2019 OASDI Trustees Report

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C. PROGRAM-SPECIFIC ASSUMPTIONS AND METHODS
The Office of the Chief Actuary at the Social Security Administration uses a set of models to project future income and cost under the OASDI program. These models rely not only on the demographic and economic assumptions described in the previous sections, but also on a number of program-specific assumptions and methods. Values of many program parameters change from year to year as prescribed by formulas set out in the Social Security Act. These program parameters affect the level of payroll taxes collected and the level of benefits paid. The office uses more complex models to project the numbers of future workers covered under OASDI and the levels of their covered earnings, as well as the numbers of future beneficiaries and the expected levels of their benefits. The following subsections provide descriptions of these program-specific assumptions and methods.
1. Automatically Adjusted Program Parameters
The Social Security Act requires that certain parameters affecting the determination of OASDI benefits and taxes be adjusted annually to reflect changes in particular economic measures. Formulas prescribed in the law, applied to reported statistics, change these program parameters annually. The law bases these automatic adjustments on measured changes in the national average wage index (AWI) and the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI).1 This section shows values for program parameters adjusted using these indices from the time that these adjustments became effective through 2028. Projected values for future years depend on the economic assumptions described in the preceding section of this report.
Tables V.C1 and V.C2 present the historical and projected values of the CPI-based benefit increases, the AWI series, and the values of many of the wage-indexed program parameters. Each table shows projections under the three alternative sets of assumptions. Table V.C1 includes:
•
The annual cost-of-living benefit increase percentages. The automatic cost-of-living adjustment provisions in the Social Security Act specify increases in OASDI benefits based on increases in the CPI. Volatility in oil prices has resulted in substantial volatility in recent cost-of-living adjustments. A large cost-of-living adjustment for December 2008 was followed by no cost-of-living adjustments for December 2009 and December 2010. More recent volatility in oil prices again affected the CPI, resulting in no cost-of-living adjustment for December 2015. Cost-of-living adjustments resumed in December 2016. All three sets of assumptions include annual cost-of-living adjustments for all future years.
•
The annual levels of and percentage increases in the AWI. Under section 215(b)(3) of the Social Security Act, Social Security benefit computations index taxable earnings (for most workers first becoming eligible for benefits in 1979 or later) using the AWI for each year after 1950. This procedure converts a worker’s past earnings to approximately average-wage-indexed equivalent values near the time of his or her benefit eligibility. Other program parameters presented in this section that are subject to the automatic-adjustment provisions also rely on the AWI.
•
The wage-indexed contribution and benefit base. For any year, the contribution and benefit base is the maximum amount of earnings subject to the OASDI payroll tax and creditable toward benefit computation. The Social Security Act defers any increase in the contribution and benefit base if there is no cost-of-living adjustment effective for December of the preceding year. There was no increase in the contribution and benefit base for 2010, 2011, or 2016 because there was no cost-of-living adjustment for the immediate prior December in each case. Under all three sets of assumptions, the contribution and benefit base is projected to increase for all future years.
•
The wage-indexed retirement earnings test exempt amounts. The exempt amounts are the annual amount of earnings below which beneficiaries do not have benefits withheld. A lower exempt amount applies for years prior to the year of attaining normal retirement age. A higher exempt amount applies beginning with the year in which a beneficiary attains normal retirement age. Starting in 2000, the retirement earnings test no longer applies beginning with the month of attaining normal retirement age. The Social Security Act defers any increase in these exempt amounts if there is no cost-of-living adjustment effective for December of the preceding year. There was no increase in these exempt amounts for 2010, 2011, or 2016 because there was no cost-of-living adjustment for the immediate prior December. Under all three sets of assumptions, the exempt amounts increase for all future years.
Table V.C1.—Cost-of-Living Benefit Increases, Average Wage Index, Contribution and Benefit Bases, and Retirement Earnings Test Exempt Amounts, 1975-2028 
Calendar year
Cost-of-living
benefit
increasea
(percent)
Average
wage index (AWI)  b

Contribution
and benefit
base c
Retirement earnings
test exempt amount
Amount
Increase
(percent)
Under
NRAd
At NRAe
Historical data:
 
1975
8.0
$8,630.92
7.5
$14,100
$2,520
$2,520
 
1976
6.4
9,226.48
6.9
15,300
2,760
2,760
 
1977
5.9
9,779.44
6.0
16,500
3,000
3,000
 
1978
6.5
10,556.03
7.9
17,700
3,240
4,000
 
1979
9.9
11,479.46
8.7
22,900
3,480
4,500
 
 
 
 
 
 
 
 
 
1980
14.3
12,513.46
9.0
25,900
3,720
5,000
 
1981
11.2
13,773.10
10.1
29,700
4,080
5,500
 
1982
7.4
14,531.34
5.5
32,400
4,440
6,000
 
1983
3.5
15,239.24
4.9
35,700
4,920
6,600
 
1984
3.5
16,135.07
5.9
37,800
5,160
6,960
 
 
 
 
 
 
 
 
 
1985
3.1
16,822.51
4.3
39,600
5,400
7,320
 
1986
1.3
17,321.82
3.0
42,000
5,760
7,800
 
1987
4.2
18,426.51
6.4
43,800
6,000
8,160
 
1988
4.0
19,334.04
4.9
45,000
6,120
8,400
 
1989
4.7
20,099.55
4.0
48,000
6,480
8,880
 
 
 
 
 
 
 
 
 
1990
5.4
21,027.98
4.6
51,300
6,840
9,360
 
1991
3.7
21,811.60
3.7
53,400
7,080
9,720
 
1992
3.0
22,935.42
5.2
55,500
7,440
10,200
 
1993
2.6
23,132.67
.9
57,600
7,680
10,560
 
1994
2.8
23,753.53
2.7
60,600
8,040
11,160
 
 
 
 
 
 
 
 
 
1995
2.6
24,705.66
4.0
61,200
8,160
11,280
 
1996
2.9
25,913.90
4.9
62,700
8,280
12,500
 
1997
2.1
27,426.00
5.8
65,400
8,640
13,500
 
1998
1.3
28,861.44
5.2
68,400
9,120
14,500
 
1999
f 2.5
30,469.84
5.6
72,600
9,600
15,500
 
 
 
 
 
 
 
 
 
2000
3.5
32,154.82
5.5
76,200
10,080
17,000
 
2001
2.6
32,921.92
2.4
80,400
10,680
25,000
 
2002
1.4
33,252.09
1.0
84,900
11,280
30,000
 
2003
2.1
34,064.95
2.4
87,000
11,520
30,720
 
2004
2.7
35,648.55
4.6
87,900
11,640
31,080
 
 
 
 
 
 
 
 
 
2005
4.1
36,952.94
3.7
90,000
12,000
31,800
 
2006
3.3
38,651.41
4.6
94,200
12,480
33,240
 
2007
2.3
40,405.48
4.5
97,500
12,960
34,440
 
2008
5.8
41,334.97
2.3
 102,000
13,560
36,120
 
2009
.0
40,711.61
-1.5
 106,800
  14,160
 37,680
 
 
 
 
 
 
 
 
 
2010
.0
41,673.83
2.4
 106,800
  14,160
 37,680
 
2011
3.6
42,979.61
3.1
 106,800
  14,160
 37,680
 
2012
1.7
44,321.67
3.1
110,100
14,640
38,880
 
2013
1.5
44,888.16
1.3
113,700
15,120
40,080
 
2014
1.7
46,481.52
3.5
117,000
15,480
41,400
 
 
 
 
 
 
 
 
 
2015
.0
48,098.63
3.5
118,500 
15,720  
41,880 
 
2016
.3
48,642.15
1.1
118,500
15,720  
41,880 
 
2017
2.0
50,321.89
3.5
127,200
16,920  
44,880 
Intermediate:
 
2018
g2.8
51,794.15
2.9
g128,400
g17,040
g 45,360
 
2019
1.8
53,863.71
4.0
g132,900
g17,640
g46,920
 
 
 
 
 
 
 
 
 
2020
2.7
56,396.34
4.7
136,800
18,120
48,360
 
2021
2.6
58,914.00
4.5
142,200
18,840
50,280
 
2022
2.6
61,399.77
4.2
149,100
19,800
52,560
 
2023
2.6
63,918.72
4.1
155,700
20,640
54,960
 
2024
2.6
66,573.32
4.2
162,300
21,480
57,240
 
 
 
 
 
 
 
 
 
2025
2.6
69,374.02
4.2
168,900
22,440
59,640
 
2026
2.6
72,318.20
4.2
175,800
23,280
62,160
 
2027
2.6
75,397.14
4.3
183,300
24,360
64,680
 
2028
2.6
78,425.26
4.0
191,100
25,320
67,440
Low-cost:
 
2018
g2.8
51,842.68
3.0
g$128,400
g17,040
g45,360
 
2019
2.6
54,589.52
5.3
g132,900
g17,640
g46,920
 
 
 
 
 
 
 
 
 
2020
3.2
58,130.23
6.5
137,100
18,120
48,360
 
2021
3.2
61,621.98
6.0
144,300
19,080
50,880
 
2022
3.2
65,003.71
5.5
153,600
20,400
54,240
 
2023
3.2
68,429.04
5.3
162,900
21,600
57,480
 
2024
3.2
72,040.30
5.3
171,900
22,800
60,600
 
 
 
 
 
 
 
 
 
2025
3.2
75,890.46
5.3
180,900
24,000
63,840
 
2026
3.2
79,999.01
5.4
190,200
25,200
67,200
 
2027
3.2
84,362.57
5.5
200,400
26,640
70,800
 
2028
3.2
88,796.52
5.3
211,500
28,080
74,640
High-cost:
 
2018
g2.8
51,774.91
2.9
g128,400
g17,040
g 45,360
 
2019
1.2
53,181.27
2.7
g132,900
g17,640
g46,920
 
 
 
 
 
 
 
 
 
2020
2.1
53,756.15
1.1
136,800
18,120
48,360
 
2021
2.0
55,258.23
2.8
140,400
18,600
49,560
 
2022
2.0
57,220.89
3.6
141,900
18,840
50,160
 
2023
2.0
59,231.07
3.5
146,100
19,320
51,600
 
2024
2.0
61,293.18
3.5
151,200
20,040
53,400
 
 
 
 
 
 
 
 
 
2025
2.0
63,356.81
3.4
156,600
20,760
55,320
 
2026
2.0
65,432.29
3.3
162,000
21,480
57,240
 
2027
2.0
67,555.34
3.2
167,400
22,200
59,160
 
2028
2.0
69,521.87
2.9
172,800
22,920
61,080
a
Effective with benefits payable for June in each year 1975-82, and for December in each year after 1982.

b
See table VI.G6 for projected dollar amounts of the AWI for years beyond the last year of this table.

c
Public Law 95-216 specified amounts for 1978-81. Public Law 101-239 changed the indexing procedure and caused slightly higher bases after 1989.

d
Normal retirement age. See table V.C3 for specific values.

e
In 1955-82, the retirement earnings test did not apply at ages 72 and over. In 1983-99, the test did not apply at ages 70 and over. Beginning in 2000, the test does not apply beginning with the month of normal retirement age attainment. In the year of normal retirement age attainment, the higher exempt amount applies to earnings prior to the month of normal retirement age attainment. Public Law 95-216 specified amounts for 1978-82. Public Law 104‑121 specified amounts for 1996-2002.

f
Originally determined as 2.4 percent. Pursuant to Public Law 106-554, effectively 2.5 percent.

g
Actual amount, as determined under automatic-adjustment provisions.

