Washington, DC - A new report by the U.S. Congress Joint Economic Committee finds that Social Security accounts for more than two-thirds of all income for women aged 65 and over and that any efforts to tinker with this program could have a dramatic impact on retired women who count on their Social Security benefits to make ends meet.
The report, “Social Security Provides Economic Security to Women,” includes a state-by-state snapshot of the 20.3 million women aged 65 and over who receive Social Security benefits. Nationally, women aged 65 and over represent 9.8 percent of the adult population, with the elderly women’s share of the adult population ranging from a low of 5.3 percent in Alaska to a high of 12.4 percent in Florida. Social Security benefits are based on lifetime earnings, with the average monthly benefit for women aged 65 and over ranging from a low of $891 in Louisiana to a high of $1,126 in New Jersey.
The report, prepared by the Majority Staff of the JEC, finds that women are especially dependent on Social Security for staying out of poverty. Without Social Security, half of elderly women would live in poverty; Social Security benefits bring the poverty rate for women aged 65 and over down to 12 percent. The impact of Social Security is particularly striking among widows aged 65 and over: 58 percent of widows would be living in poverty without Social Security; with Social Security, the poverty rate drops to 15 percent.
“Social Security is literally a lifeline for most elderly women,” said Congresswoman Carolyn B. Maloney, Chair of the JEC. “Senior citizens, and particularly elderly women, need to be wary of proposals that change the way Social Security operates. Social Security works. It keeps millions of people out of poverty. We cannot afford to mess it up.”
Continued Maloney, “Republican proposals that sound too good to be true are, in fact, not true, and will be devastating to women who depend on Social Security in their later years. It is just plain wrong to bet seniors’ retirement income on the performance of the stock market, as recent GOP proposals do. Social Security delivers an inflation-protected annuity. The Republican privatization proposals deliver risk and uncertainty.”
A key finding of an earlier JEC report on Social Security is that with privatization, retirees will be subject to fluctuations in the performance of the stock market and overall returns will vary based on individual investment decisions, with significant swings in returns and account accumulations possible from year to year and even month to month.
An annuity purchased in 2008 by a worker who had invested solely in the stock market over a 40-year work history would replace only 40 percent of his final income, down from 87 percent replacement just two years earlier. For example, a worker expecting an annuity of $867 per month in 2006 would have received $399 per month if he retired in 2008.
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