Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by 1130Super » Sat May 09, 2020 3:58 pm

One of my Parents turns 60 next year any estimate for those turning 60 in 2021

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by FiveK » Sat May 09, 2020 4:14 pm

1130Super wrote:
Sat May 09, 2020 3:58 pm
One of my Parents turns 60 next year any estimate for those turning 60 in 2021
That will depend on unemployment rate, inflation, etc. Estimates assuming "no change in AWI from 2018's value" are probably as defensible as any.

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by fujiters » Mon May 11, 2020 3:02 pm

The April jobs report showed a jump in average wage (due to most of the job losses occurring in the lowest wage jobs). Perhaps, unexpectedly, people turning 60 this year will have a jump in SS?
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by David Jay » Mon May 11, 2020 3:21 pm

fujiters wrote:
Mon May 11, 2020 3:02 pm
The April jobs report showed a jump in average wage (due to most of the job losses occurring in the lowest wage jobs). Perhaps, unexpectedly, people turning 60 this year will have a jump in SS?
April jobs report covers the March numbers. The heaviest layoffs were in April. I don't think we will have a good picture for several months.
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by 1130Super » Mon May 11, 2020 3:37 pm

fujiters wrote:
Mon May 11, 2020 3:02 pm
The April jobs report showed a jump in average wage (due to most of the job losses occurring in the lowest wage jobs). Perhaps, unexpectedly, people turning 60 this year will have a jump in SS?
No definitely not the case. Average hourly earnings doesn’t account for people’s reduced hours. Soc security accounts for everyone in average that has at least $1 of W-2 income for all of 2020, unemployment income is another form and not part of SOC sec average

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by FiveK » Mon May 11, 2020 3:45 pm

David Jay wrote:
Mon May 11, 2020 3:21 pm
fujiters wrote:
Mon May 11, 2020 3:02 pm
The April jobs report showed a jump in average wage (due to most of the job losses occurring in the lowest wage jobs). Perhaps, unexpectedly, people turning 60 this year will have a jump in SS?
April jobs report covers the March numbers. The heaviest layoffs were in April. I don't think we will have a good picture for several months.
Agree with "don't think we will have a good picture for several months" even though The Employment Situation -- APRIL 2020 does cover April numbers.

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by JohnDoh » Mon May 11, 2020 4:25 pm

FiveK wrote:
Mon May 11, 2020 3:45 pm
David Jay wrote:
Mon May 11, 2020 3:21 pm
fujiters wrote:
Mon May 11, 2020 3:02 pm
The April jobs report showed a jump in average wage (due to most of the job losses occurring in the lowest wage jobs). Perhaps, unexpectedly, people turning 60 this year will have a jump in SS?
April jobs report covers the March numbers. The heaviest layoffs were in April. I don't think we will have a good picture for several months.
Agree with "don't think we will have a good picture for several months" even though The Employment Situation -- APRIL 2020 does cover April numbers.
The Report wrote:In April, employment in leisure and hospitality plummeted by 7.7 million, or 47 percent.
:shock: :shock: :shock: :oops:

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by retireIn2020 » Mon May 11, 2020 4:59 pm

How does this affect those that turn 60 in 2020 and are on or going on SS disability?

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by ObliviousInvestor » Mon May 11, 2020 5:17 pm

retireIn2020 wrote:
Mon May 11, 2020 4:59 pm
How does this affect those that turn 60 in 2020 and are on or going on SS disability?
It doesn't.

When a person becomes eligible for a retirement or disability benefit, we calculate their PIA using the bend points that are applicable that year. The bend points from a given year are calculated based on the average wage index from 2 years prior.

So the average wage index from 2020 (i.e., the number we're concerned with being very low) is relevant for:
1) people who become eligible for a retirement benefit in 2022 by turning 62 in that year (i.e., people born in 1960 as discussed through this thread), or
2) people who become entitled to disability benefits in 2022.

