Social Security for 1960 babies

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Svensk Anga
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Social Security for 1960 babies

Post by Svensk Anga »

A year ago there was much concern that the Covid-related unemployment would impair the SS benefits of those born in 1960. The benefit calculation depends on the national average wage in the year one turns 60. Speculation was the average would be low and that the low average would result in low benefits lasting the duration of one's SS benefit.

The 2020 average wage is out today. See here: https://www.ssa.gov/OACT/COLA/AWI.html

Contrary to expectations, the average wage was up 2.83% compared to 2019. There will be no unusual impairment for those born 60 years before the pandemic.
masteraleph
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Re: Social Security for 1960 babies

Post by masteraleph »

Svensk Anga wrote: Wed Oct 13, 2021 9:15 am Contrary to expectations, the average wage was up 2.83% compared to 2019. There will be no unusual impairment for those born 60 years before the pandemic.
This is not actually a surprise. One of the things that became clear is that layoffs were heavily in lower income positions- it's part of the reason that wages vaguely keeping up this year is actually a really good sign for the economy, because many of the jobs that have been added this year are in hospitality and similar low paying jobs.
skibum
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Re: Social Security for 1960 babies

Post by skibum »

Great news. This affects me, and I've been waiting for the release of the 2020 AWI.

There were some dire predictions during middle of 2020. Later, the CBO had estimated AWI of -3.8% in Sept 2020, then -.5% in Jan of 2020. Some private projections in June of 2021 for AWI of approximately 1%.

The 2.83% released today is a pleasant surprise for me. Best wishes to 1960 babies and all.
Candor
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Re: Social Security for 1960 babies

Post by Candor »

I was wondering about that because my brother was born in 1960 and will be taking SS next year. Thanks for the info.
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LilyFleur
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Re: Social Security for 1960 babies

Post by LilyFleur »

Thanks for the update! I'm a 1960s baby!
Dottie57
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Re: Social Security for 1960 babies

Post by Dottie57 »

Candor wrote: Wed Oct 13, 2021 11:44 am I was wondering about that because my brother was born in 1960 and will be taking SS next year. Thanks for the info.
My brother and SIL are also 1960 births. Glad to see they won’t be hit by Covid in a substantial way.
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JoeRetire
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Re: Social Security for 1960 babies

Post by JoeRetire »

Candor wrote: Wed Oct 13, 2021 11:44 am I was wondering about that because my brother was born in 1960 and will be taking SS next year. Thanks for the info.
Encourage him to experiment with https://opensocialsecurity.com/ before deciding, if he can.
Just remember: it's not a lie if you believe it.
CrossOverGuy
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Re: Social Security for 1960 babies

Post by CrossOverGuy »

Another chart from the Social Security website re AWI for 2020 (the year which would affect those born in 1960):

https://www.ssa.gov/oact/cola/awidevelop.html

Much better news than than had been reported for over a year or so.
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jeffyscott
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Re: Social Security for 1960 babies

Post by jeffyscott »

masteraleph wrote: Wed Oct 13, 2021 10:12 am
Svensk Anga wrote: Wed Oct 13, 2021 9:15 am Contrary to expectations, the average wage was up 2.83% compared to 2019. There will be no unusual impairment for those born 60 years before the pandemic.
This is not actually a surprise. One of the things that became clear is that layoffs were heavily in lower income positions- it's part of the reason that wages vaguely keeping up this year is actually a really good sign for the economy, because many of the jobs that have been added this year are in hospitality and similar low paying jobs.
Because of the way they calculate the "average wage", this was a huge surprise to me. While they had backed off from the initial projections, things I saw earlier this year were still projecting a decline in at least the low single digits.

The average wage is the total income earned, divided by the number of people getting a W-2. There is no accounting for how many hours, days or weeks, each person worked to earn the wages reported on the W-2. So if someone would have earned $40,000 in 2020, but was laid off on March 31 and so earned only $10,000, that would mean one wage earner at $10K, rather than $40K, would be entered into the calculation. They do not treat that laid off person as $10K earned by 1/4 of a wage earner or anything like that.
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