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Social Security Reform Empowers Women
August 19th 11:47:37 AM
Carrie Lukas's testimony before Congress:
"Today, women take on many roles. We are homemakers; we are workers; we are the caretakers of elderly family members; we are spouses; we are single earners; and sadly, we are also widows. Women will take on many of these roles during their lives, and often must make difficult choices about what's best for themselves and their families. It is an important principle in public policy that individuals should be free to make these personal decisions without government interference. Unfortunately, under the current system, Social Security penalizes some women for their choices while rewarding others. When considering reforms to Social Security, it should be a goal to treat all women equally."
"Under the current system, women either receive benefits based on their own work history or as a result of their husbands' work history. A woman who never joins the formal workforce and pays no Social Security taxes will receive benefits worth 50 percent of her husban''s monthly benefit at retirement. A married woman who works will receive the higher of either half of her husband's benefits or a payment based on her own work history. That means that many married women who join the workforce receive no additional benefit for the taxes they pay into the system.
This is unfair to working women and distorts the decision of whether to enter the workforce in the first place. A married woman already faces high marginal tax rates because her income is combined with her husband's for tax purposes. If she expects to receive no additional retirement benefits from the taxes deducted from her paycheck, then she may be further discouraged from taking a job.
Social Security also includes some very serious drawbacks for the stay-at-home mom. Consider the situation of a stay-at-home mom who ends up divorced. This woman agreed to forgo earning her own income in order to raise children while her husband worked. But if she gets divorced after having been married for less than 10 years, that woman has no right to any portion of the retirement benefits that her husband accrued while they were married. This means that many divorced women are forced to start from square one when saving for retirement.
Many single women also face problems under Social Security. Consider a 60-year old single-mom who has been working all of her life to raise her children. In addition to struggling to provide for her family's needs, she has been paying taxes to Social Security. If she dies at age 60 and her children are over age eighteen, according to Social Security's rules, her family will receive a paltry $255 death benefit. Her years of work and thousands dollars in taxes paid will have been for nothing. This example is not an aberration: U.S. Census Bureau data shows that, each year, tens of thousands of single women between the ages of 24 and 64 die.
All of these inequities are the result of Social Security's lack of ownership. None of the money paid into the system by these women and their family members is saved for their retirement. This needs to be changed."
The whole testimony is here.
Posted by Chris Schrimpf
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