Those Vulnerable to Social Security Changes

Why are women at greater risk?

• Most women do not receive private pensions

  Only 38% of women receive employer-provided pension benefits, other than Social Security, compared to 57% of men. Women of color are even less likely to have employer-provided pension plans than either white men or women or men of color.

• Women earn less than men

  Women who work full-time earn less than men who are employed full-time. Currently women earn 74 cents for every dollar men earn. As a result median earnings for women are far below those for men.

• Women are less likely to work full-time and are more likely to spend time out of the paid labor force

  Women are more likely to work at part-time rather than full-time jobs. Many of these women are mothers who are not in the paid workforce or who take time off to care for young children or elderly parents. Even when women work full-time, they are likely to be paid less than men. In 1996, 26% of woman receiving wives' or widows' benefits had a higher benefit as a wife or widow than as an earner.

• Women are more likely to live alone in their retirement years

  Women spend more retirement years living alone, receiving just one Social Security benefit, either their own or a spousal benefit. In 1996 63% of woman beneficiaries aged 62 and older were receiving wives' or widows' benefits. Thirty-seven percent had no earnings history and were entitled only as a wife or widow. Retired men are more likely to be married; couples are usually more financially secure because they receive two Social Security benefits, for the husband and wife.

• Women live an average of 7 years longer than men

  The Social Security benefits are safe, reliable and guaranteed for life. This is especially important for women because of their longer life span. In 1996, about 39% of elderly widows had incomes below 150% of the poverty line. Benefits are adjusted annually for changes in the cost of living which protects buying power against being eroded by inflation.

• Women are more likely to be the primary care-giver for their aging parents, family members, or their retired spouses

  Proposals that raise the retirement age to 70 or older tend to hurt women who are unable to work because of their role as primary care-giver.

• Social Security's progressive benefit formula provides proportionately higher benefits for low earners than for high earners

  Social Security provides a retirement benefit equal to 50% of her spouse's benefit for those women who spend their career taking care of her family. For homemakers who become divorced after at least 10 years of marriage, Social Security provides a retirement benefit based on her former spouse's benefits. For the older woman whose husband dies, Social Security provides widow's benefits equal to 100% of her husband's benefits. For a younger widow whose children are getting survivors' benefits, she also receives benefits while she is caring for them and not working.

• Under S2313/HR 4256, spousal benefits are reduced by one-third.

Does Social Security reform effect the disabled?

• Many people with mental retardation rely on federal benefits they receive as dependents of their parents who have retired, died, or become disabled.

• Many people with mental retardation have, through years of sheltered, supported, or competitive work, earned their own "disabled worker's" insurance coverage.

• These benefits come from the Old Age, Survivors, and Disability Insurance [OASDI] programs which make up Title II of the Social Security Act. When the Social Security Trust Funds are talked about, the discussion includes everything in Title II.

• Most of the privatization proposals would shift the risk from the federal government back to the individual. This shift would have an adverse impact on people with mental retardation and their families as they try to plan for the future. The basic safety net would be substantially limited. Many people with mental retardation would be at a tremendous disadvantage in trying to manage a private account.

What is the impact of increasing the retirement age?

• Proposals which include an increase in the retirement age have a greater negative impact on African-Americans and lower-income workers.

• These groups have considerably lower life expectancy when compared to the general population.

• A 40-year-old African-American man has a life expectancy of 70.6 years compared with 76.1 years for white men. Thus a typical 40 year old Black male worker can expect about 5.6 years of benefits if he retires at 65, about half of the 11.1 years his white counterpart will enjoy.

• Increasing the age at which individuals can retire and begin to draw even a reduced Social Security benefit would be particularly burdensome for those who are unable to work until 65 or 70 either because they are in poor health during their early 60s [but not sufficiently disabled to meet the stringent Social Security disability criteria] or because they have been employed in physically strenuous occupations in which they cannot remain employed until 65.