Tuesday, June 01, 2010
Hillary Clinton and David Letterman of the 1947 cohort (Photo: J.P. Filo, CBS, via Associated Press)
The year 1947 was momentous for a lot of reasons: India gained its independence, the CIA was first established, and the transistor was invented. But 1947 was not so great for those Americans born that year, not when it comes to collecting their Social Security retirement benefits.
Thanks to a “quirk” in the Social Security benefit’s formula, the 1947 cohort is facing the real possibility of receiving 2.6% less in payments than those born from 1930-1946. According to the Center for Retirement Research at Boston College, this reduction in benefits stems from Social Security’s formula for granting cost-of-living adjustments and a spike in inflation during 2008.
Unless the federal government does something to correct this problem, the average retired couple from the 1947 population could lose more than $12,000 during their “golden years.”
Among the notables born in 1947 are: Kareem Abdul-Jabbar, Dave Barry, Tom Clancy, Hillary Clinton, Glenn Close, Larry David, Stephen King, David Letterman and Arnold Schwarzenegger…although few of these are likely to worry about their social security payments.
-Noel Brinkerhoff
A New Social Security ‘Notch’? Bad News for People Born in 1947 (by Andrew Biggs, Center for Retirement Research at Boston College) (pdf)
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