Table V.C2 shows values for other wage-indexed parameters. The table provides historical values from 1978, when indexing of the amount of earnings required for a quarter of coverage first began, through 2019, and also shows projected values through 2028. These other wage-indexed program parameters are:
•
The bend points in the formula for computing the primary insurance amount (PIA) for workers who reach age 62, become disabled, or die in a given year. As figure V.C1 illustrates, these two bend points define three ranges in a worker’s average indexed monthly earnings (AIME). The formula for the worker’s PIA multiplies a 90, 32, or 15 percent factor by the portion of the worker’s AIME that falls within the three respective ranges, and then adds the resulting products together.
Figure V.C1.—Primary-Insurance-Amount Formula for Those Newly Eligible in 2019
[D]
•
The bend points in the formula for computing the maximum total amount of monthly benefits payable based on the earnings record of a retired or deceased worker (maximum family benefit). As figure V.C2 illustrates, these three bend points define four ranges in a worker’s PIA. The formula for the maximum family benefit multiplies a 150, 272, 134, or 175 percent factor by the portion of the worker’s PIA that falls within the four respective ranges, and then adds the resulting products together.
Figure V.C2.—OASI Maximum-Family-Benefit Formula
for Those Newly Eligible in 2019
[D]
•
The amount of earnings required in a year to earn a quarter of coverage (QC). The number and timing of QCs earned determines an individual’s insured status — the basic requirement for benefit eligibility under OASDI.
•
The old-law contribution and benefit base—the contribution and benefit base that would have been in effect without enactment of the 1977 amendments. This old-law base is used in determining special-minimum benefits for certain workers who have many years of low earnings in covered employment. Since 1986, the calculation of OASDI benefits for certain workers who are eligible to receive pensions based on noncovered employment uses the old-law base. In addition, the Railroad Retirement program and the Employee Retirement Income Security Act of 1974 use the old-law base for certain purposes.
Table V.C2.—Values for Selected Wage-Indexed Program Parameters,
Calendar Years 1978-2028 
Calendar year
AIME bend
points in PIA
formula a
 
PIA bend points
in OASI maximum-
family-benefit formula b
Earnings
required for
a quarter of
coverage
Old-law
contribution
and benefit base c
First
Second
First
Second
Third
Historical data:
 
1978
d
d
 
d
d
d
e $250
e $17,700
 
1979
e $180
e $1,085
e $230
e $332
e $433
260
18,900
 
1980
194
1,171
248
358
467
290
20,400
 
1981
211
1,274
270
390
508
310
22,200
 
1982
230
1,388
294
425
554
340
24,300
 
1983
254
1,528
324
468
610
370
26,700
 
1984
267
1,612
342
493
643
390
28,200
 
1985
280
1,691
358
517
675
410
29,700
 
1986
297
1,790
379
548
714
440
31,500
 
1987
310
1,866
396
571
745
460
32,700
 
1988
319
1,922
407
588
767
470
33,600
 
1989
339
2,044
433
626
816
500
35,700
 
1990
356
2,145
455
656
856
520
38,100
 
1991
370
2,230
473
682
890
540
39,600
 
1992
387
2,333
495
714
931
570
41,400
 
1993
401
2,420
513
740
966
590
42,900
 
1994
422
2,545
539
779
1,016
620
45,000
 
1995
426
2,567
544
785
1,024
630
45,300
 
1996
437
2,635
559
806
1,052
640
46,500
 
1997
455
2,741
581
839
1,094
670
48,600
 
1998
477
2,875
609
880
1,147
700
50,700
 
1999
505
3,043
645
931
1,214
740
53,700
 
2000
531
3,202
679
980
1,278
780
56,700
 
2001
561
3,381
717
1,034
1,349
830
59,700
 
2002
592
3,567
756
1,092
1,424
870
63,000
 
2003
606
3,653
774
1,118
1,458
890
64,500
 
2004
612
3,689
782
1,129
1,472
900
65,100
 
2005
627
3,779
801
1,156
1,508
920
66,900
 
2006
656
3,955
838
1,210
1,578
970
69,900
 
2007
680
4,100
869
1,255
1,636
1,000
72,600
 
2008
711
4,288
 
909
1,312
1,711
1,050
75,900
 
2009
744
4,483
 
950
1,372
1,789
1,090
79,200
 
2010
761
4,586
 
972
1,403
1,830
1,120
79,200
 
2011
749
4,517
 
957
1,382
1,803
1,120
79,200
 
2012
767
4,624
 
980
1,415
1,845
1,130
81,900
 
2013
791
4,768
 
1,011
1,459
1,903
1,160
84,300
 
2014
816
4,917
 
1,042
1,505
1,962
1,200
87,000
 
2015
826
4,980
 
1,056
1,524
1,987
1,220
88,200
 
2016
856
5,157
 
1,093
1,578
2,058
1,260
88,200
 
2017
885
5,336
 
1,131
1,633
2,130
1,300
94,500
 
2018
895
5,397
 
1,144
1,651
2,154
1,320
95,400
 
2019
926
5,583
 
1,184
1,708
2,228
1,360
98,700
Intermediate:
 
2020
953
5,746
 
1,218
1,758
2,293
1,400
101,700
 
2021
991
5,976
 
1,267
1,829
2,385
1,460
105,600
 
2022
1,038
6,257
 
1,326
1,915
2,497
1,530
110,700
 
2023
1,084
6,536
 
1,386
2,000
2,609
1,600
115,500
 
2024
1,130
6,812
 
1,444
2,084
2,719
1,660
120,600
 
2025
1,176
7,092
 
1,503
2,170
2,830
1,730
125,400
 
2026
1,225
7,386
 
1,566
2,260
2,948
1,800
130,500
 
2027
1,277
7,697
 
1,632
2,355
3,072
1,880
136,200
 
2028
1,331
8,023
 
1,701
2,455
3,202
1,960
141,900
Low-cost:
 
2020
$954
$5,752
 
$1,219
$1,760
$2,295
$1,400
$101,700
 
2021
1,005
6,057
 
1,284
1,853
2,417
1,480
107,100
 
2022
1,070
6,449
 
1,367
1,973
2,574
1,580
114,000
 
2023
1,134
6,837
 
1,449
2,092
2,728
1,670
120,900
 
2024
1,196
7,212
 
1,529
2,207
2,878
1,760
127,500
 
2025
1,260
7,592
 
1,609
2,323
3,030
1,850
134,400
 
2026
1,326
7,993
 
1,694
2,446
3,190
1,950
141,300
 
2027
1,397
8,420
 
1,785
2,576
3,360
2,060
148,800
 
2028
1,472
8,876
 
1,881
2,716
3,542
2,170
156,900
High-cost:
 
2020
953
5,744
 
1,218
1,758
2,292
1,400
101,700
 
2021
979
5,900
 
1,251
1,805
2,355
1,440
104,400
 
2022
989
5,964
 
1,264
1,825
2,380
1,460
105,600
 
2023
1,017
6,131
 
1,300
1,876
2,447
1,500
108,300
 
2024
1,053
6,348
 
1,346
1,943
2,534
1,550
112,200
 
2025
1,090
6,572
 
1,393
2,011
2,623
1,600
116,100
 
2026
1,128
6,800
 
1,442
2,081
2,714
1,660
120,300
 
2027
1,166
7,029
 
1,490
2,151
2,805
1,720
124,200
 
2028
1,204
7,260
 
1,539
2,221
2,897
1,770
128,400
a
The formula to compute a PIA is: (1) 90% of AIME below the first bend point, plus (2) 32% of AIME in excess of the first bend point but not in excess of the second, plus (3) 15% of AIME in excess of the second bend point. The bend points are determined based on the first year a beneficiary becomes eligible for benefits.

b
The formula to compute an OASI family maximum is: (1) 150% of PIA below the first bend point, plus (2) 272% of PIA in excess of the first bend point but not in excess of the second, plus (3) 134% of PIA in excess of the second bend point but not in excess of the third, plus (4) 175% of PIA in excess of the third bend point. This formula also determines family maximums for disabled workers first eligible after 1978 and entitled before July 1980.

c
Contribution and benefit base that would have been in effect without enactment of the Social Security Amendments of 1977. Public Law 101-239 changed the indexing procedure and caused slightly higher bases after 1989.

d
No provision in law for this amount in this year.

e
Amount specified by Social Security Amendments of 1977.

