Projection is an Art, not a Science, especially for the SSA

The scary headlines of the past few days have been well-discussed below by Dale Coberly and Barkley Rosser.

Data, however, is only as good as its assumptions, and the overall trend is well worth a glance. (Note: I took the 2013-2017 data from BC professor (and director of their Center for Retirement Research) Alicia H. Munnell’s Table 1 here.

Year of Trustees Report: 2013 2014 2015 2016 2017 2018 2019
First year outgo exceeded income excluding interest 2010 2010 2010 2010 2010 2010 2010
First year outgo projected to exceed income including interest 2021 2020 2020 2020 2021 2018 2020
Year trust fund assets are projected to be exhausted 2033 2033 2034 2034 2034 2034 2035


Note that last year’s projection that 2018 would have a funding shortfall turned out to be so incorrect that this year’s report didn’t even pretend there would be excessive demand until next year.* Also note that, despite a relatively anemic recovery in the labor force, the projection “we’re out of funds” date keeps getting extended, though not so much as it did pre-Tepid Depression years.

More coming up. As usual, the report is only so good as its data assumptions and there are some interesting assumptions made.

*Part of this, as Henry Aaron noted Tuesday, is that the Disability portion of SSDI has declined precipitously from projections.

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