COVID-19 Deaths Shift U.S. Social Security Obligations

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A new report from the National Bureau of Economic Research reveals that COVID-19 has led to an estimated reduction of $205 billion in future payments from the U.S. Social Security fund. The analysis indicates that approximately 1.7 million excess deaths among individuals aged 25 and older during the pandemic years (2020-2023) will decrease the future benefits the Social Security Administration is obligated to pay since many of the deceased were nearing retirement age.

While these premature deaths are believed to lessen future retirement costs—estimated at $294 billion—the ongoing impact on tax revenue and increased survivor benefits has offset some of these savings, resulting in the projected $205 billion reduction. Research shows that many who died were seniors drawing benefits or could have soon. Disparities were noted, with Black and Hispanic populations experiencing the highest excess mortality rates. The report emphasizes that while the financial health of Social Security may be slightly improved, it does not account for the long-term economic effects of long COVID and its impact on workforce participation.

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