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| Briefing Book |
| White House Conference |
Coalition of Labor Union Women1126 16th Street, NWWashington, D.C. 20036 (202) 466-4610 Fax (202) 776-0537 Women's retirement security depends on Social Security. More than 20 million women were over age 65 in 1998, as compared to 14 million men. By the year 2030, it is estimated that more than 38 million women will be over age 65. However, it is not only these statistics that prove Social Security is a necessity for older women; it is women's work-life experiences that translate into a need for more, not less, retirement security. This is based on four key facts about their lives: women live longer than men, they spend less time in the paid workforce, they are paid less when they work and they are more likely to be widowed than men. The effect these facts have on women's economic status translate into a greater need by women for secure retirement benefits . Because women earn less than men in 99% of all occupations and are also more likely to work at temporary or contingent jobs, women's average monthly Social Security benefits are lower than men's. In 1995, the average monthly benefit for female retired workers was $621.30 compared to $810 for male retired workers. Even if pay equity went into effect in 1998, these benefits would not reflect such equalization for more than 30 years. By the year 2010, it is estimated that 8 million women age 65 and over will live alone. These unmarried women age 65 and older rely on Social Security for three quarters of their income. Older women with low incomes also have a greater chance of becoming ill; the increasing costs of health care mean that these women will spend greater amounts of their fixed incomes on health care costs. Concern about Social Security's ability to meet all of its promised benefits after 2032 drives the current debate. To date, much of the discussion about Social Security's future has focused on whether part or all of the present system should be eliminated in favor of privatized individual investment accounts. A central feature of individual account proposals, though often left out of the discussion, is the necessity of cutting Social Security's guaranteed benefit levels in order to pay for the individual accounts while at the same time covering the anticipated financing shortfall. Necessary cutbacks would likely include some combination of hikes in retirement ages to age 70, cuts in the automatic cost-of-living adjustment, sharp reductions in guaranteed benefit levels and increases in the number of work years need to earn full retirement benefits. Most privatization proposals contemplate some mix of guaranteed, though greatly reduced, monthly benefit, supplemented by accrued contributions and investment earnings in an individual account. Changes must be made to soon to ensure that the system can pay full benefits far into the future. However, the key issue for women is whether those changes will weaken or strengthen the social insurance protections that provide them with a foundation of retirement security. The wrong changes, such as those surrounding privatization, will have a devastating impact on women’s economic security and their ability to lead independent, comfortable lives in retirement. Although Social Security's projected financing shortfall must be addressed, at the same time it is essential to preserve the elements that have made the existing system so important for women, and so successful at raising millions of Americans out of poverty. This is especially true for older women, who are much more likely than older men to be living below or near the poverty line. These considerations include:
Social Security must provide adequate income to allow women to cope with the increased health care and related costs of aging that presently widen the economic gap for older women.
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