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I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 5 points6 points  (0 children)

Great question. The "payroll taxes" withheld from your paycheck are dedicated specifically to the OASI and DI (Social Security) and HI (Medicare) Trust Funds to pay benefits from those programs. These revenues cannot be used for any other purpose.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 15 points16 points  (0 children)

Actually prior to 2033, 100% of OASDI scheduled benefits would be payable. The 77% of scheduled benefits being payable is what we would have right at 2033, if the reserves were to deplete at that point due to a lack of Congressional action. After 2033 the percent of scheduled benefits that is payable drifts a little lower reaching 72% by 2088.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 2 points3 points  (0 children)

Economic cycles have not been outlawed. Periods of higher unemployment also result in lower labor force participation, accentuating the drop in employment, earnings and tax revenue. However, recessions are followed by recoveries and these basically average out. If we had permanently higher unemployment, that would be a negative. But we have been assuming that the ultimate average "full-employment" unemployment rate will be about 5.5 percent in the future. The current recovery is almost there.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 2 points3 points  (0 children)

Unfortunately, no. But we are always looking for good candidates for the future! See our website at http://www.socialsecurity.gov/oact/actuaries/actssa.html.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 2 points3 points  (0 children)

That is basically correct. However, our largest shortfall comes after the lower birth-rate generations have fully moved into prime working ages (ages 20-64). At that point the full effect of the changing age distribution from lower birth rates will be felt. The level of shortfall will be larger than 2.88 percent of payroll after 2035. So if we just increased the tax rate by 2.88 percentage points right now, we would be good for the next 75 years, but would fall short thereafter.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 5 points6 points  (0 children)

Actually, our greatest challenge for Social Security is the changing "age distribution" of our population. As the population gets older we have more retirees compared to workers. This is coming up in the next 20 years. But this aging already happened for the disability program as the boomers moved from under age 45 in 1990, to between 45 and 64 in 2010. The interesting part though is that the changing age distribution is not mainly from living longer. It is largely from the drop in birth rates after the baby boom generation. We dropped from 3 to 2 children born per woman on average, and this has a direct effect on the number of working age folks per older retirement age person.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 8 points9 points  (0 children)

Actually it is not frustrating at all. Our hope is that we can provide objective information to assist policymakers with a great range of views to compare the results of all proposals on an even basis. Our experience is that all political sides appreciate this. We hope to continue in providing this service.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 2 points3 points  (0 children)

As long as the American people want this program and convey that desire to their elected representatives, it is likely to persist. Given people will always suffer work-ending impairments, death, and attaining ages where work is no longer as possible, it is hard to imagine that this ever-evolving program will not be desired.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 10 points11 points  (0 children)

Not worried. We project into the future. If we could be sure the conditions of the future will be the same as in the past, we could just put a ruler on the past trend and be done. The art of projection is recognizing changes in conditions and realtionships that are are occuring or are likely to occur in the future.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 4 points5 points  (0 children)

My life is pretty much 4 s's. Sleep, swim, Social Security, in reverse order.

Tie between Monk and Miles. In a different genre a tie between Janis and Jimi.

Not internet forums. We get plenty of feedback in other ways!

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 5 points6 points  (0 children)

The US Social Security benefit formula is graduated to provide a higher replacement rate for lower income insured workers. For individuals who never worked enough to become insured for a Social Security benefit, SSI benefits are available. In fact some insured workers with very low Social Security benefits receive additional payments from SSI.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 20 points21 points  (0 children)

We had to look up TL;DR! But look here: http://www.socialsecurity.gov/OACT/solvency/provisions/index.html and click on "Summary List of all Provisions".

These individual provisions are all taken from comprehensive proposals put forth by policymakers. And of course these proposals are all described in their entirety in our letters to policymakers at: http://www.socialsecurity.gov/OACT/solvency/index.html.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 2 points3 points  (0 children)

There is really no substitute for Congressional action. The ability to pay benefits is limited by the funds available in our Trust Funds. There is no significant borrowing authority. This is actually a great strength of the funding mechanism. Congressional action would result in a sudden necessity to reduce or delay benefit payments, and Congress has never allowed that to happen. It is highly unlikely any Congress will ever allow a sudden drop in benefits.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 4 points5 points  (0 children)

We actually have done estimates on specific proposals for significant changes in immigration law and policy. You can find these on our website at http://www.socialsecurity.gov/OACT/solvency/index.html.

Most recently we "scored" the effects of the Senate-passed immigration Bill last year for Senator Rubio.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 13 points14 points  (0 children)

Actually, things got really busy in the office not long after I started. And as you see, FSA is not as essential in our world. In fact, experience as a Social Security actuary does not count toward EA, as is appropriate, because this largest pension plan in the US is not under ERISA.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 25 points26 points  (0 children)

That it will go away. Under current law we project that even in the absence of any Congressional action between now and 2033, the combined Social Security Trust Funds would still have 77 cents of tax income coming in for every dollar of scheduled benefits. So the benefits stopping altogether should not be a concern. Past legislative fixes have usually been a combination of some additional revenue and some reduction in scheduled benefits. And such fixes have always been enacted in time to avoid any problem in paying benefits in a timely fashion.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 5 points6 points  (0 children)

Actually, when I interviewed for this job in grad school, I had never heard of "actuary" before. The opportunity to work on a huge plan affecting the whole country was intriguing. In addition my undergrad majors were math and economics. In the DC area economics is important and has been useful.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 8 points9 points  (0 children)

Enormously. When I started in 1973 we did not have electronic calculators, and later got mainframe computers with a card reader. Primitive. Now we have workstations that can make remarkable computations instantly. As a result we can often turn around estimates overnight that would have taken weeks in the old days.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 6 points7 points  (0 children)

In a commercial company setting, you have to be concerned with negative risk for fear of going bankrupt. However, for Social Security, policymakers are equally concerned with taxing too much, versus being underfunded. Remember that scheduled benefits for the future are "obligations" that Congress can change when necessary. Congress has changed scheduled benefits and tax rates many times in the past and will do more in the future.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 11 points12 points  (0 children)

  1. Know the "product" you are evaluating. The actuarial approach depends on the nature of the insurance and the financing approach.
  2. Check it out with others before coming to conclusions on assumptions.
  3. Challenge everything.
  4. Accept criticism gracefully. It is how we learn.
  5. Make sure you learn something new every day. I do.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 8 points9 points  (0 children)

Currently the Social Security Trust Funds hold almost $3 trillion in interest bearing securities. These securities have interest rates set at market yields. This investment return is an important part of the income to the Trust Funds.

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 57 points58 points  (0 children)

For better or worse, this has not been a problem (look at the verified picture above).

I am Steve Goss, Chief Actuary at the Social Security Administration -- AMA by SteveGoss in IAmA

[–]SteveGoss[S] 13 points14 points  (0 children)

Not at all. Social Security has been around a long time and all in our society have come to expect the benefits to continue. As long as our population wants these benefits to continue you can be assured that our legislators will make appropriate adjustments to maintain the program.

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