2002 OASDI Trustees Report
Contents Previous Next Index

 

3. Estimates in Dollars

This section presents long-range projections in dollars of the operations of the combined OASI and DI Trust Funds and in some cases the HI Trust Fund. It provides the means to track the progress of the funds during the projection period. Meaningful comparison of current dollar values over long periods of time can be difficult because of the tendency toward inflation. Some means of removing inflation is thus generally desirable. Several economic series, or indices, are provided to allow current dollars to be adjusted for changes in prices, wages, and certain other aspects of economic growth during the projection period.

The selection of a particular index for adjustment of current dollars depends upon the analyst's decision as to which index provides the most useful standard for adjusting dollar amounts, over time, to create values that are appropriately comparable. Table VI.E7 presents five such indices for adjustment. Adjustment of any series of values is accomplished by dividing the value for each year by the corresponding index values for the year. This adjustment removes the inflation in the index from the series of values.

One of the most common forms of standardization is based on some measure of change in the prices of consumer goods. One such price index is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W, hereafter referred to as CPI) which is published by the Bureau of Labor Statistics, Department of Labor. This is the index used to determine annual increases in OASDI monthly benefits payable after the year of initial eligibility. The CPI is assumed to increase ultimately at annual rates of 2.0, 3.0, and 4.0 percent for the low cost, intermediate, and high cost sets of assumptions, respectively. Constant-dollar values (those adjusted by dividing by the CPI) indicate the relative purchasing power of the values over time. Constant-dollar values are provided in table VI.E8.

Another type of standardization combines the effects of price inflation and real-wage growth. The wage index presented here is the SSA average wage index, as defined in section 215(i)(1)(G) of the Social Security Act. This index is used to make annual adjustments to many earnings-related quantities embodied in the Social Security Act, such as the contribution and benefit base. The average annual wage is assumed to increase ultimately by 3.6, 4.1, and 4.6 percent under the low cost, intermediate, and high cost assumptions, respectively. Wage-indexed values indicate the level of a series relative to the standard-of-living of workers over time.

The taxable payroll index adjusts for the effects of changes in the number of workers and changes in the proportion of earnings that are taxable, as well as for the effects of price inflation and real-wage growth. The OASDI taxable payroll consists of all earnings subject to OASDI taxation, adjusted for the lower effective tax rate on multiple-employer excess wages, and including deemed wage credits for military service through calendar year 2001. Values adjusted by dividing by the taxable payroll indicate the percentage of payroll that each value represents, and thus the extent to which the series of values increases or decreases as a percent of payroll over time.

The GDP index adjusts for the growth in the aggregate amount of goods and services produced in the United States. Values adjusted by GDP (see appendix VI.E.2) indicate their relative share of the total output of the economy. No explicit assumptions are made about growth in taxable payroll or GDP. These series are computed reflecting the other more basic demographic and economic assumptions, as discussed in sections V.A and V.B, respectively.

Discounting at the rate of interest is another way of adjusting current dollars. The series of interest-rate factors included here is based on the average of the assumed annual interest rates for special public-debt obligations issuable to the trust funds for each year. This series is slightly different from the interest rates used to create summarized values elsewhere in this report, where the actual yield on currently-held trust fund assets is used for each year. Ultimate nominal interest rates, which, in practice, are compounded semiannually, are assumed to be approximately 5.7, 6.0, and 6.2 percent for the low cost, intermediate, and high cost assumptions, respectively.

Table VI.E7.—Selected Economic Variables, Calendar Years 2001-80 
[GDP and taxable payroll in billions]
Calendar year
  Adjusted
CPI 1
  SSA average
wage index 2
  Taxable
payroll 3
  Gross
domestic
product
  Compound
interest-rate
factor 4
Intermediate:
2001
98.75
$33,896.77
$4,183
$10,197
0.9497
2002
100.00
34,943.24
4,290
10,430
1.0000
2003
102.52
36,608.64
4,537
11,039
1.0630
2004
105.34
38,115.60
4,770
11,681
1.1312
2005
108.44
39,664.00
5,022
12,356
1.2045
2006
111.69
41,286.14
5,286
13,068
1.2825
2007
115.04
42,963.22
5,557
13,814
1.3647
2008
118.50
44,667.24
5,840
14,550
1.4489
2009
122.04
46,445.75
6,125
15,298
1.5371
2010
125.71
48,302.26
6,419
16,070
1.6307
2011
129.48
50,255.81
6,723
16,869
1.7300