In addition to the economic factors that affect the determination of OASDI benefits, there are certain legislated changes that affect current and future benefit amounts. Two such changes are the scheduled increases in the normal retirement age and in the delayed retirement credits. Table V.C3 shows the scheduled changes in these parameters and the resulting effects on benefit levels expressed as a percentage of PIA.
Table V.C3.—Legislated Changes in Normal Retirement Age and Delayed Retirement
Credits for Persons Attaining Age 62 in Each Year 1986 and Later
Year of birth
Year of
attainment of
age 62
Normal
retirement
age (NRA)
Credit for each
year of delayed
retirement after
NRA (percent)
Benefit, as a percentage of PIA,
beginning at age —
62
65
66
67
70
1924
1986
65
3
80
100
103
106
115
1925
1987
65
3 1/2
80
100
103 1/2
107
117 1/2
1926
1988
65
3 1/2
80
100
103 1/2
107
117 1/2
1927
1989
65
4
80
100
104
108
120
1928
1990
65
4
80
100
104
108
120
1929
1991
65
4 1/2
80
100
104 1/2
109
122 1/2
1930
1992
65
4 1/2
80
100
104 1/2
109
122 1/2
1931
1993
65
5
80
100
105
110
125
1932
1994
65
5
80
100
105
110
125
1933
1995
65
5 1/2
80
100
105 1/2
111
127 1/2
1934
1996
65
5 1/2
80
100
105 1/2
111
127 1/2
1935
1997
65
6
80
100
106
112
130
1936
1998
65
6
80
100
106
112
130
1937
1999
65
6 1/2
80
100
106 1/2
113
132 1/2
1938
2000
65, 2 mo
6 1/2
79 1/6
98 8/9
105 5/12
111 11/12
131 5/12
1939
2001
65, 4 mo
7
78 1/3
97 7/9
104 2/3
111 2/3
132 2/3
1940
2002
65, 6 mo
7
77 1/2
96 2/3
103 1/2
110 1/2
131 1/2
1941
2003
65, 8 mo
7 1/2
76 2/3
95 5/9
102 1/2
110
132 1/2
1942
2004
65, 10 mo
7 1/2
75 5/6
94 4/9
101 1/4
108 3/4
131 1/4
1943-54
2005-16
66
8
75
93 1/3
100
108
132
1955
2017
66, 2 mo
8
74 1/6
92 2/9
98 8/9
106 2/3
130 2/3
1956
2018
66, 4 mo
8
73 1/3
91 1/9
97 7/9
105 1/3
129 1/3
1957
2019
66, 6 mo
8
72 1/2
90
96 2/3
104
128
1958
2020
66, 8 mo
8
71 2/3
88 8/9
95 5/9
102 2/3
126 2/3
1959
2021
66, 10 mo
8
70 5/6
87 7/9
94 4/9
101 1/3
125 1/3
1960 & later
2022 & later
67
8
70
86 2/3
93 1/3
100
124
2. Covered Employment
Projections of the total U.S. civilian labor force and unemployment rate (see table V.B2) are based on Bureau of Labor Statistics definitions from the Current Population Survey (CPS). These projections represent the average weekly number of employed and unemployed persons, age 16 and over, in the U.S. in a calendar year. Covered employment for a calendar year is defined as the total number of persons who have any OASDI covered earnings (that is, earnings subject to the OASDI payroll tax) at any time during that year. For those age 16 and over, projected covered employment is the sum of age-sex groups, each reflecting the growth projected for the group’s total U.S employment and average weeks worked per year.2 For the short-range period, the age-sex-adjusted average weeks worked declines slightly as the age-sex-adjusted unemployment rate rises to its ultimate assumed value of 5.5 percent. After 2028, the average weeks worked for each age-sex group is assumed to remain constant. The projection method also accounts for changes in non-OASDI-covered employment and the increase in coverage of Federal civilian employment as a result of the 1983 Social Security Amendments. It also reflects changes in the number and employment status of other-than-LPR immigrants residing within the Social Security coverage area, such as undocumented immigrants and foreign workers and students with temporary visas.
The covered-worker rate is the ratio of OASDI covered workers to the Social Security area population. For men age 16 and over, the projected age-adjusted covered-worker rates3 for 2093 are 69.7, 69.3, and 68.6 percent for the low-cost, intermediate, and high-cost assumptions, respectively. For women age 16 and over, the projected age-adjusted covered-worker rates for 2093 are 67.0, 65.8, and 64.3 percent for the low-cost, intermediate, and high-cost assumptions, respectively. For men, the intermediate projected rate for 2093 is slightly lower than the 2017 age-adjusted rate of 69.6 percent primarily due to the projected increase in the portion of the Social Security area population that consists of other-than-LPR immigrants. For women, the intermediate projected rate for 2093 is higher than the 2017 age-adjusted rate of 64.2 percent because the projected increase in the age-adjusted labor force participation rate more than offsets the projected increase in the portion of the population that will be other-than-LPR immigrants.
3. Insured Population
Eligibility for worker benefits under the OASDI program requires some threshold level of work in covered employment. A worker satisfies this requirement by his or her accumulation of quarters of coverage (QCs). Prior to 1978, a worker earned one QC for each calendar quarter in which he or she earned at least $50. In 1978, when annual earnings reporting replaced quarterly reporting, the amount required to earn a QC (up to a maximum of four per year) was set at $250. As specified in the law, the Social Security Administration has adjusted this amount each year since then according to changes in the AWI. Its value in 2019 is $1,360.
There are three types of insured status that a worker can earn under the OASDI program. The number and recency of QCs earned determine each status. A worker is fully insured when his or her total number of QCs is greater than or equal to the number of years elapsed after the year of attainment of age 21 (but not less than six). After a worker has accumulated 40 QCs, he or she remains permanently fully insured. A worker is disability insured if he or she is: (1) a fully insured worker who has accumulated 20 QCs during the 40-quarter period ending with the current quarter, (2) a fully insured worker aged 24-30 who has accumulated QCs during one-half of the quarters elapsed after the quarter of attainment of age 21 and up to and including the current quarter, or (3) a fully insured worker under age 24 who has accumulated six QCs during the 12-quarter period ending with the current quarter. A worker is currently insured when he or she has accumulated six QCs during the 13-quarter period ending with the current quarter. Periods of disability reduce the number of quarters required for insured status, but not below the minimum of six QCs.
There are many types of benefits payable to workers and their family members under the OASDI program. A worker must be fully insured to be eligible for a primary retirement benefit and for his or her spouse or children to be eligible for auxiliary retirement benefits. A deceased worker must have been either currently insured or fully insured at the time of death for his or her children (and their mother or father) to be eligible for benefits. If there are no eligible surviving children, the deceased worker must have been fully insured at the time of death for his or her surviving spouse to be eligible. A worker must be disability insured to be eligible for a primary disability benefit and for his or her spouse or children to be eligible for auxiliary disability benefits.
The Office of the Chief Actuary estimates the fully insured population, as a percentage of the Social Security area population, by single year of age and sex starting in 1969. The short-range model extrapolates the historical trend in these rates from data in the Continuous Work History Sample (CWHS). The model uses information on quarters of coverage earned due to employment covered by Social Security derived from tabulations of the CWHS. The model also uses historical administrative data on beneficiaries in force and estimated historical mortality rates. The model combines this information to estimate the proportion of individuals who were alive and fully insured as of the end of each historical year. Using projected mortality rates and covered workers, the model extrapolates these rates into the future and applies them to the historical and projected population to arrive at the fully insured population by age and sex through the end of the short-range period.
The long-range fully insured model uses 30,000 simulated work histories for each sex and birth cohort, representing everyone except the other-than-LPR immigrant population. For the other-than-LPR immigrant population, the model generates substantially lower percentages attaining fully insured status. The model constructs simulated work histories using past coverage rates, earnings distributions, and amounts required for crediting QCs, and develops them in a manner that replicates historical individual variations in work patterns. The probability of covered employment in any year is assumed to be higher for those who have worked more consistently in the recent past. Model parameters are selected so that simulated fully insured percentages are consistent with the fully insured percentages estimated by the short-range model for the recent historical period.
The Office of the Chief Actuary estimates the disability insured population, as a percentage of the fully insured population, by age and sex starting in 1969. The office bases historical values on a tabulation of the disability insured population from the CWHS and estimates of the fully insured population. The short-range model projects these percentages by using the relationship between the historical percentages and covered-worker rates. The long-range model projects these percentages by using the same simulated work histories used to project the fully insured percentages. The long-range model makes additional adjustments to the model simulations in order to bring the disability insured percentages in the historical and short-range periods into close agreement with those estimated from the CWHS and the short-range model.
The office does not project the currently insured population because the number of beneficiaries who are entitled to benefits based solely on currently insured status has been very small recently and is likely to remain small in the future.
Using these insured models, the percentage of the Social Security area population aged 62 and over that is fully insured is projected to increase from its estimated level of 87.0 for December 31, 2016, to 87.1, 87.8, and 88.7 for December 31, 2095, under the low-cost, intermediate, and high-cost alternatives, respectively. Over the projection period, the percentages for both males and females change significantly. The percentage for males declines, reflecting, in part, increases in the percent of the population that is classified as other-than-LPR immigrants and is thus less likely to have earnings reported and credited to them. The percentage for females increases, reflecting the past substantial growth in the employment of younger cohorts of women. Under the intermediate assumptions, for example, the percentage for males decreases from 93.7 to 87.3, and the percentage for females increases from 81.5 to 88.4.
4. Old-Age and Survivors Insurance Beneficiaries
The Office of the Chief Actuary projects the number of OASI beneficiaries for each type of benefit separately by the sex of the worker on whose earnings the benefits are based and by the age of the beneficiary. For the long-range period, the office also projects the number of beneficiaries by marital status for several types of benefits. The office uses two separate models in making these projections. The short-range model makes projections during the first 10 years of the projection period and the long-range model makes projections thereafter.
The short-range model develops the number of retired-worker beneficiaries by applying award rates to the aged fully insured population, excluding those already receiving retired-worker, disabled-worker, aged-widow(er), or aged-spouse benefits, and by applying termination rates to the number of retired-worker beneficiaries.
The long-range model projects the number of retired-worker beneficiaries who were not previously converted from disabled-worker beneficiary status as a percentage of the exposed population.4 For age 62, the model projects this percentage by using a linear regression based on the historical relationship between this percentage, the labor force participation rate at age 62, and the number of months from age 62 to normal retirement age. The percentage for ages 70 and over is nearly 100 because delayed retirement credits cannot be earned after age 70. The long-range model projects the percentage for each age 63 through 69 based on historical experience with an adjustment for changes in the portion of the primary insurance amount that is payable at each age of entitlement. The model adjusts these percentages for ages 62 through 69 to reflect changes in the normal retirement age.
The long-range model calculates the number of retired-worker beneficiaries previously converted from disabled-worker beneficiary status using an extension of disabled-worker death rates by age, sex, and duration.
The Office of the Chief Actuary estimates the number of aged-spouse beneficiaries, excluding those who are also receiving a retired-worker benefit, from the population projected by age and sex. Benefits of aged-spouse beneficiaries depend on the earnings records of their husbands or wives, who are referred to as “earners.” The short-range model projects insured aged-spouse beneficiaries in conjunction with the retired-worker beneficiaries. This model projects uninsured aged-spouse beneficiaries by applying award rates to the aged uninsured male or female population and by applying termination rates to the population already receiving such benefits.
The long-range model estimates aged-spouse beneficiaries separately for those married and divorced. The model projects the number of married aged-spouse beneficiaries, by age and sex, by applying a series of factors to the number of spouses, aged 62 and over, in the population. These factors are the probabilities that the spouse and the earner meet all of the conditions of eligibility — that is, the probabilities that: (1) the earner is 62 or over, (2) the earner is insured, (3) the earner is either receiving benefits or has suspended benefits, (4) the spouse is not receiving a benefit for the care of an entitled child, (5) the spouse is either not insured or is insured but not receiving benefits, and (6) the spouse is not eligible to receive a significant government pension based on earnings from noncovered employment. To calculate the estimated number of aged-spouse beneficiaries, the model applies a projected prevalence rate to the resulting number of spouses. Due to the Bipartisan Budget Act of 2015, aged spouses are no longer eligible to receive an aged-spouse benefit if the earner suspends their benefit after April 29, 2016. Additionally, for those turning age 62 in 2016 and later, deemed filing now applies to all retired workers and spouses even after initial entitlement, regardless of age. Thus, spouses who are insured are no longer eligible to delay their retired-worker benefit while receiving an aged-spouse benefit.
The long-range model estimates the number of divorced aged-spouse beneficiaries, by age and sex, by applying the same factors to the number of divorced persons aged 62 and over in the population, with three differences. First, the model applies a factor to reflect the probability that the earner (former spouse) is still alive. If the former spouse is not alive, the person may be entitled to a divorced widow(er) benefit. Second, the model applies a factor to reflect the probability that the marriage to the former spouse lasted at least 10 years. Third, the model does not apply factor (3) in the previous paragraph because, effective January 1985, a divorced person is generally no longer required to wait for the former spouse to receive benefits.
The Office of the Chief Actuary bases the projected numbers of children under age 18, and students aged 18 and 19, who are eligible for benefits as children of retired-worker beneficiaries, on the projected number of children in the population. The short-range model develops the number of entitled children by applying award rates to the number of children in the population who have two living parents and by applying termination rates to the number of children already receiving benefits.
The long-range model projects separately the number of entitled children by sex of the earner parent. For each age under 18, the model multiplies the projected number of children with a parent aged 62 and over by the ratio of the number of retired workers aged 62 to 71 to the number of members of the population aged 62 to 71. For student beneficiaries, the model multiplies the number of children aged 18 and 19 in the population by the probabilities that: (1) the parent is alive, aged 62 or over, insured, and receiving a retired-worker benefit; and (2) the child is attending high school.
The Office of the Chief Actuary projects the number of disabled children, aged 18 and over, of retired-worker beneficiaries from the adult population. The short-range model applies award rates to the population and applies termination rates to the number of disabled children already receiving benefits. The long-range model projects the number of disabled children in a manner similar to that used for student children except for a factor that reflects the probability of being disabled before age 22.
The short-range model develops the number of spouses of retired workers, who are entitled to spouse benefits because they are caring for a child who is under age 16 or disabled, by applying award rates to the number of awards to children of retired workers and by applying termination rates to the number of young spouses with a child in their care who are already receiving benefits. The long-range model projects the number of young-spouse beneficiaries with a child in their care as a proportion of the number of child beneficiaries of retired workers, including projected changes in average family size.
The Office of the Chief Actuary projects the number of aged-widow(er) beneficiaries, excluding those who are also receiving a retired-worker benefit, from the population by age and sex. The short-range model projects fully insured aged-widow(er) beneficiaries in conjunction with the retired-worker beneficiaries. The model projects the number of uninsured aged-widow(er) beneficiaries by applying award rates to the aged uninsured male or female population and by applying termination rates to the population already receiving such benefits. The long-range model projects uninsured aged-widow(er) beneficiaries by marital status. The model multiplies the number of widow(er)s in the population aged 60 and over by the probabilities that: (1) the deceased earner is fully insured at death, (2) the widow(er) is not receiving a benefit for the care of an entitled child, (3) the widow(er) is not fully insured, and (4) the widow(er) benefits are not withheld because of receipt of a significant government pension based on earnings in noncovered employment. In addition, the model applies the same factors to the number of divorced persons aged 60 and over in the population and includes additional factors representing the probability that the person’s former earner spouse has died and that the marriage lasted at least 10 years. The model projects the number of insured aged-widow(er) beneficiaries who are ages 60 through 70 in a manner similar to that for uninsured aged-widow(er) beneficiaries. In addition, the model assumes that some insured widow(er)s who had not applied for their retired-worker benefits will receive widow(er) benefits. The model projects insured aged-widow(er) beneficiaries over age 70 by applying termination rates to the population that started receiving such benefits prior to age 70.
The short-range model develops the number of disabled-widow(er) beneficiaries by applying award rates to the uninsured male or female population and by applying termination rates to the population already receiving a disabled-widow(er) benefit. The long-range model projects the number for each cohort by age from 50 to normal retirement age as percentages of the widowed and divorced populations, adjusted for the insured status of the deceased spouse, the prevalence of disability, and the probability that the disabled spouse is not receiving another type of benefit.
The Office of the Chief Actuary bases the projected number of children under age 18, and students aged 18 and 19, who are entitled to benefits as survivors of deceased workers, on the number of children in the population whose mothers or fathers are deceased. The short-range model develops the number of entitled children by applying award rates to the number of orphaned children and by applying termination rates to the number of children already receiving benefits.
The long-range model projects the number of surviving-child beneficiaries in a manner similar to that for student beneficiaries of retired workers, except that the model replaces the probability that the parent is aged 62 or over with the probability that the parent is deceased.
The Office of the Chief Actuary projects the number of surviving-disabled-child beneficiaries, aged 18 and over, from the adult population. The short-range model applies award rates to the population and applies termination rates to the number of surviving-disabled-child beneficiaries already receiving benefits. The long-range model projects the number of surviving-disabled-child beneficiaries in a manner similar to that for surviving-student-child beneficiaries, except for including an additional factor to reflect the probability of being disabled before age 22.
The short-range model develops the numbers of entitled surviving-mother and surviving-father beneficiaries by applying award rates to the number of awards to surviving-child beneficiaries, in cases where the children are either under age 16 or disabled, and by applying termination rates to the number of surviving-mother and surviving-father beneficiaries already receiving benefits. The long-range model estimates the numbers of surviving-mother and surviving-father beneficiaries, assuming they are not remarried, from the number of surviving-child beneficiaries.
The Office of the Chief Actuary projects the number of surviving-parent beneficiaries based on the historical pattern of the number of such beneficiaries.
Table V.C4 shows the projected number of beneficiaries under the OASI program by type of benefit. The retired-worker beneficiary counts include those persons who receive a residual auxiliary benefit in addition to their retired-worker benefit. The office makes estimates of the number and amount of residual payments separately for spouses and widow(er)s.
Table V.C4.—OASI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1945-2095 
[In thousands]
Calendar year
Retired workers and auxiliaries
 
