DEFINITION of 'Actuarial Deficit'

The difference between future Social Security obligations and the income rate of the Social Security Trust Fund as of present. The Social Security program is said to be in actuarial deficit if the summarized income rate is less than the summarized cost rate of Social Security for any given valuation period. This situation is commonly referred to as the Social Security System being "insolvent."

BREAKING DOWN 'Actuarial Deficit'

Actuarial balance is calculated for 66 different valuation periods, beginning with the upcoming 10 year period and growing with each successive year up to the full 75 year projection. If at any point over the 75 year projection the anticipated costs of Social Security exceed the future value of the trust fund's income, that period would be deemed to be in actuarial deficit.

RELATED TERMS
  1. Actuarial Balance

    The difference between future Social Security obligations and ...
  2. Social Security Trust Fund

    An account used by the United States federal government to record ...
  3. Actuary

    A professional dealing with the assessment and management of ...
  4. Government Actuary

    An employee of the U.K. government who works for the Government's ...
  5. Social Security

    A United States federal program of social insurance and benefits ...
  6. Social Security Tax

    The tax levied on both employers and employees used to fund the ...
Related Articles
  1. Retirement

    Will the Social Security Cap Increase Help It Last Longer?

    The Social Security cap increase will be 7% in 2017, but even that may not be enough to keep Social Security from running out of funds.
  2. Personal Finance

    Insure Your Future with a Career as an Actuary

    If you've got excellent math skills, they can add up to a lucrative career as an actuary.
  3. Personal Finance

    The Top 5 Skills Every Actuary Needs

    The actuary profession is growing fast. Here's a look at the majors and top skills one needs to become a successful actuary.
  4. Retirement

    Will My Social Security Benefits Be Taxed?

    If, and how much, your social security benefits are taxed depends on your income and where you live.
  5. Retirement

    Introduction to Social Security

    You've probably contributed to this fund, but will you reap the benefits? Find out here.
  6. Retirement

    Top 3 Challenges Facing Social Security

    The first official Social Security card was given out in 1936 and while the system is still paying out, a lot has changed.
  7. Financial Advisor

    Career Advice: Financial Analyst Vs. Actuary

    Read an in-depth comparison between financial analysts and actuaries, what it's like to work as each and how to determine which is best for you.
  8. Financial Advisor

    Social Security's Insolvency and Your Retirement

    The Social Security system could run out of money by 2031. Here's a look at some proposed solutions to the problem and what can be done to prepare.
  9. Retirement

    4 Things That Are Reducing Your Social Security

    Worried about Social Security dwindling? We discuss four ways it’s already happening.
  10. Retirement

    Will Social Security Be Around for My Retirement?

    Here's what you may not know about our Social Security system and how it can affect your future.
RELATED FAQS
  1. What is the Social Security administration responsible for?

    Learn about the Social Security Administration's main responsibilities along with its history, structure and social safety ... Read Answer >>
Hot Definitions
  1. Down Round

    A round of financing where investors purchase stock from a company at a lower valuation than the valuation placed upon the ...
  2. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  3. Portfolio Investment

    A holding of an asset in a portfolio. A portfolio investment is made with the expectation of earning a return on it. This ...
  4. Treynor Ratio

    A ratio developed by Jack Treynor that measures returns earned in excess of that which could have been earned on a riskless ...
  5. Buyback

    The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies ...
  6. Tax Refund

    A tax refund is a refund on taxes paid to an individual or household when the actual tax liability is less than the amount ...
Trading Center