At the end of 2018, the OASDI program was providing benefit payments
1 to about 63 million people: 47 million retired workers and dependents of retired workers, 6 million survivors of deceased workers, and 10 million disabled workers and dependents of disabled workers. During the year, an estimated 176 million people had earnings covered by Social Security and paid payroll taxes on those earnings. The total cost of the program in 2018 was $1,000 billion. Total income was $1,003 billion, which consisted of $920 billion in non-interest income and $83 billion in interest earnings. Asset reserves held in special issue U.S. Treasury securities grew from $2,892 billion at the beginning of the year to $2,895 billion at the end of the year.
The reserves of the combined OASI and DI Trust Funds along with projected program income are adequate to cover projected program cost over the next 10 years under the intermediate assumptions. The ratio of reserves to annual cost is projected to decline from 273 percent at the beginning of 2019 to 130 percent at the beginning of 2028. By remaining at or above 100 percent, the combined OASI and DI Trust Funds satisfy the Trustees’ test of short-range financial adequacy.
2 Considered separately, the OASI Trust Fund also satisfies the test, but the DI Trust Fund does not. For last year’s report, the Trustees projected that combined reserves would be 272 percent of annual cost at the beginning of 2019 and 120 percent at the beginning of 2028.
Under the Trustees’ intermediate assumptions, OASDI cost is projected to exceed total income starting in 2020, and the dollar level of the hypothetical combined trust fund reserves declines until reserves become depleted in 2035. Figure II.D2 shows the implications of reserve depletion for the combined OASI and DI Trust Funds. Considered separately, the OASI Trust Fund reserves become depleted in 2034 and the DI Trust Fund reserves become depleted in 2052.
3 In last year’s report, the projected reserve depletion years were 2034 for OASDI, 2034 for OASI, and 2032 for DI.
To illustrate the magnitude of the 75-year actuarial deficit, consider that for the combined OASI and DI Trust Funds to remain fully solvent throughout the 75-year projection period: (1) revenue would have to increase by an amount equivalent to an immediate and permanent payroll tax rate increase of 2.70 percentage points
4 to 15.10 percent, (2) scheduled benefits would have to be reduced by an amount equivalent to an immediate and permanent reduction of about 17 percent applied to all current and future beneficiaries, or about 20 percent if the reductions were applied only to those who become initially eligible for benefits in 2019 or later; or (3) some combination of these approaches would have to be adopted.