Survivors
Total
Workera
Spouse
Child
Widow-
widower
Mother-
father
Child
Parent
Historical data:
 
1945
518
159
13
 
94
121
377
6
1,288
 
1950
1,771
508
46
 
314
169
653
15
3,477
 
1955
4,474
1,192
122
 
701
292
1,154
25
7,961
 
1960
8,061
2,269
268
 
1,544
401
1,577
36
14,157
 
1965
11,101
2,614
461
 
2,371
472
2,074
35
19,128
 
1970
13,349
2,668
546
 
3,227
523
2,688
29
23,030
 
1975
16,589
2,867
643
 
3,888
582
2,919
21
27,509
 
1980
19,564
3,018
639
 
4,415
563
2,610
15
30,823
 
1985
22,435
3,069
456
 
4,862
372
1,918
10
33,122
 
1990
24,841
3,104
421
 
5,098
304
1,777
6
35,551
 
1995
26,679
3,027
441
 
5,213
275
1,884
4
37,522
 
2000
28,505
2,798
459
 
4,901
203
1,878
3
38,747
 
2005
30,461
2,524
488
 
4,569
178
1,903
2
40,126
 
2010
34,593
2,316
580
 
4,285
159
1,913
2
43,847
 
2011
35,600
2,291
594
 
4,239
158
1,907
2
44,791
 
2012
36,720
2,280
612
 
4,193
154
1,907
1
45,868
 
2013
37,893
2,285
625
 
4,139
150
1,899
1
46,992
 
2014
39,009
2,303
635
 
4,092
143
1,892
1
48,075
 
2015
40,089
2,335
648
 
4,050
140
1,893
1
49,155
 
2016
41,233
2,370
661
 
4,004
133
1,893
1
50,296
 
2017
42,447
2,375
675
 
3,961
128
1,904
1
51,491
 
2018
43,721
2,391
690
 
3,908
121
1,911
1
52,743
Intermediate:
 
2019
45,120
2,395
710
 
3,877
117
1,926
1
54,146
 
2020
46,637
2,297
728
 
3,853
114
1,941
1
55,571
 
2025
53,990
1,868
808
 
3,753
107
1,998
1
62,525
 
2030
60,589
1,852
928
 
3,576
111
2,056
1
69,112
 
2035
64,924
1,837
1,037
 
3,361
125
2,081
1
73,366
 
2040
67,204
1,741
1,112
 
3,161
132
2,131
1
75,482
 
2045
68,246
1,680
1,109
 
3,015
129
2,110
1
76,288
 
2050
69,838
1,662
1,132
 
2,894
124
2,058
1
77,709
 
2055
72,179
1,664
1,162
 
2,802
119
1,997
1
79,924
 
2060
75,346
1,670
1,193
 
2,724
115
1,940
1
82,989
 
2065
78,439
1,685
1,203
 
2,679
114
1,908
1
86,029
 
2070
81,781
1,722
1,235
 
2,660
113
1,904
1
89,416
 
2075
85,073
1,751
1,277
 
2,637
111
1,902
1
92,754
 
2080
87,183
1,766
1,293
 
2,593
108
1,888
1
94,833
 
2085
88,496
1,792
1,298
 
2,557
105
1,862
1
96,111
 
2090
90,512
1,863
1,325
 
2,556
103
1,838
1
98,199
 
2095
93,982
1,929
1,377
 
2,557
101
1,824
1
101,771
Low-cost:
 
2019
45,107
2,395
710
 
3,876
117
1,927
1
54,133
 
2020
46,606
2,297
729
 
3,850
115
1,944
1
55,541
 
2025
53,788
1,871
814
 
3,743
109
2,026
1
62,352
 
2030
59,932
1,840
950
 
3,606
108
2,170
1
68,607
 
2035
63,664
1,834
1,080
 
3,423
122
2,289
1
72,413
 
2040
65,291
1,726
1,179
 
3,248
130
2,438
1
74,013
 
2045
65,768
1,645
1,191
 
3,117
128
2,483
1
74,334
 
2050
66,886
1,605
1,233
 
3,003
126
2,474
1
75,328
 
2055
68,897
1,573
1,286
 
2,909
125
2,457
1
77,248
 
2060
71,766
1,548
1,346
 
2,820
125
2,454
1
80,060
 
2065
74,578
1,527
1,380
 
2,759
128
2,495
1
82,870
 
2070
77,593
1,518
1,440
 
2,723
133
2,576
1
85,984
 
2075
80,469
1,495
1,514
 
2,683
136
2,654
1
88,953
 
2080
82,166
1,466
1,548
 
2,630
138
2,704
1
90,652
 
2085
83,314
1,465
1,568
 
2,608
138
2,732
1
91,827
 
2090
85,981
1,521
1,632
 
2,643
140
2,767
1
94,687
 
2095
90,842
1,589
1,737
 
2,694
142
2,821
1
99,827
High-cost:
 
2019
45,134
2,395
709
 
3,879
117
1,924
1
54,160
 
2020
46,671
2,297
727
 
3,855
114
1,938
1
55,603
 
2025
54,224
1,865
803
 
3,765
105
1,970
1
62,732
 
2030
61,495
1,882
911
 
3,524
113
1,934
1
69,859
 
2035
66,486
1,879
1,000
 
3,269
124
1,864
1
74,622
 
2040
69,483
1,805
1,046
 
3,043
127
1,821
1
77,326
 
2045
71,178
1,771
1,025
 
2,883
120
1,747
1
78,725
 
2050
73,356
1,784
1,028
 
2,760
112
1,667
1
80,708
 
2055
76,122
1,817
1,031
 
2,671
104
1,581
1
83,328
 
2060
79,603
1,860
1,031
 
2,599
96
1,495
1
86,685
 
2065
82,944
1,924
1,018
 
2,562
90
1,425
1
89,964
 
2070
86,579
2,013
1,024
 
2,546
85
1,377
1
93,625
 
2075
90,239
2,092
1,039
 
2,532
80
1,337
1
97,320
 
2080
92,712
2,150
1,039
 
2,490
75
1,298
1
99,764
 
2085
94,145
2,202
1,031
 
2,438
70
1,253
1
101,140
 
2090
95,376
2,275
1,031
 
2,401
65
1,211
1
102,361
 
2095
97,152
2,340
1,043
 
2,367
62
1,174
1
104,139
a
Retired-worker beneficiaries include persons who also receive a residual benefit consisting of the excess of an auxiliary benefit over their retired-worker benefit.

