Born in 1960? Expect a Big Social Security Cut

[RunningBum]

So there's a shortfall which is very likely to affect paying full SS benefits around 2034. No politician seems to want to do anything to address that, especially cutting benefits now.

There's a bad year (or maybe a few) where a lower AWI will reduce benefits to sum. I don't know just how much or how little it'll affect the 2034 shortfall, but it's gotta help some. All politicians have to do is let it go...do nothing.

I'm not sure why a group of politicians would step up to make the 2034 scenario more likely to happen. Sorry, 1960ers. I'm 1961 so I kind of expect us to get hit as well.

 

[Time2]

This page has number of workers and workers (x 1000) and income
(x 10^6) and it calculates out to average amount for the current year.
Then there is an increase, that is 'added on to your AWI. The 'add on' comes from the increase from the previous year.
I was born in 1955, 2015 was a good year. My wife's year is 2019, not on the chart yet.


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


OR Maybe we have it all wrong.


https://www.ssa.gov/oact/cola/AWI.html#Series


When indexing an individual's earnings for benefit computation purposes, we must first determine the year of first eligibility for benefits. For retirement, eligibility is at age 62. If a person reaches age 62 in 2020, for example, then 2020 is the person's year of eligibility. We always index an individual's earnings to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2020, we would index the person's earnings to the average wage index for 2018, or 52,145.80. We would multiply earnings in a year before 2018 by the ratio of 52,145.80 to the average wage index for that year; we would take earnings in 2018 or later at face value. (See two examples of indexed earnings.)

 

[djsander]

I contacted my congressman on this subject with an explanation. I received a canned email response that didn’t address my concerns and only addressed working to preserve social security and Medicare and working to eliminate fraud and abuse. Basically he ignored me. I responded back and let him know he didn’t address my concerns and would let all my friends and coworkers know he doesn’t care one bit about his constituents. I waiting to see if I get another reply. I’m a 1960 person and will be following this one closely. Printed out my estimated benefits and will see what happens. I’ll report back in November or so when the system is updated. My guess is the do nothing politicians won’t care unless it has a big affect on their electability.

 

[Time2]

I contacted my congressman on this subject with an explanation. I received a canned email response that didn’t address my concerns and only addressed working to preserve social security and Medicare and working to eliminate fraud and abuse. Basically he ignored me. I responded back and let him know he didn’t address my concerns and would let all my friends and coworkers know he doesn’t care one bit about his constituents. I waiting to see if I get another reply. I’m a 1960 person and will be following this one closely. Printed out my estimated benefits and will see what happens. I’ll report back in November or so when the system is updated. My guess is the do nothing politicians won’t care unless it has a big affect on their electability.

Read this and see if it really affects you.

https://www.ssa.gov/oact/cola/AWI.html#Series
Note where it says 62 not 60.

 

[gwraigty]

I contacted my congressman on this subject with an explanation. I received a canned email response that didn’t address my concerns

I'm not defending him, but based on an experience I had several years ago, your congressman may not be aware you made contact. The interns/office staff screen stuff and only pass on what they think is important. The staff probably don't read any emails/messages thoroughly enough to determine it's not just another constituent demanding they do something to fix the impending SS shortfall, which they've heard a thousand times already.

 

[djsander]

I'm not defending him, but based on an experience I had several years ago, your congressman may not be aware you made contact. The interns/office staff screen stuff and only pass on what they think is important. The staff probably don't read any emails/messages thoroughly enough to determine it's not just another constituent demanding they do something to fix the impending SS shortfall, which they've heard a thousand times already.

I agree. But is still have to vent on the congressman. They hire the staff and the staff should do a better job.

 

[djsander]

Read this and see if it really affects you.

https://www.ssa.gov/oact/cola/AWI.html#Series
Note where it says 62 not 60.

My answer is yes it affects me. The indexing is based on AWI for the year you turn 60. For 2020 the AWI is expected to decrease. It is well discussed here and elsewhere. They look back two years from the year you turn 62 to determine your AWI. So that is the year you turn 60.

 

[RunningBum]

This page has number of workers and workers (x 1000) and income
(x 10^6) and it calculates out to average amount for the current year.
Then there is an increase, that is 'added on to your AWI. The 'add on' comes from the increase from the previous year.
I was born in 1955, 2015 was a good year. My wife's year is 2019, not on the chart yet.


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


OR Maybe we have it all wrong.


https://www.ssa.gov/oact/cola/AWI.html#Series


When indexing an individual's earnings for benefit computation purposes, we must first determine the year of first eligibility for benefits. For retirement, eligibility is at age 62. If a person reaches age 62 in 2020, for example, then 2020 is the person's year of eligibility. We always index an individual's earnings to the average wage level two years prior to the year of first eligibility. Thus, for a person retiring at age 62 in 2020, we would index the person's earnings to the average wage index for 2018, or 52,145.80. We would multiply earnings in a year before 2018 by the ratio of 52,145.80 to the average wage index for that year; we would take earnings in 2018 or later at face value. (See two examples of indexed earnings.)