2015
145.73
58,956.33
8,053
20,337
2.1915
2020
168.94
71,914.19
10,025
25,539
2.9452
2025
195.84
87,859.47
12,444
32,000
3.9581
2030
227.04
107,472.90
15,470
40,167
5.3194
2035
263.20
131,619.33
19,286
50,558
7.1488
2040
305.12
161,247.40
24,047
63,631
9.6074
2045
353.71
197,388.52
29,895
79,850
12.9116
2050
410.05
241,309.55
37,059
99,927
17.3521
2055
475.36
294,849.13
45,870
124,867
23.3198
2060
551.08
360,315.78
56,744
155,943
31.3398
2065
638.85
440,389.00
70,148
194,622
42.1181
2070
740.60
538,344.62
86,626
242,640
56.6032
2075
858.56
658,055.86
106,886
302,252
76.0699
2080
995.30
804,328.88
131,822
376,333
102.2316
Low Cost:
2001
98.85
33,904.11
4,188
10,201
.9497
2002
100.00
35,156.59
4,331
10,518
1.0000
2003
101.99
36,756.79
4,595
11,158
1.0626
2004
104.03
38,180.33
4,849
11,812
1.1287
2005
106.12
39,451.58
5,087
12,405
1.1948
2006
108.23
40,726.90
5,318
13,011
1.2639
2007
110.41
42,045.76
5,554
13,644
1.3371
2008
112.61
43,450.05
5,812
14,306
1.4145
2009
114.86
44,953.78
6,079
14,987
1.4964
2010
117.16
46,516.32
6,353
15,674
1.5831
2011
119.50
48,161.21
6,630
16,375
1.6747





2015
129.35
55,416.75
7,831
19,403
2.0976
2020
142.82
65,964.85
9,568
23,814
2.7793
2025
157.68
78,597.57
11,658
29,164
3.6827
2030
174.09
93,752.48
14,252
35,841
4.8796
2035
192.21
111,985.25
17,522
44,287
6.4655
2040
212.22
133,843.26
21,602
54,858
8.5668
2045
234.31
159,892.99
26,626
67,926
11.3511
2050
258.69
190,891.25
32,777
84,000
15.0403
2055
285.62
227,842.74
40,343
103,857
19.9285
2060
315.34
271,991.28
49,694
128,498
26.4055
2065
348.17
324,747.36
61,256
159,096
34.9875
2070
384.40
387,792.85
75,479
196,904
46.3587
2075
424.41
463,021.67
92,933
243,512
61.4258
2080
468.59
552,760.43
114,332
300,918
81.3897
High Cost:
2001
98.57
33,844.16
4,173
10,175
.9497
2002
100.00
34,680.32
4,242
10,337
1.0000
2003
103.21
36,540.65
4,507
11,007
1.0715
2004
107.94
38,473.52
4,776
11,785
1.1581
2005
114.24
40,109.22
5,005
12,432
1.2495
2006
120.82
42,345.82
5,283
13,289
1.3538
2007
126.72
45,019.34
5,668
14,369
1.4666
2008
131.97
47,106.05
5,999
15,225
1.5660
2009
137.23
49,131.97
6,322
16,044
1.6658
2010
142.73
51,287.13
6,646
16,926
1.7708
2011
148.44
53,589.77
6,987
17,868
1.8824





2015
173.65
64,095.61
8,496
21,947
2.4040
2020
211.27
80,124.82
10,792
28,249
3.2636
2025
257.05
100,377.02
13,668
36,275
4.4305
2030
312.74
125,916.23
17,303
46,575
6.0148
2035
380.49
158,073.56
21,898
59,780
8.1655
2040
462.93
198,439.87
27,630
76,492
11.0852
2045
563.22
248,835.59
34,648
97,287
15.0489
2050
685.25
311,410.10
43,231
123,144
20.4299
2055
833.71
389,373.20
53,759
155,364
27.7351
2060
1,014.33
486,848.75
66,702
195,584
37.6523
2065
1,234.09
608,798.10
82,547
245,593
51.1156
2070
1,501.46
761,485.40
101,943
307,748
69.3930
2075
1,826.75
952,569.43
125,730
385,126
94.2058
2080
2,222.52
1,191,830.86
155,018
481,802
127.8910

1 The CPI used to adjust OASDI benefits is the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI), as defined by the Bureau of Labor Statistics, Department of Labor. The values shown are adjusted by dividing the calendar-year annual average CPI by the analogous value for 2002, and multiplying the result by 100, thereby initializing the CPI at 100 for 2002.