But for somebody who becomes entitled to disability benefits in 2020, we'd use the 2020 bend points, which are based on the 2018 average wage index.
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by neurosphere » Mon May 11, 2020 5:48 pm

fujiters wrote:
Mon May 11, 2020 3:02 pm
The April jobs report showed a jump in average wage (due to most of the job losses occurring in the lowest wage jobs).
Others have already touched on this...

Any particular change in the monthly average wage number is misleading, because each person who works for any fraction of the year is counted for SS wage index purposes. The monthly increase in "average wages" just represents the people who are "left".

E.g. worker one only works during the month of January while worker two works both Jan and Feb. Worker 1 earned $100 in Jan, worker two earned $2500 for each of Jan and Feb.

The average wage increased from $1300 in Jan to $2500 in February. Assuming no further earnings, the "average wage index" for the year will be $2550.

Now, had worker #1 NOT lost the job and also worked in Feb, the Feb average wages would have been $1300 (e.g. no change from Jan). But the year-end average wage would be $2600. Thus, the month to month numbers can change dramatically upward even while the year-end number declines (compared to otherwise).
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by GeoMetry » Thu Jun 18, 2020 5:55 pm

Link below to an Excel spreadsheet that does the calculations and allows you to fiddle with the appropriate numbers. No guarantees but it looks correct to me. It matches my anyPIA32 results within 10 cents, until I fiddle with the AWI numbers for 2019 and 2020. Pretty disheartening to see the affects. Looks like I will be missing out on an amount equal to my entire food budget.

The spreadsheet is only set up for someone born in 1960.

The link will disappear in a week.

https://filebin.net/2jjszxrmnh2wufy3

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by 1130Super » Thu Jun 18, 2020 6:58 pm

GeoMetry wrote:
Thu Jun 18, 2020 5:55 pm
Link below to an Excel spreadsheet that does the calculations and allows you to fiddle with the appropriate numbers. No guarantees but it looks correct to me. It matches my anyPIA32 results within 10 cents, until I fiddle with the AWI numbers for 2019 and 2020. Pretty disheartening to see the affects. Looks like I will be missing out on an amount equal to my entire food budget.

The spreadsheet is only set up for someone born in 1960.

The link will disappear in a week.

https://filebin.net/2jjszxrmnh2wufy3
So does that mean someone born in 1960 will receive 16% less soc security than someone born in 1959

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by FiveK » Thu Jun 18, 2020 7:09 pm

1130Super wrote:
Thu Jun 18, 2020 6:58 pm
So does that mean someone born in 1960 will receive 16% less soc security than someone born in 1959
Under current law, it depends on what the 2020 AWI is. Don't know that yet.

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by JoeRetire » Thu Jun 18, 2020 7:48 pm

1130Super wrote:
Sat May 09, 2020 3:58 pm
One of my Parents turns 60 next year any estimate for those turning 60 in 2021
Can't take SS at 60 anyway. They'll have to wait a few years to find out the numbers.
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by GeoMetry » Fri Jun 19, 2020 5:30 am

The article implies that this could affect 1961 as well. But I have also read that unemployment is disproportionately affecting lower income folks. The reason this hits folks born in 1960 so hard is because so many people had jobs at the beginning of 2020. The number of people receiving a W2 is the divisor. So next year if a large percentage of lower income people have not found employment and the upper income folks are still bringing in lots of income it could work out quite well for the 1961 folks. It is interesting to consider how this could have been very different if it occurred just a few months earlier and peak unemployment had occurred at the end of December 2019.

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by GeoMetry » Fri Jun 19, 2020 5:46 am

FiveK wrote:
Thu Jun 18, 2020 7:09 pm
1130Super wrote:
Thu Jun 18, 2020 6:58 pm
So does that mean someone born in 1960 will receive 16% less soc security than someone born in 1959
Under current law, it depends on what the 2020 AWI is. Don't know that yet.
It also depends (a lot less) on the AWI for 2019 which we also don't know yet. The trustees projected 3.1% increase for 2019 but I have seen higher estimates for the actual. The AWI numbers come out late in the following year so us 1960 folks will need to wait more than a year to know our fate. I suspect someone will be able to come up with pretty good estimates well before the official announcement.

