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NEW RESEARCH

Social Security Is a Crucial Part of Retirement Income

A new report, Retirement Income: The Crucial Role of Social Security, from the Economic Policy Institute shows that Social Security has become a more important part of retirement security for almost all Americans. The study looks at changes in retirement wealth over time among adults nearing retirement, focusing on Social Security wealth, private pension wealth, and other savings. Key findings include:

• For the typical American approaching retirement (aged 56-64), retirement wealth (combining total projected Social Security payments and private pension wealth) improved between 1989 and 2001, from $186,000 to $267,500 (in 2001 dollars). Increases in Social Security wealth contributed to this improvement through fast growing wages during the 1990s (since Social Security benefits depend on one’s earnings record).
• Despite increased pension coverage with the growth of defined contribution plans like 401(k)s and the rise in the stock market, private pension wealth was stagnating below $50,000 for the typical household nearing retirement (aged 56-64) between 1989 and 2001.
• The retirement wealth of single women fell farther behind that of married couples or single men between 1989 and 2001, despite improved Social Security wealth, because of almost no improvement in single women’s private pension wealth. As a result, Social Security accounts for a greater proportion (over 60%) of the retirement wealth for single women nearing retirement than for married couples and single men.

Pozen Plan Will Slash Benefits for Many Current Workers

New research, Social Security Price Indexing Proposal Means Benefit Cuts for Workers (Economic Policy Institute), shows that President Bush’s proposed “progressive indexing” (also known as the Pozen plan; see Women and Social Security Alert No. 9 for more on this proposal) would bring substantial benefit cuts to current workers, including those aged 42-54. Married couples, men, and younger workers would suffer the deepest cuts. The report includes state-by-state estimates by age group and national estimates by race, gender, and marital status.

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IN THE NEWS

Women Democrats Voice Opposition to Privatization

At a national forum on women and Social Security held on May 10, House Democratic Leader Nancy Pelosi (CA) joined with more than a dozen fellow Democratic Congresswomen to voice their opposition to the privatization of Social Security. The forum, organized by the National Council of Women’s Organizations and the Democratic Women’s Working Group, highlighted the benefit cuts included in the President’s privatization plan and their detrimental impact on women if implemented.

Key to the discussion was the importance of survivor and disability benefits which are crucial for women but are often overlooked in the Social Security debate. Cherie Brown, Chief Financial Officer of the YWCA in Oklahoma City, told the story of how her family has received $433,000 in benefits since her husband died in his 30s. She said that they could never have saved this amount of money in a private account, especially since he died at such a young age. Maya Rockeymoore of the Congressional Black Caucus Foundation highlighted the ways in which African-American women and children rely heavily on disability and survivor benefits. African-American women make up 9% of the US labor force, but are 18% of those drawing disability benefits. Of children receiving survivor benefits, 20% are African-American. For detailed coverage, please go to Female Dems Say Social Security Is Their Fight.

Importance of Social Security for Women Highlighted in Testimony to House Ways and Means Subcommittee

In testimony to the House Ways and Means Social Security Subcommittee, held on May 17, Nancy Duff Campbell (National Women’s Law Center) and Maya Rockeymoore (Congressional Black Caucus Foundation) emphasized the importance of Social Security for women. Campbell pointed out that while Social Security functions mostly as a worker retirement program for men, it plays a critical role for women as a family insurance plan since many women are beneficiaries of its spousal or family benefits (Protecting and Strengthening Social Security for Women). Rockeymoore highlighted how women of color have greater dependence on Social Security than do white women (First Do No Harm).

Youth Organize on Social Security Issues

Young people, who will be most affected by any changes in the current Social Security system, have recently begun to organize and make their voices heard in the ongoing debate (“Young Slowly Entering Social Security Fray” The New York Times, May 22, 2005). Students for a Secure Future has gotten 150 student presidents representing all 50 states to sign on to a letter asking policymakers to strengthen Social Security without incurring deficits. Students United to Protect Social Security, affiliated with Americans United to Protect Social Security, has been organizing students on college campuses with support from Rock the Vote and the NAACP Youth and College Division. Two groups that are giving support to Bush’s Social Security plan are the College Republican National Committee and Students for Saving Social Security.

IWPR Social Security Calculator Cited in Glamour Magazine

 The June 2005 edition of Glamour magazine features a story on Social Security and encourages readers to visit IWPR’s Social Security website (womenandsocialsecurity.org) and try its Social Security Accurate Benefit Calculator. The article “Will You Die Broke?” summarizes the Bush administration’s proposed changes to Social Security and poin ts out some of the criticisms that opponents have leveled against it. The magazine shows, using IWPR’s calculator, how five real-life women (ages 25-36) with incomes between $21,500 and $70,000 would all receive lower Social Security benefits if the current system is privatized as proposed by President Bush.

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UPCOMING EVENTS

IWPR Conference Sessions on Social Security

IWPR’s 8th International Women’s Policy Research Conference, to be held June 19–21, 2005, includes several panel sessions on women, retirement, and Social Security with experts in the field. The sessions are:

• Women and Pension Reforms Around the World (Monday, June 20, 10:45 am - 12:15 pm)
• Making Women’s Voices Heard in Social Security Reform (Monday, June 20, 2:15 pm - 3:45 pm)
• Caregiving and Economic Security of Older Women (Monday, June 20, 4:00 pm - 5:30 pm)

For more information on these sessions and the conference, please visit When Women Gain, So Does the World.

Community Forum on Social Security

A community forum, "Social Security: A Dialogue for All Ages," will feature presentations by Cindy Hounsell, executive director of the Women's Institute for a Secure Retirement, and Bob Rosenblatt of the National Academy of Social Insurance. This nonpartisan event will take place on Thursday, June 23, at 7:30 pm at the Owen Brown Interfaith Center in Columbia, MD. The forum is coordinated by Democracy for Howard County and is being supported by a number of women’s organizations, including Howard County NOW.

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