year to be eligible for the credit. Only one
parent can claim the childcare added dropout year for a given earnings year.
Each parent can earn at most 2 dropout years per child, and a maximum of 5
dropout years in total. The years designated as childcare years do not have
to be the years that could otherwise be included in the computation of the
average indexed monthly earnings (AIME). The provision would be effective for
all benefits payable for entitlement in January 2026 and later (without regard
for when the beneficiary became initially eligible).
graph | table | pdf-graph | pdf-table | memo (Murphy 2016) |
-0.06 | -0.06 | -2% | -1% | |
| B4.5 |
For retired and disabled workers, reduce the maximum number of dropout years
to 4 for workers newly eligible in 2026, to 3 for workers newly eligible in
2027, and to 2 for workers newly eligible in 2028 and later.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) |
0.36 | 0.51 | 10% | 11% | |
| B5.1 |
Increase the PIA to a level such that a worker with 30 years of earnings at
the minimum wage level receives an adjusted PIA equal to 120 percent of the
Federal poverty level for an aged individual. This provision takes full effect
for all newly eligible OASDI workers in 2042, and is phased in for new eligibles
in 2033 through 2041. The percentage increase in PIA is lowered proportionately
for those with fewer than 30 years of earnings, down to no enhancement for
workers with 20 or fewer years of earnings. (Year-of-work requirements are
"scaled" for disabled workers based on their years of potential work from age
22 to benefit eligibility). The benefit enhancement percentage is reduced proportionately
for workers with higher average indexed monthly earnings (AIME), down to no
enhancement for those with AIME at least twice that of a 35-year steady minimum
wage earner.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) |
-0.00 | -0.00 | -0% | -0% | |
| B5.2 |
Beginning for those newly eligible in 2025, reconfigure the special minimum benefit:
(a) A year of coverage is defined as a year in which 4 quarters of coverage are earned.
(b) At implementation, set the PIA for 30 years of coverage equal to 125 percent of
the monthly poverty level (about $1,519 in 2023). For those with under 30 years of
coverage, the PIA per year of coverage over 10 years is $1,519/20 = $75.95. (c) Index
the initial PIA per year of coverage by wage growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (Sanders 2023) | memo (Sanders, DeFazio 2022) | memo (Lawson 2021) | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Sanders, DeFazio 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Lawson 2017) | memo (Larson 2017) | memo (Sanders, DeFazio 2017) | memo (Sanders 2016) | memo (Sanders 2015) | memo (Larson 2015) | memo (Larson 2014) | memo (National Academy of Social Insurance 2009) |
-0.13 | -0.19 | -4% | -4% | |
| B5.3 |
Beginning for those newly eligible in 2025, reconfigure the special minimum benefit:
(a) A year of coverage is defined to be either a year in which 4 quarters of coverage
are earned or a child is in care. Childcare years are granted to parents who have a
child under 5, with a limit of 8 such years. (b) At implementation, set the PIA for
30 years of coverage equal to 125 percent of the monthly poverty level (about $1,519
in 2023). For those with under 30 years of coverage, the PIA per year of coverage over
10 years is $1,519/20 = $75.95. (c) Index the initial PIA per year of coverage by wage
growth for successive cohorts.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance 2009) |
-0.21 | -0.29 | -6% | -6% | |
| B5.4 |
Beginning for those newly eligible in 2031, reconfigure the special minimum benefit:
(a) A year of coverage is defined as a year in which 4 quarters of coverage are earned.
(b) At implementation, set the PIA for 30 years of coverage equal to 125 percent of
the monthly poverty level (about $1,519 in 2023). For those with under 30 years of
coverage, the PIA per year of coverage over 10 years is $1,519/20 = $75.95. (c) From
2023 to the year of implementation, 2031, index the PIA per year of coverage using
the chain-CPI index. Then, for later years, index the PIA per year of coverage by wage
growth for successive cohorts. (d) Scale work requirements for disabled workers, based
on the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) |
-0.09 | -0.14 | -3% | -3% | |
| B5.5 |
Beginning for those newly eligible in 2026, reconfigure the special minimum benefit:
(a) A year of coverage is defined as a year in which either 20 percent of the "old law
maximum" is earned or a child is in care. Childcare years are granted to parents who
have a child under 6, with a limit of 8 such years. (b) At implementation, set the PIA
for 30 years of coverage equal to 133 percent of the Census monthly poverty level (about
$1,620 in 2023). For those with under 30 years of coverage, the PIA per year of coverage
over 19 years is $1,620/11 = $147.20. (c) Index the initial PIA per year of coverage by
wage growth for successive cohorts. (d) Scale work requirements for disabled workers,
based on the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
-0.00 | -0.01 | -0% | -0% | |
| B5.6 |
Beginning for those newly eligible in 2025, reconfigure the special minimum benefit:
(a) A year of coverage is defined to be either a year in which 4 quarters of coverage
are earned or a child is in care. Childcare years are granted to parents who have a
child under 6, with a limit of 5 such years. (b) At implementation, set the PIA for
30 years of coverage equal to 100 percent of the monthly poverty level (about $1,255
in 2024). For those with under 30 years of coverage, the PIA per year of coverage over
10 years is $1,255/20 = $62.75. (c) From 2024 to the year of implementation, 2025, index
the PIA per year of coverage using the CPI index. Then, for later years, index the PIA
per year of coverage by wage growth for successive cohorts. (d) Scale work requirements
for disabled workers, based on the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Chaffetz 2011) |
-0.07 | -0.11 | -2% | -2% | |
| B5.7 |
Beginning for those newly eligible in 2027, reconfigure the special minimum benefit:
(a) The number of years of work (YOWs) is determined as total quarters of coverage
divided by 4, ignoring any fraction. Childcare years are granted to parents who have
a child under 6, with a limit of 5 such years. (b) At implementation, set the PIA for
30+ YOWs equal to 100 percent of the monthly HHS poverty level for the year prior to
eligibility. For workers between 11 and 29 YOWs, reduce the special minimum by 3 1/3
percentage points per YOW so that at 29 YOWs the minimum would be 96 2/3% of poverty,
..., down to 11 YOWs at 36 2/3% of poverty. No minimum for 10 or fewer YOWs.
graph | table | pdf-graph | pdf-table | memo (Moore 2013) |
-0.02 | -0.00 | -1% | -0% | |
| B5.8 |
Beginning in 2029, create a Basic Minimum Benefit (BMB) within Social Security (i.e.,
the cost of the BMB would be charged as a cost to the OASI Trust Fund), with the following
specifications: (1) Eligibility for the BMB would be limited to OASI beneficiaries who
have attained normal retirement age (NRA) or above. OASI beneficiaries under NRA would
not be eligible for the BMB. (2) The BMB would be calculated on a household basis and
split equally between members of the household. In the case of a married couple, both
spouses would need to claim any Social Security benefits for which they are eligible
before they could receive the BMB. If both spouses have claimed and one is NRA or above
and the other has not yet attained NRA, only the half of the BMB for the spouse over NRA
would be payable. (3) The BMB amount for single beneficiaries would be equal to either:
1) the BMB base ($604 in 2015) - 0.70 * current monthly OASI benefit (not including any
BMB), if positive; or 2) zero. (4) The BMB amount for married beneficiaries would be equal
to either: 1) the BMB base ($906 in 2015) - 0.70 * total household monthly OASI benefits
(not including any BMB), if positive; or 2) zero. (5) The BMB bases for singles and couples
would be updated annually for changes in the average wage index (AWI). (6) Single filers
with Adjusted Gross Income (AGI) over $30,000 and joint filers with AGI (including taxable
SS benefits) over $45,000 would be subject to clawback of the BMB through the income tax
system. Any BMB would be reduced by one dollar for every dollar of income above the thresholds.