2 The "SSA average wage index" is defined in section 215(i)(1)(G) of the Social Security Act; it is used in the calculations of initial benefits and the automatic adjustment of the contribution and benefit base and other wage-indexed program amounts.

3 Taxable payroll consists of total earnings subject to OASDI contribution rates, adjusted to include deemed wages based on military service through calendar year 2001 and to reflect the lower effective contribution rates (compared to the combined employee-employer rate) which apply to multiple-employer "excess wages."

4 The compound interest-rate factor is based on the average of the assumed annual interest rates for special public-debt obligations issuable to the trust funds in the 12 months of the year, under each alternative.


Table VI.E8 shows estimated operations of the combined OASI and DI Trust Funds in constant 2002 dollars (i.e., adjusted by the CPI indexing series as discussed above). Items included in the table are: income excluding interest, interest income, total income, total outgo, and assets at the end of the year. Income excluding interest consists of payroll-tax contributions, income from taxation of benefits, and miscellaneous reimbursements from the General Fund of the Treasury. Outgo consists of benefit payments, administrative expenses, net transfers from the OASI and DI Trust Funds to the Railroad Retirement program under the financial-interchange provisions, and payments for vocational rehabilitation services for disabled beneficiaries. These estimates are based on the low cost, intermediate, and high cost sets of assumptions.

Table VI.E8.—Operations of the Combined OASI and DI Trust Funds,
in Constant 2002 Dollars,1 Calendar Years 2002-80 
[In billions]
Calendar year
  Income
excluding
interest
  Interest
income
  Total
income
  Outgo
  Assets at
end of year
Intermediate:
2002
$544.8
$79.6
$624.4
$465.2
$1,371.8
2003
561.2
86.6
647.8
464.9
1,520.9
2004
574.4
96.0
670.4
473.7
1,677.0
2005
588.1
105.8
693.9
484.5
1,838.5
2006
600.2
116.0
716.1
496.8
2,004.3
2007
614.0
126.3
740.3
510.7
2,175.6
2008
626.5
136.4
762.9
526.2
2,348.8
2009
638.7
146.1
784.8
544.2
2,521.2
2010
650.8
155.6
806.4
563.5
2,690.5
2011
664.6
165.1
829.7
584.0
2,857.9





2015
711.4
198.4
909.8
683.1
3,445.5
2020
770.6
223.4
993.9
844.7
3,838.2
2025
831.9
218.0
1,049.9
1,017.6
3,686.3
2030
897.8
178.8
1,076.7
1,174.6
2,956.2
2035
969.0
109.7
1,078.6
1,301.8
1,721.6
2040 2
1,043.4
17.2
1,060.5
1,400.5
96.3
Low Cost:
2002
549.8
80.2
630.1
464.0
1,378.6
2003
571.1
88.6
659.7
464.2
1,547.2
2004
590.8
99.1
689.9
472.0
1,734.8
2005
608.3
109.5
717.8
482.2
1,936.4
2006
622.7
119.9
742.6
493.4
2,147.7
2007
638.9
130.9
769.8
506.2
2,369.1
2008
655.4
142.6
798.0
520.7
2,599.9
2009
672.7
154.8
827.5
537.7
2,838.9
2010
689.9
167.5
857.4
556.1
3,084.5
2011
708.6
180.6
889.2
575.8
3,337.4





2015
776.7
236.8
1,013.5
677.7
4,365.0
2020
865.9
302.6
1,168.4
851.2
5,531.9
2025
962.0
353.3
1,315.3
1,041.6
6,410.1
2030
1,070.2
387.8
1,458.0
1,221.2
7,004.3
2035
1,194.0
413.6
1,607.6
1,372.7
7,458.7
2040
1,332.8
442.8
1,775.6
1,497.3
7,997.7
2045
1,487.0
483.7
1,970.6
1,634.4
8,751.3
2050
1,657.8
536.0
2,193.8
1,800.8
9,709.1
2055
1,848.9
597.6
2,446.5
2,006.2
10,825.3
2060
2,063.6
666.0
2,729.6
2,238.8
12,063.6
2065
2,304.4
743.2
3,047.5
2,495.4
13,463.8
2070
2,572.3
830.0
3,402.4
2,785.5
15,037.7
2075
2,869.5
926.0
3,795.6
3,115.4
16,773.0
2080
3,198.9
1,029.0
4,227.9
3,492.3
18,627.2
High Cost:
2002
539.0
79.5
618.6
467.7
1,363.4
2003
554.0
87.3
641.3
466.6
1,495.8
2004
561.5
98.2
659.8
472.5
1,617.6
2005
557.2
108.6
665.8
480.8
1,713.3
2006
554.8
117.2
672.0
495.2
1,796.8
2007
569.6
128.6
698.2
513.5
1,897.9
2008
579.2
135.7
714.9
532.4
2,004.9
2009
587.6
140.2
727.8
550.6
2,105.1
2010
595.1
144.2
739.3
569.4
2,194.0
2011
604.4
147.8
752.1
589.1
2,272.6





