Home » Economy » Coronavirus puts full Social Security benefits at risk years earlier than expected, researchers say
Coronavirus puts full Social Security benefits at risk years earlier than expected, researchers say
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Economists are warning that the government needs to begin thinking seriously about the longer-term impacts of the coronavirus pandemic – including how it will negatively affect Social Security in a "significant" way.
A new analysis conducted by researchers at the Penn Wharton Budget Model showed that Social Security is at risk of running out of funds as many as four years earlier than anticipated – in 2032 – depending on the shape of the U.S. economic recovery. Prior to the pandemic, the group had a 2036 estimate for the OASDI trust fund.
“In the Social Security world, this really isn’t very long [off],” Penn Wharton Budget Model Faculty Director Kent Smetters told FOX Business. “Clearly people are focused on the here and now, but it’s time to start focusing on the longer-run trade-offs … we just lost four years [from Social Security].”
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If the U.S. economy were to bounce back sharply – and the recovery resembled more of a “V” shape – then reserves would be depleted in 2034. Unfortunately, Smetters said this scenario is less likely than a more gradual “U-shaped” recovery, under which the PWBM forecasts the 2032 timeframe.