(Thresholds, in 2015 dollars, would be indexed to chained CPI-U.) Clawbacks would be credited
back to the OASI Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
-0.21 | -0.25 | -6% | -5% | |
| B5.9 |
Beginning for those newly eligible in 2026, reconfigure the special minimum benefit:
(a) A year of coverage is defined as a year in which 4 quarters of coverage are earned.
(b) At implementation, set the PIA for 40 years of coverage equal to 125 percent of
the monthly Aged Federal poverty level (about $1,522 in 2023). For those with 20 or
fewer years of coverage, phase up linearly from 0 percent of the poverty level for 10
years of coverage to 100 percent of the poverty level. For those having between 20
and 40 years of coverage, phase up linearly from 100 percent of the poverty level at
20 years of coverage to 125% of the poverty level for 40 or more years of coverage.
(c) For newly eligible workers in 2026 and 2027, index the applicable poverty level
using the CPI index, to the year prior to eligibility. Then, for newly eligible workers
in 2028 and later, index the PIA per year of coverage by wage growth for successive
cohorts. (d) Disabled workers have a somewhat similar minimum benefit, with work requirements
scaled based on the number of years of non-disabled potential work.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) |
-0.15 | -0.23 | -4% | -5% | |
| B5.10 |
Reconfigure the special minimum benefit, phased in for retired and disabled workers
newly eligible from 2031 through 2040: (a) A year of work (YOW) coverage is equal to
earnings at or above $10,875 in 2024 (reflecting a full-time worker earning the federal
minimum wage), adjusted thereafter for wage growth. (b) At implementation, set the
minimum PIA at zero percent of AWI for those with 10 or fewer YOWs to 15 percent of
AWI for those with 15 YOWs, increasing linearly so that it reaches 19 percent for 19
YOWs. Then the minimum PIA would jump up to 25 percent of AWI for those with 20 YOWs,
increasing linearly so that it equals 35 percent of AWI for those with 35 or more YOWs.
(c) Use the AWI for two years prior to the year of initial eligibility in the minimum
PIA calculation with COLA increase after the year of initial eligibility. (d) Scale
the YOW requirements for disabled workers, based on the number of years of non-disabled
potential work.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
-0.38 | -0.64 | -11% | -14% | |
| B5.11 |
Beginning for those newly eligible in 2025, reconfigure the special minimum benefit:
(a) The number of years of work (YOWs) is determined as total quarters of coverage
divided by 4, ignoring any fraction. Childcare years are granted to parents who have
a child under 6, with a limit of 5 such years. (b) For beneficiaries becoming newly
eligible in 2025, set the initial special minimum benefit for 30+ YOWs equal to 100
percent of the monthly HHS poverty level for 2024. For beneficiaries becoming newly
eligible after 2025, the initial special minimum benefit is indexed by the AWI. For
workers between 11 and 29 YOWs, reduce the special minimum by 3 1/3 percentage points
per YOW so that at 29 YOWs the minimum would be 96 2/3% of poverty, ..., down to 11
YOWs at 36 2/3% of poverty. No minimum for 10 or fewer YOWs.
graph | table | pdf-graph | pdf-table | memo (Moore 2023) | memo (Moore 2022) | memo (Moore 2019) |
-0.09 | -0.13 | -3% | -3% | |
| B6.1 |
Provide a 5 percent increase to the monthly benefit amount (MBA) of any beneficiary
who is 85 or older at the beginning of 2025 or who reaches their 85th birthday after
the beginning of 2025.
graph | table | pdf-graph | pdf-table | memo (Chaffetz 2011) | memo (National Academy of Social Insurance 2009) |
-0.13 | -0.18 | -4% | -4% | |
| B6.2 |
Provide the same dollar amount increase to the monthly benefit amount (MBA) of any
beneficiary who is 85 or older at the beginning of 2025 or who reaches their 85th
birthday after the beginning of 2025. The dollar amount of increase equals 5 percent
of the average retired-worker MBA in the prior year.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance 2009) |
-0.13 | -0.18 | -4% | -4% | |
| B6.3 |
Provide an increase in the benefit level of any beneficiary who is 85 or older
at the beginning of 2026 or who reaches their 85th birthday after the beginning
of 2026. Increase the beneficiary's PIA based on an amount equal to the average
retired-worker PIA at the end of 2025, or at the end of the year age 80 if later.
Increase the beneficiary's PIA by 5 percent of this amount for those older than
85 at the beginning of 2026 and by 5 percent of this amount at age 85 for others,
phased in at 1 percent per year for ages 81-85.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
-0.16 | -0.21 | -5% | -5% | |
| B6.4 |
Starting in 2025, provide a 5 percent uniform benefit increase 24 years after
initial benefit eligibility. Phase in the benefit increase at 1 percent per year
from the 20th through 24th years after eligibility. For disabled workers, the
eligibility age is the initial entitlement year to the benefit. The benefit
increase is equal to 5 percent of the PIA of a worker assumed to have career-average
earnings equal to SSA's average wage index. Auxiliary beneficiaries receive
benefit enhancement based on the PIA of the governing worker.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) | memo (Fiscal Commission 2010) |
-0.18 | -0.24 | -5% | -5% | |
| B6.5 |
Starting in 2027, provide a 5 percent uniform PIA increase 20 years after benefit
eligibility. Phase in the PIA increase at 1 percent per year from the 16th through
20th years after eligibility. The full PIA increase is equal to 5 percent of the
PIA of a worker assumed to have career-average earnings equal to the SSA average
wage index. Auxiliary beneficiaries receive benefit enhancement based on the PIA
of the governing worker.
graph | table | pdf-graph | pdf-table | memo (Moore 2023) | memo (Moore 2022) | memo (Moore 2019) | memo (Moore 2013) |
-0.28 | -0.34 | -8% | -7% | |
| B6.6 |
Starting in 2031, provide a uniform PIA increase in the 24th year of benefit
eligibility. Phase in the PIA increase at 0.5 percent per year from the 15th
through the 24th years of eligibility. The full PIA increase is equal to 5 percent
of the average retired worker PIA in December of the 14th year of benefit eligibility.