2015
632.5
148.5
781.1
677.3
2,429.2
2020
667.0
131.9
798.9
819.0
2,140.7
2025 2
701.2
79.8
781.0
969.5
1,198.9

1 The adjustment from current to constant dollars is by the CPI indexing series shown in table VI.E7.

2 Estimates for later years are not shown because the combined OASI and DI Trust Funds are estimated to become exhausted in 2041 under the intermediate assumptions and in 2029 under the high cost assumptions.

Note: Totals do not necessarily equal the sums of rounded components.


Figure VI.E1 provides a comparison of annual outgo with total annual income (including interest) and annual income excluding interest, for the OASDI program under intermediate assumptions. All values are expressed in constant dollars, as shown in table VI.E8. The difference between the income values for each year is equal to the trust fund interest earnings. Thus the figure illustrates the fact that, under intermediate assumptions, combined OASDI expenditures will be payable from (1) current tax income alone through 2016, (2) current tax income plus amounts from the trust funds that are less than annual interest income for years 2017 through 2026, and (3) current tax income plus amounts from the trust funds that are greater than annual interest income for years 2027 through 2040, i.e., through the year preceding the year of trust fund exhaustion.

Figure VI.E1.—Estimated OASDI Income and Outgo in Constant Dollars,
Based on Alternative II
[In billions]
A comparison of annual outgo with total annual income (including interest) and annual income excluding interest, for the OASDI program under the intermediate assumptions. All values are expressed in constant dollars, as shown in table VI.E8.


Table VI.E9 shows estimated operations of the combined OASI and DI Trust Funds in current dollars-that is in dollars unadjusted for price inflation. Items included in the table are: income excluding interest, interest income, total income, total outgo, and assets at the end of the year. These estimates, based on the low cost, intermediate, and high cost sets of demographic and economic assumptions, are presented to facilitate independent analysis.

Table VI.E9.—Operations of the Combined OASI and DI Trust Funds,
in Current Dollars, Calendar Years 2002-80 
[In billions]
Calendar year
  Income
excluding
interest
  Interest
income
  Total
income
  Outgo
  Assets at
end of year
Intermediate:
2002
$544.8
$79.6
$624.4
$465.2
$1,371.8
2003
575.4
88.8
664.2
476.6
1,559.4
2004
605.1
101.1
706.3
499.0
1,766.6
2005
637.7
114.7
752.5
525.4
1,993.7
2006
670.3
129.6
799.9
554.9
2,238.7
2007
706.3
145.3
851.7
587.5
2,502.9
2008
742.4
161.7
904.1
623.6
2,783.4
2009
779.5
178.3
957.8
664.2
3,077.0
2010
818.2
195.6
1,013.7
708.4
3,382.3
2011
860.6
213.8
1,074.3
756.2
3,700.4





2015
1,036.7
289.1
1,325.9
995.5
5,021.1
2020
1,301.8
377.4
1,679.2
1,427.1
6,484.2
2025
1,629.3
426.9
2,056.3
1,992.9
7,219.6
2030
2,038.4
406.0
2,444.5
2,666.8
6,711.7
2035
2,550.4
288.7
2,839.0
3,426.4
4,531.4
2040 1
3,183.6
52.4
3,236.0
4,273.4
294.0
Low Cost:
2002
549.8
80.2
630.1
464.0
1,378.6
2003
582.5
90.4
672.9
473.4
1,578.1
2004
614.7
103.1
717.8
491.1
1,804.7
2005
645.6
116.2
761.7
511.6
2,054.8
2006
673.9
129.8
803.7
534.0
2,324.5
2007
705.4
144.5
849.9
558.8
2,615.6
2008
738.0
160.6
898.7
586.4
2,927.9
2009
772.6
177.8
950.5
617.6
3,260.8
2010
808.3
196.2
1,004.5
651.5
3,613.8
2011
846.8
215.9
1,062.7
688.1
3,988.3
.