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What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by RetireSoon90 » Sun Jul 26, 2020 5:14 am

[Thread merged into here, see below. --admin LadyGeek]

Short Story - Americans born in 1960. Unless Congress acts, the Covid-19 recession will cost them about 9% of their projected Social Security benefits.

Long Story - https://www.forbes.com/sites/janetnovac ... 5025b4ce57

Is there anything I can do to mitigate?
Last edited by RetireSoon90 on Sun Jul 26, 2020 5:50 am, edited 1 time in total.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by JoeRetire » Sun Jul 26, 2020 5:49 am

Anything is possible. We aren't supposed to speculate on potential legislation.

If you were born in 1960 (or any other particularly bad year), plan for it.
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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by sycamore » Sun Jul 26, 2020 6:28 am

Fwiw, couple of previous threads on this subject:
viewtopic.php?t=311036
viewtopic.php?t=312269

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by furwut » Sun Jul 26, 2020 6:31 am

Is there anything I can do to mitigate?
If you were planning on taking the benefit before age 70 delay for another year.

Contact your Congressperson. Though it has been pointed out those hitting 60 in 2009 faced a similar circumstance during the Great Recession and Congress declined to do anything then.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by retiringwhen » Sun Jul 26, 2020 6:41 am

Doesn't this happen every time we have a recession? Why is this time different?

If the AWI is calculated based upon the total national payroll divided by the # of earners. Any time we have a dip in payroll this same thing happens. Unless a jobs recession last through a full 12 mos. (and keeps the # of earners depressed the full period) this happens at least at the beginning of every recession and possibly at the end of the recession if payroll $ don't climb quickly.

Also, in the past we have had recessions where the payroll # recover but at lower pay amounts (the old barista argument.) This situation creates the same drag as well.

Much ado about something that happens almost every recession. Convince me otherwise.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by gasdoc » Sun Jul 26, 2020 7:01 am

Since they are conceivably trying to give money to people who need/deserve it to stimulate the economy, perhaps they could just give us "60ers" an advance on the future Soc Sec benefit. I would be happy with the value of the future income stream in todays dollars, paid today. We could all use it to purchase a deferred annuity, to kick in at age 70.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by 22twain » Sun Jul 26, 2020 8:35 am

retiringwhen wrote:
Sun Jul 26, 2020 6:41 am
Doesn't this happen every time we have a recession?
The AWI has decreased only once so far (since 1950), in 2009, by 1.5%. The projected decrease for this year is about 9%, according to the analyst cited in the Forbes article.

https://www.ssa.gov/oact/cola/AWI.html
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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by retiringwhen » Sun Jul 26, 2020 9:21 am

22twain wrote:
Sun Jul 26, 2020 8:35 am
retiringwhen wrote:
Sun Jul 26, 2020 6:41 am
Doesn't this happen every time we have a recession?
It's happened only once so far (since 1950), in 2009. That was a 1.5% decrease.

https://www.ssa.gov/oact/cola/AWI.html
Ahh, looking at the numbers I realized the AWI is calculated as nominal, in years like 1982 where there was significant job loss, but still pretty high inflation, maybe the inflation covers up the relative wage reductions. If we took a "real" wage view (take the out the inflation component of the AWI), then my observation might be more salient.

To test that I look at the AWI and the report CPI-U for the years 1981, 1982 and 2001 as a test. Well in all three cases the real AWI was positive.... interesting. But there were other years where it is negative, years not associated with recessions. This calculation is independent of the COLA calculations so retirees are protected by the COLA to some degree but current workers are not.

Seems like folks who retired who turned 60 in 1980, 89, 90, 93, 2002 and 2016 all got the shaft too. 2009 was the worst by far though.

So far this year is looking to a very very low inflation. so to 2020 cohort may not be so badly hit.

