Writer: Steve Dinnen
If you turn 60 in 2020, happy birthday. The Social Security Administration even has a special gift for you – a drain on your Social Security benefit that promises to never end.
Social Security payments are based on your 35 highest years of earnings. There also is an index that is applied to the growth in average national wages until the worker turns 60, says Kiplinger’s Sandy Block, the always well-informed financial issues writer. This year, because of the economic downturn due to the pandemic, average wages will drop. It doesn’t even matter if your individual pay during the year was unaffected.
Andrew Biggs, former deputy commissioner of the Social Security Administration, estimated for Block that this downward adjustment will cause benefits for those 60-year-olds to fall approximately 9%. For someone who retires at age 67 – the year you can collect full Social Security benefits – Biggs pegged that diminishment at about $2,500 a year.
If you live to 84, you’ll receive Social Security for 17 years and pile up a deficit of $42,500. There’s no way around this other than to stall your retirement – you build up an additional credit of around 8% for every year you delay receiving benefits past full retirement age.
Just one more way this pandemic is messing things up.
