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Social Security Safety Net Unraveling for Many Notch Babies Social Security is responsible for a major reduction in poverty in our country. Without it, about half of all older Americans would live in poverty. But as seniors born during the Notch years of 1917 through 1926 grow older, the Social Security safety net is unraveling, especially for women who through death or divorce become single again. Poverty in our country is defined (in 2000) as individuals having incomes below $8,350 and couples with incomes of $11,250 or below. Many Notch Babies who have no other financial resources except Social Security are at risk for living at or below the poverty line. Take for example a Notch Baby who retired in 1984 at age 65 with an average benefit. In 2000 his annual benefits were worth $9,000. If his wife received a spouse`s benefit (that was equal to half of his) their combined benefits would total $13,500--only $2,250 more than the poverty level. Just imagine the gravity of the situation for the Notch Babies who retired with below-average benefits. Compounding the problem, as Notch Babies age and pass away the widow does not get to keep the combined benefit. The widow in the above example would keep her husband`s benefit and lose her own, meaning she would have to live on $9,000 instead of $13,500. Out of that $9,000 she would spend on average more than one third, about $3,142 on health care costs and prescription drugs. The unhappy reality is that the generation that took a cut in Social Security benefits in order to save the system for future generations, is now faced with or living in poverty at a time when our nation is enjoying huge budget surpluses. `The Notch Fairness Act,` would provide either improved monthly benefits or a Lump-Sum totaling $5,000 payable over four years, and would be financed from cuts to wasteful spending. Congress, however, is now considering a massive tax cut and changes to overall spending that may affect our ability to enact Notch Reform legislation for years to come. It is vitally important to contact your Representative and urge him or her to co-sponsor the Notch Fairness Act now, to ensure that Notch Babies do not become the generation forced into poverty for their sacrifice. This article first appeared in Volume 6, Issue 6 of "The Social Security and Medicare Advisor" newsletter (May/2001). To receive future editions of "The Advisor" in its special, free e-mail version, please click here. | ||||||||
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