A similar additional PIA increase applies in the 43rd year of benefit eligibility
(age 104), phased in from the 34th through the 43rd years of eligibility. For
those past the 15th year of eligibility in 2030 (over age 76 for retirees), phase
in the PIA enhancement over 10 years starting in 2031. Auxiliary beneficiaries
receive benefit enhancement based on the PIA of the governing worker.
graph | table | pdf-graph | pdf-table | memo (FY 2014 Budget) |
-0.23 | -0.32 | -7% | -7% | |
| B6.7 |
Starting in January 2031, provide an addition to monthly benefits for all beneficiaries
who have been eligible for at least 20 years, with the following specifications: (1)
Augment benefits (not the PIA) for those of qualifying age and eligibility duration with
a MAGI below about $30,000 if single and $60,000 if married. MAGI is set to equal the
IRMAA definition (AGI plus tax-exempt interest income). Index these thresholds after 2031
by the increase in the C-CPI-U; (2) The full additional amount is applicable for those
born 1964 and later, once 24 years elapse from initial eligibility. The basic additional
amount is calculated as 5 percent of the PIA for a hypothetical worker with earnings equal
to the AWI each year; (3) For those born prior to 1964, the full additional amount is
multiplied by the number of years they have been affected by the C-CPI-U, divided by 24;
(4) Beneficiaries will receive 20 percent of their additional amount in their 20th year
after initial eligibility, 40 percent in their 21st year after initial eligibility,...,
and 100 percent of their additional amount in their 24th and later years after benefit
eligibility; (5) Retired and disabled worker beneficiaries, dually entitled spouse beneficiaries,
and all survivor beneficiaries received their addition as described above. Spousal beneficiaries
(aged or with child in care) and child beneficiaries of a living retired or disabled worker
receive 50 percent of the additional amount described above. Other beneficiary types (such
as parents of deceased workers) will receive the percentage of the flat benefit that equals
the percentage of the insured worker's PIA that they receive; (6) The AWI used is for the
second year prior to the beneficiary's initial eligibility year, with applicable COLAs applied
up to the age when the addition is received; and (7) The additional amount is added to the
monthly benefit after reductions for early claiming or increases for delayed claiming have
been applied.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
-0.06 | -0.07 | -2% | -1% | |
| B6.8 |
Starting in 2026, provide an additional monthly benefit equal to 1/12th of 2 percent
of the AWI for the second prior year. This additional benefit would be available to
those meeting any of the following four requirements: (a) Social Security beneficiaries
who have attained age 82; (b) Social Security beneficiaries who have attained NRA and
have both AIME at or below the first PIA bend point ($1,174 for 2024 initial eligibility)
and at least 11 "years of coverage" as used for Windfall Elimination Provision purposes
(earnings above $31,275 for 2024); (c) Individuals who have received Social Security
benefits and/or SSI payments for at least 240 distinct months after attaining age 19;
or (d) SSI recipients who have attained the Social Security NRA. This additional benefit
would be paid out of the applicable Social Security OASI or DI Trust Fund for any month
in which the individual is in receipt of a Social Security benefit; it would be paid out
of the General Fund of the Treasury for any month in which the individual is in receipt
of an SSI monthly payment but not a Social Security monthly benefit.
graph | table | pdf-graph | pdf-table | memo (Wyden 2018) |
-0.30 | -0.38 | -8% | -8% | |
| B7.2 |
Reduce benefits by 5 percent for those newly eligible for benefits in 2025 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.62 | 0.85 | 18% | 18% | |
| B7.3 |
Give credit to parents with a child under 6 for earnings for up to five years.
The earnings credited for a childcare year equal one half of the SSA average wage
index (about $34,396 in 2024). The credits are available for all past years to
newly eligible retired-worker and disabled-worker beneficiaries starting in 2025.
The 5 years are chosen to yield the largest increase in AIME.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance 2009) |
-0.23 | -0.32 | -7% | -7% | |
| B7.5 |
Increase benefits by 5 percent for all beneficiaries as of the beginning of 2025
and for those newly eligible for benefits after the beginning of 2025.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance 2009) |
-0.80 | -0.85 | -23% | -18% | |
| B7.7 |
Reduce individual Social Security benefits if modified adjusted gross income,
or MAGI (AGI less taxable Social Security benefits plus nontaxable interest income)
is above $60,000 for single taxpayers or $120,000 for taxpayers filing jointly.
This provision is effective for individuals newly eligible for benefits in 2029
or later. The percentage reduction increases linearly up to 50 percent for single/joint
filers with MAGI of $180,000/$360,000 or above. Index the MAGI thresholds for
years after 2029, based on changes in the SSA average wage index.
graph | table | pdf-graph | pdf-table | memo (Chaffetz 2011) |
0.50 | 0.69 | 14% | 15% | |
| B7.8 |
Replace the Windfall Elimination Provision (WEP) and Government Pension Offset
(GPO) with a revised reduction for most OASI benefits based on all earnings, beginning
with beneficiaries newly eligible in 2031.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.07 | 0.11 | 2% | 2% | |
| B7.9 |
Beginning for newly eligible retired workers and spouses in 2031, all claimants
who are married would receive a specified joint-and-survivor annuity benefit (i.e.,
surviving spouses would receive 75 percent of the decedents' benefits, in addition
to their own) that would be payable if both were still alive. Initial benefits would
be actuarially adjusted to keep the expected value of benefits equivalent to what
would otherwise be current law.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
-0.01 | -0.29 | -0% | -6% | |
| B7.10 |
Replace the current-law WEP with a new calculation for most OASI and DI benefits
based on covered and non-covered earnings, phased in for beneficiaries becoming
newly eligible in 2031 through 2040. For this new approach, compute a PIA based
on all past earnings (covered and non-covered), and multiply by the "non-covered
earnings ratio." This ratio is equal to the current-law concept of the average
indexed monthly earnings computed without non-covered earnings divided by a modified
average indexed monthly earnings that includes both covered and non-covered earnings
in agency records.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.05 | 0.08 | 1% | 2% | |
| B7.11 |
Beginning in January 2027, eliminate the retirement earnings test for all beneficiaries
under normal retirement age, including retired workers, aged spouses, aged widow(er)s,
young spouses with a child in care, young surviving spouses with a child in care, and children.
graph | table | pdf-graph | pdf-table | memo (Walorski 2019) | memo (Johnson, Walorski 2017) | memo (Johnson 2016) |
0.03 | 0.12 | 1% | 3% | |
| B7.12 |
Provide an option to split the 8-percent delayed retirement credit (DRC) to offer
a lump sum benefit at initial entitlement equal to 2 percent of the 8 percent DRC
earned, and a 6 percent DRC on subsequent monthly benefits, effective for workers
newly entitled to retired worker benefits in 2027 and later. Widows are held harmless
from the lump-sum decision.
graph | table | pdf-graph | pdf-table | memo (Johnson, Smith 2017) | memo (Johnson 2016) |
-0.00 | 0.00 | -0% | 0% | |
| B7.13 |
Eliminate the DI 5-month waiting period for disabled workers and disabled surviving
spouses, and eliminate the 24-month Medicare (HI) waiting period for individuals who
have become entitled to Social Security disability benefits. Effective with 2025 applications.
graph | table | pdf-graph | pdf-table | memo (Sanders 2018) |
-0.09 | -0.10 | -3% | -2% | |
| B7.14 |
Eliminate completely the Windfall Elimination Provision (WEP) and Government Pension
Offset (GPO), effective 2025.
graph | table | pdf-graph | pdf-table | memo (Davis, Spanberger 2022) | memo (Brown 2016) |
-0.12 | -0.12 | -4% | -3% | |
| Category: Provisions Affecting Retirement Age (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| C1.1 |
Starting with those age 62 in 2025, increase the normal retirement age
(NRA) 1 month every 2 years until the NRA reaches 68.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.43 | 0.71 | 12% | 15% | |
| C1.2 |
Increase the normal retirement age (NRA) 2 months per year for those age
62 starting in 2025 and ending in 2030 (NRA reaches 68 for those age 62
in 2030).
