Uncertainty in Social Security Trust Fund projections

This paper presents measures of uncertainty about Social Security Trust Fun d projections based on the new Long-Term Actuarial Model (LTAM) being devel oped at the Congressional Budget Office. Measuring the variance in Social S ecurity outcomes involves three steps: specifying a model, characterizing u ncertainty about model inputs, and generating useful measures of the uncert ainty about model outputs. There are significant trade-offs to be made at e ach step, which can affect measured uncertainty in important ways. The LTAM framework is a promising approach for reconciling differences in other stu dies of uncertainty about longterm Social Security finances.