2015
1,004.7
306.3
1,311.0
876.7
5,646.4
2020
1,236.6
432.1
1,668.7
1,215.7
7,900.6
2025
1,516.9
557.0
2,074.0
1,642.5
10,107.6
2030
1,863.2
675.2
2,538.4
2,126.0
12,194.0
2035
2,295.0
794.9
3,089.9
2,638.5
14,336.7
2040
2,828.4
939.7
3,768.1
3,177.5
16,972.7
2045
3,484.1
1,133.2
4,617.4
3,829.6
20,505.0
2050
4,288.6
1,386.7
5,675.3
4,658.7
25,116.9
2055
5,280.8
1,706.9
6,987.7
5,730.2
30,919.3
2060
6,507.5
2,100.1
8,607.6
7,060.0
38,042.2
2065
8,023.2
2,587.4
10,610.6
8,688.2
46,876.8
2070
9,888.3
3,190.7
13,078.9
10,707.6
57,806.1
2075
12,178.7
3,930.2
16,109.0
13,222.3
71,187.5
2080
14,989.9
4,821.6
19,811.5
16,364.7
87,285.2
High Cost:
2002
539.0
79.5
618.6
467.7
1,363.4
2003
571.8
90.1
661.8
481.5
1,543.7
2004
606.1
106.0
712.1
509.9
1,745.9
2005
636.5
124.1
760.6
549.2
1,957.3
2006
670.3
141.6
811.9
598.3
2,170.9
2007
721.8
163.0
884.7
650.7
2,405.0
2008
764.4
179.1
943.5
702.6
2,645.8
2009
806.4
192.4
998.8
755.7
2,888.9
2010
849.3
205.9
1,055.2
812.7
3,131.4
2011
897.2
219.3
1,116.5
874.4
3,373.4





2015
1,098.4
257.9
1,356.3
1,176.1
4,218.4
2020
1,409.1
278.8
1,687.9
1,730.2
4,522.7
2025 1
1,802.4
205.0
2,007.4
2,492.1
3,081.9

1 Estimates for later years are not shown because the combined OASI and DI Trust Funds are estimated to become exhausted in 2041 under the intermediate assumptions and in 2029 under the high cost assumptions.

Note: Totals do not necessarily equal the sums of rounded components.


Table VI.E10 shows, in current dollars, estimated income (excluding interest) and estimated total outgo (excluding the cost of accumulating target trust fund balances) of the combined OASI and DI Trust Funds, of the HI Trust Fund, and of the combined OASI, DI, and HI Trust Funds, based on the low cost, intermediate, and high cost sets of assumptions described earlier in this report. For OASDI, income excluding interest consists of payroll-tax contributions, proceeds from taxation of OASDI benefits, and miscellaneous transfers from the General Fund of the Treasury. Outgo consists of benefit payments, administrative expenses, net transfers from the trust funds to the Railroad Retirement program, and payments for vocational rehabilitation services for disabled beneficiaries. For HI, income excluding interest consists of payroll-tax contributions (including contributions from railroad employment) and proceeds from the taxation of OASDI benefits. Total outgo consists of outlays (benefits and administrative expenses) for insured beneficiaries. Income and outgo estimates are shown on a cash basis for the OASDI program and on an incurred basis for the HI program.

Table VI.E10 also shows the difference between income excluding interest and outgo, which is called the balance. The balance indicates the size of the net cash flow from tax income and expenditures to the funds.

Table VI.E10.—OASDI and HI Annual Income Excluding Interest, Outgo, and
Balance in Current Dollars, Calendar Years 2002-80 
[In billions]
Calendar
year
OASDI

HI

Combined
  Income
excluding
interest
  Outgo
  Balance
  Income
excluding
interest
  Outgo
  Balance
  Income
excluding
interest
  Outgo
  Balance
Intermediate:
2002
$545
$465
$80

