DEFINITION of 'Actuarial Balance'

The difference between future Social Security obligations and the income rate of the Social Security Trust Fund as of present. The Social Security program would be said to be in actuarial balance if the summarized income rate is inline with the summarized cost rate of Social Security for any given valuation period.


Commonly referred to as the "solvency" of the Social Security System.

BREAKING DOWN 'Actuarial Balance'

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 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 out of actuarial balance. The difference would theoretically be the difference in the tax rate of Social Security provided from FICA.

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