Actual future income from OASDI payroll taxes and other sources, and actual future expenditures for benefits and administrative expenses, will depend upon a large number of factors: the size and composition of the population that is receiving benefits, the level of benefit amounts, the size and characteristics of the work force covered under OASDI, and the level of workers' earnings. These factors will depend in turn upon future marriage and divorce rates, birth rates, death rates, migration rates, labor force participation and unemployment rates, disability incidence and termination rates, retirement age patterns, productivity gains, wage increases, cost-of-living increases, and many other economic and demographic circumstances affecting the OASDI program.
While it is reasonable to assume that actual trust fund experience will fall within the range defined by the three alternative sets of assumptions used in this report, no definite assurance can be given that this will occur because of the uncertainty inherent in projections of this type and length. In general, a greater degree of confidence can be placed in the assumptions and estimates for the earlier years than for the later years. Nonetheless, even for the earlier years, the estimates are only an indication of the expected trend and general range of future program experience.
The assumptions vary, in most cases, from year to year during the first 5 to 25 years before reaching their ultimate values for the remainder of the 75-year projection period. The following table summarizes the ultimate values assumed for the key economic and demographic factors underlying the actuarial estimates shown in this report. These ultimate values apply for years after 2019, with the exception of life expectancy, which is assumed to continue improving throughout the projection period.
These key assumptions for this report are similar to the assumptions used in the 1994 report. The only significant change in any of the ultimate economic or demographic assumptions is an increase in the annual net immigration. The net number of other-than-legal immigrants assumed to enter the Social Security area population each year was increased by 50,000. This increase is consistent with estimates based on recent data from the Immigration and Naturalization Service.
Revisions of other economic and demographic assumptions for the early years of the projection period, based on data collected since the 1994 report, had little effect in the long range, with the exception of life expectancy and fertility. Data obtained since last year's report indicate that life expectancy in 1992 and 1993 was somewhat lower than was estimated a year ago. Projected values for life expectancy through the year 2070 are thus somewhat lower than estimated a year ago because the assumed ultimate rate of improvement in mortality was not changed for this report. Data for birth rates available since last year's report indicate slightly higher levels than were assumed a year ago. As a result, projected fertility rates are slightly higher for this year's report during the first 25 years, before the ultimate rates are attained. Taken alone, higher fertility rates for the first 25 years would result in a larger population throughout the 75-year period.
These assumptions reflect a careful assessment of past data and future prospects. No major changes in ultimate economic or demographic assumptions, other than those made for immigration, were deemed necessary to ensure that the financial projections continue to be based on the most plausible range of economic and demographic conditions. Other changes in assumptions and methods reflected in the estimates in this report are discussed in section II.F.