Actuarial Balance

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.

RELATED TERMS
  1. Actuarial Deficit

    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. Social Security

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

    The tax levied on both employers and employees used to fund the ...
  5. Social Security Benefits

    The monetary benefits received by retired workers who have paid ...
  6. National Social Security Fund (China)

    A government-controlled investment fund established primarily ...
Related Articles
  1. Retirement

    Can the Market Affect Social Security Benefits?

    What you should know about the relationship between the stock market and your monthly Social Security check.
  2. Retirement

    How to Fix an Error on Your Social Security Check

    For many seniors, social security benefits checks are their income stream which means the benefit has to be correct. If you spot an error, you can fix it.
  3. Retirement

    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.
  4. Retirement

    Will Baby Boomers Bankrupt Social Security?

    Will the massive Baby Boomer generation, now retiring in droves, bankrupt the Social Security System?
  5. Retirement

    What Will Social Security Look Like When You Retire?

    Many workers are not confident that Social Security will be around during their retirement. Here's what you need to know about its future.
  6. Retirement

    When Do I Stop Paying Social Security Tax?

    Almost never, unless you belong to one of these special groups.
  7. Retirement

    The Purpose of a Social Security Statement

    Learn what information your Social Security benefit statement contains and how you can use the information to more intelligently plan for retirement.
  8. Financial Advisors

    When Taking Social Security Early Can Make Sense

    Sometimes it makes financial sense to take Social Security early. Here's a look at when this might be a good idea.
  9. Retirement

    How Social Security Works After Retirement

    Millions of Baby Boomers are looking forward to collecting benefits, but several factors can affect how much they get and whether the money is taxed.
  10. Retirement

    How Social Security Works for the Self-Employed

    As both employee and employer, you have to pay more in Social Security, but there are deductions that can help lighten the tax burden.
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 >>
  2. Must I pay Social Security taxes on my earnings after full retirement age?

    Paying Social Security contributions continues even past reaching full retirement age, but that can increase future Social ... Read Answer >>
  3. Is it possible for a 79 year old married person to legally stop paying taxes on social ...

    I am 79 years old and my wife is 78 years old (working part time). I am drawing two Social Security checks, a small retirement, ... Read Answer >>
  4. Will a cash withdrawal from an employer sponsored 401k account be considered as income ...

  5. What is the Social Security tax rate?

    Learn what the Social Security tax rate is, how it has evolved over the years, what is future may hold and a common complaint ... Read Answer >>
  6. What are the most common scams regarding Social Security benefits?

    Learn about some of the most common Social Security scams that occur by phone, email and direct mail, and how to recognize ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center