Notes:
1. The number of beneficiaries does not include uninsured individuals who receive benefits under section 228 of the Social Security Act. Transfers from the General Fund of the Treasury reimburse the OASI Trust Fund for the cost of most of these individuals.
2. Totals do not necessarily equal the sums of rounded components.
5. Disability Insurance Beneficiaries
The DI Trust Fund pays for benefits to disabled workers who: (1) satisfy the disability insured requirements, (2) are unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment severe enough to satisfy the requirements of the program, and (3) have not yet attained normal retirement age. Spouses and children of such disabled workers may also receive DI benefits provided they satisfy certain criteria, primarily age and earnings requirements.
The Office of the Chief Actuary projects the number of disabled-worker beneficiaries in current-payment status (disability prevalence) for each future year. The projections start with the number in current-payment status as of December 2018. Projections of the number of new beneficiaries awarded benefits each year (disability incidence) and the number of beneficiaries leaving the disability rolls each year then determine the number in current-payment status in later years. Beneficiaries leave the rolls due to death and recovery (disability terminations) and due to conversion from disabled-worker to retired-worker beneficiary status at normal retirement age, after which the OASI Trust Fund pays for benefits. The remainder of this section describes the concepts of disability incidence, termination, and prevalence.
a. Disability Incidence
The disability incidence rate is the ratio of the number of new beneficiaries awarded benefits each year to the number of individuals who meet insured requirements but are not yet receiving benefits (the disability-exposed population5). The Office of the Chief Actuary projects the number of newly awarded beneficiaries for each future year by multiplying assumed age-sex-specific disability incidence rates and the projected disability-exposed population by age and sex.
Figure V.C3 illustrates the historical and estimated incidence rates under the three alternatives. Incidence rates have varied substantially during the historical period since 1970 due to a variety of demographic and economic factors, along with changes in legislation and program administration. The solid lines in figure V.C3 show the incidence rate adjusted to the age-sex distribution of the disability-exposed population for 2000. This adjustment allows a comparison of incidence rates over time by focusing on the likelihood of becoming disabled, and by excluding the effects of a changing distribution of the population toward ages where disability is more or less likely.
The dashed lines in figure V.C3 represent the gross (unadjusted) incidence rates. The changing age‑sex distribution of the exposed population over time influences these unadjusted rates. The gross incidence rate fell below the age‑sex-adjusted rate between 1975 and 2000 as the baby-boom generation increased the size of the younger working-age population, where disability incidence is lower than in older populations. After 1995, the gross rate generally increased relative to the age‑sex-adjusted rate as the baby-boom generation moved into an age range where disability incidence peaks. The projected gross incidence rate generally declines relative to the age-sex-adjusted rate as the baby-boom generation moves above the normal retirement age and the lower-birth-rate cohorts of the 1970s enter prime disability ages (50 to normal retirement age). As these smaller cohorts age beyond normal retirement age, by about 2050, the gross incidence rate returns to a higher relative level under the intermediate assumptions. Thereafter, the gross rate remains higher than the age-sex-adjusted rate, and reflects the persistently higher average age of the working-age population, which is largely due to lower birth rates since 1965, and to the increase in the normal retirement age.
For the first 10 years of the projection period (through 2028), incidence rates reflect several factors including: (1) aspects of program administration, such as efforts to reduce the disability determination backlogs and recent changes in procedures for adjudicating claims; (2) assumed future unemployment rates; and (3) recent trends in incidence. At the beginning of the recent period of high unemployment, disability incidence rates were well above the general trend level, with rates reaching a peak in 2010. Over the last few years, incidence rates have subsided as the economy has recovered, and have persisted at levels well below those expected over the long-term. Some of the elevation of disability incidence rates experienced during the recession and the lowering of incidence rates experienced during the recovery are likely due to many individuals applying for disability benefits earlier than they would have otherwise. For 2018, the actual incidence rate (4.1 per thousand) was below the level projected in last year’s report (4.6 per thousand). In this year’s report, incidence rates are assumed to rise more gradually early in the short-range period than in last year’s report, and are lower later in the period. Incidence rates are assumed to be somewhat elevated during the period 2019 through 2022, when the Social Security Administration is expected to eliminate a backlog of individuals who have appealed for a hearing on a prior disability claim denial. In 2028, at the end of the short-range period, age-sex-specific incidence rates reach the ultimate rates assumed for the long-range projections. These ultimate age-sex-specific disability incidence rates were selected based on careful analysis of historical levels and patterns and expected future conditions, including the impact of scheduled increases in the normal retirement age.6 The ultimate incidence rates represent the expected average rates of incidence for the future.
For the intermediate alternative, the Trustees assume that the ultimate age-sex-adjusted incidence rate (adjusted to the disability-exposed population for the year 2000) will be 5.2 awards per thousand exposed, which is lower than in last year’s report by 0.2 awards per thousand exposed. See page 37 for more information. Figure V.C3 illustrates that the assumed ultimate age-sex-adjusted incidence rate of 5.2 is slightly higher than the average rate for the historical period 1970 through 2018 (5.1 per thousand). However, a similar comparison using gross incidence rates gives a very different result. The estimated ultimate gross incidence rate is substantially greater than the average gross rate over the historical period due to the large changes in the age-sex distribution of the disability-exposed population between 1970 and 2010.
The Trustees assume that the ultimate age-sex-adjusted incidence rates for the low-cost and high-cost alternatives will be 4.2 and 6.2 awards per thousand exposed, or about 1.0 awards per thousand lower and 1.0 awards per thousand higher, respectively, than the ultimate incidence rate for the intermediate alternative. The low-cost and high-cost ultimate age-sex-adjusted incidence rates are lower than those in last year’s report by 0.1 and 0.2 awards per thousand exposed, respectively.
Figure V.C3.—DI Disability Incidence Rates, 1970-2095
[Awards per thousand disability-exposed]
[D]
b. Disability Termination
Beneficiaries stop receiving disability benefits when they die, recover from their medically-determinable disabling condition, or return to substantial work. Disabled-worker beneficiaries who return to substantial work for an extended period are deemed to have recovered, and their benefits are then terminated. The termination rate is the ratio of the number of terminations for these reasons to the average number of disabled-worker beneficiaries during the year.
The Office of the Chief Actuary projects termination rates by age, sex, and reason for termination. In addition, the office projects termination rates by duration of entitlement to disabled-worker benefits in the long-range period (post-2028).
In the short-range period (through 2028), the projected age-sex-adjusted death rate (adjusted to the 2000 disabled-worker population) under the intermediate assumptions gradually declines from 25.2 deaths per thousand beneficiaries for 2018 to about 24.3 per thousand for 2028. The projected age-sex-adjusted recovery rate (medical improvement and return to work) under the intermediate assumptions decreases from the relatively high level of 20.2 per thousand beneficiaries for 2018 to 11.4 per thousand beneficiaries for 2028. The recovery rate has been high in recent years due to an ongoing administrative effort to work down a backlog of continuing disability reviews. The rate is expected to decrease as the backlog is reduced. Under the low-cost and high-cost assumptions, total age-sex-adjusted termination rates due to death and recovery are roughly 10-15 percent higher or lower, respectively, than under the intermediate assumptions.
For the long-range period (post-2028), the Office of the Chief Actuary projects death and recovery rates by age, sex, and duration of entitlement relative to the average level of rates experienced over the base period 2006 through 2010. The assumed ultimate age-sex-adjusted recovery rate for disabled workers is about 10.3 per thousand beneficiaries. The assumed ultimate age-sex-adjusted recovery rates for the low-cost and high-cost alternatives are about 12.5 and 8.2 recoveries per thousand beneficiaries, respectively. Recovery rates by age, sex, and duration of entitlement reach ultimate levels in the twentieth year of the projection period (2038) for all three sets of assumptions. In contrast, death rates by age and sex change throughout the long-range period at the same rate as death rates in the general population. From the age-sex-adjusted death rate of 25.2 per thousand beneficiaries in 2018, this rate decreases to 18.7, 11.8, and 6.9 per thousand disabled-worker beneficiaries for 2095 under the low-cost, intermediate, and high-cost assumptions, respectively.
Figure V.C4 illustrates gross and age-sex-adjusted total termination rates (including both recoveries and deaths) for disabled-worker beneficiaries for the historical period since 1970, and for the projection period through 2095. As with incidence rates, the age-sex-adjusted termination rate illustrates the real change in the tendency to terminate benefits. Changes in the age-sex distribution of the beneficiary population influence the gross termination rate. A shift in the disabled-worker beneficiary population to older ages, as occurred over the past 20 years when the baby-boom generation moved into pre-retirement ages, increases gross death termination rates relative to the age-sex-adjusted rates.
Figure V.C4.—DI Disability Termination Rates, 1970-2095
[Terminations per thousand disabled-worker beneficiaries]
[D]
c. Comparison of Incidence, Termination, and Conversion
Incidence and termination rates are the foundation for projecting the number of disabled-worker beneficiaries in current-payment status. At normal retirement age, all disabled-worker beneficiaries convert to retired-worker status and leave the DI rolls.
Figure V.C5 compares the historical and projected (intermediate) levels of incidence, termination, and conversion on both a gross basis and an age-sex-adjusted basis. Incidence rates have varied widely, and the Trustees expect the age-sex adjusted rates under the intermediate assumptions to remain near the middle of the high and low extremes experienced since 1970. Termination rates have declined and the Trustees expect them to continue to decline, largely because of declining death rates.
Conversions are a transfer of beneficiaries at normal retirement age from the DI program to the OASI program. Therefore, the disability “conversion” rate is 100 percent for disabled-worker beneficiaries reaching normal retirement age in a given year and zero at all other ages. After conversion, recovery from the disabling condition is no longer relevant for benefit eligibility. The conversion ratio is the number of conversions in a given year (that is, beneficiaries who reach normal retirement age) divided by the average number of disabled-worker beneficiaries at all ages in that year. The ratio is constant on an age-sex-adjusted basis, except for the two periods during which normal retirement age increases under current law. On a gross basis, however, the conversion ratio rises and falls with the changing proportion of all disabled-worker beneficiaries who attain normal retirement age in a given year. The gross conversion ratio generally increases from 2005 to 2030 due to aging of the beneficiary population.
Figure V.C5.—Comparison of DI Disability Incidence Rates, Termination Rates and Conversion Ratios Under Intermediate Assumptions, 1970-2095
[Awards per thousand disability-exposed;
terminations and conversions per thousand disabled-worker beneficiaries]
[D]
d. DI Beneficiaries and Disability Prevalence Rates
The Office of the Chief Actuary makes detailed projections of disabled-worker awards, terminations, and conversions and combines these to project the number of disabled workers receiving benefits over the next 75 years. Table V.C5 presents the projected numbers of disabled workers in current-payment status. The number of disabled workers in current-payment status grows from 8.5 million at the end of 2018, to 12.0 million, 13.8 million, and 14.8 million at the end of 2095, under the low-cost, intermediate, and high-cost assumptions, respectively. Of course, much of this growth results from the growth and aging of the population described earlier in this chapter. Table V.C5 also presents projected numbers of auxiliary beneficiaries and disability prevalence rates on both a gross basis and an age-sex-adjusted basis.
Table V.C5.—DI Beneficiaries With Benefits in Current-Payment Status
at the End of Calendar Years 1960-2095 
[Beneficiaries in thousands; prevalence rates per thousand persons insured for disability benefits]
Calendar year
Disabled‑
worker beneficiaries
Auxiliary beneficiaries
Total
beneficiaries
Disability
prevalence rates
Spouse
Child
Gross
Age-sex- adjusteda
Historical data:
 
