From Stephanie Murray writing for The Atlantic about her family’s experience:
… America’s retirement system is stacked against mothers. Women are more likely than men to reduce their hours or drop out of the workforce to raise children and, as a result, are likelier to face poverty in old age. America’s primary safety net for the elderly—Social Security—rewards long careers and high pay, all but guaranteeing that parents who focus on the work of child-rearing receive the smallest payouts. …
4 comments:
Hardly. The author's mother got surviving divorced spouse benefits of $1300 per month. Neither parent earned much or worked a lot or the amount would have been higher.
SSA was never meant to be the sole source of income.
Women who leave the workforce to raise children do a noble thing but that it usually is not financially advantageous is just the consequence of their choice.
The Social Security system was based on the typical model of a family as it existed in the 30's and 40's with man working and wife staying home. Probably not as common as believed even then but still more likely true than not. The women of that era are the ones that hit retirement age ten to fifteen years ago and that is why currently women have a lower benefit rate than men.
The solution was always said to be simply treat a marriage as a partnership and divide all earnings between the two, but for a lot of reasons and complications, that was never done.
Ironically, that family model has largely ceased to exist and going forward, for late boomers and beyond, the model of the stay at home wife resulting in a lower benefit no longer applies. Income disparity by sex is still an issue but the idea of treating marriage as a partnership as a solution going forward is now less necessary than before.
The author characterizes the current system as a "penalty" against people who choose to stay home, but I have a hard time seeing it that way. If you work, the government collects 15.3% in FICA taxes from you. If you don't work, the government collects 0% in FICA taxes from you, but you may still be eligible for benefits on a spouse's earnings record.
If anything, it seems like there's a "marriage bonus," not a stay-at-home penalty.
At this point the birth rate is low and that is causing challenges for Social Security solvency. An aging society has different economic and social challenges (and opportunities) than one with more young people.
So I think as a country we either need to do things that make people more willing to have kids (child care, paid leave, medical care, tax credits, better employment practices like less on-call scheduling, SS changes like caregiver credits and expanded childcare dropout years, etc.) or bring in more young immigrants, or admit that we are going to be an aging society like Japan and parts of Europe and start planning for that. But we can't act like people are on their own if they decide to have kids and then be shocked when instead of 2-3 they have 0-1.
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