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick 2005) |
0.53 | 0.71 | 15% | 15% | |
| C1.3 |
Starting for those age 62 in 2025, index the normal retirement age (NRA)
to maintain a constant ratio of expected retirement years (life expectancy
at NRA) to potential work years (NRA minus 20). We assume the NRA will
increase 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ryan 2010) | memo (AARP 2008) | memo (Ryan 2008) | memo (Social Security Advisory Board 2005) |
0.68 | 1.80 | 19% | 39% | |
| C1.4 |
Increase the normal retirement age (NRA) 2 months per year for those
age 62 starting in 2025 and ending in 2036 (NRA reaches 69 for those
age 62 in 2036). Thereafter, increase the NRA 1 month every 2 years.
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) | memo (Chaffetz 2011) |
1.32 | 2.56 | 38% | 55% | |
| C1.6 |
Starting with those age 62 in 2025, increase the normal retirement age
(NRA) 1 month every 2 years until the NRA reaches 69. Also increase the
age up to which the delayed retirement credit may be earned at the same
rate (from 70 to 72). No change to earliest eligibility age.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.64 | 1.35 | 18% | 29% | |
| C1.7 |
Increase the normal retirement age (NRA) 3 months per year for those
age 62 starting in 2025 and ending in 2032 (NRA reaches 69 for those
age 62 in 2032). Increase the age up to which delayed retirement credits
may be earned from 70 to 72 on the same schedule. Increase the widow(er)
NRA in the same manner. The earliest eligibility age (EEA) for worker's
and widow(er)'s benefit is unchanged.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
1.01 | 1.36 | 29% | 29% | |
| C2.1 |
Increase the earliest eligibility age (EEA) by 2 months per year for
those age 62 starting in 2026 and ending in 2043 (EEA reaches 65 for
those age 62 in 2043).
graph | table | pdf-graph | pdf-table | memo (AARP 2008) |
-0.10 | -0.44 | -3% | -9% | |
| C2.2 |
Starting for those age 62 in 2025, index the normal retirement age (NRA)
to maintain a constant ratio of expected retirement years (life expectancy
at NRA) to potential work years (NRA minus 20). We assume the NRA will
increase 1 month every 2 years. Also, raise the earliest eligibility age
(EEA) for retired-workers, aged widow(er)s, and disabled widow(er)s by the
same amount as the NRA starting for those attaining 62 in 2025.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA 2010) | memo (Warshawsky 2008) |
0.66 | 1.51 | 19% | 33% | |
| C2.3 |
Starting for those age 62 in 2025, index the normal retirement age (NRA)
to maintain a constant ratio of expected retirement years (life expectancy
at NRA) to potential work years (NRA minus 20). We assume the NRA will
increase 1 month every 2 years. Also, increase the earliest eligibility
age (EEA) by the same amount as the NRA starting for those age 62 in 2025
so as to maintain a 5 year difference between the two ages. Include a "hardship
exemption" with no EEA/NRA change for a worker with 25 years of earnings
(with 4 quarters of coverage each), and average indexed monthly earnings
(AIME) less than 250 percent of the poverty level (wage-indexed from 2013).
The hardship exemption is phased out for those with AIME above 400 percent
of the poverty level.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) |
0.49 | 1.15 | 14% | 25% | |
| C2.4 |
Starting for those age 62 in 2025, increase both the normal retirement
age (NRA) and the earliest eligibility age (EEA) by 36/47 of a month per
year until the NRA and EEA reach 70 and 65 respectively. For each year,
the computed NRA and EEA round down to the next lower full month.
graph | table | pdf-graph | pdf-table | memo (Lummis 2011) |
0.91 | 1.81 | 26% | 39% | |
| C2.5 |
Increase the normal retirement age (NRA) 3 months per year for those age
62 starting in 2025 and ending in 2036 (NRA reaches 70 for those age 62
in 2036). Thereafter, index the NRA to maintain a constant ratio of expected
retirement years (life expectancy at NRA) to potential work years (NRA minus
20). We assume the NRA will increase 1 month every 2 years. Also, increase
the earliest eligibility age (EEA) from 62 to 64 at the same time the NRA
increases from 67 to 69; that is, for those attaining age 62 in 2025 through
2032. Keep EEA at 64 thereafter.
graph | table | pdf-graph | pdf-table | memo (Graham, Paul, Lee 2011) |
1.65 | 2.93 | 47% | 63% | |
| C2.6 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 in 2025-2026 to 68 and 63, respectively, and then
by 3 months per year in 2027-2030 to 69 and 64, respectively.
graph | table | pdf-graph | pdf-table | memo (Hutchison 2011) |
0.92 | 1.05 | 26% | 23% | |
| C2.7 |
Increase the normal retirement age (NRA) and the earliest eligibility age
(EEA) for those age 62 starting in 2025 by 3 months per year until EEA reaches
64 in 2032 and NRA reaches 69 in 2032.
graph | table | pdf-graph | pdf-table | memo (Hutchison 2011) |
0.86 | 1.05 | 25% | 23% | |
| C2.8 |
Starting in 2027, convert all disabled-worker beneficiaries to retired-worker
status upon attainment of their earliest eligibility age (EEA) rather than their
normal retirement age (NRA). After conversion, apply the early retirement reduction
for retirement at EEA (currently 30 percent for those age 62 in 2027) phased
in over 40 years.
graph | table | pdf-graph | pdf-table | memo (Warshawsky 2008) |
0.38 | 0.68 | 11% | 15% | |
| Category: Provisions Affecting Family Member Benefits (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| D1 |
Beginning in 2025, continue benefits for children of disabled or deceased workers
until age 22 if the child is in high school, college or vocational school.
graph | table | pdf-graph | pdf-table | memo (Sanders 2023) | memo (Sanders, DeFazio 2022) | memo (Lawson 2021) | memo (Sanders, DeFazio 2019) | memo (Lawson 2017) | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) | memo (Begich, Murray 2014) | memo (Moore 2013) | memo (National Academy of Social Insurance 2009) |
-0.05 | -0.05 | -1% | -1% | |
| D2 |
The current spouse benefit is based on 50 percent of the PIA of the other spouse.
