Those turning 60 this year could face a dramatic hit of about $2,500 annually in Social Security benefits unless Congress addresses a glitch in the calculation formula.
State Sen. Scott Wilk, R-Santa Clarita, is pushing for correction with new legislation: Senate Resolution 89.
“Unless this is fixed, Americans turning 60 years old in 2020 will be unfairly singled out and punished for the rest of their lives simply because of the year they were born. Many people at this age are near retirement and have already factored in their anticipated Social Security earnings when planning for life after work,” Wilk said in a prepared statement. “Retirees across the nation rely on Social Security for things like food, rent, medication, medical care and transportation. It would be incredibly unfair to leave them high and dry so close to retirement when there are fixes available.”
The proposal suggests Congress base Social Security benefits calculated in 2020 off of only first-quarter earnings or wages paid before the pandemic took hold, or to base Social Security benefits for those turning 60 this year off of 2019 earnings.
Benefits are calculated based on both individual earning history and the aggregate economy-wide wages in the year a person turns 60, regardless of retirement age. With aggregate wage levels down due to millions out of work due to the pandemic, retirees are expected to lose roughly $2,500 annually, or about $45,859 on average over the course of their retirement, according to Wilk in a news release.
“The solution isn’t complicated, it’s simply a matter of doing what’s right. COVID-19 shouldn’t penalize a retiree for the rest of his/her life,” said Wilk. “These individuals have paid into this system for decades, and Congress must ensure it keeps our nation’s promise to those who have paid their dues.”
SR 89 was introduced and referred to the Committee on Rules on July 22.