Hi, I’m Steve Goss, Chief Actuary at the Social Security Administration. Ask me anything. I’ll be taking your questions for approximately 2 hours starting at 2pm ET.

Proof it's me: https://twitter.com/SocialSecurity/status/496353934169354240

Last week, the Social Security Board of Trustees released its annual report on the long-term financial status of the Social Security Trust Funds. The combined asset reserves of the Old-Age and Survivors Insurance, and Disability Insurance (OASDI) Trust Funds are projected to become depleted in 2033, unchanged from last year, with 77 percent of benefits still payable at that time. The DI Trust Fund will become depleted in 2016, also unchanged from last year's estimate, with 81 percent of benefits still payable. You can read more of a brief summary of the report at http://www.socialsecurity.gov/news/press/releases.html#!/post/7-2014-2

You can read a little bit more about me here: http://www.nasi.org/about/spotlight/stephen-goss

Update: I want to thank all the Redditors for participating in this dialogue about the Social Security program. I think this is an excellent example of how social media can bridge the gap between government administrators and the public. At this end, I and others learned a lot and we hope this was positive for all of you too.

As a final plug, please remember join the millions and create a my Social Security account at http://www.socialsecurity.gov/myaccount. With a my Social Security account, you can view your Social Security Statement. With your Statement you can review estimates of your future retirement, disability, and survivors benefits, check your annual earnings to verify the amounts we post are correct; and see the estimated Social Security and Medicare taxes you’ve paid. If you already receive benefits, you can manage your account online with us.

Comments: 147 • Responses: 31  • Date: 

Agadefe76 karma

Ever since I passed the last of my preliminary exams back in 2011, I've been finding it increasingly difficult to fend off the large number of women that find themselves naturally drawn to me, a problem which only increases with each passing year.

How are you, as a top-level actuary, able to manage your workload at the SSA with politely declining all of their advances?

SteveGoss57 karma

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

MustSeeReason28 karma

Hello Mr. Goss, thanks for doing this. I work as an actuary on the health side. A while back I met someone who, upon hearing I was an actuary, said, "So why haven't you guys figured out Social Security yet?" I promptly told him that actuaries have known and been declaring the financial risks for Social Security for years, but that politicians haven't listened. Do you agree with this statement? Do you feel that actuaries' opinions are valued in DC? In your view, what more can actuaries and the actuarial profession do to have our voices heard on Capitol Hill and elsewhere?

edit: want to give a quick shout out to /r/actuary if anyone is interested in learning more about actuaries

SteveGoss26 karma

Thanks for this question. Yes, we have been aware that the Trust Fund reserves would eventually deplete and we would need further legislative action, ever since the last major changes in 1983. We have posted many proposals from legislators on our web page where legislators have asked for estimates for their preferred approach to extending solvency for Social Security. http://www.socialsecurity.gov/OACT/solvency/index.html

10824127 karma

What is the biggest misconception about Social Security that you see in the general population?

SteveGoss24 karma

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.

adapter97 karma

To clarify, that 77/100 figure is for the period between now and 2033, right? And 2033 is the theoretical insolvency point? And by that point legislators are expected to either increase revenues or cut benefits?

SteveGoss17 karma

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.

gerritvb14 karma

Thanks very much for participating!

I understand in advance if you cannot respond to some of these questions due to political concerns.

  1. Would removing the income cap on contributions paid to SS be enough to indefinitely postpone the depletion projected the 2033?
  2. In your opinion, how reasonable would it be to replace the Social Security benefit for retirees with a market-based solution as George W. Bush proposed? Is the a way to account for the risk that a retiree might "cash out" during a recession? Or alternatively, is that risk overstated?

SteveGoss13 karma

Please see our website at http://www.socialsecurity.gov/OACT/solvency/provisions/index.html for scores of many provisions that policymakers have suggested.

  1. Not quite, but it could make a big contribution. One popular provision is to increase the taxable maximum to get the percent of all earnings that are taxed back to 90% as was the case in 1983.
  2. This is a huge question that policymakers will continue to discuss and debate. We will continue to provide the best estimates we can for all provisions that policymakers want to consider.

CupBeEmpty11 karma

How much has technology changed the actuarial field since you started? Are there certain calculations that are trivial now that used to be quite difficult? Or is rising complexity keeping pace with advancing technology?

SteveGoss8 karma

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.

actuaryhopeful4 karma

As a followup question, how susceptible do you see the actuarial career in the future to being replaced or severely limited by technological advancements?

SteveGoss12 karma

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.

orangejulius10 karma

What would your policy recommendations be to congress to fix the problems you just described with social security?

SteveGoss18 karma

Our Office of the Chief Actuary always asks policymakers what their goals are and we work with them in developing proposals to meet their goals. We do not express preference for any proposals, any more than the home plate umpire would express preference for the Orioles over the Yankees. See our website at http://www.socialsecurity.gov/OACT/solvency/index.html

orangejulius3 karma

SteveGoss19 karma

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.

MustSeeReason4 karma

Basically, this website gives proposals that have been reviewed or backed by various legislators over the past 20 years to reform SS funding. There are a ton of different proposals that attempt to fix the problem either through changing taxes or changing the distribution, or both.

orangejulius7 karma

Is there any one that's greater than the others?

I kind of wanted him to point us that direction but instead got a "RTFM" sort of response. Which is understandable because for political reasons I don't think he can answer the question I asked.

SteveGoss14 karma

That is exactly right.

TrueBlonde10 karma

When I tell people I'm an actuary, I often get a blank stare or a wild guess as to what that is. What's the most hilarious thing that someone you have met has done/said when you tell them that you're an actuary?

