Since 1935, millions of elderly Americans
have relied on Social Security for their retirement income. Women,
in particular, have been the most dependent. Today, for one in
five people over the age of 65, Social Security is their only
source of income. In spite of this, over ten percent of our elderly
live in poverty.
Although there is a great deal of attention paid to Social Security’s
future financial shortfalls, equally important to women may be
the clash between the current benefit structure and the socioeconomic
changes that have occurred since 1935. These changes include
the great increase in the number of women in the workforce, women
marrying later or not at all, and the doubling of the divorce
rate.
By failing to keep pace with the changing nature of American
families, Social Security’s outdated benefit structure
results in serious inequities.
“Imagine a retirement system that…treats married
couples with the same total earnings differently by granting
smaller benefits to those whose earnings are more equally
split between spouses; and (a retirement program) that gives
an additional benefit to spouses just for being spouses but
no such benefit to single and many divorced parents, including
those who raise more children, work more, and pay more taxes.”1
- C. Eugene Steurle, Senior Fellow, Urban Institute “The more evenly couples’ earnings are split,
the more Social Security reduces their benefits...At the margin
many
secondary workers get absolutely nothing for their additional
contributions to Social Security.”2
- C. Eugene Steurle, Senior Fellow, Urban Institute “Those looking out for older women need to steer clear
of subtle traps as the debate over Social Security’s
future gathers force. One is turning a blind eye to the difficult
funding
problems facing the system. More grievous would be to overlook
the benefits of individual accounts.”3
- Rudolph G. Penner, Senior Fellow, Urban Institute;
Former Director, Congressional Budget Office Social
Security reform not only must restore the system to
solvency, it should also address the program’s
other inequities that disadvantage women. One way to
do this would be to allow younger workers, including
younger women, to privately invest at least a portion
of their Social Security taxes through Personal Retirement
Accounts.
Personal Retirement Accounts would give women
greater ownership and control of their retirement
income and create a benefit structure far more in tune
with
the needs of the modern family.
|
Inequities... STAY-AT-HOME SPOUSES GRANTED 50% EXTRA
TWO COUPLES, SAME WAGES AND TAXES, DIFFERENT
BENEFITS
USING COUPLES ABOVE,
DIFFERENT WIDOWS’ BENEFITS
MARRIED WORKING WOMEN OFTEN GET NO MORE FOR TAXES
PAID
DIVORCED WOMAN (LESS THAN 10 YEARS OF MARRIAGE)
LOSES
SINGLE WOMAN, DIES BEFORE RETIREMENT AGE, GETS
ZERO |
