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. This year's report reflects the Trustees' estimates of the effects of the COVID-19 pandemic and the ensuing recession. With the future course of the pandemic still uncertain, the Trustees will continue to monitor developments and modify projections accordingly in future reports. In general, the report assumes that the pandemic's effects on program finances occur mainly in the short range. The table below outlines key measures of the actuarial status of the trust funds under the intermediate assumptions in the 2021 report.
The outlook for the combined OASDI trust funds has worsened from the 2020 report. The projected actuarial deficit for the combined trust funds over the next 75 years is 3.54 percent of taxable payroll, 0.32 percentage point greater than last year. If the law, data, assumptions, and methods had all remained unchanged from last year's Trustees Report, the long-range OASDI actuarial deficit would have increased by 0.06 percent of taxable payroll solely due to the change in the valuation period, which now includes 2095, a high deficit year. The projections in this report also reflect new data and changes in law, assumptions, and methods. 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.
Depletion of the DI Trust Fund asset reserves is now projected for 2057, 8 years earlier than in last year's report. The DI Trust Fund's reserve depletion date is very sensitive to changes in program cash flows and there is now less revenue anticipated in the near term than in last year's report.
The OASI Trust Fund alone can pay full benefits until 2033, a year earlier than projected last year, and the combined OASDI funds until 2034, also a year earlier than in last year's report.
|2020 report||2021 report|
|75-year actuarial deficit|
|As a percentage of taxable payroll||3.21%||3.54%|
|As a percentage of GDP||1.1%||1.2%|
|Income and outgo in year prior to report year (in billions)|
|Social Security contributions a||$944||$1,001|
|Income taxes on benefits||$36||$41|
|Benefit payments b||$1,053||$1,101|
|Net increase in assets||$2||$11|
|Trust fund reserves|
|Amount at beginning of report year (in billions)||$2,897||$2,908|
|Amount at beginning of report year (as a percentage of report year outgo)||261%||253%|
|Year of peak trust fund reserves c||2020||2021|
|Amount at end of peak year (in billions)||$2,902||$2,831|
|Year of trust fund depletion|
|Share of OASDI outgo covered by scheduled revenue in—|
|Year of trust fund depletion||79%||78%|
|End of 75-year reporting period||73%||74%|
|SOURCES: 2020 and 2021 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.|
A 2020 annual surplus of $10.9 billion increased the asset reserves of the combined OASDI trust funds to $2.91 trillion at the end of the year. This amount is equal to 253 percent of the estimated annual expenditures for 2021. The 2020 Trustees Report had projected a $4.4 billion increase in combined trust fund reserves during 2020 under the intermediate assumptions.
The Trustees project that OASDI annual cost will exceed total income beginning in 2021—as was projected in last year's report—and throughout the 75-year projection period. After the projected trust fund reserve depletion in 2034, continuing income would be sufficient to pay 78 percent of program cost, declining to 74 percent for 2095.
Beneficiaries and Benefit Payments
At the end of 2020, the Social Security program was providing monthly benefits to about 65 million people: 55 million from the OASI Trust Fund and 10 million from the DI Trust Fund. Total benefit payments for the year (excluding payments to the Railroad Retirement Board) were $1,096 billion: $952 billion from the OASI Trust Fund and $144 billion from the DI Trust Fund.
Sources of Trust Fund Income
During 2020, an estimated 175 million workers had earnings covered by Social Security and paid payroll taxes. Employees pay a 6.2 percent contribution from earnings up to a maximum of $142,800 in 2021, 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. The trust funds also earn interest ($76 billion in 2020 for the combined OASDI trust funds) on their accumulated reserves.