Reduce this percent each year by 1 percentage point beginning with newly eligible
spouses in 2025, until the percent reaches 33 in 2041.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance 2009) |
0.09 | 0.13 | 3% | 3% | |
| D3 |
Allow divorced aged spouses and divorced surviving spouses married 5 to 9 years
to get benefits based on the former spouse's account. Divorced aged and surviving
spouses would receive 50% of the applicable current-law PIA percentage if married
5 years, 60% of the applicable PIA percentage if married 6 years, ..., 90% of the
applicable PIA percentage if married 9 years. This benefit would be available to
divorced spouses on the rolls at the beginning of 2026 and those becoming eligible
after 2025.
graph | table | pdf-graph | pdf-table | memo (Begich, Murray 2014) |
-0.01 | -0.01 | -0% | -0% | |
| D4 |
Establish an alternative benefit for a surviving spouse. For the surviving
spouse, the alternative benefit would equal 75 percent of the sum of the survivor's
own worker benefit and the deceased worker's PIA (including any actuarial
reductions or delayed retirement credits). If the deceased worker died before
becoming entitled, use the age 62 actuarial reduction if deceased before age
62, or the applicable actuarial reduction/DRC for entitlement at the age of
death if deceased after 62. The alternative benefit would not exceed the PIA
of a hypothetical earner who earns the SSA average wage index (AWI) every year,
and who becomes eligible for retired-worker benefits in the same year in which
the deceased worker became entitled to worker benefits or died (if before entitlement).
The alternative benefit would be paid only if more than the current-law benefit.
This benefit would be available to surviving spouses on the rolls at the beginning
of 2026 and those becoming eligible after 2025.
graph | table | pdf-graph | pdf-table | memo (Lawson 2021) | memo (Lawson 2017) | memo (Begich, Murray 2014) |
-0.10 | -0.11 | -3% | -2% | |
| D5 |
Limit the spousal benefit to that received by the spouse of the 75th percentile
career-average worker, beginning with retired workers newly eligible in 2031. For
future cohorts, this limit would be indexed for inflation annually using chain
weighted CPI-U. The provision affects divorced spouses and young spouses (retired
workers) but not spouses of disabled workers.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.08 | 0.16 | 2% | 3% | |
| D6 |
For spouses and children of retired and disabled workers becoming newly eligible
beginning in 2031 and phased in for 2031 through 2040, limit their auxiliary benefit
to one-half of the PIA for a hypothetical worker with earnings equal to the national
average wage index (AWI) each year.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.07 | 0.12 | 2% | 3% | |
| D7 |
Beginning in January 2027, require full time school enrollment as a condition
of eligibility for child benefits at age 15 up to 18.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
0.01 | 0.01 | 0% | 0% | |
| D8 |
Beginning in 2025, continue benefits for children of disabled, retired, or
deceased workers until age 26 if the child is in high school, college or
vocational school.
graph | table | pdf-graph | pdf-table | memo (Moore 2023) | memo (Moore 2022) | memo (Moore 2019) |
-0.07 | -0.07 | -2% | -2% | |
| D9 |
Provide for pro-rata benefit payment for the month of death of a beneficiary,
rather than no payment for month of death. For situations where an auxiliary
beneficiary is changed from one type of benefit to another upon the death of
the worker, benefits for the month of the worker's death would be determined
on a pro-rata basis. This provision would apply for deaths in 2025 or later.
graph | table | pdf-graph | pdf-table | memo (Deutch, Hirono 2022) |
-0.03 | -0.03 | -1% | -1% | |
| Category: Provisions Affecting Payroll Taxes (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| E1.1 |
Increase the payroll tax rate (currently 12.4 percent) to 16.0 percent in 2025 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
3.51 | 3.62 | 100% | 78% | |
| E1.2 |
Increase the payroll tax rate (currently 12.4 percent) to 15.9 percent in 2035-2064,
and to 19.4 percent in years 2065 and later.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
4.13 | 6.95 | 118% | 150% | |
| E1.4 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2030-2049, until the rate reaches 14.4 percent in 2049 and later.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) | memo (National Academy of Social Insurance 2009) |
1.50 | 2.02 | 43% | 44% | |
| E1.8 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage point
each year from 2027-2032, until the rate reaches 13.0 percent for 2032 and later.
graph | table | pdf-graph | pdf-table | memo (Moore 2023) | memo (Moore 2022) | memo (Moore 2019) | memo (Moore 2013) |
0.55 | 0.61 | 16% | 13% | |
| E1.9 |
Increase the payroll tax rate (currently 12.4 percent) by 0.1 percentage
point each year from 2028-2051, until the rate reaches 14.8 percent in
2051 and later.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) |
1.79 | 2.42 | 51% | 52% | |
| E1.10 |
Increase the payroll tax rate by 0.1 percentage point per year for 2026
through 2035 so that it equals 13.4 percent for 2035 and later. The increase
would be split evenly between the employer and employee share, and would
be split between OASI and DI in proportion to currently scheduled payroll
tax rates.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.90 | 1.01 | 26% | 22% | |
| E2.1 |
Eliminate the taxable maximum in years 2025 and later, and apply full 12.4
percent payroll tax rate to all earnings. Do not provide benefit credit for
earnings above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (DeFazio 2015) | memo (Social Security Advisory Board 2005) |
2.55 | 2.60 | 73% | 56% | |
| E2.2 |
Eliminate the taxable maximum in years 2025 and later, and apply full 12.4
percent payroll tax rate to all earnings. Provide benefit credit for earnings
above the current-law taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
1.86 | 1.37 | 53% | 29% | |
| E2.4 |
Eliminate the taxable maximum for years 2031 and later (phased in 2025-2031),
and apply full 12.4 percent payroll tax rate to all earnings. Provide benefit
credit for earnings above the current-law taxable maximum that are subject to
the payroll tax, using a secondary PIA formula. This secondary PIA formula
involves: (1) an "AIME+" derived from annual earnings from each year after
2024 that were in excess of that year's current-law taxable maximum; (2) a new
bend point equal to $9,770 in 2025, indexed by wages after 2025; and (3) formula
factors of 3 percent and 0.25 percent below and above the new bend point, respectively.
