Closing the gender pay gap would have a direct effect on a woman’s Social Security benefits and her ability to save for retirement, according to research released by Social Security Works in conjunction with a press conference call on Thursday with Rep. Rosa DeLauro, D-Conn.
Closing the pay gap “would help women and families now and in the future and into retirement,” DeLauro said.
Social Security Works looked at research that showed—because Social Security benefits are based on lifetime earnings—the gender pay gap during working years creates a gender gap in Social Security benefits. In 2012, women aged 65 or older received an average Social Security benefit of $12,520, compared to $16,396 for men.
Ben Veghte, research director for Social Security Works, added during the call that “social security benefits are directly related to what you earn now.”
“With that additional income they would be paying more into Social Security and hence getting more earned benefits when they retire,” Veghte said.
He added that many of the women currently receiving Social Security benefits are suffering because they did not earn enough so they did not pay enough into Social Security to get comfortable benefits when they retire.
DeLauro stressed that this is why you see such a high poverty rate in elderly women.
Among those age 65 or older, research shows that nearly twice as many women as men are poor: 11% of women, compared to 6.6% of men.
And the more income women have, the more they will be able to save for retirement.
It’s been reported that men had an average of $139,467 in their individual retirement accounts as of 2012, compared with the average of $81,700 that women had stashed in their IRAs, according to a report released by the Employee Benefit Research Institute.
Strengthen Social Security’s Finances
Social Security Works also looked at research from the Institute for Women’s Policy Research that estimates closing the wage gap between women and men of the same age, at similar levels of education and hours of work, would directly increase the wages of 59.3% of women –and, in 2012, would have led to additional income of $447.6 billion dollars.
Social Security Works’ report states that “since about 97% of female workers have earnings below Social Security’s tax cap ($117,000 in 2014), and the vast majority of these women work in employment covered by Social Security, most of this additional income would be subject to Social Security, generating tens of billions of additional Social Security revenue each year. This additional revenue, coupled with women receiving benefits on their own earnings records, as opposed to their spouses’, could reduce Social Security’s projected long‐term shortfall by roughly one‐third.”
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