Hi Larry,
Do you think our legislators will fix the benefit calculation problem for those of us born in 1960?

Hi,

To clarify the significance of your question for other readers, I'll start with a brief explanation. Social Security retirement benefits are based on an average of a person's highest 35 years of Social Security covered wage-indexed earnings. Indexing converts a person's historical annual earnings to amounts more reflective of current day dollars. For example, a person born in 1959 who earned $20,000 in 1991 would have those earnings indexed to an amount close to $50,000 when calculating their Social Security retirement benefit rate.

Worker's earnings histories are indexed based on the average wage index (AWI) in the year they reach age 60. Therefore, the AWI in 2020 will be used to calculate the retirement benefit rates for people born in 1960. And, if the 2020 AWI is lower due to the pandemic, the historical indexed earnings amounts and the resulting benefit rates for people born in 1960 will also be lower.

I asked Larry for his thoughts on your question, and Larry strongly believes that Congress will take action to address the benefit calculation problems caused by the pandemic. In fact, he reports, there are already Congressional bills in the works to address this situation.

Best, Jerry