OASDI Income and Cost Rates Under

1
OASDI Income and Cost Rates Under Intermediate
Assumptions (as a percentage of taxable payroll)
Source 2005 Annual Trustees Report, Figure
II.D2.
2
UNFUNDED OASDI OBLIGATIONS FOR 1935 (PROGRAM
INCEPTION) THROUGH THE INFINITE HORIZON (Present
values as of January 1, 2005 dollar amounts in
trillions)
75 Year Infinite Horizon Horizon D
OLLARS 4.0 11.1 TAXABLE PAYROLL 1.8
3.5 PERCENT OF GDP 0.6 1.2
Source 2005 OASDI Trustees Report, Table IV.B6
3
Source Fast Facts and Figures about Social
Security, 2004, SSA Office of Policy Publication
No. 13 11785
4
Source Fast Facts and Figures about Social
Security, 2004, SSA Office of Policy Publication
No. 13 11785
5
THE PRESIDENTS STATE OF THE UNION ADDRESS
Right now, a set portion of the money you earn
is taken out of your paycheck to pay for the
Social Security benefits of today's retirees. If
you are a younger worker, I believe you should be
able to set aside part of that money in your own
retirement account, so you can build a nest egg
for your own future.
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CASH FLOWS FROM INDIVIDUAL ACCOUNTS ( of Taxable
Payroll)
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TRUST FUND RATIO (In Percent)WITH AND WITHOUT
INDIVIDUAL ACCOUNTS
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PRICE INDEXING OF INITIAL BENEFITSAS IN MODEL
2 OF THE PRESIDENTS COMMISSION TO STRENGTHEN
SOCIAL SECURITY
11
EFFECT OF PRICE INDEXING OR REAL WAGE
DEFLATING ON BENEFITS
Note Calculated as 1minus (0.99 55-age),
assuming real wage growth rate is 1 percent per
year.
12
EFFECT OF PRICE INDEXING OR REAL WAGE
DEFLATING ON BENEFITS
Note Calculated as 1 minus (0.99 55-age), and
1minus (0.985 55-age).
13
INCREASING THE AGE FOR FULL BENEFITS (NORMAL
RETIREMENT AGE) AS IN MODEL 3 OF THE PRESIDENTS
COMMISSION TO STRENGTHENSOCIAL SECURITY
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TRUST FUND RATIO (In Percent)
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Bottom Line Benefits for Medium Earners

• Benefit reductions less substantial for lower
  earners and more substantial for higher
  earners.
• Benefit reduction for 25-year-olds smaller than
  under 1983 reforms.

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