$165
$148
$17

$710
$613
$97
2003
575
477
99

174
151
23

750
627
122
2004
605
499
106

184
159
25

789
658
131
2005
638
525
112

194
168
25

832
694
138
2006
670
555
115

204
178
26

874
733
141
2007
706
587
119

215
189
26

922
776
145
2008
742
624
119

227
201
26

969
825
145
2009
780
664
115

239
214
25

1,019
878
141
2010
818
708
110

252
228
24

1,070
936
134
2011
861
756
104

266
243
23

1,127
999
127











2015
1,037
996
41

322
318
4

1,359
1,314
45
2020
1,302
1,427
-125

408
456
-48

1,710
1,883
-173
2025
1,629
1,993
-364

515
660
-144

2,145
2,653
-508
2030
2,038
2,667
-628

649
958
-309

2,687
3,625
-937
2035
2,550
3,426
-876

815
1,363
-548

3,365
4,789
-1,424
2040
3,184
4,273
-1,090

1,018
1,882
-863

4,202
6,155
-1,953
2045
3,961
5,315
-1,355

1,267
2,536
-1,269

5,228
7,852
-2,623
2050
4,915
6,641
-1,726

1,574
3,361
-1,787

6,490
10,002
-3,513
2055
6,094
8,367
-2,272

1,956
4,439
-2,483

8,050
12,805
-4,755
2060
7,553
10,555
-3,002

2,429
5,910
-3,480

9,983
16,464
-6,482
2065
9,355
13,314
-3,959

3,015
7,937
-4,923

12,370
21,251
-8,882
2070
11,574
16,789
-5,215

3,738
10,705
-6,967

15,312
27,494
-12,182
2075
14,305
21,123
-6,818

4,629
14,383
-9,755

18,934
35,507
-16,572
2080
17,670
26,512
-8,841

5,728
19,270
-13,543

23,398
45,782
-22,384
Low Cost:
2002
550
464
86

166
144
22

716
608
108
2003
582
473
109

176
145
31

759
619
140
2004
615
491
124

186
150
35

801
642
159
2005
646
512
134

195
155
40

840
667
173
2006
674
534
140

204
160
43

878
694
183
2007
705
559
147

213
166
48

919
724
194
2008
738
586
152

224
172
52

962
759
203
2009
773
618
155

235
179
56

1,007
797
211
2010
808
652
157

246
187
60

1,054
838
216
2011
847
688
159

259
195
64

1,106
883
223











2015
1,005
877
128

309
233
75

1,313
1,110
203
2020
1,237
1,216
21

383
298
85

1,619
1,514
105
2025
1,517
1,642
-126

473
385
88

1,990
2,027
-38
2030
1,863
2,126
-263

583
500
84

2,447
2,626
-179
2035
2,295
2,639
-344

720
650
70

3,015
3,289
-273
2040
2,828
3,177
-349

887
840
47

3,715
4,017
-302
2045
3,484
3,830
-345

1,091
1,084
7

4,576
4,914
-338
2050
4,289
4,659
-370

1,343
1,408
-65

5,632
6,067
-435
2055
5,281
5,730
-449

1,654
1,849
-195

6,935
7,579
-644
2060
6,507
7,060
-552

2,040
2,450
-411

8,547
9,510
-963
2065
8,023
8,688
-665

2,515
3,281
-765

10,538
11,969
-1,431
2070
9,888
10,708
-819

3,101
4,415
-1,315

12,989
15,123
-2,134
2075
12,179
13,222
-1,044

3,820
5,918
-2,097

15,999
19,140
-3,141
2080
14,990
16,365
-1,375

4,704
7,907
-3,202

19,694
24,271
-4,577
High Cost:
2002
539
468
71

163
151
12

702
619
83
2003
572
482
90

174
158
16

745
640
106
2004
606
510
96

185
171
14

791
681
110
2005
637
549
87

195
184
10

831
734
97
2006
670
598
72

206
200
6

876
799
78
2007
722
651
71

223
220
3

945
870
74
2008
764
703
62

237
240
-4

1,001
943
58
2009
806
756
51

250
261
-11

1,056
1,017
39
2010
849
813
37

264
284
-20

1,113
1,097
16
2011
897
874
23

281
311
-30

1,178
1,185
-7











2015
1,098
1,176
-78

346
446
-100

1,444
1,622
-178
2020
1,409
1,730
-321

448
716
-268

1,857
2,446
-589
2025
1,802
2,492
-690

578
1,162
-583

2,381
3,654
-1,273
2030
2,301
3,449
-1,149

745
1,886
-1,141

3,045
5,335
-2,290
2035
2,928
4,597
-1,669

953
2,934
-1,981

3,881
7,531
-3,650
2040
3,707
5,956
-2,249

1,211
4,331
-3,120

4,918
10,287
-5,369
2045
4,663
7,676
-3,013

1,527
6,092
-4,565

6,190
13,768
-7,578
2050
5,837
9,891
-4,053

1,918
8,234
-6,316

7,755
18,125
-10,369
2055
7,289
12,803
-5,515

2,405
10,927
-8,522

9,694
23,730
-14,037
2060
9,085
16,572
-7,487

3,011
14,594
-11,583

12,096
31,166
-19,070
2065
11,297
21,445
-10,148

3,764
19,627
-15,863

15,061
41,072
-26,011
2070
14,021
27,694
-13,673

4,696
26,479
-21,783

18,717
54,172
-35,456
2075
17,374
35,579
-18,206

5,848
35,569
-29,721

23,221
71,148
-47,927
2080
21,509
45,421
-23,912

7,272
47,649
-40,378

28,781
93,070
-64,290

Note: Totals do not necessarily equal the sums of rounded components.


