SACRAMENTO – Senator Scott Wilk (R–Santa Clarita) announces that Senate Joint Resolution 5 (SJR 5) has received unanimous support in the Senate Committee on Labor, Public Employment and Retirement. SJR 5 urges the federal government to correct the Social Security benefit calculation formula to ensure that the nearly 8 million Americans who have turned 60 during the pandemic will not see reduced benefits because of a glitch in the formula used to calculate benefits.
“People turning 60 during the pandemic are very close to retirement and have most likely calculated what their Social Security retirement benefits will look like. The pandemic threw all those numbers out the window. Without a change to the Social Security formula, these retirees will see smaller benefits in their retirements and could be left in a tough financial position,” said Wilk. “Thankfully, Congress can easily fix this by adjusting the formula so that individuals’ benefits, and more importantly, their futures are protected.”
Social Security benefits are calculated using an individual’s earning history and then are indexed to economy-wide wages in the year a person turns 60, regardless of retirement age. This ensures that benefits reflect the general rise in the standard of living that occurred during a person’s time working.
Because the pandemic and the ensuing lockdowns around the nation forced tens of millions of Americans into unemployment, average wages dropped at an unprecedented rate in a short period of time. Due to the impact of the pandemic on this formula, Americans born in 1960 and 1961 can expect a lifetime loss of up to $45,859 in Social Security benefits simply because they were unlucky enough to celebrate a birthday during a global pandemic.
SJR 5 urges Congress to amend the Social Security Average Wage Index (the formula to index these benefits) so that those turning 60 in 2020 or 2021 do not see a reduction in their social security benefits.