graph | table | pdf-graph | pdf-table | memo (Hirono, Tokuda 2024) | memo (Deutch, Hirono 2022) | memo (Deutch, Hirono 2019) | memo (Deutch, Hirono 2017) | memo (Deutch 2015) | memo (Deutch 2010) |
2.37 | 2.49 | 68% | 54% | |
| E2.5 |
Apply 12.4 percent payroll tax rate on earnings above $250,000 starting in 2025,
and tax all earnings once the current-law taxable maximum exceeds $250,000. Do
not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Sanders 2023) | memo (Sanders, DeFazio 2022) | memo (Sanders, DeFazio 2019) | memo (Sanders, DeFazio 2017) | memo (Sanders 2016) | memo (Sanders 2015) | memo (Sanders 2013) | memo (DeFazio 2011) |
2.49 | 2.60 | 71% | 56% | |
| E2.11 |
Eliminate the taxable maximum in years 2030 and later. Phase in elimination
by taxing all earnings above the current-law taxable maximum at: 2.48 percent
in 2026, 4.96 percent in 2027, and so on, up to 12.40 percent in 2030. Provide
benefit credit for earnings above the current-law taxable maximum that are
subject to the payroll tax, using a secondary PIA formula. This secondary PIA
formula involves: (1) an "AIME+" derived from annual earnings from each year
after 2025 that were in excess of that year's current-law taxable maximum;
and (2) a formula factor of 5 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Sanchez 2016) | memo (Schatz 2015) | memo (Harkin 2013) |
2.22 | 2.20 | 64% | 47% | |
| E2.12 |
Eliminate the taxable maximum in years 2036 and later. Phase in elimination
by taxing all earnings above the current-law taxable maximum at: 1.24 percent
in 2027, 2.48 percent in 2028, and so on, up to 12.40 percent in 2036. Provide
benefit credit for earnings above the current-law taxable maximum. Create a
new bend point at the current-law taxable maximum with a 3 percent formula
factor applying above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Moore 2023) | memo (Moore 2022) | memo (Moore 2019) | memo (Moore 2013) |
2.01 | 2.15 | 57% | 46% | |
| E2.13 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $400,000 starting
in 2026, and tax all earnings once the current-law taxable maximum exceeds $400,000.
Provide benefit credit for earnings above the current-law taxable maximum that
are subject to the payroll tax, using a secondary PIA formula. This secondary
PIA formula involves: (1) an "AIME+" derived from annual earnings from each year
after 2025 that were in excess of that year's current-law taxable maximum; and
(2) a formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) | memo (Larson 2015) | memo (Larson 2014) |
2.20 | 2.45 | 63% | 53% | |
| E2.14 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 starting
in 2026, and tax all earnings once the current-law taxable maximum exceeds $250,000.
Provide benefit credit for earnings above the current-law taxable maximum that
are subject to the payroll tax, using a secondary PIA formula. This secondary
PIA formula involves: (1) an "AIME+" derived from annual earnings from each year
after 2025 that were in excess of that year's current-law taxable maximum; and
(2) a formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Lawson 2021) | memo (Lawson 2017) |
2.38 | 2.44 | 68% | 53% | |
| E2.15 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $300,000 starting
in 2026, and tax all earnings once the current-law taxable maximum exceeds $300,000.
Provide benefit credit for earnings above the current-law taxable maximum that
are subject to the payroll tax, using a secondary PIA formula. This secondary
PIA formula involves: (1) an "AIME+" derived from annual earnings from each year
after 2025 that were in excess of that year's current-law taxable maximum; and
(2) a formula factor of 3 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Crist 2017) |
2.28 | 2.36 | 65% | 51% | |
| E2.16 |
Apply OASDI 12.4 percent payroll tax rate on earnings above $250,000 starting
in 2025, and tax all earnings once the current-law taxable maximum exceeds $250,000.
Increase the computed level of the SSA average wage index for years after 2024
by amounts ranging from 0.7 percent for 2025 to 0.9 percent for 2033 and later.
Provide benefit credit for earnings above the current-law taxable maximum that
are subject to the payroll tax, using a secondary PIA formula. This secondary
PIA formula involves: (1) an "AIME+" derived from annual earnings from each year
after 2024 that were in excess of that year's current-law taxable maximum; and
(2) a formula factor of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Craig 2024) | memo (Craig 2022) |
2.34 | 2.38 | 67% | 51% | |
| E2.17 |
Apply 12.4 percent payroll tax rate on earnings above $400,000 starting in
2025 and tax all earnings once the current-law taxable maximum exceeds $400,000.
Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Whitehouse, Boyle 2023) |
2.30 | 2.60 | 66% | 56% | |
| E2.18 |
Apply the combined OASDI payroll tax rate on covered earnings above $400,000
paid in 2026 and later, and tax all covered earnings once the current-law taxable
maximum exceeds $400,000. Increase the computed level of the AWI for years
after 2025 by amounts ranging from 0.5 percent for 2026 to 0.9 percent for
2047 and later. Credit the additional earnings taxed for benefit purposes by:
(a) calculating a second average indexed monthly earnings ("AIME+") reflecting
only earnings taxed above the current-law taxable maximum, (b) applying a 1
percent factor on this newly computed "AIME+" to develop a second component
of the PIA, and (c) adding this second component to the current-law PIA.
graph | table | pdf-graph | pdf-table | memo (Larson 2023) |
2.18 | 2.46 | 62% | 53% | |
| E3.1 |
Increase the taxable maximum such that 90 percent of earnings would be subject
to the payroll tax (phased in 2025-2034). Provide benefit credit for earnings
up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.84 | 0.69 | 24% | 15% | |
| E3.2 |
Increase the taxable maximum such that 90 percent of earnings would be
subject to the payroll tax (phased in 2025-2034). Do not provide benefit
credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Liebman, MacGuineas, Samwick 2005) |
1.08 | 1.19 | 31% | 26% | |
| E3.5 |
Increase the taxable maximum each year by an additional 2 percent beginning
in 2025 until taxable earnings equal 90 percent of covered earnings. Provide
benefit credit for earnings up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) | memo (National Academy of Social Insurance 2009) |
0.70 | 0.72 | 20% | 16% | |
| E3.6 |
Increase the taxable maximum each year by an additional 2 percent beginning in
2027 until taxable earnings equal 90 percent of covered earnings. Do not provide
benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (NRC/NAPA 2010) |
0.83 | 1.19 | 24% | 26% | |
| E3.7 |
Increase the taxable maximum by an additional 2 percent per year beginning in
2026 until taxable earnings equal 90 percent of covered earnings. Provide benefit
credit for earnings up to the revised taxable maximum. Create a new bend point
equal to the current-law taxable maximum with a 5 percent formula factor applying
above the new bend point.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) |
0.72 | 0.87 | 21% | 19% | |
| E3.8 |
Beginning in 2032, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017 (about $366,000 in 2032), with the threshold wage-indexed
after 2032. Provide proportional benefit credit for additional earnings taxed, based
on the payroll tax rate applied to the additional earnings divided by the full 12.4
percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan 2010) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.18 | 0.10 | 5% | 2% | |
| E3.9 |
Beginning in 2032, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $200,000 in 2017 (about $366,000 in 2032), with the threshold wage-indexed
after 2032. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan 2010) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.26 | 0.30 | 7% | 6% | |
| E3.10 |
Beginning in 2032, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017 (about $549,000 in 2032), with the threshold wage-indexed
after 2032. Provide proportional benefit credit for additional earnings taxed, based
on the payroll tax rate applied to the additional earnings divided by the full 12.4
percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan 2010) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.13 | 0.07 | 4% | 2% | |
| E3.11 |
Beginning in 2032, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $300,000 in 2017 (about $549,000 in 2032), with the threshold wage-indexed
after 2032. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan 2010) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.19 | 0.22 | 6% | 5% | |
| E3.12 |
Beginning in 2032, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017 (about $732,000 in 2032), with the threshold wage-indexed
after 2032. Provide proportional benefit credit for additional earnings taxed, based
on the payroll tax rate applied to the additional earnings divided by the full 12.4
percent payroll tax rate.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan 2010) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.10 | 0.06 | 3% | 1% | |
| E3.13 |
Beginning in 2032, apply 2 percent payroll tax rate on earnings over the wage-indexed
equivalent of $400,000 in 2017 (about $732,000 in 2032), with the threshold wage-indexed
after 2032. Do not provide benefit credit for additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Johnson, Brady, Ryan 2010) (includes similar provisions with 3 percent and 4 percent payroll tax rates) |
0.16 | 0.18 | 4% | 4% | |
| E3.14 |
Eliminate the taxable maximum for the employer payroll tax (6.2 percent) beginning
in 2025. For the employee payroll tax (6.2 percent) and for benefit credit purposes,
beginning in 2025, increase the taxable maximum by an additional 2 percent per year
until taxable earnings equal 90 percent of covered earnings.
