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

    Introduction to Social Security

    You've probably contributed to this fund, but will you reap the benefits? Find out here.
  2. 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.
  3. 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.
  4. 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.
  5. Retirement

    Will Baby Boomers Bankrupt Social Security?

    Will the massive Baby Boomer generation, now retiring in droves, bankrupt the Social Security System?
  6. 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.
  7. Retirement

    10 Common Questions About Social Security

    Find out everything you need to know about this program.
  8. Retirement

    When Do I Stop Paying Social Security Tax?

    Almost never, unless you belong to one of these special groups.
  9. 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.
  10. Retirement

    No, Social Security Is Not Being Depleted

    There are a number of reasons why concerns over Social Security depletion have emerged, but there are ways you can prepare for it.
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. 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 >>
  4. 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. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  2. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  3. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
  4. Job Market

    A market in which employers search for employees and employees search for jobs. The job market is not a physical place as ...
  5. Yuppie

    Yuppie is a slang term denoting the market segment of young urban professionals. A yuppie is often characterized by youth, ...
  6. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
Trading Center