Women and Social Security :: Institute for Women's Policy Research

New Research
Income Sources for Older Americans
Social Security and Pre-Retirement Income Replacement
Changing Demographics, A Look at Future Retirees

In the News
Push for Privatization Dead in the Water

Upcoming Events
National Academy of Social Insurance Conference, Older and Out of Work: Jobs and Social Insurance for a Changing Economy, January 19–20, 2006

New Innovations
New Educational Game by Center for Retirement Research at Boston University

NEW RESEARCH

Income Sources for Older Americans

Using the March 2004 Current Population Survey, AARP details the various sources of income for older Americans in its brief, “Sources of Income for Older Persons in 2003,” including Social Security, pensions, personal savings, and earnings. The results of AARP’s analysis show substantial disparities between women and men in income across the above-mentioned sources and others, with the most striking examples in earnings income, pension income, and Social Security benefits. Over 17 percent of Americans 65 and older had earnings income, but women’s median earnings ($12,000) were far lower than men’s ($20,000). Likewise, women’s median income from pensions was $5,880 compared with $12,000 for men, and women’s median income from Social Security was $8,612 compared with $12,104 for men. Additionally, women 65 and older with income of any source had a median income ($11,816) that was a bit more than half that of their male counterparts ($20,400). Disparities in income for older persons also exist by race and ethnicity. The brief found that African Americans and Hispanics were less likely than Whites to receive income from Social Security (84.8 percent and 76.4 percent compared with 91 percent, respectively) and far less likely to receive interest income from personal savings (26.6 percent and 23.5 percent compared with 59 percent, respectively). Furthermore, AARP found that people 65 and older with less income were more dependent on payments from Social Security than their richer counterparts, with the bottom three personal income quintiles depending on Social Security for 75.4 to 85.5 percent of their total income.

Social Security and Pre-Retirement Income Replacement

In "How Much Pre-Retirement Income Does Social Security Replace?" Alicia Munnell and Mauricio Soto use the Average Index of Monthly Earnings and the Health and Retirement Study to determine Social Security's median income replacement rate for single men and women, and couples with and without working wives. For newly retired beneficiaries in the Health and Retirement Study, the median replacement rate was 52 percent for women, 37 percent for men, and 72 percent for persons in the bottom earnings quintile. The replacement rate was also high for married couples in which the wife did not work, at 58 percent, compared with 41 percent for couples in which the wife did work. The overall findings show that Social Security is a more important source of post-retirement income for single women, low earners, and married couples without working wives.

Changing Demographics, A Look at Future Retirees

Two new Urban Institute briefs, "How Will Boomers Fare at Retirement?" by Barbara A. Butrica and Cori E. Uccello (1) and "Changing Demographics of the Retired Population" by Karen Smith and Eric Toder take a look at future retirees and how they differ from today’s older population. Simulation modeling done for the first brief shows that while the Baby Boom generation will be wealthier and less likely to live in poverty than current retirees (2 percent as compared to 8 percent, respectively), the ratio of their post-retirement income to pre-retirement income will not likely improve beyond that of current retirees. The second brief looks at different demographic changes in the retirement population, noting that in the period 2008-2012, 30 percent of 62 year-olds will be college-educated, compared with 17 percent from 1993-1997. It also notes that the proportion of never married 62 year-old women will double by 2028-2032 and the proportion of widowed 62 year-old women is declining. Additionally, African Americans and Hispanics will make up a larger share of retirees in the future, with African Americans increasing from 9 percent for current retirees to 12 percent in 2028-2032 and Hispanics jumping from 8 percent to 15 percent.

NEWS

Push for Privatization Dead in the Water

The strong public aversion to any plan to privatize Social Security has successfully immobilized privatization backers for the remainder of 2005, but there is also some indication that such plans will lie dormant for some time to come. Senator Chuck Grassley (R-IA), Senate Finance Committee Chairman, publicly expressed his doubt that the issue would be revisited before the year 2009. Others like Senator John Sununu (R-NH) and Representative Jim McCrery (R-LA), while less pessimistic, agree that it would be difficult to push a privatization agenda in the coming year given the focus on elections. Representative Bill Thomas (R-CA) abandoned his plan to combine Social Security privatization with pension reform, signaling a new level of uneasiness around supporting privatization. For more information, see “Grassley: Social Security reform dead until 2009,” (November 30, 2005), “Moves by Key Chairmen May Signal End of This Year’s Social Security Debate,” (November 8, 2005), and “Bush Social Security plan laid to rest,” (November 15, 2005).

UPCOMING EVENTS

National Academy of Social Insurance Conference

The National Academy of Social Insurance (NASI) will hold its 18 th Annual Conference, Older and Out of Work: Jobs and Social Insurance for a Changing Economy, on January 19–20, 2006 at the National Press Club in Washington, DC. The conference will address policy solutions to the workforce and income security issues faced by older workers given changing demographics and a different economy.

NEW INNOVATIONS

New Educational Game by Center for Retirement Research at Boston University

The Center for Retirement Research at Boston College has created an educational game called, "Get Rich Slow," that allows women to engage in a number of different retirement planning scenarios.

(1) This brief was adapted from a 2004 report by Butrica and Uccello.

In January, just as the debate on Social Security reform was getting underway, we launched the IWPR Women and Social Security Alert (WomenSSA). According to the positive feedback we received from you – our colleagues, our members, and advocates on this issue – this special alert system has proven to be a comprehensive resource in helping you to stay at the forefront of this topic and its effect on women. Please help us continue to produce this beneficial resource by contributing to our special Women and Social Security Alert Fund today! With your help, we will ensure the continued distribution of this important information on Social Security reform and those most affected – women. PLEASE CONTRIBUTE NOW!