 
 
1960
455
77
155
687
 
 
 
1965
988
193
558
1,739
 
 
 
1970
1,493
283
889
2,665
20
18
 
1975
2,488
453
1,411
4,351
29
28
 
1980
2,856
462
1,359
4,677
28
31
 
1985
2,653
306
945
3,904
24
26
 
1990
3,007
266
989
4,261
25
28
 
1995
4,179
264
1,409
5,852
33
35
 
2000
5,036
165
1,466
6,667
36
36
 
2005
6,519
157
1,633
8,309
45
40
 
2010
8,204
161
1,820
10,185
55
44
 
2011
8,576
164
1,874
10,614
58
45
 
2012
8,827
163
1,900
10,890
59
46
 
2013
8,941
157
1,889
10,987
60
46
 
2014
8,955
150
1,828
10,932
59
46
 
2015
8,909
143
1,756
10,808
59
45
 
2016
8,809
136
1,667
10,612
58
44
 
2017
8,695
127
1,590
10,412
56
42
 
2018
8,537
119
1,507
10,164
55
41
Intermediate:
 
 
 
2019
8,465
115
1,474
10,054
54
40
 
2020
8,370
115
1,447
9,932
54
40
 
2025
8,597
134
1,437
10,167
54
39
 
2030
8,734
135
1,563
10,433
54
41
 
2035
9,078
137
1,774
10,989
55
42
 
2040
9,557
139
2,011
11,708
56
43
 
2045
10,246
155
2,135
12,536
59
44
 
2050
10,719
157
2,204
13,080
61
45
 
2055
11,142
159
2,247
13,549
61
45
 
2060
11,331
156
2,279
13,766
61
46
 
2065
11,630
162
2,334
14,125
62
46
 
2070
11,899
169
2,423
14,491
62
46
 
2075
11,986
168
2,518
14,672
62
47
 
2080
12,288
170
2,594
15,052
62
47
 
2085
12,857
178
2,651
15,686
62
47
 
2090
13,518
191
2,706
16,415
64
47
 
2095
13,829
192
2,769
16,789
64
47
Low-cost:
 
 
 
2019
8,395
115
1,457
9,967
54
40
 
2020
8,217
114
1,412
9,743
53
39
 
2025
7,965
131
1,326
9,423
50
36
 
2030
7,695
117
1,405
9,217
47
35
 
2035
7,669
112
1,573
9,355
46
35
 
2040
7,797
106
1,768
9,672
45
35
 
2045
8,179
113
1,859
10,151
46
35
 
2050
8,466
111
1,906
10,482
46
35
 
2055
8,764
110
1,944
10,818
46
35
 
2060
8,921
107
1,990
11,018
45
35
 
2065
9,192
108
2,075
11,375
45
35
 
2070
9,476
112
2,203
11,791
45
36
 
2075
9,676
111
2,336
12,123
44
36
 
2080
10,113
113
2,445
12,671
44
36
 
2085
10,847
122
2,533
13,501
45
36
 
2090
11,629
133
2,623
14,385
46
36
 
2095
12,047
134
2,729
14,910
46
36
High-cost:
 
 
 
2019
8,543
116
1,493
10,151
55
41
 
2020
8,578
116
1,497
10,191
55
41
 
2025
9,241
135
1,540
10,916
59
43
 
2030
9,764
157
1,707
11,628
62
46
 
2035
10,477
169
1,931
12,577
64
49
 
2040
11,337
181
2,170
13,688
68
51
 
2045
12,358
206
2,308
14,873
74
54
 
2050
13,025
214
2,391
15,630
77
55
 
2055
13,560
221
2,429
16,210
79
56
 
2060
13,753
219
2,435
16,407
80
57
 
2065
14,030
228
2,441
16,699
82
57
 
2070
14,215
239
2,468
16,922
82
58
 
2075
14,087
235
2,502
16,824
82
58
 
2080
14,104
234
2,529
16,867
82
58
 
2085
14,299
239
2,543
17,081
83
58
 
2090
14,647
249
2,552
17,448
84
59
 
2095
14,767
251
2,560
17,578
84
59
a
Adjusted to the age-sex distribution of the disability insured population for the year 2000.

Note: Totals do not necessarily equal the sums of rounded components.
The disability prevalence rate is the ratio of the number of disabled-worker beneficiaries in current-payment status to the number of persons insured for disability benefits. Figure V.C6 illustrates the historical and projected disability prevalence rates on both a gross basis and on an age-sex-adjusted basis (adjusted to the age-sex distribution of the disability insured population for the year 2000).
Changes in prevalence rates are a direct result of changes in incidence rates and termination rates. Figure V.C5 depicts patterns for incidence and termination rates, which are helpful for understanding the trend in prevalence rates. Annual incidence and termination rates are not directly comparable or combinable because their denominators differ.
Figure V.C6.—DI Disability Prevalence Rates, 1970-2095
[Rate per thousand persons insured for disability benefits]
[D]
Age-sex-adjusted prevalence rates have increased primarily because: (1) termination rates, in particular death termination rates, have declined, (2) incidence rates at younger ages have increased relative to rates at older ages (new beneficiaries at younger ages have more potential years on the disability rolls), and (3)  incidence rates have increased substantially for women to parity with men. Gross prevalence rates have increased more than age-sex-adjusted prevalence rates since the baby-boom generation began to reach ages 45 through normal retirement age, a time of life when disability incidence rates are relatively high. The Office of the Chief Actuary projects both gross and age-sex adjusted prevalence rates to grow at a slower pace based on assumed stabilization in three factors: (1) the age distribution of the general population, (2) the age distribution of the disability insured population, and (3) incidence rates by age and gender. As these factors gradually stabilize, the declining death termination rate continues to have a small influence toward higher disability prevalence rates.
As mentioned above in the discussion of incidence and termination rates, the age-sex-adjusted prevalence rate isolates the changing trend in the underlying likelihood of receiving benefits for the insured population, without reflecting changes in the age distribution of the population. As with incidence rates, gross disability prevalence rates declined relative to the age-sex-adjusted rate when the baby-boom generation reached working age between 1970 and 1990; this trend reflects the lower disability prevalence rates associated with younger ages. Conversely, the gross rate of disability prevalence has increased relative to the age-sex-adjusted rate after 1990 due to the aging of the baby-boom generation into ages with higher disability prevalence rates.
Under the intermediate assumptions, the projected age-sex-adjusted disability prevalence rate grows from 40.9 per thousand disability insured at the end of 2018 to 47.2 per thousand at the end of 2095. As mentioned above, the Office of the Chief Actuary projects that the growth in prevalence will slow relative to the historical period.
Under the low-cost and high-cost assumptions, the age-sex-adjusted disability prevalence rate decreases to 36.3 per thousand and increases to 58.8 per thousand insured workers at the end of 2095, respectively.
Table V.C5 presents projections of the numbers of auxiliary beneficiaries paid from the DI Trust Fund. As indicated at the beginning of this subsection, auxiliary beneficiaries are qualifying spouses and children of disabled workers. A spouse must either be at least age 62 or have an eligible child beneficiary in his or her care who is either under age 16 or disabled prior to age 22. A child must be: (1) under age 18, (2) age 18 or 19 and still a student in high school, or (3) age 18 or older and disabled prior to age 22.
The projection of the number of auxiliary beneficiaries relies on the projected number of disabled-worker beneficiaries. In the short-range period (2019 through 2028), the Office of the Chief Actuary projects incidence and termination rates for each category of auxiliary beneficiary. After 2028, the office projects child beneficiaries at ages 18 and under in relation to the projected number of children in the population using the probability that either of their parents is a disabled-worker beneficiary. The office projects the remaining categories of children and spouses in a similar manner.
6. Covered and Taxable Earnings, Taxable Payroll, and Payroll Tax Contributions
Covered earnings include both covered wages and covered self-employment net earnings. The Office of the Chief Actuary projects covered wages for component sectors of the economy (i.e., private, State and local, Federal civilian, and military) based on the projected overall growth of sectoral and total wages in the U.S. economy. The projections of covered wages also reflect changes in covered employment due to a relative increase in non-covered undocumented immigrants and to the mandatory coverage of new hires in the Federal civilian sector. The office projects covered self-employment net earnings based on the growth in net proprietors’ income in the U.S. economy.
Taxable earnings are the portion of covered earnings subject to the Social Security payroll tax. Taxable wages for an employee are total covered wages from all wage employment up to the contribution and benefit base. Taxable wages for an employer are the sum of all covered wages paid to each employee up to the base. Employees with multiple jobs whose total wages exceed the base are eligible for a refund of excess employee taxes withheld; employers are not eligible for a refund on this basis. For self-employed workers with no taxable wages, taxable earnings are the amount of covered self-employment net earnings up to the base. For self-employed workers with taxable wages less than the base, covered self-employment net earnings are taxable up to the difference between the base and their taxable wages. For projection purposes, the Office of the Chief Actuary computes taxable earnings based on a proportion of covered earnings that is at or below the base.
The OASDI taxable payroll (see table VI.G6) for a year is computed as the amount of earnings which, when multiplied by the combined OASDI employee-employer payroll tax rate for that year, yields the total amount of payroll taxes due from wages paid and self-employment net earnings for the year. The Trustees use taxable payroll to determine income rates, cost rates, and actuarial balances. Taxable payroll is derived by adjusting total taxable earnings to account for categories of earnings that are taxed at rates other than the combined employee-employer rate and to take into account amounts credited as wages that were not included in normally reported wages. For 1951 and later, taxable earnings are reduced by one-half of the amount of wages paid to employees with multiple jobs that exceed the contribution and benefit base. For 1983 through 2001, deemed wage credits for military service after 1956 are added to taxable earnings. The self-employment tax rates for 1951 through 1983 were less than the combined employee-employer rates; therefore, the self-employment component of taxable payroll for those years is reduced by multiplying the ratio of the self-employment rate to the combined employee-employer rate times the taxable self-employment net earnings. Finally, for 1966 through 1979, employers were exempt from paying their share of payroll tax on their employees’ tips and, for 1980 through 1987, employers paid tax on only part of their employees’ tips. For those years, the taxable payroll is reduced by half of the amount of tips for which the employer owed no payroll tax.
The ratio of taxable payroll to covered earnings (the taxable ratio) fell from 88.7 percent for 1984 to 82.6 percent for 2000, mostly due to much higher increases in wage levels for very high earners than for all other earners. From 2000 to 2010, the taxable ratio varied with the business cycle, rising during economic downturns and falling during recoveries. Specifically, the taxable ratio rose to 85.7 percent for 2002, declined to 82.4 percent for 2007, rose to 85.2 percent for 2009, and was 83.2 percent for 2017.
For this report, the Trustees assume a level for the taxable ratio at the end of the short-range period (2028) of 82.5 percent for the intermediate assumptions, 81.0 percent for the high-cost assumptions, and 84.0 percent for the low-cost assumptions. These are the same assumptions that the Trustees made for the end of the short-range period (2027) for the 2018 report.
The Office of the Chief Actuary projects payroll tax contributions using the patterns of tax collection required by Federal laws and regulations. The office determines payroll tax liabilities by multiplying the scheduled tax rates for each year by the amount of taxable wages and self-employment net earnings for that year. The office then splits these liabilities into amounts by collection period. For wages, Federal law requires that employers withhold OASDI and HI payroll taxes and Federal individual income taxes from employees’ pay. As an employer’s accumulation of such taxes (including the employer share of payroll taxes) meets certain thresholds, which the Department of the Treasury determines, the employer must deposit these taxes with the U.S. Treasury by a specific day, depending on the amount of money involved.7 For projection purposes, the office splits the payroll tax contributions related to wages into amounts paid in the same quarter as incurred and in the following quarter. Self-employed workers must make estimated tax payments on their earnings four times during the year and make up any underestimate on their individual income tax returns. The projection splits the self-employed tax liabilities by collection quarter to reflect this pattern.
The projected tax contributions also reflect the method used to ensure that money transferred to the trust funds is adjusted, over time, to equal the actual liability owed. Because payers generally make tax payments without identifying the separate OASDI contribution amounts, Treasury makes daily transfers of money from the General Fund to the trust funds on an initial estimated basis. The Social Security Administration periodically certifies the amounts of wages and self-employment net earnings on which tax contributions are owed for each year, at which time Treasury determines adjustments to appropriations to reconcile tax liabilities with deposits in the trust funds. This process also includes periodic transfers from the trust funds to the General Fund for contributions on wages in excess of the contribution and benefit base.
Table V.C6 shows the payroll tax contribution rates applicable under current law in each calendar year and the allocation of these rates between the OASI and DI Trust Funds.8 It also shows the contribution and benefit base for each year through 2019.
Table V.C6.—Contribution and Benefit Base and Payroll Tax Contribution Rates 
Calendar years
Contribution
and benefit base
Payroll tax contribution rates (percent)
Employees and employers, combineda
 
