COVID-19 could shift the long-run curves or accelerate the date of depletion of the trust fund
A frequent question from the press is how the COVID-19 pandemic will affect Social Security finances. This topic was not covered in the Trustees Report released last week, as the report was prepared before the pandemic. Of course, no one knows the answer, because no one knows how long it will take to get the virus under control and how long it will take the economy to recover from the shutdown.That said, two pictures offer a useful way to think about the question.
The reason for the lack of concern is the fact that Social Security has a pile of assets in its trust fund that it can use to cover the gap between cost and income for some period of time. In the 2020 Trustees Report, that period extends to 2035, at which point the trust fund is depleted and income and payroll taxes can cover only about 75% to 80% of benefits going forward.So the impact of COVID-19 on Social Security finances could come through two routes.
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