Older Women, Social Security, and Poverty
For many older women, particularly those who are not married, Social Security is all that stands between them and poverty. As it stands, the poverty rate for older women is 13.1 percent, reaching over 25 percent for unmarried older women. Without the steady income provided by Social Security, 52 percent of older white women, 61 percent of older Latina women, and 65 percent of older African-American women would be poor.

Why are so many older women in poverty or in danger of being in poverty? Women on the whole have lower earnings than men. The wage gap between men and women, 73 percent on average, increases with age, and by ages 55-64, the average female worker is earning only 68 percent of her male counterpart. According to the Older Women’s League, over a lifetime this adds up to $250,000 less for women to put into retirement, with even more dire losses for African-American women ($420,000 over a 35-year career) and Latinas ($510,000 for same). With such a striking loss in potential retirement income, it is no surprise that women are forced to depend so strongly on Social Security.

Furthermore, as Boston College’s Center for Retirement Research notes, while Social Security might be “indexed for inflation[,] employer-sponsored pension benefits generally are not. As a result, even if some of their husband’s pension benefit continues after his death, the value of that benefit declines sharply over time. The erosion of the purchasing value of pension benefits as well as health and other problems contribute to the increase in poverty rates at older ages.”

If Social Security is crucial for married women past retirement age, it is even more for unmarried older women. The Institute for Women’s Policy Research calculates that Social Security income accounts for 49 percent of annual income for the average unmarried older woman living alone and 54 percent for the average unmarried older woman living with people besides a spouse. For married women, it still makes up 44 percent. (For older men, married or unmarried, alone or with others, Social Security accounts for between 33-40 percent of income.)

Women and Privatization
Privatizing Social Security, in addition to jeopardizing the inflation-adjusted guarantee is so vital to maintaining women's retirement incomes, would punish widows in particular. The 45 percent cut which the Congressional Budget Office estimates would occur under "Plan 2" of the President's Commission would bring the average widow benefit of $10,376 down to $5,709—equal to 65 percent of the poverty line.

Privatization would also levy a “motherhood penalty”. As the Economic Policy Institute points out, while Social Security currently determines benefits based on the 35 most productive work years, the annuities in privatization proposals would, as a result of compound interest, be considerably less for those who started work late after their education so as to begin a family.