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Decision Making Retirement - Public Policy Issues

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At the beginning of the twenty-first century, issues related to retirement were receiving increased political attention. The number of people reaching the peak retirement years will increase rapidly early in the century as members of the baby boom generation reach their sixties. The number of very old people is also likely to grow due to expected longevity increases for both women and men. The changes that will be needed in the Social Security and Medicare systems to insure benefits for such a large retired population is the subject of heated public debate.

Feminist economists have pointed out that many proposed changes fail to consider that the majority of Social Security and Medicare beneficiaries are women, and that women are more dependent on these forms of social insurance than men. In 1998, for example, unmarried women age sixty-five and over received about half of their retirement income from Social Security. For 25 percent of unmarried retired women, Social Security was the only source of income. It is important for the system to give careful consideration to the importance of Social Security for this group.

Many proposed changes are likely to be especially harmful for women with modest incomes. Privatization schemes usually involve large reductions in regular Social Security benefits in the hope that private accounts will make up the difference; this is risky, however, especially for small accounts with high administrative costs. Plans that maintain the current benefit structure, while making smaller cuts, sometimes favor policies such as scaling back cost-of-living increases, which would be most harmful for the oldest of the old (predominately women). Other policies that are less harmful for women and other low earners include increasing the amount of earnings subject to the payroll tax or taxing Social Security benefits like other pensions. Even a small percentage cut in all benefits would be less harmful to women than many of the other proposals being discussed.

Women are more likely than men to time retirement based on family caregiving responsibilities. Although some older men perform unpaid caregiving for family members, older women are much more likely to ‘‘work’’ in retirement as caregivers to spouses, parents, or other relatives. Advocates for women contend that policies intended to raise the ages at which most people retire from paid employment should take the needs of unpaid caregivers into account.

Women and men experience retirement differently. These differences may lessen, but are not likely to disappear, in the future. Gains in women’s retirement income resulting from longer careers are also expected to be offset by the number of women entering retirement as either divorced or never married. For the foreseeable future, therefore, issues of gender are likely to remain important for studying retirement timing and the economic status of retired persons.

LOIS SHAW CATHERINE HILL

See also ECONOMIC WELL-BEING; EMPLOYMENT OF OLDER WORKERS; PENSIONS, PUBLIC PENSIONS; PENSIONS, HISTORY; PENSIONS, PLAN TYPES AND POLICY APPROACHES; RETIREMENT PLANNING; RETIREMENT, EARLY RETIREMENT INCENTIVES; RETIREMENT, PATTERNS; SAVINGS; SOCIAL SECURITY ADMINISTRATION; SOCIAL SECURITY, HISTORY AND OPERATIONS; SOCIAL SECURITY, LONG-TERM FINANCING AND REFORM; TAXATION.

BIBLIOGRAPHY

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ARNOLD, R. D.; GRAETZ, M. J.; and MUNNEL, A. H., eds. Framing the Social Security Debate: Values Politics and Economics. Washington, D.C.: National Academy of Social Insurance, 1998.

BURTLESS, G., and QUINN, J. Retirement Trends and Policies to Encourage Work Among Older Americans. Boston, Mass.: Center for Retirement Research at Boston College, 2000.

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IAMS, H. M. ‘‘Employment of Retired-Worker Women.’’ Social Security Bulletin 49 (1986): 5–13.

JOHNSON, R. The Gender Gap in Pension Wealth: Is Women’s Progress in the Labor Market Equalizing Retirement Benefits? Washington, D.C.: Urban Institute, 2000.

MISHEL, L.; BERNSTEIN, J.; and SCHMITT, J. The State of Working America. Ithaca, N.Y.: Cornell University Press, 2000.

MITCHELL, O. S.; LEVINE, P. B.; and PHILLIPS, J. W. The Impact of Pay Inequality, Occupational Segregation, and Lifetime Work Experience on the Retirement Income of Women and Minorities. Washington D.C.: AARP, 1999.

PARNES, H. S. ‘‘The Retirement Decision.’’ In The Older Worker. Edited by Michael Borus, Herbert Parnes, Steven Sandell and Bert Seidman. Madison, Wisc.: Industrial Relations Research Association, 1988.

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SHAW, L., and HILL, C. The Gender Gap in Pension Coverage: What Does the Future Hold? Washington, D.C.: Institute for Women’s Policy Research 2001.

SMEEDING, T.; ESTES, C.; and GLASSE, L. Social Security in the 21st Century: More than Deficits, Strengthening Security For Women. Washington, D.C.: Gerontological Society of America, 1999.

Social Security Administration. Income of the Population 55 or Older: 1998. Washington D.C.: Social Security Administration, 2000.

WEAVER, D. A. ‘‘The Work and Retirement Decisions of Older Women: A Literature Review.’’ Social Security Bulletin 57 (1994): 3–24.

WIATROWSKI, W. ‘‘Changing Retirement Age: Ups and Downs.’’ Monthly Labor Review. April 2001.

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