Self-employedb
OASDI
OASI
DI
OASDI
OASI
DI
1937-49
$3,000
2.00
2.00
—
 
—
—
—
1950
3,000
3.00
3.00
—
 
—
—
—
1951-53
3,600
3.00
3.00
—
 
2.2500
2.2500
—
1954
3,600
4.00
4.00
—
 
3.0000
3.0000
—
1955-56
4,200
4.00
4.00
—
 
3.0000
3.0000
—
1957-58
4,200
4.50
4.00
0.50
 
3.3750
3.0000
0.3750
1959
4,800
5.00
4.50
.50
 
3.7500
3.3750
.3750
1960-61
4,800
6.00
5.50
.50
 
4.5000
4.1250
.3750
1962
4,800
6.25
5.75
.50
 
4.7000
4.3250
.3750
1963-65
4,800
7.25
6.75
.50
 
5.4000
5.0250
.3750
1966
6,600
7.70
7.00
.70
 
5.8000
5.2750
.5250
1967
6,600
7.80
7.10
.70
 
5.9000
5.3750
.5250
1968
7,800
7.60
6.65
.95
 
5.8000
5.0875
.7125
1969
7,800
8.40
7.45
.95
 
6.3000
5.5875
.7125
1970
7,800
8.40
7.30
1.10
 
6.3000
5.4750
.8250
1971
7,800
9.20
8.10
1.10
 
6.9000
6.0750
.8250
1972
9,000
9.20
8.10
1.10
 
6.9000
6.0750
.8250
1973
10,800
9.70
8.60
1.10
 
7.0000
6.2050
.7950
1974
13,200
9.90
8.75
1.15
 
7.0000
6.1850
.8150
1975
14,100
9.90
8.75
1.15
 
7.0000
6.1850
.8150
1976
15,300
9.90
8.75
1.15
 
7.0000
6.1850
.8150
1977
16,500
9.90
8.75
1.15
 
7.0000
6.1850
.8150
1978
17,700
10.10
8.55
1.55
 
7.1000
6.0100
1.0900
1979
22,900
10.16
8.66
1.50
 
7.0500
6.0100
1.0400
1980
25,900
10.16
9.04
1.12
 
7.0500
6.2725
.7775
1981
29,700
10.70
9.40
1.30
 
8.0000
7.0250
.9750
1982
32,400
10.80
9.15
1.65
 
8.0500
6.8125
1.2375
1983
35,700
10.80
9.55
1.25
 
8.0500
7.1125
.9375
1984 c
37,800
11.40
10.40
1.00
 
11.4000
10.4000
1.0000
1985 c
39,600
11.40
10.40
1.00
 
11.4000
10.4000
1.0000
1986 c
42,000
11.40
10.40
1.00
 
11.4000
10.4000
1.0000
1987 c
43,800
11.40
10.40
1.00
 
11.4000
10.4000
1.0000
1988 c
45,000
12.12
11.06
1.06
 
12.1200
11.0600
1.0600
1989 c
48,000
12.12
11.06
1.06
 
12.1200
11.0600
1.0600
1990
51,300
12.40
11.20
1.20
 
12.4000
11.2000
1.2000
1991
53,400
12.40
11.20
1.20
 
12.4000
11.2000
1.2000
1992
55,500
12.40
11.20
1.20
 
12.4000
11.2000
1.2000
1993
57,600
12.40
11.20
1.20
 
12.4000
11.2000
1.2000
1994
60,600
12.40
10.52
1.88
 
12.4000
10.5200
1.8800
1995
61,200
12.40
10.52
1.88
 
12.4000
10.5200
1.8800
1996
62,700
12.40
10.52
1.88
 
12.4000
10.5200
1.8800
1997
65,400
12.40
10.70
1.70
 
12.4000
10.7000
1.7000
1998
68,400
12.40
10.70
1.70
 
12.4000
10.7000
1.7000
1999
72,600
12.40
10.70
1.70
 
12.4000
10.7000
1.7000
2000
76,200
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2001
80,400
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2002
84,900
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2003
87,000
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2004
87,900
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2005
90,000
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2006
$94,200
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2007
97,500
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2008
102,000
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2009
106,800
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2010d
106,800
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2011d
106,800
10.40
8.89
1.51
 
10.4000
8.8900
1.5100
2012d
110,100
10.40
8.89
1.51
 
10.4000
8.8900
1.5100
2013
113,700
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2014
117,000
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2015
118,500
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2016e
118,500
12.40
10.03
2.37
 
12.4000
10.0300
2.3700
2017e
127,200
12.40
10.03
2.37
 
12.4000
10.0300
2.3700
2018e
128,400
12.40
10.03
2.37
 
12.4000
10.0300
2.3700
2019
132,900
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
2020 and later
f
12.40
10.60
1.80
 
12.4000
10.6000
1.8000
a
Except as noted below, the combined employee/employer rate is divided equally between employees and employers.

b
Beginning in 1990, self-employed persons receive a deduction, for purposes of computing their net earnings, equal to half of the combined OASDI and HI contributions that would be payable without regard to the contribution and benefit base. The OASDI contribution rate then applies to net earnings after this deduction, but subject to the OASDI base.

c
In 1984 only, employees received an immediate credit of 0.3 percent of taxable wages against their OASDI payroll tax contributions. The self-employed received similar credits of 2.7 percent, 2.3 percent, and 2.0 percent against their combined OASDI and Hospital Insurance (HI) contributions on net earnings from self-employment in 1984, 1985, and 1986-89, respectively. The General Fund of the Treasury reimbursed the trust funds for these credits.

d
Public Law 111-147 exempted most employers from paying the employer share of OASDI payroll tax on wages paid during the period March 19, 2010 through December 31, 2010 to certain qualified individuals hired after February 3, 2010. Public Law 111-312 reduced the OASDI payroll tax rate for 2011 by 2 percentage points for employees and for self-employed workers. Public Law 112-96 extended the 2011 rate reduction through 2012. These laws require that the General Fund of the Treasury reimburse the OASI and DI Trust Funds for these temporary reductions in 2010 through 2012 payroll tax revenue, in order to “replicate to the extent possible” revenue that would have been received if the combined employee/employer payroll tax rates had remained at 12.4 percent for OASDI (10.6 percent for OASI and 1.8 percent for DI).

e
Section 833 of the Bipartisan Budget Act of 2015 reallocated payroll tax rates on a temporary basis. For earnings in calendar years 2016 through 2018, 0.57 percentage point of the 12.40 percent OASDI payroll tax rate is reallocated from OASI to DI.

f
Subject to automatic adjustment based on increases in average wages.

