TABLE C-2 Projected Social Security Trust Fund Ratio, Selected Years, Current Law Compared with Options 1-4

Year

Current Law

Option 1a

Option 2b

Option 3c

Option 4d

2010

360

360

360

360

360

2015

359

367

365

373

375

2020

315

351

334

353

359

2025

244

311

290

319

319

2030

153

257

233

270

277

2035

50

202

178

227

229

2040

0

155

128

187

184

2045

0

121

114

167

157

2050

0

100

113

151

131

2055

0

91

112

137

117

2060

0

90

117

120

96

2065

0

95

122

123

97

2070

0

103

132

125

93

2075

0

109

142

126

99

2080

0

112

152

130

99

2082

0

113

155

132

100

2084

0

114

157

135

100

NOTE: The “trust fund ratio” is the trust fund balance at the beginning of the year, divided by that year’s spending.

aChanges in benefits only.

b2/3 benefit growth reductions; 1/3 payroll tax increases.

c1/3 benefit growth reductions; 2/3 payroll tax increases.

dPayroll-tax increases only.

the price level becoming more predominant as career earnings rise, up to the maximum subject to the Social Security payroll tax. As a result, the rate of increase in the preretirement benefits would usually be greatest for the lowest earners, and decrease with earnings, up to the payroll tax maximum, but to no less than the rate of price inflation.5

  • Increasing the future age for full and early retirement benefits accounts for a 0.56 percent increase in the balance.

  • Changing the cost-of-living adjustment to monthly benefits in retirement adds 0.36 percent to the balance.6

Option 2 gets roughly two-thirds of its effect by reducing benefit growth and one-third by payroll-tax increases. It improves the 75-year actuarial balance by 2.07 percent of payroll.

  • For the preretirement benefit formula, another form of progressive indexing is the only provision affecting benefits. It improves the



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