No, I don't think so. I bolded the part that says the AWI is done two years before first eligibility, so AWI is calculated at age 60.

 

[SevenUp]

Read this and see if it really affects you.

https://www.ssa.gov/oact/cola/AWI.html#Series
Note where it says 62 not 60.

Yes, if one turns 62 in 2020 that means a 1958 birthday, and the 2018 AWI is used.

If one turns 62 in 2022 that means a 1960 birthday, and the 2020 AWI is used.

The latter situation is the focus of this thread.

 

[Time2]

Yes, if one turns 62 in 2020 that means a 1958 birthday, and the 2018 AWI is used.

If one turns 62 in 2022 that means a 1960 birthday, and the 2020 AWI is used.

The latter situation is the focus of this thread.

Ahh, I missed a line, "We always index an individual's earnings to the average wage level two years prior to the year of first eligibility."
Thanks for setting me straight.
https://www.ssa.gov/oact/cola/AWI.html#Series

 

[rrppve]

I would think AARP might be an effective advocate for this as they already have plenty of influence with the boys and girls in DC.

Have not been able to get the time of day from AARP lobbying office. Anyone have a better contact there? Please send me their contact info. Thanks

 

[cathy63]

Those born in 1960 may want to follow the progress of bill H.R.7499, which was introduced in the House on July 9th, to change the SS law to use "the highest national average wage index (as so defined) for any calendar year before such second calendar year" when calculating the PIA. So, if the 2020 wage index is indeed lower than 2019's, SSA would use the 2019 wage index for those who turn 60 in 2020. This would continue to apply going forward, but it's not retroactive to the 2009 downturn.

There's a lot of other stuff in this bill that I didn't try to parse out, such as "SEC. 4. ACROSS-THE-BOARD BENEFIT INCREASE." and "SEC. 7. EXTENSION OF CHILD’S BENEFIT FOR FULL-TIME POST-SECONDARY SCHOOL STUDENTS UNDER AGE 23." I don't know if these additions will help or hinder, but I'm sure there will be much debate to come.

The current status is "Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned."

Link to the bill: https://www.congress.gov/bill/116th-congress/house-bill/7499/text

 

[CaptTom]

Link to the bill: https://www.congress.gov/bill/116th-congress/house-bill/7499/text

Thanks! I saw an article on that but it was pretty weak on details.

I can't help but notice that there are 47 co-sponsors, and every one says "[D-" next to their name. Not one "[R-."

I'm not mentioning this to spark partisan debate. Only that in the current environment, nothing supported only by those with a "[D-" next to their name is likely to get passed.

I have to assume at this point that this is nothing more than a gesture, with no real hope of passage into law.

Without hearing the reasons both parties can't agree on this, I can't even be sure *I* want to support it. Perhaps there's an alternative bill in the works from the other side of the aisle. I wish there was a way to find out.

 

[djsander]

Those born in 1960 may want to follow the progress of bill H.R.7499, which was introduced in the House on July 9th, to change the SS law to use "the highest national average wage index (as so defined) for any calendar year before such second calendar year" when calculating the PIA. So, if the 2020 wage index is indeed lower than 2019's, SSA would use the 2019 wage index for those who turn 60 in 2020. This would continue to apply going forward, but it's not retroactive to the 2009 downturn.

There's a lot of other stuff in this bill that I didn't try to parse out, such as "SEC. 4. ACROSS-THE-BOARD BENEFIT INCREASE." and "SEC. 7. EXTENSION OF CHILD’S BENEFIT FOR FULL-TIME POST-SECONDARY SCHOOL STUDENTS UNDER AGE 23." I don't know if these additions will help or hinder, but I'm sure there will be much debate to come.

The current status is "Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned."

Link to the bill: https://www.congress.gov/bill/116th-congress/house-bill/7499/text

Thanks for the update. I’m following this one as I’m a 1960er. I’ve contacted my congressman which was a dud.

 

[Time2]

Thanks! I saw an article on that but it was pretty weak on details.

I can't help but notice that there are 47 co-sponsors, and every one says "[D-" next to their name. Not one "[R-."

I'm not mentioning this to spark partisan debate. Only that in the current environment, nothing supported only by those with a "[D-" next to their name is likely to get passed.

I have to assume at this point that this is nothing more than a gesture, with no real hope of passage into law.

Without hearing the reasons both parties can't agree on this, I can't even be sure *I* want to support it. Perhaps there's an alternative bill in the works from the other side of the aisle. I wish there was a way to find out.

I suspect it would get the 'R' support if it was just the, "highest national average wage index (as so defined) for any calendar year before such second calendar year". That issue seems to be an issue of fairness. However, when you start adding on additional large government programs the adults need to draw the line. I hope it gets sent to the senate, they get some things removed and it can be passed.

 

[CaptTom]

I suspect it would get the 'R' support if it was just the, "highest national average wage index (as so defined) for any calendar year before such second calendar year". That issue seems to be an issue of fairness. However, when you start adding on additional large government programs the adults need to draw the line. I hope it gets sent to the senate, they get some things removed and it can be passed.

