Once you get to those golden years, here's how to make the most of them, from Senior Living Guide Donna B. Yeaw.
An alternative to privatization. page 1, 2, 3
During the Presidential campaign, Vice President Gore presented a plan which included several of the provisions in a proposal by the National Council of Women's Organizations' (NCWO) Task Force on Women and Social Security. Those provisions address the most serious problems faced by women under the current structure: The time working women drop out of the labor force to care for children, and the reduction of benefits for widows.
The first provision is based on the fact that all Social Security benefits are calculated by averaging lifetime earnings over 35 years. So, if a woman (or man - the proposal is gender-neutral) takes five years off work to raise children, those years are still counted as "earnings" years, which lowers the average that is the basis of the Social Security benefit calculation. The NCWO proposal is that a care-giver would be credited as having "earned" one-half of the average wage (about $16,500 in 2001) in the computation of his or her Social Security benefits, for up to five years. The amount would be indexed to inflation, and offset by any actual earnings if the care-giver worked part time.
The second provision would limit the reduction in benefits to widows and widowers. As I mentioned, the current system reduces the benefit by anywhere from one-third to one-half of the couple's Social Security benefit. NCWO proposes to place a 75 percent "floor" on the reduction in benefits. This would mean that widows would receive at least 75 percent of the couple's previous (combined) benefit, bringing the survivors' benefits closer to the actual reduction in cost of living that they experience after the death of their spouse.
Clearly, the NCWO plan is better for women than the privatization plans being floated. In my opinion, it's also a better plan for men. Even though men with larger earnings may be able to make more with privatized accounts, they - like women - would lose the guarantee of benefits that they won't outlive, and can't lose in a stock market crash or similar economic catastrophe.
Let me leave you with a few more facts to chew on, from the Women and Retirement Security Report prepared by the National Economic Council:
In 1997, median income for elderly unmarried women (widowed, divorced, separated, and never married) was $11,161, compared with $14,769 for elderly unmarried men.
Elderly unmarried women get 51 percent of their total income from Social Security.
For 25 percent of unmarried women, Social Security is their only source of income.
In 1997, the poverty rate of elderly women was 13.1 percent, and for unmarried elderly women, the poverty rate was 19 percent.
Without Social Security benefits, the poverty rate among elderly women would have been 52.2 percent, and among widows it would have been 60.6 percent.
So, do you still think Social Security is boring? I sure don't!
Karen
Information on Social Security Reform
Cato Project on Social Security Privatization
An web site from the Cato Institute supporting the privatization of Social Security. Includes an extensive list of papers in support of such proposals.
Social Security Information Project
A project of the Institute for America's Future. Provides background, experts, updates on the debate, original analysis, and core resources and links.
The Women and Social Security Project
The website devoted to information about women and Social Security, from the National Council of Women's Organizations, a bipartisan network of over 100 women's organizations.
Retirement planning and information:
Social Security and Taxes
Once you get to those golden years, here's how to make the most of them, from Senior Living Guide Donna B. Yeaw.
The Social Security Handbook
A web version of the Social Security Handbook, 13th edition, from the Social Security Administration. Also can be downloaded as a "zip" file.
The Social Security Quiz
How much do you really know about Social Security? Take this quiz from the National Council of Women's Organizations and find out.
Women and Retirement
What women need to know about retirement planning - including stuff you don't even know you need to know! From Retirement Planning Guide Greg Hanna.