Five ways the influx of women in Congress can improve retirement security

Women serving in the U.S. Congress by party through 2019. Source: Wikimedia Commons

The record number of women legislators on Capitol Hill could have a positive impact on women’s retirement security. More than 100 women were sworn into office as members of the U.S. House last week. 

This new “sisterhood” of lawmakers brings a stronger female perspective to the nation’s retirement challenges — which disproportionately affect women — and the possibility of reversing long-term trends that will decrease women’s financial stability during their senior years.Historically, women have had fewer assets and income in retirement, and depend more heavily on Social Security to make ends meet. The ongoing gender pay gap – and time away from the workforce caring for family — diminish women’s Social Security retirement benefits. In 2018, women’s average monthly benefits were 21 percent lower than men’s. At the same time, women’s greater longevity means their retirement dollars must stretch over a greater number of years. 

As mothers, caregivers, and members of the workforce, most women of the 116th Congress understand these critical issues and are well positioned to affect change. Elle magazine described some of the incoming lawmakers as “women who can’t afford their rent until their new job starts… women who look nothing like Mr. Smith, and who are revolutionizing Washington.”

Boosting Social Security and Medicare benefits would go a long way toward improving women’s retirement security. But there is even more to be done.

Read more (The Hill) »

Pension spending supports 7.5 million jobs, $1.2 trillion in economic output across U.S.

Real Estate, Food Services, Health Care, and Retail Sectors See Biggest Employment Impacts

Defined benefit (DB) pensions are a substantial contributor to the U.S. economy, according to a new report. Retiree spending of pension benefits in 2016 generated $1.2 trillion in total economic output, supporting some 7.5 million jobs across the U.S. Pension spending also added a total of $202.6 billion to government coffers, as taxes were paid at federal, state and local levels on retirees’ pension benefits and their spending in 2016.

“The analysis shows that virtually every state and local economy across the country benefits from the spending when retirees spend their pension benefits,” said Diane Oakley, NIRS executive director. “Pension expenditures are especially vital for small and rural communities where other steady sources of income may not be readily found if the local economy lacks diversity.”

For example, when a retired nurse receives a pension benefit payment, s/he spends the pension check on goods and services in the local community. S/he purchases food, clothing, and medicine at local stores, and may even make larger purchases like a car or laptop computer. These purchases, combined with those of other retirees with pensions, create a steady economic ripple effect. In short, pension spending supports the economy and supports jobs where retirees reside and spend their benefits.

This study finds that in 2016:

  • $578.0 billion in pension benefits were paid to 26.9 million retired Americans, including:
    • $294.7 billion paid to some 10.7 million retired employees of state and local government and their beneficiaries (typically surviving spouses);
    • $83.0 billion paid to some 2.7 million federal government beneficiaries;
  • $200.3 billion was paid to some 13.5 million private sector beneficiaries, including:
    • $41.8 billion paid out to 3.5 million beneficiaries of multi-employer pension plans, and
    • $158.6 billion paid out to 10.0 million beneficiaries of single-employer pension plans.

Expenditures made out of those payments collectively supported:

  • 7.5 million American jobs that paid nearly $386.7 billion in labor income;
  • $1.2 trillion in total economic output nationwide;
  • $685.0 billion in value added (GDP); and
  • $202.6 billion in federal, state, and local tax revenue.

Defined-benefit pension expenditures have large multiplier effects:

  • Each dollar paid out in pension benefits supported $2.13 in total economic output nationally.
  • Each taxpayer dollar contributed to state and local pensions supported $8.48 in total output nationally. This represents the leverage afforded by robust long-term investment returns and shared funding responsibility by employers and employees.

Pensionomics 2018: Measuring the Economic Impact of Defined Benefit Pension Expenditures, was released today by the National Institute on Retirement Security. The full report is available here. A map with downloadable state fact sheets is available here.

New Congress Will Hold Historic Hearings On Expanding Social Security And Medicare

Los Angeles residents rally for Medicare for All | Image: Molly Adams via Flickr Creative Commons, https://flic.kr/p/W9xAZc

The 116th U.S. Congress is already historic. It reflects the diversity of our country better than any previous Congress, with the highest numbers of women and people of color in history. Nancy Pelosi, the first and only female speaker of the House, has regained her gavel. New members include the first ever Native American Congresswomen, Muslim Congresswomen and the youngest Congresswoman in history.

This Congress is poised to make history on policy, as well. It will make significant strides in the fight to expand Social Security and Medicare. The incoming chair of the Social Security Subcommittee, Representative John Larson (D-CT), has told Social Security supporters that he will hold hearings on expanding Social Security early in the new Congress. And, on the first day of this new Congress, House Democrats announced that they will be holding hearings on Improved Medicare for All as well.

These hearings are a major development. They will mark the first time the House of Representatives has held hearings on expanding Social Security in almost half a century and the first time ever on improving Medicare and expanding it to cover all Americans. (Three-quarters of a century ago, the Senate, but not the House, held hearings on a national health insurance bill.)