graph | table | pdf-graph | pdf-table | memo (National Academy of Social Insurance 2009) |
1.56 | 1.45 | 45% | 31% | |
| E3.15 |
Increase the taxable maximum such that 90 percent of earnings are subject to the
payroll tax (phased in 2025-2034). In addition, apply a tax rate of 6.2 percent
for earnings above the revised taxable maximum (phased in from 2025-2034). Provide
benefit credit for earnings taxed up to the revised taxable maximum.
graph | table | pdf-graph | pdf-table | memo (Senate Special Committee on Aging 2010) |
1.52 | 1.41 | 43% | 30% | |
| E3.16 |
Beginning in 2026, apply 4 percent payroll tax rate on earnings above the wage-indexed
equivalent of $400,000 in 2015 (about $612,900 in 2026), with the threshold wage-indexed
after 2026. Provide benefit credit for additional earnings taxed, using a secondary PIA
formula. This secondary PIA formula involves: (1) an "AIME+" derived from annual earnings
taxed only between 2015 wage-indexed equivalents of $400,000 and $500,000, or about $612,900
and $766,200 in 2026 (with thresholds wage-indexed after 2026); and (2) a formula factor
of 2 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Begich, Murray 2014) |
0.32 | 0.33 | 9% | 7% | |
| E3.17 |
Beginning in 2026, increase the taxable maximum by twice the rate of increase
in the national Average Wage Index, but never by less than 3 percent. Provide
benefit credit for earnings up to the revised taxable maximum levels.
graph | table | pdf-graph | pdf-table | memo (Murphy 2016) |
1.13 | 1.56 | 32% | 34% | |
| E3.18 |
Increase the taxable maximum linearly over 4 years to $291,000 for 2029. After 2029,
index the taxable maximum to AWI plus 0.5 percentage point. Apply benefit credit on
additional earnings taxed.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.66 | 0.72 | 19% | 16% | |
| E3.19 |
Increase the taxable maximum such that 90 percent of earnings would be subject to
the payroll tax (phased in linearly from 2026-2031). Provide benefit credit for additional
earnings taxed, using a secondary PIA formula. This secondary PIA formula involves:
(1) an "AIME+" derived from additional annual earnings taxed over the current-law
taxable maximum; and (2) a formula factor of 2.5 percent on this newly computed "AIME+".
graph | table | pdf-graph | pdf-table | memo (Ribble 2016) |
1.05 | 1.11 | 30% | 24% | |
| Category: Provisions Affecting Coverage of Employment or Earnings, or Inclusion of Other Sources of Revenue (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| F1 |
Starting in 2025, cover newly hired State and local government employees.
graph | table | pdf-graph | pdf-table | memo (Fiscal Commission 2010) | memo (Bipartisan Policy Center 2010) | memo (Warshawsky 2008) | memo (Social Security Advisory Board 2005) |
0.15 | -0.17 | 4% | -4% | |
| F2 |
Starting in 2025, exempt individuals with more than 180 quarters of coverage from
the OASDI payroll tax. Earnings exempted from OASDI payroll tax would not be used
in computing benefits.
graph | table | pdf-graph | pdf-table | memo (Warshawsky 2008) |
-0.81 | -1.02 | -23% | -22% | |
| F3 |
Expand covered earnings to include employer and employee premiums for employer-sponsored
group health insurance (ESI). Starting in 2028, phase out the OASDI payroll tax exclusion
for ESI premiums. Set an exclusion level at the 75th percentile of premium distribution
in 2028, with amounts above that subject to the payroll tax. Reduce the exclusion level
each year by 10 percent of the 2028 exclusion level until fully eliminated in 2038.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
1.10 | 0.75 | 31% | 16% | |
| F4 |
Expand covered earnings to include contributions to voluntary salary reduction plans
(such as Cafeteria 125 plans and Flexible Spending Accounts). Starting in 2025, subject
these contributions to the OASDI payroll tax, making the payroll tax treatment of these
contributions like 401(k) contributions.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center 2010) |
0.34 | 0.22 | 10% | 5% | |
| F6 |
Apply a separate 6.2 percent tax on investment income as defined in the Affordable
Care Act (ACA), with unindexed thresholds as in the ACA ($200,000 for single filer,
$250,000 for married filing jointly), starting in 2026. Proceeds go to the OASI and
DI Trust Funds.
graph | table | pdf-graph | pdf-table | memo (Sanders, DeFazio 2019) | memo (Sanders, DeFazio 2017) | memo (Sanders 2016) | memo (Sanders 2015) |
0.67 | 0.80 | 19% | 17% | |
| F7 |
For the estate tax, gift tax, and generation skipping transfer (GST) tax, return
the respective exemption thresholds and tax rates to 2009 levels ($3.5 million threshold
for estate tax with a top 45% tax rate) for deaths after 2024 and gifts made after
2024, with those levels not indexed in future years. All proceeds from the estate
tax, gift tax, and GST tax would go to the OASI and DI Trust Funds.
graph | table | pdf-graph | pdf-table | memo (Van Hollen 2019) |
0.61 | 0.77 | 17% | 17% | |
| F8 |
For active S-corporation officers and limited partners, apply a 16.2 percent tax
on investment income as defined in the ACA, with unindexed thresholds as in the
ACA ($200,000 single filer, $250,000 for married filing joint), starting in 2025.
Proceeds go to the OASDI Trust Funds for tax attributable to 12.4 percent of the
total 16.2 percent tax rate.
graph | table | pdf-graph | pdf-table | memo (Sanders 2023) | memo (Sanders, DeFazio 2022) |
0.93 | 1.00 | 27% | 22% | |
| F9 |
Apply a separate 12.4 percent tax on investment income as defined in the Affordable
Care Act (ACA), with unindexed thresholds as in the ACA ($200,000 single filer, $250,000
for married filing joint), starting in 2026. Proceeds go to the OASDI Trust Funds.
graph | table | pdf-graph | pdf-table | memo (Sanders 2023) | memo (Sanders, DeFazio 2022) |
1.31 | 1.56 | 38% | 34% | |
| F10 |
Expand the tax on net investment income (NII) as defined in the Affordable Care
Act (ACA) to cover earnings from active S corporation holders and active limited
partners. Apply a 12.4-percent tax on this expanded definition of NII, payable to
the OASI and DI Trust Funds with specified thresholds, effective for 2025 and later.