SteveGoss16 karma

The blank stare is pretty much it! But we usually get to the difference between an introvert versus extravert actuary.

tc161909 karma

This is my dream comes true!!! Thanks so much for doing this AMA.

I'm an actuarial science/ risk management student trying to get my foot into this field. What skills, software, traits do you think are very important to become a successful actuary?

SteveGoss21 karma

Most of all think carefully about everything. The great thing about our work is that it encompasses everything in our society. Our office motto "challenge everything".

TrueBlonde9 karma

In your projections of when the OASDI Trust Funds will become depleted, are you applying a PAD to the results? How conservative are these estimates? Does this projection take into account inflation and/or investment earnings?

SteveGoss11 karma

Our projections of the future cost and income for the Social Security Trust Funds are all based on our best assumptions for the future, working with our Board of Trustees and many reviewers. We believe these are the best estimates possible, given the uncertainties about the future.

Yes, the projections take into account explicit assumptions about the future population and economy.

Eternally655 karma

What do you mean by "investment earnings" in this instance? <puzzled>

SteveGoss10 karma

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.

TrueBlonde3 karma

When an insurance company sells a product, they have to set up a reserve to pay out the claims. This reserve doesn't just sit there as a large pile of cash earning no interest - it's invested (albeit conservatively). I'm a life insurance actuary and that's how it works - I'm not sure if the OASDI Trust Fund functions similarly.

In other words, will it be depleted assuming that the amount earns 0% interest every year? Or will it be depleted assuming it earns 3% interest a year? Or more?

Eternally653 karma

The OASDI Trust Fund is, I believe, solely invested in special Treasury securities, so I suppose there might be some interest income. I see what you mean now. Thanks.

TrueBlonde2 karma

Right - I'm wondering what kind of earned rate is being used in the projection since we're in such a low interest rate environment. Does it continue for many years or is there a forecast for improvement?

Rheleas2 karma

It would be very unwise to take a rise of interest rates in the projection. (Or this means the optimistic scenario is used, but that's not a good move)

TrueBlonde3 karma

Which leads me back to my original question - how much of a PAD (provision for adverse deviation) is in the results of the projection?

SteveGoss10 karma

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.

The_Blue_Doll8 karma

In your estimation, what are the top five lessons all actuaries should always keep in mind?

SteveGoss11 karma

  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.

TrueBlonde8 karma

As a 20 something who is just joining the workforce, all I hear about is how Social Security won't be around when I retire. How valid is this concern? If you were in my shoes, would you be worried?

SteveGoss13 karma

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.

meta_level7 karma

What made you stop taking exams? Why don't you have your FSA?

SteveGoss12 karma

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.

meta_level2 karma

Cool, thanks for answering. I expect they didn't give you any study time as well.

SteveGoss8 karma

Our office does give study time!

SrSkippy7 karma

Do you think loosening immigration laws would have a positive effect on the future viability of social security?

SteveGoss9 karma

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.

Rheleas6 karma

Thanks for this AMA.

In France, social security deficit is atributed to the economic crisis and the increase of life expectency. Is is also the case in United States ? What importance would you give to each issue ?

SteveGoss6 karma

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.

Dank_Underwood6 karma

Any thoughts on Basic Income and its potential in the US?

SteveGoss7 karma

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.

1082415 karma

On a less serious note, what do you do outside of work? Who's your favorite musician? Favorite sports teams? You ever just go on actuarial discussion forums to see what they think of the job you're doing?

SteveGoss5 karma

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!

MustSeeReason4 karma

Any particular reason you chose the public route to work as an actuary over working in the private sector?

SteveGoss5 karma

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.

Banana_blanket4 karma

What are the biggest frustrations/difficulties about working as a secular department leader in a department/area that gets way too caught up in the modern day political crossfire?

SteveGoss8 karma

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.

internetguy874 karma

Do unemployment rates have much of an effect on the solvency of social security? It would seem that an increase in unemployment would reduce the total tax revenue to fund social security, but this may be offset by decreasing future liabilities with fewer social security credits being earned.

SteveGoss3 karma

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.

Eternally653 karma

As expected, the “actuarial deficit” increased a bit, rising to 2.88% from 2.72%. In a nutshell, this rise means if we increased the Social Security tax by that amount, there would not be any problem funding Social Security for the next 75 years.

I know this comes from a dubious source, but is it correct?

SteveGoss3 karma

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.

Balthos3 karma

According to the figures you summarized (The OASDI will go from 100% of benefits payed out to 77% in 2033, while the DI trust fund will go from 100% to 81% in 2016), is there a way to address that shortfall sans congressional action, given the fondness congress has for can-kicking problem avoidance?

Will the beneficiaries of these programs be informed why they are suddenly receiving a smaller check? And will there just be a universal cut across the board, or will some people be prioritized over others?

More speculative: if you had your druthers, what social safety net programs would you like to see implemented?

Also- what programs do you believe should be getting more attention than they currently are?

Sorry for the barrage of questions. Looking forward to this AMA!

SteveGoss3 karma

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.

insanesquirle2 karma

It has been said that social security wont be around in another 30-40 years. What is the plan so that tomorrows seniors will have social security benefits?

SteveGoss3 karma

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.

adapter92 karma

Why do SS taxes show up as a separate line item on my paycheck? Why aren't they integrated into the rest of Federal taxes? I mean, I don't see a separate line item for DOD spending, so why SS?

SteveGoss3 karma

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.

Need_actuary_job1 karma

Do you have any entry-level openings? Also, what do you think of actuarialoutpost.com?



SteveGoss3 karma

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.