Born in 1947? You’ve Been Notched, Baby!

Category: Financial and taxes in retirement

May 25, 2010 — Social Security recipients born in certain years have been notched before – notably those born in 1917-1921. Those unlucky souls didn’t receive social security benefits quite as generous as those born in 1916 and before. Individuals in both groups, however, if they lived long enough, probably received far more in benefits than they ever paid into the system.

Now, according to the Boston College Center for Retirement Research, a new notch has been created – one affecting people born in 1947. The Center calculates that boomers born in that year might not receive as large a monthly payment as those born in the 1930-1946 birth cohorts.

The reason for their being short-changed has to do with the larger-than-usual 2009 COLA payments that their older brethren received, which took effect right after prices dropped due to the economic crisis. As a result of that large COLA followed by a decline in prices, there was no COLA at all in 2010.

Individuals who turned 62 in 2009 were unlucky about missing the 2009 COLA – their benefits will likely be lower than older recipients due to a quirk in the benefit formula. The math for how all of this happened is very complex, but the formula is spelled out in the Center’s Study, “A New Social Security Notch“.

The author of the Center for Retirement study, Andrew G. Biggs, suggests that to prevent such a ‘notch,’ policymakers could increase benefits for the 1947 group and modify the benefit formula to prevent a future recurrence. Given the pressure on the government to rein in spending on entitlement programs, legislative handicappers will have their work cut out for them.

For further reference:
Surprising Answer: When Should You Start Taking Social Security

What do you think?
Give us your opinion about this issue – should the formula be changed to help out those born in 1947? Speak your piece in our Comments section below.

Posted by Admin on May 25th, 2010

4 Comments »

  1. entitlements are a burden on a government that has stalled doing the right thing for 50+ years. the government stole the money from us, for other uses, with a promise to repay. repay will never happen. so the government will find ways to short change the boomer bunch and those that follow. my group, 1945, has been extended to age 66, for full entitlement. now they have tagged the 1947 group for another “needed adjustment”. the game is the same, but the rules are flexible, for the convenience of the government. under the current administration and a socialist house/senate, this game is going to get real nasty. when they go after the veterans retirement checks, which is only a matter of time, things will get real ugly. the 2012 revolution may become a reality. just one man’s opinion. DFH.

    by david huckabee — May 26, 2010

  2. how can the government short change my group born in 1947? things are bad enough. how are we suppose to live. I’ll bet those sitting in those government seats have a nice big fat check………………..

    by linda lopez — August 3, 2010

  3. I think it stinks! The comment before me is right, the government “borrowed” the money we puut in, and now they are looking forways NOT to pay it back! Same old government tactics. Give you OUR costiuents, and to hell with the rest othe them!!!!!!!!!! 😈

    by David Oxford — August 14, 2010

  4. There were approximately 2.50 million born in 1947 and SS shows 2.74 collecting. HOw many of those were actually born in the USA in 1947?

    The Congress ‘wrote IOU’s to SS. There is plenty of money in the system and more to be paid back in IOU’s; trouble is, congress does not want to pay it back. The only time a politician tells the truth is when he describes the other party of a lying thief!

    by John Michaels — April 7, 2011

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