The fact that the most diverse Congress in history will be prioritizing these issues, which are important to all of us, but especially to women and people of color, is no coincidence. Representation matters.

Expanding Social Security and improving Medicare and expanding it to everyone represent the strong will of the people. Indeed, in the lead-up to November’s election, two out of three voters said that they were more likely to vote for a candidate who favored expanding, not cutting, Social Security and nearly the same percentage, 64%, said that they would be more likely to vote for a candidate who favored expanding Medicare. Not surprisingly, virtually all of the new members ran on expanding Social Security and Medicare.

Read more: Forbes »

If You’re Over 50, Chances Are the Decision to Leave a Job Won’t be Yours

Image: Evan Jackson via Flickr Creative Commons, https://flic.kr/p/5iYExr

A new data analysis by ProPublica and the Urban Institute shows more than half of older U.S. workers are pushed out of longtime jobs before they choose to retire, suffering financial damage that is often irreversible.

Tom Steckel hunched over a laptop in the overheated basement of the state Capitol building in Pierre, South Dakota, early last week, trying to figure out how a newly awarded benefit claims contract will make it easier for him do his job.

Steckel is South Dakota’s director of employee benefits. His department administers programs that help the state’s 13,500 public employees pay for health care and prepare for retirement.

It’s steady work and, for that, Steckel, 62, is grateful. After turning 50, he was laid off three times before landing his current position in 2014, weathering unemployment stints of up to eight months.

When he started, his $90,000-a-year salary was only 60 percent of what he made at his highest-paying job. Even with a subsequent raise, he’s nowhere close to matching his peak earnings.

Money is hardly the only trade-off Steckel has made to hang onto the South Dakota post.

He spends three weeks of every four away from his wife, Mary, and the couple’s three children, who live 700 miles away in Plymouth, Wisconsin, in a house the family was unable to sell for most of the last decade.

With Christmas approaching, he set off late on Dec. 18 for the 11-hour drive home. When the holiday is over, he’ll drive back to Pierre.

“I’m glad to be employed,” he said, “but this isn’t what I would have planned for this point in my life.”

Many Americans assume that by the time they reach their 50s they’ll have steady work, time to save and the right to make their own decisions about when to retire.

But as Steckel’s situation suggests, that’s no longer the reality for many — indeed, most — people.

Read more: Propublica »

Exploring Social Security’s history helps debunk current myths

Image: Nick Youngson, via The Blue Diamond Gallery/Creative Commons 3.0, http://www.thebluediamondgallery.com/typewriter/s/social-security.html

Social Security is unaffordable due to our aging population. Social Security is a driver of our national debt. Social Security is built on a house of cards – its assets are just IOUs. Social Security is a Ponzi scheme.

No doubt you have heard some or all of these claims from politicians and pundits debating solutions to the problems of our most important retirement program.

But Nancy Altman argues that these claims are not just wrong, but part of a purposeful campaign to undermine and dismantle Social Security that has been underway since its creation in the 1930s. Altman makes her case in a provocative, highly informative new book, The Truth About Social Security: The Founders’ Words Refute Revisionist History, Zombie Lies, and Common Misunderstandings.

Read more (Retirement Revised) »

Time is money: Let’s open Social Security field offices, not close them

social security card on dollar bills
Image: 401kcalculator.org via Flickr Creative Commons, https://flic.kr/p/ayZi8V

Thanks to determined, effective resistance by the American people, opponents of Social Security have failed so far to cut our earned benefits. But those opponents have succeeded in forcing neighborhood field offices to close, making those earned benefits more difficult to access.

Under Republican control, Congressional budget cuts to the Social Security Administration (SSA) have resulted in field office closings, massive layoffs, and workload backlogs. Fortunately, Rep. Gwen Moore (D-Wis.) has introduced legislation to reverse that death by a thousand cuts.

Moore, whose constituents on the south side of Milwaukee saw the shuttering of their field office, has recently introduced H.R. 7146, the Maintain Access to Vital Social Security Services Act. That important legislation would require SSA to operate a sufficient number of field offices and employ an adequate number of personnel at each field office to provide convenient and accessible services to the public while minimizing wait times.

In addition, the bill would create important checks on a Social Security commissioner who is considering closing a field office. H.R. 7146 would shift the decision-making process from behind closed doors into public view. Once this bill becomes law, SSA will have to provide public notification before a proposed closure, separately notify all relevant elected officials, hold at least two public hearings, and write a public report, if SSA decided to move forward with the closure. This sort of transparency is critical for SSA and Congress to truly understand the potential harm caused by closing or consolidating SSA field offices.

Read more (The Hill) »

Retirement in America is too expensive, so some are going offshore

“Retirement offshoring” is the little-discussed phenomenon of migration from North to South by retirees. A new book examines the lives of expats in Ecuador and their struggle to stay in the middle class.

The movement of “snowbird” pensioners from cold Northern countries to warmer, Southern ones, illustrates that maintaining middle-classness into one’s golden years is getting more and more difficult. It is also the story of the stark inequality between wealthy countries that produce “expats” and poorer countries that send “migrants.”

Read more (The New Republic) »