Social Security actuaries update projections for COVID-19 - MarketWatch & AMAC

When the Social Security Trustees released its yearly report on the program’s financial health last April, it made clear that the outlook did not take into account the Covid-19 pandemic.  Various commentators have suggested that the insolvency date might move up several years.  But in this MarketWatch piece, Alicia Munnell notes that while there will indeed be a “hit” to the program’s finances, it appears to be more modest than many pundits thought earlier this year.  Among the highlights: “Mortality is up, fertility and immigration are down, disability incidence is down in 2020 and then up for the next three years, unemployment is up, real wages down then up, and real interest rates down.”

The impact on Social Security finances appears to be modest, as most of the pandemic/recession effects end by 2025, and the effects on the long-term deficit and on the depletion of the trust fund are negligible.  Still, benefits will be cut across the board by up to 25% once reserves are depleted in 2034 (one year earlier than last projected).  Thus, reform before then is required.  Munnell suggests Congress and the new Administration begin to focus on the issue once the pandemic is no longer monopolizing their plates.  Full article here.

The Association of Mature American Citizens (AMAC) believes Social Security must be preserved and modernized.  This can be achieved by making modest changes in cost of living adjustments and the retirement age, with no additional taxes on workers.  AMAC advocates for a bipartisan compromise, “The Social Security Guarantee Act,” taking selected portions of bills introduced by former Rep. Johnson (R-TX) and current Rep. Larson (D-CT) and merging them with the Association’s own well researched ideas.  One component is Social Security PLUS, a new, voluntary plan that would allow all earners to have more income available at retirement.  This component is intended to appeal especially to younger workers.  AMAC is resolute in its mission that Social Security be preserved and modernized and has gotten the attention of lawmakers in DC, meeting with a great many congressional offices and their staffs over the past several years.  Read AMAC’s plan here.



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