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Ask Rusty - Did My Wife
Dear Rusty: I was born in May of 1930, and my wife was born in April 1931. My wife claims she received an increase in her Social Security benefit due to the “Notch Baby” provision. Is she correct about this? Signed: Inquisitive Husband
Dear Inquisitive: Allow me to clarify for you what your wife is referring to, and you can use your own judgement on how to present the information to her.
So-called “notch babies” are those Social Security recipients who were born between the years 1917 and 1921. Folks born in those years were affected by a Social Security issue which had to do with how Cost of Living Adjustments (COLAs) were computed. Here’s what happened:
In 1972, when the Social Security Administration switched to automatic COLA increases based on the Consumer Price Index, they made an error in the automatic COLA computation formula which wasn’t discovered for several years. During those several years they awarded COLA increases using the incorrect formula which paid COLA at a higher level than appropriate. After discovering the error, and in an attempt to fix the issue, in the mid-1970s, Congress decided that those born before 1917 would be allowed to stay on the incorrect (more generous) formula, but COLA for those born after 1917 would use a corrected formula. However, that didn’t sit well with SS beneficiaries born after 1917 because they were receiving less COLA than their counterparts born before 1917. So, in an attempt to mollify those Social Security beneficiaries born after 1917, Congress created a special “notch” formula for those born between 1917 and 1921. And those who were born between those dates were called “notch babies.”
The new “notch baby” formula was not quite as generous as the incorrect formula being enjoyed by those born before 1917, but yet a bit more generous than the corrected COLA formula which applied to anyone born after 1921 (and still exists today). Thus, “notch babies” do enjoy a slightly better COLA formula than other Social Security beneficiaries born after 1921.
Over the years, various attempts have been made to extend the notch baby end-year definition from 1921 to, for example, those born before 1927. And even as recently as 2019, a Congressional bill called the “Notch Fairness Act” attempted to provide restitution by extending the end date of the “notch” to 1926. But none of those attempts in Congress have ever succeeded in changing the definition of “notch babies” beyond the original 1970s Congressional definition to apply only to those born between 1917 and 1921. So, anyone born after 1921, including your wife, has COLA computed using the corrected formula, not the “notch baby” formula. This article is intended for information purposes only and does not represent legal or financial guidance. It presents the opinions and interpretations of the AMAC Foundation’s staff, trained and accredited by the National Social Security Association (NSSA). NSSA and the AMAC Foundation and its staff are not affiliated with or endorsed by the Social Security Administration or any other governmental entity. To submit a question, visit our website (amacfoundation.org/ programs/social-security-advisory) or email us at ssadvisor@ amacfoundation.org.
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