Losing your job is a nasty shock at any age, but for older Americans nearing retirement, there's an extra kick: A late stretch of unemployment will haunt them throughout their Golden Years in the form of lower Social Security payments.
Social Security benefits are based on a person's highest 35 years of earnings, which are then indexed for wage growth. The last years of one's career are when most people earn their highest salaries, so replacing those top-income years with less lucrative ones -- or no income at all -- can prove costly. A person who misses a year of earnings could see his Social Security payments reduced by 3%, or just over $450 annually if he receives the average check of $1,262 a month, according to a calculation AARP ran for CNNMoney.Less social security will be paid out in the out years.
Yes, I know. There's that nasty little problem of less money going into the program during periods of high unemployment.
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