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 Benefits

    The monetary benefits received by retired workers who have paid ...
  5. Actuary

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

    An employee of the U.K. government who works for the Government's ...
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. Retirement

    Introduction to Social Security

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

    Is Social Security the Next President’s Problem?

    Social Security isn't going bankrupt, but someone will need to fix it at some point.
  5. 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.
  6. 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.
  7. Retirement

    4 Things That Are Reducing Your Social Security

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

    Who Pays Your Social Security Benefits?

    The short answer is, current earners. Taxes on current wages pay the Social Security benefits of retirees, the disabled, children and other beneficiaries.
  9. 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.
  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. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  2. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
  3. Expense Ratio

    A measure of what it costs an investment company to operate a mutual fund. An expense ratio is determined through an annual ...
  4. Mezzanine Financing

    A hybrid of debt and equity financing that is typically used to finance the expansion of existing companies. Mezzanine financing ...
  5. Long Run

    A period of time in which all factors of production and costs are variable. In the long run, firms are able to adjust all ...
  6. Quasi Contract

    A legal agreement created by the courts between two parties who did not have a previous obligation to each other. A normal ...
Trading Center