The unindexed thresholds for this provision are $400,000 for a single filer and
$500,000 for a married couple filing jointly. The NII tax would apply to the lesser
of NII and the excess of modified adjusted income (MAGI) above the unindexed thresholds.
graph | table | pdf-graph | pdf-table | memo (Whitehouse, Boyle 2023) |
1.80 | 2.19 | 52% | 47% | |
| F11 |
Apply a separate 12.4-percent tax on net investment income (NII), as defined in
the Affordable Care Act (ACA), payable to the OASI and DI Trust Funds with an
unindexed threshold of $400,000, effective 2026 and later. The NII tax would apply
to the lesser of NII and the excess of modified adjusted income (MAGI) above the
unindexed threshold of $400,000. This single threshold would apply regardless
of tax filing status.
graph | table | pdf-graph | pdf-table | memo (Larson 2023) |
1.21 | 1.53 | 34% | 33% | |
| Category: Provisions Affecting Trust Fund Investment in Equities (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| G1 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2025-2039), assuming an ultimate 5.8 percent annual real
rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.50* | 0.00 | * | 0% | |
| G2 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2025-2039), assuming an ultimate 4.8 percent annual real
rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.37* | 0.00 | * | 0% | |
| G3 |
Invest 40 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2025-2039), assuming an ultimate 2.3 percent annual real
rate of return on equities. Thus, the ultimate rate of return on equities
is the same as that assumed for Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (Social Security Advisory Board 2005) |
0.00* | 0.00 | * | 0% | |
| G4 |
Invest 15 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2025-2034), assuming an ultimate 5.8 percent annual real
rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (AARP 2008) |
0.20* | 0.00 | * | 0% | |
| G5 |
Invest 15 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2025-2034), assuming an ultimate 2.3 percent annual real
rate of return on equities. Thus, the ultimate rate of return on equities
is the same as that assumed for Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (AARP 2008) |
0.00* | 0.00 | * | 0% | |
| G6 |
Invest 25 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2027-2036), assuming an ultimate 5.8 percent annual real
rate of return on equities.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.32* | 0.00 | * | 0% | |
| G7 |
Invest 25 percent of the OASI and DI Trust Fund reserves in equities
(phased in 2027-2036), assuming an ultimate 2.3 percent annual real
rate of return on equities. Thus, the ultimate rate of return on equities
is the same as that assumed for Trust Fund bonds.
graph | table | pdf-graph | pdf-table | memo (Larson 2014) |
0.00* | 0.00 | * | 0% | |
| * A change in the investment of trust fund reserves to include some equities affects the size of all summarized measures because increased "present-value" discounting reduces the weight on values for more distant future years. As a result, the magnitude of the current-law actuarial balance and the summarized effects of most proposals is reduced. Therefore, the size of the change in the long-range actuarial balance indicated here cannot be interpreted directly as a reduction in the shortfall. The actual reduction in the shortfall from equity investment depends on the amount of reserves that are available for investment throughout the period. For example, if provisions to change revenue or scheduled benefits resulted in a purely pay-as-you-go system (reserves just above zero throughout the period), then investment in equities would have no effect on the actuarial balance. | ||||||
| Category: Provisions Affecting Taxation of Benefits (2024 Trustees Report intermediate assumptions) | ||||||
| Current law shortfall in long-range actuarial balance is 3.50 percent of payroll and in annual balance for the 75th year is 4.64 percent of payroll. | ||||||
| H2 |
Starting in 2025, tax Social Security benefits in a manner similar to private
pension income. Phase out the lower-income thresholds during 2025-2044.
graph | table | pdf-graph | pdf-table | memo (Warshawsky 2008) |
0.22 | 0.19 | 6% | 4% | |
| H4 |
Increase the threshold for taxation of OASDI benefits to $50,000 for
single filers and $100,000 for joint filers starting in 2026. Taxation
of benefits revenues transferred to the Hospital Insurance (HI) Trust
Fund would be the same as if the current-law computation applied.
graph | table | pdf-graph | pdf-table | memo (Larson 2015) | memo (Larson 2014) |
-0.10 | -0.01 | -3% | -0% | |
| H5 |
Beginning in 2031, for single/head-of-household/married-filing-separate
taxpayers with MAGI of $250,000 or more and joint filers with MAGI of $500,000
or more, include up to the remaining 15 percent of Social Security benefits
in taxable income (increased from up to 85 percent of benefits taxable
under current law). In subsequent years, update these thresholds for growth
in wages (AWI). Revenue from this provision would be credited to the Social
Security trust funds. Current law taxation of up to 85 percent of Social
Security benefits would remain unchanged.
graph | table | pdf-graph | pdf-table | memo (Bipartisan Policy Center October 2016) | memo (Bipartisan Policy Center June 2016) |
0.02 | 0.02 | 0% | 0% | |
| H6 |
Eliminate federal income taxation of OASDI benefits that is credited
to the OASI and DI Trust Funds for 2054 and later. Phase out OASDI taxation
of benefits by increasing relevant "income" thresholds from 2045 through
2053 as follows, for single/joint tax filers: (a) 2045 = $32,500/$65,000;
(b) 2046 = $40,000/$80,000; (c) 2047 = $47,500/$95,000; (d) 2048 =
$55,000/$110,000; (e) 2049 = $62,500/$125,000; (f) 2050 = $70,000/$140,000;
(g) 2051 = $77,500/$155,000; (h) 2052 = $85,000/$170,000; and (i) 2053
= $92,500/$185,000. Taxation of benefits revenues for the Hospital
Insurance (HI) Trust Fund would be maintained at the same level as if
the current-law computation applied.
graph | table | pdf-graph | pdf-table | memo (Johnson 2016) |
-0.62 | -1.11 | -18% | -24% | |
| H7 |
Replace the current-law thresholds for federal income taxation of
OASDI benefits with a single set of thresholds at $50,000 for single
filers and $100,000 for joint filers for taxation of up to 85 percent
of OASDI benefits, effective for tax year 2026. These thresholds
would be fixed and not indexed to price inflation or average wage
increase. Reallocate a portion of revenue from taxation of OASDI
benefits to the HI Trust Fund such that the HI Trust Fund would be
in the same position as if the current-law computation (in the absence
of this provision) applied. The net amount of revenue from taxing
OASDI benefits, after the allocation to HI, would be allocated to
the combined Social Security Trust Fund.
graph | table | pdf-graph | pdf-table | memo (Larson, Blumenthal, Van Hollen September 2019) | memo (Larson, Blumenthal, Van Hollen January 2019) | memo (Larson 2017) |
-0.16 | -0.01 | -5% | -0% | |