Women rely heavily on Social Security in retirement

Social Security continues to be a retirement mainstay for women, according to a new report by the AARP Public Policy Institute. Social Security is particularly important to older women, many who never worked and do not have pensions or other savings to fall back on.

The program kept roughly 38 percent of older women and 32 percent of older men out of poverty in 2010, although older women are still more likely to be in poverty than older men, the report found. More than a quarter of older women rely on Social Security for nearly all of their family income.

The program is particularly helpful because it does more for lower lifetime earners, guarantees benefits for life and is inflation-adjusted.

According to the report, women earn less on average than men. In 2010, women’s earnings for all occupations were 81 percent of men’s earnings. Women are more likely to work part-time or have gaps in their employment, resulting in lower benefits.

In 2010, 17 million women received retirement worker benefits, 2.3 million received spouse benefits and 4.4 million received survivor benefits.

Among minority women, only 77 percent of Hispanic and 68 percent of Asian women receive any Social Security family income. The higher shares of immigrants and naturalized citizens in these groups account in part for their lower receipt of benefits. Fifty-four percent of all older Hispanic women and 80 percent of all older Asian women were either naturalized citizens or immigrants in 2010. Immigrants may not be eligible to receive benefits and naturalized citizens may not have enough years of work in the United States when they retire to be eligible for Social Security benefits.

Seven percent of older white women and 8 percent of older African American women were naturalized citizens or immigrants in 2010.

Women who never married are the least likely to receive any family income from Social Security. Only 71 percent of women who never married received family income from Social Security in 2010, compared to 90 percent of married and widowed women.

The report talks about Social Security reform proposals that could benefit women, including an enhanced minimum benefit targeting workers with long careers and low lifetime earnings and an enhanced minimum benefit that would ensure that workers receive a minimum level of benefits regardless of their lifetime earnings. This proposal would be very helpful for women who never married,  and divorced women with low lifetime earnings but enough years of covered employment to be eligible for Social Security.

Caregiving credits are another proposal that would enhance the minimum benefit, according to the report. This proposal would treat time spent out of the labor force providing unpaid caregiving as time spent working for the purposes of Social Security benefit calculation.

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