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In three previous articles (article 1, article 2, and article 3), I have used data science in conjunction with public historical Social Security data to produce a historical, present-value analysis of Social Security retirement benefits versus total worker contributions to Social Security. This approach gives much insight into past and present Social security performance. It does not directly solve Social Security problems, but it does suggest some very simple modifications to the Social Security program that would make Social Security more stable and sustainable. Here I demonstrate how this approach works by simulating what Social Security would look like had overall Social Security benefits to workers and dependents been limited by the lifetime amount of worker contributions over the past 75 years. This also allows us to better understand the Social Security OASI Trust Fund and debunk some of the misconceptions and misinformation that have developed around it.

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The previous analysis produced data columns and graph curves of historical total contributions to Social Security for each year in which workers retired. See the original article for a full discussion of assumptions and simplifications in the methodology. Since generational demographics seem to be of such concern to many who follow Social Security, it makes sense to incorporate more generational data into the simulations presented here. This means eliminating the use of labor force data as an inflator/deflator and instead incorporating yearly birth data to estimate generational sizes and variation. These are straightforward modifications to the analysis presented previously.

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Population data from U.S. Census Bureau and birth rate data from gapminder.org (FREE TO USE! CC-BY GAPMINDER.ORG) and UN World Population Prospects Birth Rates are used to produce birth data for each year. The population data are available at 10 year increments and therefore necessitate interpolation for yearly values. Relevant data from 1883 onward are presented in columns AF through AK. Birth data are an imperfect means of estimating worker age distribution. Disease, war, and generation cultural variation can cause actual labor force age distribution to differ from birth rate distribution. Nevertheless these data are likely sufficient for demonstration purposes. The Social Security Administration (SSA) has detailed work force participation data that should be more accurate.

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Table I and Figure 1 show the historical worker contributions, benefits, and trust fund behavior with these modifications. This table and figure are analogous to Table I and Figure 1 in article 1.

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Here Labor force and labor force distribution data (columns O, W, and X) have been eliminated from the Table I spreadsheet, and birth data (columns AI and AJ) have been incorporated into the computation of Lifetime Worker Contributions (column S). The resulting table data and figure curves are in constant 2023 dollars, but not constant labor force.

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Figure 1 here demonstrates substantially all the same features that were noteworthy in the original article. In particular, Social Security benefits greatly exceeded lifetime worker contributions from 1960 to 2010. This produced the lion's share of the decline in the OASI Trust Fund. Elevated worker contributions from 1980 to 2010 (substantially from Boomers) exceeded benefit payments and largely rescued the OASI Trust Fund. The lifetime worker contributions curve here shows more variation than the corresponding original curve. This reflects identifiable generational variation. The dip between 1992-2002 roughly corresponds to a dip in births during the Great Depression. Peaks in 2007 and 2011 correspond to identifiable peaks in births dating to 1943 and 1947. The pronounced rise around 2009 corresponds, of course, to the beginning of the large bloom in Boomer births after World War II.

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SSA uses a complicated set of rules to determine how much each beneficiary (worker or dependent) gets in any year based on how much the worker paid into the Social Security system, as well as age, relationship, etc. This system seems to be a satisfactory way to apportion benefits in relative terms. Let us refer to these traditional calculated amounts as traditional benefits (Column G or Cost Total in Table I). What this system does NOT do is keep overall benefits in balance with total worker contributions, especially when economic conditions or generational and cultural changes produce significant variation in worker/beneficiary ratios.

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To keep benefits in line with lifetime worker contributions, it would be useful to have some kind of yearly sustainability multiplier that could be directly applied to traditional benefit computations to produce actual benefits. If we divide total contributions for workers who retire in a particular year (column S in Table I) by total traditional benefits for that year (column G in Table I), we can then average these fractions for a couple of years to produce such a sustainability multiplier that computes actual benefits from traditional benefits in the next year. [We need to use data from a previous year(s) because worker contribution data and total traditional benefits data are not available until the end of any given year.] Occasionally total traditional benefits might drop well below total contributions for a year or two, potentially causing the multiplier to rise too sharply for the subsequent year. This effect can be avoided by capping the multiplier at 1.0. Columns Y and Z in the Table I spreadsheet show the sustainability multiplier and resulting simulated yearly benefits totals. Columns AA-AC contain the simulated trust fund and necessary intermediate calculations.

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Figure 2 shows the Simulated Worker/Dependent Benefits curve (worker plus dependents total benefits) which results from application of the sustainability multiplier described above. This method produces total benefits that track total retiring worker contributions closely. Also shown in Figure 2 is the Simulated Trust Fund Ratio to Benefits. This is SUBSTANTIALLY better than the actual trust fund ratio shown in Figure 1. The ratio does however decline noticeably from 2003 onward. This decline is a bit misleading. The simulated OASI Trust Fund in column AB actually increases over this time period (from $4.4T to $7.3T), but not as rapidly as the increase in yearly total Social Security benefits. Interestingly a similar phenomena occurs with the actual OASI Trust Fund and actual yearly total Social Security benefits. This points out the need for us to be wary when looking at ratios as a proxy for actual values.

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The difference between actual benefits and simulated benefits is large in the years between 1960 and 2010. Some readers will wonder if such a substantial reduction in Social Security benefits might be a serious hardship for some retirees. Certainly this could be the case. The need for such a safety net does NOT however mean those extra benefits should come from Social Security, which is effectively a worker funded pension. Further the possibility that some beneficiaries might need greater support is NOT an argument that all Social Security beneficiaries should get more in benefits than lifetime worker contributions, which is what actually occurred during this period. Undoubtedly this contributed to the misconception that it is possible for retirees to live off of Social Security.

