Uncertainty in Social Security Trust Fund Projections
Abstract:
This paper presents measures of uncertainty about Social Security Trust Fund projections based on the new Long-Term Actuarial Model (LTAM) being developed at the Congressional Budget Office. Measuring the variance in Social Security outcomes involves three steps: specifying a model, characterizing uncertainty about model inputs, and generating useful measures of the uncertainty about model outputs. There are significant trade-offs to be made at each step, which can affect measured uncertainty in important ways. The LTAM framework is a promising approach for reconciling differences in other studies of uncertainty about long-term Social Security finances.