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RETIRE.CMP
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1990-09-18
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-- START OF TEXT --
Women not only make less money than men, they also are penalized in
many ways at retirement. A report compiled in May by the Older Women's League
shows that by the year 2020, today's 25-year old woman can expect to receive
nearly the same retirement benefits that her mother received. "I'm troubled
by the results of the study," said Rep. Bill Hughes (D-NJ), chairman of the
House Aging Subcommittee on Retirement Income and Employment, at a May 22
hearing on income security of older women. Social Security retirement
benefits are accumulated through withholdings from employee pay, and women are
particularly affected by the Social Security Administration's dual entitlement
provision. This provision of the law says a spouse is entitled to 50 percent
of a wage-earner's benefit allowance. However, a person cannot get both
benefits in full, so in effect, the person, usually a woman, is penalized by
getting only the higher of the two benefits.
Although the language of the 1935 Social Security Act is
gender-neutral, the program was designed to meet the needs of a "typical"
American family that is no longer typical. Most modern families find it
essential for both parents to work because of a decline in real family income,
said Judsen Culbreth, editor-in-chief of Working Mother Magazine, in his
hearing statement. "In many families, that second paycheck is the difference
between working class and welfare." American business could not survive
without women willing to work. Nor could the American family, said Culbreth.
Louise Crooks, president of the American Association of Retired Persons
testified that some women have and will continue to have lower Social Security
benefits than men because they enter and leave the work force more often. In
most cases this is due to family care-giving responsibilities. One of the
women offering testimony at the House hearing was Judith Rensberger of
Washington, D.C., who was recently forced to return to work following a
divorce to support two teen-age sons.
For 14 years of the 23-year marriage, she was a full-time mother,
going where her husband's career took them. "According to my Social Security
record," Rensberger said in testimony, "all of this translates into nine
'zero' years and five near-zero years. In all, my work record shows 12 years
with total annual earnings of under $1,000." A zero year is a year out of the
work force. "When it comes time to compute Social Security eligibility and
benefits, zero years are not simply ignored or discounted," she said. "They
are averaged in." Culbreth said women who raise children experience an
average loss of $14,000 per woman over three years, according to the
Institute For Women's Policy Research. Lower salaries translate into less
generous benefits as women grow older. According to Crooks, Social Security
is meant to be gender neutral, but in December 1988, the average monthly
benefit for retired female workers was only 76 percent of that for retired
male workers. Women's job mobility is due to family responsibilities,
following transferred husbands, and leaving dead-end jobs, according to the
report.
Women often do not build up a pension, because their income is
traditionally considered secondary to the husband's. Mobility penalizes women
heavily as most pension plans require five years on the job before pension
rights vest. Resenberger advised women who divorce to retain rights to the
ex-spouse's pensions, thereby preserving some retirement income for those who
have built up very little while being full-or part-time homemakers-mothers.
"In recent years, more women than ever have entered our nation's work force
and are contributing to Social Security," said Hughes at the hearing.
"Despite this, women still receive an average of just 73 cents in Social
Security benefits for every dollar men receive. It's clear that we need to
make some fundamental changes in our nation's retirement income programs to
remove the biases which exist against women."
*** From The (Shreveport) Times, Shreveport, LA ***
-- END OF TEXT --