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Older Minority Women Need Retirement Help Now
As members of Congress are now
contemplating more assistance for those who are already well off, they
should also look to those Americans who are most in need: the millions of
older women, especially minority women, who are quietly and too often
desperately struggling through retirement in poverty. Fairness requires
nothing less. The outcome of congressional
battles over the White House tax-cut proposal—when issues such as
retirement reforms normally are taken up--isn't likely to do this. When
that battle ends it is likely that upper-income workers and investors, and
some in the middle-income bracket, can expect much more than a little
extra jingle in their pockets. For these Americans, congressional leaders
are supporting ambitious new tax breaks; raising the amount of income-tax
deductions for stock market losses, increasing the contributions ceiling on retirement accounts,
reducing or even eliminating taxes on stock dividends and permanently
abolishing the estate tax. Meanwhile, what about helping the
less fortunate among us? The nation did succeed in reducing the overall
poverty rates among elderly Americans over the last several decades, but
poverty remains persistently and alarmingly high for older women of color.
Today, four out of 10 single black women over age 65 and nearly five out
of 10 older and single Hispanic women live in poverty; a rate twice that
of white women of the same age. Most Laborious Jobs Are Followed
by Leanest Retirements These are women who labored
through their working years at low-wage jobs with few, if any, benefits.
They cleaned homes, provided care for other people's children, clerked in
stores, waited tables in restaurants and tended the sick and infirm in
hospitals and nursing homes. All too often, they end up entering their
retirement years and confronting the financial demands of aging with fewer
pensions and less personal savings that any other group of workers in
America's population. For an adequate retirement that
will sustain them above poverty, most workers rely on income from a
financial "three-legged stool" of pensions, personal savings and
Social Security benefits. However, significant numbers of African
American, Asian American and Hispanic women are coming up short in all
three income categories. Only 15 percent of older black women and 8
percent of Hispanic older women received pension income in 2000. For those
working today, just 38 percent of black women, 26 percent of Hispanic
women and 38 percent of Asian and Pacific Islander women are covered by
any sort of pension in the workplace. While elderly women overall
typically have extremely modest retirement savings and investments,
minority households have even fewer financial resources to rely upon.
Older black households, for instance, have an estimated median net worth
of just $13,000, compared with a median $181,000 for older white
households. As a result, for most older minority women, Social Security
has become the most important, and too-often sole, source of retirement
income. In fact, without Social Security benefits, 62 percent of black
women and 57 percent of Hispanic women would be destitute. Practical Solutions to the Problem Helping women of color lift
themselves out of the shadows of America's economy requires neither
monumental new efforts nor massive investments of government dollars. A
handful of practical changes in the laws governing the nation's retirement
system could provide low-income minority women with much greater financial
security in their older years. Increasing pension coverage for lower-wage,
part-time and temporary workers would provide critical, additional income
for retirement. So, too, would making pension division upon divorce more
equitable for women, increasing Social Security's survivor benefits and
giving women Social Security work credit for care giving. A significant source of the deep
income gap minority women face in retirement is due to the low-paying jobs
they have held in their working years. Good-paying jobs require skills and
education. And that means more than a high-school diploma. Minority women have been making
impressive strides in achieving the education that those better jobs
demand. Since 1974, the number of Hispanic women attending college has
soared by 265 percent, and three times as many black women now hold
college degrees. Nevertheless, they still lag far behind white women and
men with higher-education degrees. Expanding federal scholarship and
education-loan programs would go a long way toward truly opening the doors
to higher education and higher-wage jobs for women of color. The steps Congress takes now will
decide whether these Americans will endure a bleak retirement or be able
to enjoy their years after a lifetime of work with some comfort and
safety. Improvements would include: examining pension and Social Security
reforms together as part of a cohesive retirement policy; increasing
opportunities for low-income women to build wealth through what are known
as "individual development accounts;" simplifying complicated
tax credit programs so that more low-income people can take advantage of
them; providing financial education for those who are eligible and
exempting some amount of retirement-account assets so that low-income
people might, for instance, hang on to some of their 401(k) accounts or
other savings and still qualify for Supplemental Security Income under the
federal poverty program. Cindy Hounsell is executive
director of the Women's Institute for a Secure Retirement, a nonpartisan
and nonprofit advocacy group based in Washington, D.C., devoted to
improving the long-term financial security of women. Pat Humphlett is
WISER's program director. The article “Minority Women and
Retirement Income” is available at: www.globalaging.org/elderrights/us/minoritywomen.pdf. Copyright
© 2002 Global Action on Aging |
