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Notch Babies May Be At Higher Than Average Risk for Living in Poverty (Press Release) Alexandria, VA (April 4, 2001) Robert Patten and his business partner earned exactly the same amount each week for over 30 years. Yet when they retired, Patten received $100 less per month in Social Security benefits than his partner. Patten is a Notch Baby. He was born in 1917, while his partner was born just one year earlier in 1916. Patten`s plight was created by changes made in 1977 to prevent Social Security from going broke by the early 1980s. Those affected by the changes were born from 1917 through 1926 and are known as `Notch Babies.` They receive substantially lower benefits than other retirees with similar work and earnings records. When benefits are represented on a chart, the disparity forms a deep `V` notch. Benefits plunged from a peak for retirees born in 1916 and hit the lowest part of the `V` for those who were born in the years 1920-21. Benefits began to rise for those born in 1922 until they became level with other retirees, starting with those born in 1927. Today even Notch Babies who retired with average benefits, may be at higher-than-average risk for living in poverty, especially those with no other source of income except Social Security. The Notch affects some estimated 9 million seniors and their surviving spouses. A gradual lowering of Social Security benefits was expected as a result of the 1977 Social Security changes, but benefits plunged rapidly for Notch Babies because a transitional benefit formula did not work as anticipated. In addition, the economic conditions which followed in the 1980s of double-digit inflation and low wage growth contributed to even greater benefit disparities. Research undertaken for TREA Senior Citizens League (TSCL), a senior organization that lobbies for correcting the Notch disparity indicates that many Notch Babies receive more than $1000 less in benefits annually than other retirees with similar work and earnings histories. According to TSCL studies, a Notch Baby who retired with average benefits in 1984 will receive about $9,000 in benefits in 2001- only $650 above the poverty level. Yet like other retirees, Notch Babies who are now ages 75 through 84 will spend on average $3,142 in out-of-pocket health care costs this year. Notch Babies are at the age where they are more likely to suffer from chronic health conditions, take one or more prescription drugs daily and face the stiffest spending increases for their medications and supplemental health insurance premiums. TREA Senior Citizens League (TSCL) was formed in 1995 to protect `earned` Social Security and Medicare benefits. Many TSCL members are affected by the Notch, and rank Notch Reform as their top legislative priority. TSCL is the only national senior citizens action organization to continue to lobby for Notch Reform. To date, TSCL has 1.3 million members and supporters who participate in a number of grassroots lobbying and public education campaigns. For more information, send $1.00 for shipping and handling to: TREA Senior Citizens League, Dept. W10403, 909 N. Washington St., Suite 300, Alexandria, VA 22314.
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