Table VI.E11 shows projected future benefit amounts payable upon retirement at either the normal retirement age (NRA) or age 65, for workers attaining age 65 in 2002 and subsequent years. Illustrative benefit levels are shown for workers with four separate pre-retirement earnings patterns. All estimates are based on the intermediate assumptions in this report. The benefit amounts are shown in constant 2002 dollars (adjusted to 2002 levels by the CPI indexing series shown in table VI.E7). Benefit amounts are also shown as percentages of the general, career-average relative earnings level for each case, wage indexed up to the year prior to retirement. These percentages thus represent the benefit "replacement rate" of the career-average level of earnings.

The normal retirement age is 65 for individuals who reached age 62 before 2000 and is scheduled to increase to age 66 during the period 2000-05 (at a rate of 2 months per year as workers attain age 62) and to age 67 during the period 2017-22 (also by 2 months per year as workers attain age 62). Thus, for illustrative cases attaining age 65 after 2002, benefit levels shown for retirement at 65 are lower than the levels shown for retirement at NRA, primarily because of the actuarial reduction for "early" (pre-NRA) retirement.

Four different pre-retirement earnings patterns are represented in table VI.E11. Three of these patterns are for workers with scaled-earnings patterns,1 reflecting low, medium, and high career-average levels of pre-retirement earnings starting at age 21. The fourth case is the steady maximum earner. The three scaled-earnings cases have earnings patterns that reflect differences by age in the probability of work and in average earnings levels experienced by insured workers during the period 1989-98. The general, career-average level of earnings for the scaled cases is set relative to the SSA average wage indexing series (AWI) so that benefit levels are consistent with levels for "steady-earnings" cases that were shown in the 2000 and earlier Trustees' Reports. For the scaled medium earner, the general, career-average earnings level is about equal to the AWI. For the scaled low and high earners, the general, career-average earnings level is set at about 45 percent and 160 percent of the AWI, respectively. The steady maximum earner is assumed to have earnings at (or above) the OASDI contribution and benefit base for each year prior to retirement starting at age 22.

As noted above, the scaled-earnings cases were constructed so that their career-average earnings levels are consistent with the corresponding steady low, average, and high earners that were illustrated in the 2000 Trustees Report. As a result, values in this table for benefits under the present-law Social Security benefit formula are essentially comparable to those in earlier reports. Scaled-earnings cases are now generally being used instead of steady-earnings cases because they more accurately illustrate the differences in benefit levels under the wide variety of reform proposals considered in recent years.

Table VI.E11.—Estimated Annual Scheduled Benefit Amounts1 for Retired Workers
With Various Pre-Retirement Earnings Patterns Based on
Intermediate Assumptions, Calendar Years 2002-80 
Year attain age 65 2

Retirement at normal retirement age

Retirement at age 65

  Age at retirement
  Constant
2002
dollars 3
  Percent of earnings
  Age at retirement
  Constant
2002
dollars 3
  Percent of earnings
Scaled low earnings:4
2002

