The annual Social Security Administration trustees report for this year has yet to be released with post-Covid-19 estimates.
But because the economy is growing, including middle- and upper-income payrolls that comprise most of the trust funds’ revenues, the pandemic’s impact could be small, according to Shai Akabas, director of economic policy at the Bipartisan Policy Center.
“The bottom line is that we don’t think the picture has changed a whole lot,” Akabas said. “It’s still the dire picture that we had a year or two years or three years ago.”
Those born in 1960 may get a benefit cut
The dramatic effect the pandemic had on the economy and employment in 2020 had some worrying that the average wage index could drop dramatically.
That, in turn, could lower Social Security benefits for those people whose benefits are calculated based on that year, particularly retirement benefits for people born in 1960.
But the good news is that as 2020 progressed, the average wage index does not appear to have dropped by as much as people had anticipated.
The Congressional Budget Office estimated in January that it may have fallen just 0.5%. The official average wage index for 2020 won’t be confirmed until later this year.
The recovery points to a much smaller drop in benefits for the cohort affected.