A Retired Woman's Best Friend: Social Security

Article excerpt

A group of pension experts met in Washington, D.C., last July to discuss pension coverage and retirement income security in the United States. They pointed out the need for a retirement income vehicle with several specific characteristics-it goes from job to job with the worker, provides a steady stream of income that lasts for the life of the retiree and is adjusted to keep pace with the cost of living. After a lengthy discussion, one voice piped up and reminded the roomful of authorities, "We already have that-it's Social Security."

Retirement income security is often depicted as a roof supported by pillars. Generally, those pillars include Social security, pensions and savings, work, public assistance programs and healthcare insurance. Among those with lowerincome and middle-income work histories and little, if any, pension coverage, older women are especially helped by Social Security.

Although some women have planned enough, been lucky enough or inherited enough to have sufficient and stable retirement income, the sad fact is that for many women, the financial picture for their retirement is bleak. The one bright spot is Social security. Ironically, though, many women don't understand what the program provides. It is interesting to note that people who have pension coverage consistently overestimate the portion of retirement income they will receive from their pension and underestimate the share of their income security they will receive from Social security. Following are key facts about the financial security of older American women.


Poverty for all people age 65 or older in the United States has been reduced significantly since the 19705. Yet, impoverishment remains a primary issue for older women-particularly those belonging to certain ethnic and racial groups. The poverty rates for older African American women (27.6%) and female Hispanic elders (23.6%) are about double the 12.4% level for all older women in the United States. Disproportionate percentages of older minority women also hover at income levels not far above the poverty line. Of older African American women, 38.8% are below 125% of the federal poverty threshold, and 34.5% of Latina elders are also in this category. And for those with incomes below 150% of the U.S. poverty barrier, the rates are a whopping 48.4% for African American women and 44.7% for Latina elders. Women in this group are only one medical emergency or expensive prescription drug away from poverty.

Without Social Security, those living in poverty or near poverty would be even more vulnerable. The Supplemental Security Income (SSI) program was designed to assure a minimum income to elders and to people with blindness or disabilities who have limited income and assets. However, the federal SSI benefit has never raised recipients above the poverty threshold. Actually, Social security is more successful at reducing poverty for older people than any of the explicitly antipoverty programs.

Social security is by far the dominant income source for older Americans, benefiting about 90% of those age 65 or older, including both workers and spouses of workers. Not only do most older women receive benefits-they depend heavily on them. Currently, more than two-thirds of older people depend on Social security for at least half of their income. Older people who are alone count on Social security for an even larger portion: Eighty-one percent of unmarried men and 87% of widowed, divorced and never-married women depend on Social security for at least 50% of their income. …