3 Ways COVID-19 Might Result in Lower Social Security Benefits
COVID-19 has been wreaking havoc on the U.S. economy for close to three months now, and while parts of the country are beginning to reopen, it's safe to say that our total recovery is still a ways off. Not only is COVID-19 hurting millions of workers, but it also has the potential to impact current and future Social Security recipients. Here are some of the reasons the pandemic might drive benefits down.
Social Security's primary source of revenue is the 12.4% payroll tax it collects on wages of up to $137,700 (that figure can change from year to year, but it applies to earnings in 2020). If you're self-employed, you pay the entire 12.4% tax yourself. If you work for someone else, you pay half and your employer picks up the rest of the tab. But with millions of Americans out of work because of COVID-19, Social Security is currently taking in a lot less revenue than normal. And the longer unemployment levels stay the way they are today, the more detrimental that situation will become.
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Source Fool.com
