A New Social Security ‘Notch’? Bad News for People Born in 1947

Andrew G. Biggs

IB#10-9

The brief’s key findings are:

  • While Social Security beneficiaries received no COLA this year, they are still ahead of the game.
  • The reason is that they received a larger-than-usual COLA in 2009, which took effect right after prices dropped due to the economic crisis.
  • But individuals who turned 62 in 2009 are not so lucky – their benefits will likely be lower than older and younger recipients due to a quirk in the benefit formula.
  • To prevent such a ‘notch,’ policymakers could increase benefits for the 1947 group and modify the benefit formula to prevent a recurrence in the future.