The countless negative ramifications of the COVID-19 pandemic continues. Initially, shortages occurred due to consumers believing that they needed to “stock up” on essentials. Toilet paper and other sundries disappeared from shelves faster than employees could adequately replace stock.
A more serious COVID-driven shortfall may be coming as Social Security trust funds faces are nearing depletion. An annual government report reveals that money needed for retirements could be gone in 12 years, one year sooner than anyone expected.
Safety nets at stake
The deterioration of funds is alarming, if not grim when it comes to the future of benefits. The Old-Age and Survivors Insurance combined with the Disability Insurance Trust funds provide much-needed income for retired workers and those unable to work due to disability.
Money in the Old-Age and Survivors trust fund could vanish post-2033 with the Disability Insurance funds potentially disappearing in 2057, eight years earlier than what was reported in 2020. While laws separate the two funds, the combination of both could mean that benefits will only last until 2034.
Sadly, the increase in retirement-age deaths last year is actually one of the key factors that could keep depletion of funds at bay. Help will also come in the form of a permanent reduction of worker productivity that will see the GDP permanently reduced by one percent, resulting in contraction of the U.S. labor force size..
The promise of receiving long-earned financial compensation when workers retire or are no longer able to ply their trades was always assumed. However, that light at the end of the tunnel is facing collapse, potentially leaving many recipients with reduced or potentially no financial benefits.