Triboro Center for Rehabilitation and Nursing on Changes that COVID-19 May Bring to Social Security
A combination of government intervention and high unemployment during the COVID-19 pandemic could lead to sweeping change to the country’s Social Security system, which is funded by people currently in the job market.
Triboro Center for Rehabilitation and Nursing has a look at the changes that could be coming to Social Security in the coming years and decades thanks to the pandemic.
Trust Funds Could Run Out Sooner
Social Security has run at a deficit for many years due to more and more Americans eligible for benefits and also living longer. At the current pace, the system is set to run out of funds in 2035, but thanks to the record unemployment numbers we’ve seen in 2020, that timetable could be accelerated by as much as five or six years without some sort of government intervention.
Benefits May Not Increase Much in the Coming Years
Due to job losses and a weak economy (people are reluctant to spend money now), inflation levels in 2020 have been very low. Social Security benefits are tied into inflation, so there will probably not be a large increase in benefits in 2021 or possibly even subsequent years.
Wage Cap May Not Increase
In order to continue to keep the program funded, the wage cap (Social Security is not collected after around $135,000-worth of earnings annually) generally grows year by year. Due to so many Americans out of work, however, the wage cap isn’t expected to grow until possibly 2023.
Possible Social Security Tax Relief
A proposal being considered in Washington is to temporarily suspend the Social Security tax so workers can take home more money in their paychecks. But any stoppage in Social Security tax collection will lead to a decrease in overall funds.
What Can Be Done?
If you’re nearing retirement age, it’s suggested that you have a separate retirement plan (a 401[k] through an employer, an IRA, etc.) in order for you to not be totally reliant on Social Security when you retire.
To learn more about Triboro Center for Rehabilitation and Nursing and all of the services they offer, visit https://triboro-center.facilities.centershealthcare.org/.