Code: Select all

	CPI-U	CPI-U	CPI-U	Nominal	Real AWI
	Start	End	%	AWI	AWI
1980	77.80	87.00	11.83%	9.01%	-2.82%
1981	87.00	94.30	8.39%	10.07%	1.68%
1982	94.30	97.80	3.71%	5.51%	1.79%
1983	97.80	101.90	4.19%	4.87%	0.68%
1984	101.90	105.50	3.53%	5.88%	2.35%
1985	105.50	109.60	3.89%	4.26%	0.37%
1986	109.60	111.20	1.46%	2.97%	1.51%
1987	111.20	115.70	4.05%	6.38%	2.33%
1988	115.70	121.10	4.67%	4.93%	0.26%
1989	121.10	127.40	5.20%	3.96%	-1.24%
1990	127.40	134.60	5.65%	4.62%	-1.03%
1991	134.60	138.10	2.60%	3.73%	1.13%
1992	138.10	142.60	3.26%	5.15%	1.89%
1993	142.60	146.20	2.52%	0.86%	-1.66%
1994	146.20	150.30	2.80%	2.68%	-0.12%
1995	150.30	154.40	2.73%	4.01%	1.28%
1996	154.40	159.10	3.04%	4.89%	1.85%
1997	159.10	161.60	1.57%	5.84%	4.26%
1998	161.60	164.30	1.67%	5.23%	3.56%
1999	164.30	168.80	2.74%	5.57%	2.83%
2000	168.80	175.10	3.73%	5.53%	1.80%
2001	175.10	177.10	1.14%	2.39%	1.24%
2002	177.10	181.70	2.60%	1.00%	-1.59%
2003	181.70	185.20	1.93%	2.44%	0.52%
2004	185.20	190.70	2.97%	4.65%	1.68%
2005	190.70	198.30	3.99%	3.66%	-0.33%
2006	198.30	202.42	2.08%	4.60%	2.52%
2007	202.42	211.08	4.28%	4.54%	0.26%
2008	211.08	211.14	0.03%	2.30%	2.27%
2009	211.14	216.69	2.63%	-1.51%	-4.13%
2010	216.69	220.22	1.63%	2.36%	0.73%
2011	220.22	226.67	2.93%	3.13%	0.21%
2012	226.67	230.28	1.59%	3.12%	1.53%
2013	230.28	233.92	1.58%	1.28%	-0.30%
2014	233.92	233.71	-0.09%	3.55%	3.64%
2015	233.71	236.92	1.37%	3.48%	2.11%
2016	236.92	242.84	2.50%	1.13%	-1.37%
2017	242.84	247.87	2.07%	3.45%	1.38%
2018	247.87	251.71	1.55%	3.62%	2.07%
2019	251.71	257.97	2.49%	3.62%	1.14%

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by vested1 » Sun Jul 26, 2020 9:38 am

Interesting topic, and just thinking out loud. Those who turned 60 in 2009 were born in 1949, and due to the nearly 10% average unemployment during that year of the recession, the average wage index was $623 less than in 2008. Since the current average unemployment in 2020 is 11.1% half way through the year, we have no idea how that percentage will be affected by the end of December. We are still losing over 1 million jobs a week however.

While unemployment numbers may be some indication of what the average wage index will be in 2020, there is not a direct correlation because, unless I'm mistaken, after unemployment benefits have expired the unemployed person is removed from the count of total unemployed. The actual number of unemployed is thus much higher, which definitely affects the average wage index. Other factors like reduced hours will also have an impact.

Since we still don't have the AWI for 2019 we likely won't know the effect of the pandemic on SS benefits until late 2022 for those born in 1960. The same concern could also exist for those born in 1961 if the solution to the pandemic is delayed through a good portion of 2021.

As for the possible reduction of 9% in the AWI from 2019, that's 6 times the amount of reduction from 2008 to 2009 (1.51%) due to the recession. Those who say to simply suck it up probably weren't born in 1960.
Last edited by vested1 on Sun Jul 26, 2020 9:51 am, edited 1 time in total.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by dodecahedron » Sun Jul 26, 2020 9:46 am

Interesting note: in the case of SS benefits due to death or disability, the basis for AWI is not age 60 year but rather the year two years prior to the year of death or onset of disability.

Thus the dip in AWI in 2020 will also affect anyone filing for SS benefits based on the earnings record of someone who dies or becomes disabled in 2022.