Right. I always thought each individual line item on a bill should stand alone.

At any rate, I hope all the extra "fluff" is just there to allow compromise. I wish there were bi-partisan support. I'm tired of every issue becoming a political football.

 

[rrppve]

Those born in 1960 may want to follow the progress of bill H.R.7499, which was introduced in the House on July 9th, to change the SS law to use "the highest national average wage index (as so defined) for any calendar year before such second calendar year" when calculating the PIA. So, if the 2020 wage index is indeed lower than 2019's, SSA would use the 2019 wage index for those who turn 60 in 2020. This would continue to apply going forward, but it's not retroactive to the 2009 downturn.

There's a lot of other stuff in this bill that I didn't try to parse out, such as "SEC. 4. ACROSS-THE-BOARD BENEFIT INCREASE." and "SEC. 7. EXTENSION OF CHILD’S BENEFIT FOR FULL-TIME POST-SECONDARY SCHOOL STUDENTS UNDER AGE 23." I don't know if these additions will help or hinder, but I'm sure there will be much debate to come.

The current status is "Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned."

Link to the bill: https://www.congress.gov/bill/116th-congress/house-bill/7499/text

So a little update here. This bill died in Committee. It was introduced by John Larson (CT-1). My understanding is that he wants to re-introduce it this session and I'm trying to connect with committee staff on it.
The latest estimate from the CBO is that the effect may not be that bad. Only 0.5%. The actual AWI for 2020 should be released in October.
https://www.cbo.gov/publication/56973
I'm considering/playing with the idea of forming a lobbying group, maybe a PAC, to advocate on this issue.

 

[MarieIG]

So a little update here. This bill died in Committee. It was introduced by John Larson (CT-1). My understanding is that he wants to re-introduce it this session and I'm trying to connect with committee staff on it.
The latest estimate from the CBO is that the effect may not be that bad. Only 0.5%. The actual AWI for 2020 should be released in October.
https://www.cbo.gov/publication/56973
I'm considering/playing with the idea of forming a lobbying group, maybe a PAC, to advocate on this issue.

I suppose we shall see, but I have a hard time reconciling a .5% difference. There were huge numbers of people who were laid off in March (and rolling periods thereafter). Even if they were hired back after a few months, their yearly wage would still be down. My employer still has people on furlough; and has not restored Covid-Cut salaries.

 

[rrppve]

I suppose we shall see, but I have a hard time reconciling a .5% difference. There were huge numbers of people who were laid off in March (and rolling periods thereafter). Even if they were hired back after a few months, their yearly wage would still be down. My employer still has people on furlough; and has not restored Covid-Cut salaries.

I agree. I was surprised that it was that low. CBO estimated 3.8% in the Fall. I’ve heard estimates up to 9.5%
Regardless, it represents a permanent reduction in decades of benefits received in return for 35 years of work simply due to a 1 year recession. In this case, due to the Covid pandemic. Since the Covid relief bill is likely going to be passed through the budget reconciliation process, it can’t be attached to that bill.
The 2009 decline in the AWI was 1.5% affecting those born in 1949.

 

[Blue_Bird]

In this "1960" boat as well. I doubt that estimate...even so, any decline is not nearly as good as the usual increase. I have been tweeting lawmakers to remind them of this bill...bummed.

 

[2017ish]

Yeah, old news (poster neurosphere on bogleheads was way ahead of curve). Will be interesting to see if any changes to the law (and to see how bad awi is hit.) If we get any social, it is more than we expect, but hoping for other's sake that it isn't too bad.

(Me, 1960; DW, 1961)

 

[Al in Ohio]

Well thankfully I was born in 1961.

 

[RunningBum]

Well thankfully I was born in 1961.

1961ers like us may face the same problem if jobs don't recover.

 

[ERObjd]

Thanks! I saw an article on that but it was pretty weak on details.

I can't help but notice that there are 47 co-sponsors, and every one says "[D-" next to their name. Not one "[R-."

I'm not mentioning this to spark partisan debate. Only that in the current environment, nothing supported only by those with a "[D-" next to their name is likely to get passed.

I have to assume at this point that this is nothing more than a gesture, with no real hope of passage into law.

Without hearing the reasons both parties can't agree on this, I can't even be sure *I* want to support it. Perhaps there's an alternative bill in the works from the other side of the aisle. I wish there was a way to find out.

I looked on congress site and on govtrack site and bill now has 83 co sponsors all appeared to be democrat. I would think if any bill would generate interest on both sides this would. Workers of both parties earn their SS benefits. I will be writing to my rep on Monday yes as luck would have it I was born in 1960.

 

[rrppve]

I looked on congress site and on govtrack site and bill now has 83 co sponsors all appeared to be democrat. I would think if any bill would generate interest on both sides this would. Workers of both parties earn their SS benefits. I will be writing to my rep on Monday yes as luck would have it I was born in 1960.

Agreed that this should garner bipartisan support. People born in 1960 belong to both parties. I’ll try to speak with the Republican committee staff, as well as the Democratic side.