Lawmakers are looking at ways to shore up Social Security for women, as millions of elderly women depend on their Social Security checks to keep them from tumbling into poverty.
At a Tuesday hearing held by the Senate Finance Committee titled "Social Security: Is a Key Foundation of Economic Security Working for Women?", Senate Finance Committee Chairman Ron Wyden, D-Ore., noted that millions more women than men rely on Social Security for nearly all of their income when they retire, “and because women live longer on average, their savings accounts get squeezed at both ends.”
Given these dire statistics, lawmakers explored whether Social Security is strong enough to keep these elderly women financially afloat. Wyden opined that “the numbers indicate that for many women, the answer is no.”
Wyden noted that retired women are nearly twice as likely as retired men to fall into poverty, with women often “walking an economic tightrope — balancing food and medical costs.”
Wyden offered the following four proposals that lawmakers should consider to help shore up women’s Social Security benefits:
Boost the Social Security benefits for women who outlive their spouses.
Create caregiver credits for people who leave their jobs to take care of children or disabled or elderly family members. With those credits, caring for a loved one would no longer come at the cost of a reduced Social Security benefit later in life.
Close the gap between disabled widows or widowers and others who receive Social Security disability benefits. It would end benefit reductions, time limits and other restrictions.
Include revising student benefit rules and removing gender bias from Social Security so that couples and their children – regardless of gender – would receive equal benefits.
Indeed, Catherine Dodd, chairwoman of the Board of Directors of the National Committee to Preserve Social Security and Medicare, told members of the committee during her testimony that a confluence of factors lead to women having smaller Social Security payouts than men.
While women live longer than men, women have also generally worked for lower wages due to “persistent gender wage discrimination,” leading to a smaller Social Security benefit, Dodd said.
Women also often interrupt their participation in the labor force to provide care to other family members, usually children and elderly parents or relatives, and they are less likely to have a pension.
Dodd noted that nearly 22 million women aged 65 and older receive Social Security benefits, and that a woman who reaches age 65 can expect to live an additional 20 years.
For these women, “Social Security represents a vitally important source of income, and is often their only available hedge against inflation,” Dodd said.
Without Social Security, more than half of these women would be living in poverty, Dodd continued, and even with Social Security, 11% of older women still live in poverty.
For widows, the poverty rate is worse, at 15%. That rate is 50% higher than the poverty rate for all people 65 and older.
--- Check out Retired Women Face Smaller Nest Eggs, Higher Poverty Risk on ThinkAdvisor.