Not much that can be done to mitigate that although I suppose if you are contemplating risky activity (e.g., travel to a relative living in a dangerous place, risky elective surgery) that might leave you dead or disabled, you should consider doing it before or after 2022.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by vested1 » Sun Jul 26, 2020 10:08 am

dodecahedron wrote:
Sun Jul 26, 2020 9:46 am
Interesting note: in the case of SS benefits due to death or disability, the basis for AWI is not age 60 year but rather the year two years prior to the year of death or onset of disability.

Thus the dip in AWI in 2020 will also affect anyone filing for SS benefits based on the earnings record of someone who dies or becomes disabled in 2022.

Not much that can be done to mitigate that although I suppose if you are contemplating risky activity (e.g., travel to a relative living in a dangerous place, risky elective surgery) that might leave you dead or disabled, you should consider doing it before or after 2022.
Great, if my mom were still alive I'd have to mention to her that she should have had me 1 year earlier or 1 year later. I turn 70 in the exact middle of 2022, when I'll file for my own benefit. Thanks to your comment I plan on being cryogenically frozen between 1/1/22 and 7/2/22.
:sharebeer

Seriously though, I assume your comment applies to someone who dies or becomes disabled prior to FRA and has not yet filed.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by clydewolf » Sun Jul 26, 2020 10:36 am

retireingwhen aske, "Doesn't this happen every time we have a recession? Why is this time different?"

This time is different because this time I am aware of what's happening and it's happening to me!

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by dodecahedron » Sun Jul 26, 2020 10:42 am

vested1 wrote:
Sun Jul 26, 2020 10:08 am
dodecahedron wrote:
Sun Jul 26, 2020 9:46 am
Interesting note: in the case of SS benefits due to death or disability, the basis for AWI is not age 60 year but rather the year two years prior to the year of death or onset of disability.

Thus the dip in AWI in 2020 will also affect anyone filing for SS benefits based on the earnings record of someone who dies or becomes disabled in 2022.

Not much that can be done to mitigate that although I suppose if you are contemplating risky activity (e.g., travel to a relative living in a dangerous place, risky elective surgery) that might leave you dead or disabled, you should consider doing it before or after 2022.
Great, if my mom were still alive I'd have to mention to her that she should have had me 1 year earlier or 1 year later. I turn 70 in the exact middle of 2022, when I'll file for my own benefit. Thanks to your comment I plan on being cryogenically frozen between 1/1/22 and 7/2/22.
:sharebeer

Seriously though, I assume your comment applies to someone who dies or becomes disabled prior to FRA and has not yet filed.
You are correct that my comment needed more details about when it applies, however FRA is not quite the right cutoff.

My comment above generally applies to workers who die or become disabled before the year in which they would have turned age 62, and it also appears there is an optional version of the rule called Windexing, which can make things even more complicated than described.

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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by neurosphere » Sun Jul 26, 2020 10:51 am

22twain wrote:
Sun Jul 26, 2020 8:35 am
retiringwhen wrote:
Sun Jul 26, 2020 6:41 am
Doesn't this happen every time we have a recession?
The AWI has decreased only once so far (since 1950), in 2009, by 1.5%. The projected decrease for this year is about 9%, according to the analyst cited in the Forbes article.

https://www.ssa.gov/oact/cola/AWI.html
Remember, the "9%" number is not the actual projected absolute decrease in AWI, but rather the change from what was otherwise expected. E.g. if the AWI was expected to go up 3% in 2020, but is instead down 6%, that's a "change" of -9%.

I assume the 1.5% number you cite is an actual/absolute change in the AWI. If the AWI that year had been "expected" to go up 5% we would have been talking about a projected "Decrease in the AWI" that year of 7.5%. :D
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Re: What the Heck, Reduced SS Benefits For Boomers Born In 1960 due to COVID

Post by sycamore » Sun Jul 26, 2020 3:33 pm

The Forbes article references a working paper written by Andrew Biggs on the topic -- https://repository.upenn.edu/cgi/viewco ... prc_papers.

And there's another paper Social Security's Financial Outlook: The 2020 Update In Perspective that is a broader look at SS in general but it also discusses the working paper.

