Tuesday, July 28, 2015

Social Security and the Single Woman

Over the weekend as I read Haley Sweetland Edwards' article "The Next Social Security Crisis" in the August 3, 2015 issue of Time, I wondered if this was just another example of the backlash against women in America or only an unfortunate result of really bad program design. Edwards points out the sad fact that single women (including divorced and widowed) will not receive the same level of Social Security benefits as men because they will not have worked as much or saved as much. The retirement outlook for these women is bleak. They will probably be living in poverty.  So much for the social safety net that Social Security was supposed to provide everyone, especially those who could fall into poverty without it, like older women.

It hits very close to home for me. As a writer, I have not earned an income for large chunks of time during my work life, and although I qualify for Social Security benefits, the monthly amount is less than half what I'd need based on my current living expenses.  As a writer, I chose to use my savings for my living expenses during those large chunks of time I wasn't working for someone else. Now that savings is gone. The message that Edwards' article has for me is that I should get married to avoid poverty in retirement, then I would at least have access to my husband's benefits and retirement savings.

Photo courtesy of das.iowa.gov

But that's no reason to marry, in my opinion. Social Security was apparently designed based on what Edwards calls "traditional households," i.e. married couple with children (or no children). This does not take into account the reality of women's lives. They are the primary caretakers in a family, so even in a traditional household, they may not work as much or consistently as men outside the home, but they're working their butts off in the home. Women stay home to take care of children or elderly parents, for example, and re-enter the workplace 10 or 15 years later. Women are not paid on the same level as men even though many are the primary wage earners in their household.  Oh, it's that pesky "equal pay for equal work" issue that some people wish would just go away for some strange reason. As a result, women aren't paying into Social Security at the same rate as men. All this adds up to lower benefit checks after retirement.  Does anyone else get the feeling that American society has set women up to fail unless they marry?

The other thing about this article that I found interesting was the benefit amounts:
"In 2013, women age 65 and older received an average of $12,857 a year from Social Security, while men received $16,590. Taking into account Social Security, pensions, asset income, and other earnings, men received an average of $27,657 a year in retirement, according to a report by the Institute for Women's Policy Research based on 2012 data. Women received $15,323."
Clearly, no one at Social Security or in Congress has really sat down and figured out what average monthly expenses are for living nowadays. When I was doing my 2014 tax returns this year, I was surprised to learn that the poverty cutoff for a single person in Minnesota was $11,490 a year.  Really?  I had expected it to be closer to $6000 or $7000. But no. So a single woman receiving $12,857 a year from Social Security is above the poverty cutoff. And yet, I'm certain that it would be difficult to make ends meet with only that as income.  I know because I am constantly trying to make ends meet on an income about twice that a year, and my spending is limited to only necessities. I budget everything, of course, on a monthly basis, and go without if the money just isn't in the bank for something. This year is an especially lean year because of the unexpected medical expenses I incurred during the first six months.

And the solution to my financial issues and a comfortable retirement is to get married?  Congress needs to get with the times instead of living in some idealized patriarchal past when women could stay at home and a family only needed one wage earner to survive. I think that if Congress was determined to overhaul Social Security anyway, it would be a prime opportunity to re-examine its purpose, how benefits are calculated, and how benefits are paid out, i.e. someone who has an unearned income from dividends and interest of $100,000+ should not receive Social Security benefits -- benefits should be paid out based on need.  And while they're at it, Congress could also pass a law giving women equal pay for equal work to help raise their benefits in retirement.

What kind of disgusts me is that even though the need for revamping is there, I doubt Congress has the courage to do it. Especially when I observe what's going on currently between the major political parties in the 2016 presidential election race.... 



Crystal Collier said...

Don't get mad at me, but what happened to people earning their own retirement? I know it's an outdated notion, but it's one I rather like. We're not a socialist country, nor do I ever want us to be one. It's definitely not easy, but if we can live on less than we make and invest what's left, there will be a retirement, and we don't have to worry about what the government is or isn't doing for us.

Gina said...

Your point is a good one, Crystal, and I truly wish that every person could do this. Especially if it were to begin in childhood because eventually the cost of living will overwhelm any regular or standard savings retirement program. People earn their own retirement now -- have you not noticed? With 401k plans, for example, or setting up annuity programs, etc. In a consumerist, capitalist society as American society is, however, the emphasis will always be on spending, not saving, in order to keep the economy humming along. So, it's not only what the government does for us (which is a good thing for people like me who find themselves on the edge of poverty) but also our own attitudes and beliefs as a society. Nothing will change until we all agree, as a society, to change our addiction to money, material things, power from money, and the capitalistic system. Thanks for your comment and I hope you'll return often! Gina