7. Income From Taxation of Benefits
Under current law, the OASI and DI Trust Funds are credited with income tax revenue from the taxation of up to the first 50 percent of taxpayers’ OASI and DI benefit payments. (The HI Trust Fund receives the remainder of the income tax revenue from the taxation of up to 85 percent of taxpayers’ OASI and DI benefit payments.) Benefits are taxed for beneficiaries with “combined income” (adjusted gross income, plus half of benefits and all non-taxable interest) exceeding specified threshold amounts. The threshold amounts are $25,000 for single filers, $32,000 for joint filers, and $0 for those married but filing separately.
For the short-range period, the Office of the Chief Actuary estimates the income to the trust funds from taxation of benefits by applying the following two factors (projected by the Office of Tax Analysis, Department of the Treasury) to total OASI and DI scheduled benefits: (1) the percentage of taxpayers’ scheduled benefits (limited to 50 percent) that is taxable and (2) the average marginal tax rate applicable to those benefits.
For the long-range period, the office estimates the income to the trust funds from taxation of benefits by applying projected ratios of taxation of OASI and DI benefits to total OASI and DI scheduled benefits. The income thresholds used for benefit taxation are, by law, constant in the future, while income and benefit levels continue to rise. Accordingly, projected ratios of income from taxation of benefits to the amount of benefits increase gradually. Ultimate tax ratios for OASI and DI benefits used in the projection rely on estimates from the Office of Tax Analysis in the Department of the Treasury.
8. Average Benefits
Projections of average benefits for each benefit type reflect recent historical averages, projected average primary insurance amounts (PIAs), and projected ratios of average benefits to average PIAs. Calculations of average PIAs are based on projected distributions of beneficiaries by duration from year of initial entitlement, average PIAs at initial entitlement, and increases in PIAs after initial entitlement. Projected increases in average PIAs after initial entitlement depend on automatic benefit increases, recomputations to reflect additional covered earnings, and differences in mortality by level of lifetime earnings. Calculations of future average PIAs at initial entitlement are based on projected earnings histories, which in turn reflect a combination of the actual earnings histories associated with a sample of 2015 initial entitlements and more recent actual earnings levels by age and sex for covered workers.
For retired-worker, aged-spouse, and aged-widow(er) benefits, the percentage of the PIA that is payable depends on the age at initial entitlement to benefits. Projected ratios of average benefits to average PIAs for these types of benefits are based on projections of age distributions at initial entitlement.
9. Scheduled Benefits
For each type of benefit, scheduled benefits are the product of the number of beneficiaries and the corresponding average monthly benefit. The short-range model calculates scheduled benefits on a quarterly basis. The long-range model calculates all scheduled benefits on an annual basis, using the number of beneficiaries at the beginning and end of the year. Adjustments to these annual scheduled benefits include retroactive payments to newly awarded beneficiaries and other amounts not reflected in the regular monthly scheduled benefits.
Scheduled lump-sum death benefits are estimated as the product of: (1) the number of lump-sum death payments projected on the basis of the assumed death rates, the projected fully insured population, and the estimated percentage of the fully insured population that will qualify for lump-sum death payments; and (2) the amount of the lump-sum death payment, which is $255 (unindexed since 1973).
10. Illustrative Scheduled Benefit Amounts
Table V.C7 shows, under the intermediate assumptions, future benefit amounts payable upon retirement at the normal retirement age and at age 65, for various hypothetical workers attaining age 65 in 2019 and subsequent years. The illustrative benefit amounts in table V.C7 are presented in CPI-indexed 2019 dollars—that is, adjusted to 2019 levels by the CPI indexing series shown in table VI.G6. As a point of comparison, table V.C7 also shows the national average wage index (AWI) for 2019 and subsequent years in CPI-indexed 2019 dollars.
The normal retirement age was 65 for individuals who reached age 62 before 2000. It increased to age 66 during the period 2000 through 2005, at a rate of 2 months per year as workers attained age 62. Under current law, the normal retirement age increases to age 67 during the period 2017 through 2022, also by 2 months per year as workers attain age 62. The illustrative benefit amounts shown in table V.C7 for retirees at age 65 are lower than the amounts shown for retirees at normal retirement age because the statute requires an actuarial reduction for monthly benefits taken before normal retirement age to reflect the expected additional years benefits will be collected. For example, those who collect benefits starting in 2027 at age 65 will receive benefits for two more years than if they instead claim benefits at the normal retirement age (age 67) unless they die between the ages of 65 and 67.
Table V.C7 shows five different pre-retirement earnings patterns. Four of these patterns assume the earnings history of workers with scaled-earnings patterns9 and reflect very low, low, medium, and high career-average levels of pre-retirement earnings starting at age 21. The fifth pattern assumes the earnings history of a steady maximum earner starting at age 22. The four scaled-earnings patterns derive from earnings experienced by insured workers during 1996‑2015. These earnings levels differ by age. The career-average level of earnings for each scaled case targets a percent of the AWI.
For the scaled medium earner, the career-average earnings level is about equal to the AWI (or $53,864 for 2019). For the scaled very low, low, and high earners, the career-average earnings level is about 25 percent, 45 percent, and 160 percent of the AWI, respectively (or $13,466, $24,239, and $86,182, respectively, for 2019). The steady maximum earner has earnings at or above the contribution and benefit base for each year starting at age 22 through the year prior to retirement (or $132,900 for 2019).
Table V.C7.—Annual Scheduled Benefit Amounts for Retired Workers
With Various Pre-Retirement Earnings Patterns
Based on Intermediate Assumptions, Calendar Years 2019-2095 
 
 
 
Benefits in 2019 dollarsa with retirement at normal retirement age
 
Year attain age 65b
Age at retirement
Scaled very low earningsc
Scaled low earningsd
Scaled medium earningse
Scaled high earningsf
Steady maximum earningsg
National Average Wage Index in 2019 dollarsh
 
2019
66:0
$10,125
$13,243
$21,843
$28,934
$35,355
$53,864
 
2020
66:2
10,451
13,671
22,545
29,867
36,513
54,951
 
2025
67:0
10,917
14,294
23,586
31,212
38,428
59,454
 
2030
67:0
11,807
15,466
25,516
33,757
41,601
63,817
 
2035
67:0
12,672
16,595
27,366
36,220
44,642
67,950
 
2040
67:0
13,497
17,668
29,133
38,560
47,493
72,155
 
2045
67:0
14,327
18,756
30,933
40,947
50,445
76,437
 
2050
67:0
15,183
19,873
32,773
43,384
53,389
81,136
 
2055
67:0
16,119
21,097
34,796
46,051
56,568
86,237
 
2060
67:0
17,129
22,424
36,984
48,949
60,058
91,656
 
2065
67:0
18,208
23,833
39,305
52,024
63,786
97,297
 
2070
67:0
19,327
25,299
41,721
55,221
67,711
103,121
 
2075
67:0
20,486
26,812
44,216
58,527
71,769
109,179
 
2080
67:0
21,688
28,386
46,813
61,963
75,991
115,493
 
2085
67:0
22,942
30,028
49,517
65,543
80,390
122,122
 
2090
67:0
24,258
31,753
52,360
69,308
85,012
129,158
 
2095
67:0
25,657
33,584
55,380
73,302
89,920
136,637
 
 
 
 
 
 
 
 
 
 
 
 
Benefits in 2019 dollarsa with retirement at age 65
 
 
2019
65:0
9,518
12,451
20,538
27,208
33,134
53,864
 
2020
65:0
9,621
12,598
20,766
27,515
33,539
54,951
 
2025
65:0
9,461
12,378
20,427
27,034
33,043
59,454
 
2030
65:0
10,234
13,398
22,092
29,244
35,789
63,817
 
2035
65:0
10,979
14,375
23,705
31,382
38,423
67,950
 
2040
65:0
11,691
15,302
25,240
33,416
40,878
72,155
 
2045
65:0
12,416
16,253
26,801
35,480
43,425
76,437
 
2050
65:0
13,156
17,220
28,396
37,592
45,958
81,136
 
2055
65:0
13,963
18,281
30,144
39,902
48,692
86,237
 
2060
65:0
14,845
19,429
32,041
42,412
51,700
91,656
 
2065
65:0
15,778
20,651
34,055
45,078
54,912
97,297
 
2070
65:0
16,748
21,920
36,145
47,850
58,296
103,121
 
2075
65:0
17,749
23,233
38,309
50,714
61,792
109,179
 
2080
65:0
18,792
24,597
40,560
53,692
65,428
115,493
 
2085
65:0
19,880
26,020
42,904
56,796
69,217
122,122
 
2090
65:0
21,022
27,513
45,367
60,058
73,195
129,158
 
2095
65:0
22,233
29,099
47,982
63,519
77,422
136,637
a
Annual amounts are the total for the 12-month period starting with the month of retirement, adjusted to be in 2019 dollars by using the CPI indexing series from table VI.G6.

b
Attains age 65 on January 1 of the year.

c
Career-average earnings at about 25 percent of the AWI.

d
Career-average earnings at about 45 percent of the AWI.

e
Career-average earnings at about 100 percent of the AWI. Such a worker would have career-average earnings at approximately the 56th percentile of all new retired-worker beneficiaries.

f
Career-average earnings at about 160 percent of the AWI.

g
Earnings for each year at or above the contribution and benefit base.

h
Average Wage Index from table VI.G6, adjusted to be in 2019 dollars by using the CPI indexing series from table VI.G6.
Note: Benefits shown at age 65 reflect adjustments for early retirement. For early retirement as early as age 62, the benefit amount is reduced 5/9 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month. For example, if the number of reduction months is 60 (the maximum number for retirement at 62 when normal retirement age is 67), then the benefit is reduced by 30 percent. Delayed retirement credit is generally given for retirement after the normal retirement age. The delayed retirement credit is 2/3 of one percent per month for persons born in 1943 and later. No credit is given for delaying benefits after attaining age 70. See table V.C3 for additional details, including adjustments applying to other birth years.

11. Administrative Expenses
The projection of administrative expenses through the short-range period is based on historical experience and the projected growth in average wages. The Office of Budget of the Social Security Administration provides estimates for the first several years of the projection. For years after the short-range period, projected administrative expenses reflect increases in the number of beneficiaries in current-payment status, and increases in the average wage. However, the increases in average wage are partially offset by assumed administrative productivity gains.
12. Railroad Retirement Financial Interchange
Railroad workers are covered under a separate multi-tiered benefit plan, with a first tier of coverage similar to OASDI coverage. An annual financial interchange between the Railroad Retirement fund and the OASI and DI Trust Funds is made to resolve the difference between: (1) the amount of OASDI benefits that would be paid to railroad workers and their families if railroad employment had been covered under the OASDI program, plus administrative expenses associated with these benefits; and (2) the amount of OASDI payroll tax and income tax that would be received with allowances for interest from railroad workers.
Calculation of the financial interchange with the Railroad Retirement reflects trends similar to those used in estimating the cost of OASDI benefits. The annual short-range net cost for the OASI and DI Trust Funds is about $5‑$6 billion and the long-range summarized net cost for the OASI and DI Trust Funds is 0.05 percent of taxable payroll.
 
1
The Federal Register publishes details of these indexation procedures annually. Also see
www.ssa.gov/OACT/COLA/.

2
For those under age 16, projected covered employment is the sum of age-sex components, each of which is projected as a ratio to the Social Security area population.

3
Age-adjusted covered-worker rates are adjusted to the 2011 age distribution of the Social Security area population.

4
The exposed population is the fully insured population age 62 and over, excluding persons entitled to or converted from disabled-worker benefits and fully insured persons entitled only to widow(er) benefits.

5
The disability-exposed population excludes those receiving benefits, while the disability insured population includes them. Section V.C.3 of this report describes the projection of the disability insured population.

6
Projected incidence rates are adjusted upward to account for additional workers who are expected to file for disability benefits (rather than retirement benefits) in response to reductions in retirement benefits as the normal retirement age rises.

7
Generally, the higher the amount of liability, the sooner the taxes must be paid. For smaller employers, payment is due by the middle of the month following when the liability was incurred. Medium-size employers have three banking days in which to make their deposits. Larger employers must make payment on the next business day after paying their employees.

8
Table VI.G1 shows the payroll tax contribution rates for the Hospital Insurance (HI) program.

9
Actuarial Note 2019.3 has more details on scaled-earnings patterns.
See www.ssa.gov/OACT/NOTES/ran3/.

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