65:0
$8,181
53.6

65:0
$8,181
53.6
2005

65:6
8,695
54.7

65:0
8,398
53.1
2010

66:0
9,458
56.3

65:0
8,823
53.1
2015

66:0
9,938
56.2

65:0
9,271
53.0
2020

66:2
10,462
56.2

65:0
9,648
52.4
2025

67:0
11,012
55.6

65:0
9,545
49.2
2030

67:0
11,602
55.5

65:0
10,057
49.1
2035

67:0
12,244
55.4

65:0
10,613
49.1
2040

67:0
12,940
55.5

65:0
11,213
49.1
2045

67:0
13,672
55.5

65:0
11,849
49.1
2050

67:0
14,438
55.6

65:0
12,512
49.2
2055

67:0
15,228
55.6

65:0
13,197
49.2
2060

67:0
16,050
55.6

65:0
13,910
49.2
2065

67:0
16,919
55.6

65:0
14,663
49.2
2070

67:0
17,837
55.6

65:0
15,459
49.2
2075

67:0
18,810
55.6

65:0
16,301
49.2
2080

67:0
19,833
55.6

65:0
17,188
49.2
Scaled medium earnings:5
2002

65:0
13,526
39.9

65:0
13,526
39.9
2005

65:6
14,357
40.6

65:0
13,878
39.5
2010

66:0
15,618
41.9

65:0
14,575
39.4
2015

66:0
16,406
41.8

65:0
15,313
39.4
2020

66:2
17,278
41.7

65:0
15,929
38.9
2025

67:0
18,180
41.3

65:0
15,756
36.5
2030

67:0
19,159
41.2

65:0
16,606
36.5
2035

67:0
20,218
41.2

65:0
17,524
36.5
2040

67:0
21,361
41.2

65:0
18,511
36.5
2045

67:0
22,571
41.2

65:0
19,562
36.5
2050

67:0
23,834
41.3

65:0
20,656
36.5
2055

67:0
25,135
41.3

65:0
21,784
36.6
2060

67:0
26,494
41.3

65:0
22,960
36.6
2065

67:0
27,927
41.3

65:0
24,204
36.6
2070

67:0
29,444
41.3

65:0
25,518
36.5
2075

67:0
31,049
41.3

65:0
26,909
36.5
2080

67:0
32,739
41.3

65:0
28,374
36.5
Scaled high earnings:6
2002

65:0
17,635
32.5

65:0
17,635
32.5
2005

65:6
18,871
33.4

65:0
18,238
32.4
2010

66:0
20,644
34.6

65:0
19,264
32.6
2015

66:0
21,687
34.5

65:0
20,241
32.5
2020

66:2
22,836
34.5

65:0
21,057
32.2
2025

67:0
24,028
34.1

65:0
20,823
30.2
2030

67:0
25,322
34.1

65:0
21,942
30.2
2035

67:0
26,720
34.0

65:0
23,155
30.1
2040

67:0
28,229
34.0

65:0
24,464
30.1
2045

67:0
29,829
34.1

65:0
25,851
30.1
2050

67:0
31,499
34.1

65:0
27,298
30.2
2055

67:0
33,216
34.1

65:0
28,788
30.2
2060

67:0
35,011
34.1

65:0
30,343
30.2
2065

67:0
36,906
34.1

65:0
31,985
30.2
2070

67:0
38,912
34.1

65:0
33,724
30.2
2075

67:0
41,032
34.1

65:0
35,561
30.2
2080

67:0
43,265
34.1

65:0
37,496
30.2
Steady maximum earnings: 7
2002

65:0
$19,942
24.8

65:0
$19,942
24.8
2005

65:6
21,642
25.2

65:0
20,922
24.6
2010

66:0
24,491
26.9

65:0
22,670
25.1
2015

66:0
26,216
27.3

65:0
24,335
25.6
2020

66:2
27,731
27.4

65:0
25,478
25.5
2025

67:0
29,366
27.3

65:0
25,252
24.0
2030

67:0
30,975
27.4

65:0
26,651
24.0
2035

67:0
32,691
27.3

65:0
28,127
24.0
2040

67:0
34,495
27.3

65:0
29,680
24.0
2045

67:0
36,452
27.3

65:0
31,364
24.0
2050

67:0
38,485
27.3

65:0
33,116
24.0
2055

67:0
40,582
27.3

65:0
34,920
24.0
2060

67:0
42,772
27.3

65:0
36,806
24.0
2065

67:0
45,087
27.3

65:0
38,798
24.0
2070

67:0
47,537
27.3

65:0
40,905
24.0
2075

67:0
50,128
27.3

65:0
43,136
24.0
2080

67:0
52,857
27.3

65:0
45,485
24.0

1 Annual scheduled benefit amounts are the total for the 12-month period starting with the month of retirement.

2 Assumed to attain age 65 in January of the year.

3 The adjustment for constant dollars is made using the CPI indexing series shown in table VI.E7.

4 Career-average earnings at about 45 percent of the SSA average wage index (AWI).

5 Career-average earnings at about 100 percent of the AWI.

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

7 Earnings for each year equal to the OASDI contribution and benefit base.


1 More details are provided on the development of scaled-earnings patterns in the Social Security Administration Actuarial Note Number 144, located at the following internet web site: http://www.ssa.gov/OACT/NOTES/note144.html.


Contents Previous Next Index

 Link to FirstGov.gov: U.S. Government portal Privacy Policy | Website Policies & Other Important Information  | Site Map  | Actuarial Publications 3/26/2002