Just FYI for anyone looking for more details on this subject.

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Turning 62 in 2022?

Post by TravelforFun » Thu Jul 30, 2020 8:03 pm

[Post merged into here, see below. --admin LadyGeek]

'The effect is very likely to be so significant that workers turning 62 in 2022 would receive initial retirement benefits that are less than those of workers who were born a year earlier and who had essentially the same earnings history. This phenomenon, known as a benefit notch, would have long-lasting consequences.'

and

'The chief actuary of the Social Security Administration predicts an average earner born in 1960 could lose $1,428 per year in inflation-adjusted dollars for the rest of their life, and above-average earners could lose even more each year.'

https://www.americanprogress.org/press/ ... -pandemic/

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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by LadyGeek » Thu Jul 30, 2020 8:45 pm

I merged RetireSoon90's thread and TravelforFun's post into the on-going discussion.

Changes in Social Security require changes in legislation, a political process. Speculation about future legislation is prohibited by forum policy, see Unacceptable Topics:
Politics and Religion

In order to avoid the inevitable frictions that arise from these topics, political or religious posts and comments are prohibited. The only exceptions to this rule are:
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This forum is focused on investing that is directly actionable to personal investors. We don't hold debates on conjecture.

The whole point of the policy is to (1) eliminate contentious disagreements that result from these discussions and (2) keep investors from making bad decisions. Proposed legislation changes many times between the time it's introduced and signed into law.

Please stay focused on the financial aspects.
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LilyFleur
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by LilyFleur » Thu Jul 30, 2020 10:45 pm

I was born in 1960 and due to my health conditions was planning on starting SS in 2022 at age 62.

Should I be open to the possibility of delaying SS for a year or two?

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FiveK
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by FiveK » Thu Jul 30, 2020 11:10 pm

LilyFleur wrote:
Thu Jul 30, 2020 10:45 pm
I was born in 1960 and due to my health conditions was planning on starting SS in 2022 at age 62.

Should I be open to the possibility of delaying SS for a year or two?
Always a good idea to look at your own situation rather than do what conventional rules of thumb suggest.

The two main assumptions for SS benefit start choice are life expectancy and rate of return. How much Roth conversion you might do before taking SS is another consideration.

You'll know by the end of 2021 how 2020's average wages affect your personal SS benefits.

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David Jay
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Location: Michigan

Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by David Jay » Fri Jul 31, 2020 9:34 pm

GeoMetry wrote:
Fri Jun 19, 2020 5:46 am
FiveK wrote:
Thu Jun 18, 2020 7:09 pm
1130Super wrote:
Thu Jun 18, 2020 6:58 pm
So does that mean someone born in 1960 will receive 16% less soc security than someone born in 1959
Under current law, it depends on what the 2020 AWI is. Don't know that yet.
It also depends (a lot less) on the AWI for 2019 which we also don't know yet. The trustees projected 3.1% increase for 2019 but I have seen higher estimates for the actual. The AWI numbers come out late in the following year so us 1960 folks will need to wait more than a year to know our fate. I suspect someone will be able to come up with pretty good estimates well before the official announcement.
Typically Mid-October. So the 2019 AWI will be published in about 2 1/2 months.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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neurosphere
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Re: Graph of how SS benefits can change with decreases in 2020 national wages for one born in 1960

Post by neurosphere » Tue Aug 04, 2020 2:05 pm

FiveK wrote:
Thu Jul 30, 2020 11:10 pm
You'll know by the end of 2021 how 2020's average wages affect your personal SS benefits.
I just noticed that the latest social security trustees report was dated April 22, 2020. That was in the midst of covid onset and the covid-related market drop. I doubt that they had any time to opine/estimate anything based on the current events.

But it got me to thinking that next year's Trustee report may provide some useful estimates about 2020 wage data, in advance of the official numbers. I suspect their ability to predict proximal wage changes is as good as anyone else's and they may even have access to data others don't, e.g. W2 data received so far?
If you have to ask "Is a Target Date fund right for me?", the answer is "Yes".

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