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Women Stand to Lose if Retirement Reforms Take Root

Women Stand to Lose if Retirement Reforms Take Root

(NewsUSA)- Today, one in five of America's retired single women and widows lives in poverty--and millions more may be just one tragedy or illness away from sharing that fate. But the Bush administration continues to explore Social Security and Medicare "reforms" that are likely to make the status of retired women even more unstable.
The roots of retirement insecurity for women lie in their working lives. Women earn less and spend more years out of the work force, caring for children or parents, leaving less money to set aside for retirement.
They're also less likely to have jobs that offer retirement plans. And, because they earn less, their Social Security checks are smaller when they retire. Today, the checks of newly retired men are, on average, 47 percent larger than those for women.
A number of recent trends have made retirement more secure for aging women, including requirements that wives must consent if survivor benefits are to be waived under their husbands' pension plans, shorter vesting requirements for pensions and improvements in asset exclusions under Medicaid.
But these positive developments may soon be offset by two more dangerous trends. The first is the movement away from retirement plans that pay a guaranteed amount every month and toward plans like 401(k)s, which require employee contributions and offer no guarantees.
With more time out of the work force and lower disposable incomes to contribute, women can look forward to a significantly smaller nest egg than men. But, since they live longer, women at age 65 actually need to have saved an additional 15 percent to maintain whatever income level they had in their early retirement years. And defined contribution plans can lose huge amounts of value in a relatively short time.
Compounding the problems is a continuing effort by the Bush administration and the political right to privatize Social Security and to cut back on Medicare benefits.
Medicare cuts would mean more out-of-pocket expenses for a demographic that has less money saved. To the extent that any new arrangements would replace a portion of Social Security's early-death and disability coverage, protections for women would likely suffer further, because the assets in their new savings accounts are unlikely to have had enough time to reach meaningful levels.
If the social safety net is to be rewoven, it is critical that lawmakers take into account the unique needs and circumstances of American women. Policymakers must protect women's economic security, lest their likelihood of poverty--already 70 percent higher than the rate for retired men--climb even higher.
Teresa Heinz Kerry is chairman of the Heinz Family Philanthropies and the wife of U.S. Sen. John F. Kerry. Jeffrey R. Lewis is president of the Heinz Family Philanthropies.

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