The Best Mother’s Day Gift of All: Retirement Security

2017-07-10T16:01:39+00:00May 12th, 2017|Retirement, Social Security, women|

Let’s add something to the gift list for mom this Mother’s Day along with flowers and candy: financial security in retirement.   Our nation’s mothers – indeed, all American women – are at greater risk of financial insecurity in their senior years than fathers (and other men). For myriad reasons, the women in our lives are less able to save for retirement than men, and their Social Security benefits are typically lower.  At the same time, nearly half of elderly unmarried women rely on Social Security for 90% of their income.  Working women who take time off to care for loved ones pay an especially steep price, losing an average $324,000 in wages and retirement benefits over their lifetimes.  

As we discussed on Facebook Live from Capitol Hill on Thursday, the major factors contributing to women’s poorer retirement status include:

 *Pay inequity, which means women can’t save as much as men during their working lives. (Women working full-time still earn only about 78 cents annually for every dollar earned by men doing the same job.)

 *Loss of wages during time spent caring for children, parents and spouses. (Women make up 66% of unpaid caregivers). 

 *Women’s tendency to work part-time rather than full-time for family reasons. (26% of employed women work part time compared with only 13% for men.)

 *Lack of retirement savings plans or pensions in jobs predominantly held by women.

 *Women, on average, live longer than men, meaning their retirement savings are stretched thinner.  (The average life expectancy for women in the U.S. is 81.2 years compared to 76.5 years for men.)

Even when women continue to work past 65, they face a startling wage gap.  Women in this age group earn 25% less than men.  By the age of 80, the gender wage gap widens to 44%!

Since 2014, our Eleanor’s Hope initiative has advocated for common sense measures to reverse the retirement security crisis for women.  The initiative honors first lady (and first mother!) Eleanor Roosevelt –  a fierce advocate for women’s rights and her husband President Franklin Roosevelt’s Social Security Act.  Their son, James Roosevelt, Sr., founded the National Committee to Preserve Social Security and Medicare.

Our founder’s son, James Roosevelt, Jr., reflected on his grandmother’s legacy during a recent “Behind the Headlines” Facebook Live interview:

“My grandmother would say many important things, but one was, ‘It’s up to the women.’   Eleanor would tell my female siblings and cousins, ‘You’ve got to get out, and you’ve got to be part of fighting for what’s been done already (Social Security) and moving things farther forward.’” – James Roosevelt, Jr. 3/23/17

We believe Eleanor Roosevelt would be dismayed by the retirement inequities plaguing today’s women.  Fortunately, the solutions are intuitive, if too long in coming.  Here are a just a few:

*Public policies to promote pay equity between the genders.

*Reforms to the employer-based system to encourage retirement plans that are universal, secure, and adequate – where financial risk is not borne entirely by workers.

*Spousal consent in defined contribution plans similar to those required for traditional pension plans.

To close the tremendous gap in women’s Social Security benefits, we support legislation to credit caregivers for time spent out of the workforce attending to loved ones.  Such credits would count toward future Social Security benefits.  Rep. Nita Lowey (D-NY) is reintroducing legislation to do just that.  Her Social Security Caregiver Credit Act would “provide caregivers with a… credit when they take unpaid time off from their job to provide care.” For example, a full-time caregiver would receive a Social Security credit of about $22,000 per year, increasing her future benefits.  Senator Sherrod Brown (D-OH) plans to introduce similar legislation based on the National Average Wage Index (currently, $48,099) to formulate caregiver credits.  We at the National Committee feel these bills could go a long way toward equalizing women’s and men’s Social Security benefits. 

Mother’s Day is a reminder of all we owe our mothers.  They dried our tears and calmed our fears. One of the best things we can do for them – and all the other women in our lives – is make it possible to live out their retirement years without fear of financial strife.