2007 Social Security Trustees report says SS getting heathier - Trust Fund adds one year to 2041

[papau]

before benefits would be cut to 75.56%% (in 2041 with no funds to draw on from the Trust Fund the benefits would be limited to the tax produced by a combined (employer plus employee)tax rate of 12.4% in the face of a benefit flow that would otherwise be 16.41% - so 12.4/16.41 = 75.56%) of the otherwise payable benefit so as to match tax income.

But 2041 is not a real "worry date" because it is based on the middle projection of 3 projections all of which use quite conservative assumption - the three could be called "conservative", "very conservative", and "extremely conservative".

Using what most less conservative actuaries, based on past history of SSA "middle projections" to actual later results, might choose to use - something "close" to the least conservative "low cost" scenario (the least conservative has only a 2.5% likelyhood they say - but that assumes a bell shape curve that is unlikely the correct probability distribution, in my opinion) - the Trust fund never drops below 3 times the amount of money needed for one years benefit payments - meaning through 2082 the Social Security tax is set a bit too high and could be reduced - today!.

I have the complete 250 page Trustees report in Word Format - should anyone care to read it in WORD and do not want to just download the PDF formated version at http://www.ssa.gov/OACT/TR/TR07/tr07.pdf , just pm me with your email address.


SOCIAL SECURITY
News Release
Social Security Board of Trustees Issues Annual Report
Long-Range Financing Challenges Continue

The Social Security Board of Trustees today released its annual report on the financial health of the Social Security Trust Funds. The 2007 Trustees Report shows slight improvement in the projected financial status of the Social Security program from last year.

In the 2007 Annual Report to Congress, the Trustees announced:

The projected point at which tax revenues will fall below program costs comes in 2017 -- the same as the estimate in last year’s report.

The projected point at which the Trust Funds will be exhausted comes in 2041 -- one year later than the projection in last year’s report.

The projected actuarial deficit over the 75-year long-range period is 1.95 percent of taxable payroll -- .06 percentage point smaller than in last year’s report.

Over the 75-year period, the Trust Funds would require additional revenue equivalent to $4.7 trillion in today’s dollars to pay all scheduled benefits. This unfunded obligation is about $100 billion higher than the amount estimated last year. (NOTE THAT THIS IS SOLELY DUE TO THE CURRENT VALUATION DATE BEING CLOSER TO THE BOOMER PERIOD THAT IS AROUND 2030 - THERE IS DETERIOATION IN THE SYSTEM'S FINANCES AND INDEED IT IS STRONGER THAN EXPECTED LAST YEAR).

Other highlights of the Trustees Report include:

Income including interest to the combined Old-Age and Survivors, and Disability Insurance (OASDI) Trust Funds amounted to $745 billion ($626 billion in net contributions, $17 billion from taxation of benefits and $102 billion in interest) in 2006.

Total expenditures from the combined OASDI Trust Funds amounted to $555 billion in 2006.

The assets of the combined OASDI Trust Funds increased by about $190 billion in 2006 to a total of $2 trillion.

During 2006, an estimated 162 million people had earnings covered by Social Security and paid payroll taxes.

Social Security paid benefits of $546 billion in calendar year 2006. There were 49 million beneficiaries at the end of the calendar year.

The cost of $5.3 billion to administer the program in 2006 was a very low 1.0 percent of total expenditures.

The combined Trust Fund assets earned interest at an effective annual rate of 5.3 percent.

The Board of Trustees is comprised of six members. Four serve by virtue of their positions with the federal government: Henry M. Paulson, Jr., Secretary of the Treasury and Managing Trustee; Michael J. Astrue, Commissioner of Social Security; Michael O. Leavitt, Secretary of Health and Human Services; and Elaine L. Chao, Secretary of Labor. The two public trustees are John L. Palmer and Thomas R. Saving.

The 2007 Trustees Report will be posted at
http://www.ssa.gov/OACT/TR/TR07/

http://www.ssa.gov/OACT/TR/TR07/tr07.pdf