Retirement Security:

The Social Security Notch Issue

T-HRD-88-15: Published: Apr 22, 1988. Publicly Released: Apr 22, 1988.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

GAO discussed the social security benefits disparity, known as the notch, specifically: (1) how the notch arose; (2) how it affects beneficiaries; and (3) alternatives for financing legislation to address the problem. GAO found that: (1) Congress amended the Social Security Act in 1977 to alter the social security benefits computation formula; (2) under the new formula, retirees born in or after 1917 receive smaller benefit amounts than those born before then; (3) rapid inflation in the late 1970's and early 1980's caused the benefits of the pre-notch group to rise faster and widened the gap between the two groups' benefits; and (4) legislation to award higher benefits to the notch group would be costly and would affect both the short- and long-term status of the trust fund. GAO believes that Congress may wish to: (1) keep the effect of notch legislation on current and projected trust fund balances as neutral as possible; (2) evaluate the resources and time required to implement the legislation; and (3) retain the current 5-year transition period.

Dec 10, 2014

Oct 30, 2014

Oct 22, 2014

Jul 29, 2014

Jul 28, 2014

Jul 7, 2014

Jun 16, 2014

May 27, 2014

Apr 21, 2014

Looking for more? Browse all our products here