2014 OASDI Trustees Report

C. ASSUMPTIONS ABOUT THE FUTURE

The future income and expenditures of the OASI and DI Trust Funds will depend on many factors, including the size and characteristics of the population receiving benefits, the level of monthly benefit amounts, the size of the workforce, and the level of covered workers’ earnings. These factors will depend in turn on future birth rates, death rates, immigration, marriage and divorce rates, retirement-age patterns, disability incidence and termination rates, employment rates, productivity gains, wage increases, inflation, interest rates, and many other demographic, economic, and program-specific factors.

Table II.C1 presents key demographic and economic assumptions for three alternative scenarios. The intermediate assumptions reflect the Trustees’ best estimates of future experience. Therefore, most of the figures in this overview present only the outcomes under the intermediate assumptions. Any projection of the future is, of course, uncertain. For this reason, the Trustees also present results under low-cost and high-cost alternatives to provide a range of possible future experience. The actual future costs are unlikely to be as extreme as those portrayed by the low-cost or high-cost projections. A separate section on the uncertainty of the projections, beginning on page 18, highlights the implications of these alternative scenarios.

The Trustees reexamine the assumptions each year in light of recent experience and new information. This annual review helps to ensure that the Trustees’ assumptions provide the best estimate of future possibilities.

Table II.C1.—Long-Range Values^a  of Key Assumptions for the 75-year Projection Period

Long-range assumptions	Intermediate	Low-cost	High-cost
Demographic:
Total fertility rate (children per woman), for 2038 and later	2.0	2.3	1.7
Average annual percentage reduction in total age‑sex‑adjusted death rates from 2013 to 2088	.79	.41	1.20
Average annual net immigration (in thousands) for 2014 to 2088	1,125	1,430	830
Economic:
Average annual percentage change in:
Productivity (total U.S. economy), for 2026 and later	1.68	1.98	1.38
Average wage in covered employment from 2025 to 2088	3.83	5.16	2.52
Consumer Price Index (CPI-W), for 2020 and later	2.70	3.40	2.00
Average annual real-wage differential (percent) for 2025 to 2088	1.13	1.76	.52
Unemployment rate (percent, age-sex-adjusted), for 2023 and later	5.5	4.5	6.5
Annual trust fund real interest rate (percent), for 2025 and later	2.9	3.4	2.4
Programmatic:
Disability incidence rate (per 1,000 exposed, age-sex-adjusted) by 2040	5.4	4.3	6.5
Disability recovery rate (per 1,000 beneficiaries, age-sex-adjusted) by 2045	10.4	12.6	8.3

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a

See chapter V for details, including historical and projected values.