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Today’s Lecture #23 Social Security

Today’s Lecture #23 Social Security. Can We Afford to Keep This Promise? 2007 Trustees Report Actuarial Assumptions Financial Projections. Definitions. OASI Old Age and Survivors’ Insurance (Pensions) DI Disability Insurance HI Hospital Insurance (Medicare Part A).

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Today’s Lecture #23 Social Security

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  1. Today’s Lecture #23Social Security Can We Afford to Keep This Promise? 2007 Trustees Report Actuarial Assumptions Financial Projections

  2. Definitions OASI Old Age and Survivors’ Insurance (Pensions) DI Disability Insurance HI Hospital Insurance (Medicare Part A)

  3. Beneficiaries OASI 40.5 million DI 8.6 million HI 44.1 million

  4. 2006 Experience(figures in billions of $)

  5. Actuarial Projections - OASDI Projections are based on economic and demographic assumptions Low Cost Assumptions (I) Intermediate Cost Assumptions (II) High Cost Assumptions (III)

  6. Social Security Administration Web Site http://www.ssa.gov/OACT/pubs.html Or use the hyperlink on the Fin 230 Website

  7. Figures from Social Security Website2007 OASDI Trustees Report – Summaryhttp://www.ssa.gov/OACT/TRSUM/trsummary.html Chart A – OASI, DI, and HI Trust Fund Ratios – Summary Chart B – SS and Medicare Cost as a Percentage of GDP Chart C – Income and Cost Rates

  8. Chart A – OASI, DI, and HI Trust Fund Ratios[Assets as a percentage of annual expenditures]

  9. Chart B – Social Security and Medicare Cost as a Percentage of GDP

  10. Chart C – Income and Cost Rates[Percentage of taxable payroll]

  11. Figure IV.B2.-Number of OASDI Beneficiaries Per 100 Covered Workers

  12. Social Security’s Impending Bankruptcy Based on Intermediate Cost Assumptions Medicare (HI) OASDI

  13. Analysis of Actuarial Assumptions – MortalityLife Expectancy at Birth Life Expectancy at Birth Year Male Female 1900 46.4 49.0 1910 50.1 53.6 1920 54.5 56.3 1930 58.0 61.3 1940 61.4 65.7 1950 65.6 71.1 1960 66.7 73.2 1970 67.2 74.9 1980 69.9 77.5 1990 71.8 78.9 2000 74.0 79.4 2001 74.1 79.5 2002 74.2 79.5 2003 74.4 79.6 2004 (Est.) 74.7 79.6 2005 (Est.) 74.8 79.6 2006 (Est.) 75.0 79.7

  14. Your Actuarial ForecastLife Expectancy at Birth YearMaleFemale 2085

  15. SSA Actuarial Assumptions –2007Life Expectancy at Birth YearMaleFemale I II III I II III 2085

  16. Figure IV.B1.-Long-Range OASI and DI Annual Income Rates and Cost Rates [As a percentage of taxable payroll]

  17. Figure II.D7.-Long-Range OASDI Trust Fund Ratios Under Alternative Assumptions [Assets as a percentage of annual cost]

  18. Tables from Social Security Website Table II.C1.-- Ultimate Demographic and Economic Assumptions Table V.A1.-- Principal Demographic Assumptions, Calendar Years, 1940-2085  Table V.B1 -- Principal Economic Assumptions

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