Table 4. Monthly Annuity as Percent of Social Security Benefit -- Joint & 2/3 Survivor Annuity
Retire at 65 -- PRELIMINARY 1/
Contribution Rate: 8% for $1, 3% for Maximum Earnings
Percent of Present Law OASDI Retirement Benefit Provided with Annuity from Specified Percent Individual Account (IA)
Accumulated IA at Spec Percent of OASDI Taxable Earnings
Contributions Starting in 2003, or Age 21, if Later, Through Age 64
Annual Administrative Expenses (as Percent of Assets)
     During Accumulation = 0.1%
     During Annuitization = 0.3%
Year
Attained
Age 65
DeMint Contribution Rates Based on Formula
 
Percent of Assets Invested in Equities 2/
60.0%
88.6%
31.4%
0.0%
Real Net Yield on Assets During Accumulation
5.0
6.0
4.0
2.9
5.0
6.0
4.0
2.9
Annuity Real Return Rate -- Net of IA Administrative Expenses
4.8
5.8
3.8
2.7
4.8
5.8
3.8
2.7
(2-earner couple)
(1-earner couple)

Scaled Low Earner
2012
10.2
11.6
8.9
7.5
6.8
7.8
5.9
5.1
2022
31.5
38.3
25.8
20.6
21.2
25.8
17.3
13.8
2032
63.3
82.1
48.7
36.4
42.8
55.4
32.9
24.6
2042
100.6
138.7
72.9
51.3
67.9
93.7
49.3
34.7
2052
114.5
161.8
81.2
55.8
77.3
109.3
54.8
37.7

Scaled Medium Earner
2012
11.9
13.6
10.3
8.8
8.0
9.1
6.9
5.9
2022
35.5
43.1
29.1
23.2
23.9
29.0
19.6
15.6
2032
71.0
91.9
54.7
40.9
47.9
62.1
36.9
27.6
2042
114.2
157.6
82.7
58.2
77.1
106.5
55.9
39.3
2052
131.5
186.3
93.0
63.8
88.8
125.8
62.8
43.1

Scaled High Earner
2012
12.0
13.6
10.4
8.9
8.0
9.2
7.0
6.0
2022
33.8
41.0
27.8
22.3
22.8
27.6
18.7
15.0
2032
67.1
86.7
51.8
38.8
45.3
58.6
34.9
26.2
2042
110.2
152.4
79.8
56.0
74.4
102.9
53.9
37.8
2052
129.4
184.1
91.2
62.3
87.4
124.3
61.6
42.1

Steady Maximum Earner
2012
10.5
12.0
9.2
7.8
7.0
8.0
6.1
5.2
2022
27.5
33.2
22.6
18.2
18.5
22.3
15.2
12.2
2032
53.5
69.1
41.4
31.2
36.1
46.6
28.0
21.0
2042
90.0
124.7
65.1
45.7
60.8
84.2
44.0
30.9
2052
113.3
162.9
79.0
53.4
76.5
110.0
53.4
36.1

Note: "Self Annuitization" presumes that retirees would continue to invest their assets in the same manner as before retirement, and make monthly withdrawals that, on average, roughly match the pattern of a CPI-indexed life annuity.

Earnings Scale Factors #2: using cross section data of all fully insured for 1985-94
1/ Values may be somewhat overstated due to use of general population mortality for annuity calculations.
2/ The balance of each portfolio is assumed to be invested in Long-Term U.S. Government Bonds.

Based on the intermediate assumptions of the 2001 Trustees Report
Office of the Actuary
Social Security Administration
December 16, 2001
 

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