Summary: Actuarial Status of the Social Security Trust Funds
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The annual report of the Social Security Board of Trustees presents the actuarial status of the Old-Age and Survivors Insurance (OASI) and Disability Insurance (DI) Trust Funds. The COVID-19 pandemic has had significant effects on Social Security finances in the near term, but the Trustees project little effect on the long-term actuarial status of the program. With the future course of the pandemic still uncertain, the Trustees will continue to monitor developments and modify projections accordingly in future reports. The table below outlines key measures of the actuarial status of the trust funds under the intermediate assumptions in the 2022 report.
The economic recovery from the pandemic-induced 2020 recession has been stronger and faster than assumed in last year's report. The projected actuarial deficit for the combined trust funds over the next 75 years is 3.42 percent of taxable payroll, down from 3.54 percent reported last year. The main reasons for the smaller deficit are a stronger-than-expected recovery from the recession, higher expected levels of labor productivity, and lower anticipated long-range disability incidence rates. As a share of the economy as measured by gross domestic product (GDP), the projected actuarial deficit over the next 75 years is 1.2 percent.
The projected reserve depletion date for the combined OASDI trust funds is 2035, a year later than in last year's report.1 For the first time since the 1983 Trustees Report, the DI Trust Fund is projected to be able to pay full benefits through the end of the 75-year projection period (2096 in this year's report). Last year's report projected DI Trust fund depletion in 2057. The DI Trust Fund's reserve depletion date is very sensitive to changes in program cash flows and based on recent experience of declining program applications and incidence rates, the Trustees have lowered anticipated long-range disability incidence rates in this year's report. Considered on its own, the OASI Trust Fund can pay full benefits until 2034, a year later than projected last year.
| 2021 report | 2022 report | |
|---|---|---|
| 75-year actuarial deficit | ||
| As a percentage of taxable payroll | 3.54% | 3.42% |
| As a percentage of GDP | 1.2% | 1.2% |
| Income and outgo in year prior to report year (in billions) | ||
| Income | ||
| Total | $1,118 | $1,088 |
| Social Security contributions a | $1,001 | $981 |
| Income taxes on benefits | $41 | $38 |
| Interest | $76 | $70 |
| Outgo | ||
| Total | $1,107 | $1,145 |
| Benefit payments b | $1,101 | $1,138 |
| Administration | $6 | $6 |
| Net change in assets | $11 | −$56 |
| Trust fund reserves | ||
| Amount at beginning of report year (in billions) | $2,908 | $2,852 |
| Amount at beginning of report year (as a percentage of report year outgo) | 253% | 230% |
| Projected year of peak trust fund reserves c | 2021 | 2022 |
| Amount at end of peak year (in billions) | $2,831 | $2,805 |
| Year of trust fund depletion | ||
| OASDI | 2034 | 2035 |
| OASI | 2033 | 2034 |
| DI | 2057 | d |
| Share of OASDI outgo covered by scheduled revenue in— | ||
| Year of trust fund depletion | 78% | 80% |
| End of 75-year reporting period | 74% | 74% |
| SOURCES: 2021 and 2022 Trustees Reports. | ||
| a. Includes adjustments for prior calendar years. | ||
| b. Includes a small amount of payments to the Railroad Retirement Board. | ||
| c. Measured at end of year. | ||
| d. The trust fund is not projected to become depleted during the 75-year period ending in 2096. | ||
A 2021 annual deficit of $56.3 billion decreased the asset reserves of the combined OASDI trust funds to $2,852 billion at the end of the year. This amount is equal to 230 percent of the estimated annual expenditures for 2022. The 2021 Trustees Report had projected a $77.3 billion decrease in combined trust fund reserves during 2021 under the intermediate assumptions.
The Trustees project that OASDI annual cost will exceed total income throughout the 75-year projection period. After the projected trust fund reserve depletion in 2035, continuing income would be sufficient to pay 80 percent of program cost, declining to 74 percent for 2096.
Beneficiaries and Benefit Payments
At the end of 2021, the Social Security program was providing monthly benefits to about 65 million people: 56 million from the OASI Trust Fund and 9 million from the DI Trust Fund. Total benefit payments for the year (excluding payments to the Railroad Retirement Board) were $1,133 billion: $993 billion from the OASI Trust Fund and $140 billion from the DI Trust Fund.
Sources of Trust Fund Income
During 2021, an estimated 179 million workers had earnings covered by Social Security and paid $981 billion in payroll taxes. Employees pay a 6.2 percent contribution from earnings up to a maximum of $147,000 in 2022, which their employers match. Self-employed workers pay both shares of the contribution, or 12.4 percent. Generally, more than 40 percent of current beneficiaries pay income taxes on part of their benefits, and those taxes go to the OASDI trust funds and Medicare's Hospital Insurance Trust Fund. In 2021, income to the combined OASDI trust funds from the taxation of benefits amounted to $38 billion. The trust funds also earned $70 billion in interest payments on their accumulated reserves.
1 The OASI and DI Trust Funds are distinct legal entities that operate independently. The two trust funds are often considered on a hypothetical combined basis—designated OASDI—to illustrate the actuarial status of the Social Security program as a whole.