Ask Larry

Is Congress Working On A Fix For People Who Turned 60 During COVID-19?

Is there a bill or is Congress working on a fix for the people who turned 60 during COVID 19, so they won’t get shorted on social security? Any info will help. Thank You

Hi. To clarify the issue for other readers, I'll start with a brief explanation. Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings. Indexing converts a person's historical annual earnings to amounts more reflective of current day dollars. For example, a person born in 1959 who earned $20,000 in 1991 would have those earnings indexed to an amount close to $50,000 when calculating their Social Security retirement benefit rate.

Worker's earnings histories are indexed based on the average wage index (AWI) in the year they reach 60. So the AWI in 2020 will be used to calculate the retirement benefit rates for people born in 1960. And if the 2020 AWI is lower due to the pandemic, the historical indexed earnings amounts and the resulting benefit rates for people born in 1960 will also be lower.

I'm not aware of any bills currently pending in Congress to address this issue, but that doesn't mean that there aren't some that are at least being worked on. I think it would be hard to for Congress to finalize any legislation intended to address this issue at the present time. Retirement benefit rates for people born in 1960 can't be precisely calculated until the 2020 AWI is determined, and that amount won't be known until later this year. In other words, it's difficult to fix a problem until you find out how much of a problem there actually is. I do know that Larry strongly believes that congress will take action at some point to address the benefit calculation problems caused by the pandemic.

Best, Jerry

Jun 27 2021 - 10:28am
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