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For more than a decade people have been sounding the alarm that the OASI Trust Fund is nearing depletion. This is hardly any surprise given the $10T (today dollars) failure by SSA to balance total Social Security benefits against worker contributions from 1960-2010, Some critics of Social Security want to blame the shortfall on a combination of increasing retiree longevity and declining labor force due to decreasing birthrates, but actual labor force data and life expectancy data from reputable economic sources show NEITHER declining labor force NOR significantly increasing longevity. Regardless there is substantial reason for concern about the future health of Social Security. The simulation in Figure 2 demonstrates that it is possible to make Social Security sustainable by tying benefits to lifetime worker contributions through a sustainability multiplier, but this does not fix past multi-trillion dollar losses from mismanagement.

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Numerous solutions have been proposed to forestall bankruptcy of the OASI Trust Fund: e.g. a $50,000 per-year cap on individual benefits, 25% across-the-board benefit cuts, or large increases in the income limit to which Social Security tax is applied, Most of these proposals are likely to be \"dead on arrival\". Boomers already gave at the office in the sense that it was mostly Boomer Social Security contributions which funded excessive benefits to previous generations. Furthermore Boomers are already receiving benefits that are a far lower percent of lifetime worker contributions than most previous generations.

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There are other alternatives to rescue the OASI Trust Fund. Much of the benefit of the Social Security program has actually gone to large U.S. corporations that did not have to provide worker pensions the way corporations do in most of the rest of the world. One alternative is therefore to get U.S. corporations to donate some/all of the money needed to restore the OASI Trust Fund. This could presumably be spread out over time.

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Many current retirees have already been adversely affected by a profusion of changes to retirement rules in the past decade (goalpost moving). Goalpost moving is overall counterproductive for retirement because it provides a strong disincentive to plan and prepare for retirement. Cuts to the Social Security program would simply constitute further goalpost moving. Nevertheless some retirees might be willing to forego a portion of their Social Security benefits in return for tax relief or relaxation of certain required minimum IRA distribution requirements and Roth IRA conversion rules. For example:

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Different retirees have quite different circumstances, so several alternative approaches are probably necessary in order to be fair to most retirees.

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Going forward will require clear recognition that government mismanagement created our current Social Security problems. The simulation here demonstrates that a stable and sustainable Social Security program is possible. Creative and informed solutions and a lot more detailed oversight will be needed to avoid Social Security problems in the future. While much of this article (and previous articles) has focused on the Boomer generation, a long-term fix for Social Security with stable and sustainable benefits will help every generation from here onward.

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Have A Question?

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Have a question about this article? Have something to add on this topic? Email me, and I’ll get back to you personally.

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Notes and Licensing

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This work by Bruce R. Copeland is licensed under a Creative Commons BY-NC 4.0 International License\"\"\"\"\"\". The overwhelming majority of the data in this article is U.S. Government data in the Public Domain. There is one important exception. The per-capita GDP data in Table I is derived from Public Domain U.S. Government data, but was separately aggregated and provided by FRED under a non-commercial use license. I am accordingly making this entire article available under a Creative Commons BY-NC license. Note that it is also acceptible to use/share any other parts of this article commercially BY as long as column P of Table I (or Table I in its entirety) is excluded. It may also be possible to get permission from FRED to use the data in column P of Table I commercially, in which case this entire article is licensed BY under Creative Commons.

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The previous analysis produced data columns and graph curves of historical total contributions to Social Security for each year in which workers retired. See the original article for a full discussion of assumptions and simplifications in the methodology. Since generational demographics seem to be of such concern to many who follow Social Security, it makes sense to incorporate more generational data into the simulations presented here. This means eliminating the use of labor force data as an inflator/deflator and instead incorporating yearly birth data to estimate generational sizes and variation. These are straightforward modifications to the analysis presented previously. Population data from U.S. Census Bureau and birth rate data from gapminder.org (FREE TO USE! CC-BY GAPMINDER.ORG) and UN World Population Prospects Birth Rates are used to produce birth data for each year. The population data are available at 10 year increments and therefore necessitate interpolation for yearly values. Relevant data from 1883 onward are presented in columns AF through AK. Birth data are an imperfect means of estimating worker age distribution. Disease, war, and generation cultural variation can cause actual labor force age distribution to differ from birth rate distribution. Nevertheless these data are likely sufficient for demonstration purposes. The Social Security Administration (SSA) has detailed work force participation data that should be more accurate. Table I and Figure 1 show the historical worker contributions, benefits, and trust fund behavior with these modifications. This table and figure are analogous to Table I and Figure 1 in article 1. Here Labor force and labor force distribution data (columns O, W, and X) have been eliminated from the Table I spreadsheet, and birth data (columns AI and AJ) have been incorporated into the computation of Lifetime Worker Contributions (column S). The resulting table data and figure curves are in constant 2023 dollars, but not constant labor force. Figure 1 here demonstrates substantially all the same features that were noteworthy in the original article.","fields":{"link":"/2026-06-24-toward-a-stable-and-sustainable-social-security-system/"},"frontmatter":{"date":"June 24, 2026","author":"Bruce R. 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