Monday, February 6, 2023
Homenew road to retirementSocial Security’s funds have been ‘significantly affected’ by Covid-19. Here’s how that...

Social Security’s funds have been ‘significantly affected’ by Covid-19. Here’s how that could impact your benefits

  • Social Security's funds could run out sooner than was believed, according to the first estimates that take into account the effects of Covid-19.
  • However, those projections are unlikely to prompt swift action by lawmakers to repair the program's funds, one expert says.
  • Recent inflation trends point to a cost-of-living adjustment of about 6% for next year.

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A new report released by the Social Security Administration on Tuesday reveals new estimates of just how much the Covid-19 pandemic has impacted the program's already ailing trust funds.

The results show the funds from which the program pays benefits have been "significantly affected" by both the pandemic and the ensuing recession of 2020.

Now, the fund that pays retirement and survivor benefits — known as the Old-Age and Survivors Insurance Trust Fund — will be able to pay full benefits as scheduled only until 2033. That is one year earlier than last year's projections.

At that time, the program will only be able to pay 76% of those scheduled benefits.

The Disability Insurance Trust Fund, meanwhile, will be able to pay benefits until 2057 – eight years sooner than last year's estimates. At that time, Social Security will be able to pay 91% of those benefits.

Combined, both trust funds are estimated to be able to pay full benefits as scheduled until 2034, one year earlier than last year's projections, at which point 78% of benefits will be payable.

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