Social Security Post COVID-19
Social Security was in a bit of a pickle before COVID-19 because the program owes more money in benefits than it earns in revenue. This is caused by the massive number of baby boomers leaving their jobs and entering their retirement years. Fortunately, the Social Security has trust funds to keep up with the promised benefits. Now, it’s deep in the pickle jar now that COVID-19 is present. People are asking what could happen to their Social Security benefits.
Down but Not Out
There are three factors that are affecting the strain on Social Security. Unemployment is at double-digits, seasoned workers are getting laid off, and underemployment will rise and the payroll tax revenue will decrease. Unless Congress steps in to make an effective counterattack against this issue sooner than later, things could get ugly.
The good news is that this does not mean that Social Security will not run out of money. According to the SmartAsset, “The reason why is because projections show that even if nothing is done about the trust funds, the program will cover around 79% of its obligations through 2090. That is a funding issue to address. It doesn’t mean, though, that the program will go bankrupt.”
What Can Future Retirees Do?
The Motley Fool stated the following: “Those who are still working should ramp up their savings efforts to compensate for the possibility of lower benefits in retirement.” So, the best way to have a safety net is to cut costs and increase savings.
It is unfortunate that this pandemic has put everything and everyone’s lives on pause. However, the other good part about this situation is that most people are focused on the basic essentials during this pandemic. There are no vacations and no large group events just to practice precaution.
Just because places are reopening does not mean that it is safe to host large events. The economy is slowly but surely getting back on track. With the help of remote working, social distancing, and staying healthy as possible, we will overcome this. The strongest and the smartest will survive.