Do Social Security Benefits Stop During a Government Shutdown?

Key Points

• Social Security benefit payments will continue uninterrupted.

• Staffing levels at the Social Security Administration will likely shrink.

• That may make it harder to get some things done, such as claiming benefits.

• The $23,760 Social Security bonus most retirees completely overlook ›

At midnight on Oct. 1, the U.S. government shut itself down, as those in power in Washington D.C. were unable to reach an agreement to keep it open and running.

The shutdown is ongoing as I write this, and many services we're used to accessing and many people's jobs are on hold -- indefinitely. If you're in or near retirement, you may be particularly interested in how Social Security will be affected by the shutdown.

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What does the shutdown mean for Social Security?

Social Security is a big deal, with around 69 million Americans receiving some kind of Social Security benefit. There are several different kinds of benefits beyond retirement benefits, such as benefits for qualifying disabled people and survivors of deceased workers (including children). Total benefits recently amounted to about $1.6 trillion annually.

Note, too, that retirement benefits are not gifts from the government. They're paid to people who worked for at least 10 years, paying taxes into the system with the promise of receiving benefits in retirement.

So what happens with the shutdown? Well, most Social Security benefits will continue to be paid -- because those payments are considered mandatory and don't need annual approvals from Congress. If you get your benefits direct-deposited, that will likely continue uninterrupted. If you're among the few who have been getting checks in the mail, know that the U.S. mail is also continuing. So that's a lot of good news.

The news isn't all good, though. For example, staffing levels at many government agencies will be much lower, so if you're trying to contact a Social Security office, you may have to wait on hold a lot longer. If you're signing up for Social Security, you may face delays, due to understaffing. (When to claim your benefits is a big decision, so read up on it before doing so and weigh the pros and cons of claiming at different ages. For lots of us, the best age to claim your benefits is 70.)

Another effect of a shutdown is that news of the next Social Security cost-of-living adjustment (COLA) may be delayed. The COLA for 2026 was recently expected to be between 2.7% and 2.8%, and it was to be announced on Oct. 15.

If you set up a my Social Security account at the Social Security Administration (SSA) website, you may be able to take care of a lot of your Social Security business online.

What stops and what continues?

Here's a brief overview of the status of major services in a shutdown such as this one. The following services are open and running -- but there may be delays and interruptions, as some federal workers may be working without pay:

• Social Security
• Medicare
• Medicaid
• The U.S. Postal Service
• Law enforcement agencies at the federal level
• Courts (at all levels)
• The military (but only active-duty military -- more than 700,000 civilian employees might end up furloughed)
• Air traffic control
• Banks
• Border security
• Disaster relief
• National parks (though with understaffing, some visitor centers and other facilities may be closed)

That's a long list. The list for services that are subject to stopping during a shutdown is shorter, featuring Smithsonian museums and visitor centers and tours of federal government buildings.

What does the shutdown mean for investors?

Since you're reading a Motley Fool article, you may also be wondering what the shutdown means for investors. Here are a few things to know:

• Past shutdowns, which have typically lasted only a few days, have not been tied to major market moves.
• The labor market has already been on somewhat shaky ground, and an extended shutdown could lead to more people looking for work.
• A prolonged shutdown could make a recession more likely. But recessions happen every now and then, and the stock market and economy have always bounced back from them, eventually.

So keep up with the news, because a government shutdown may end up affecting you -- though if it's short-lived, it may not be too painful for most.

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