Friday, February 27, 2009

Saving in Hard Economic Times

It’s the end of America Saves week, a national campaign to promote saving for all Americans, and what an opportune time to discuss the concept given the current economic state of our country.

Saving has always been a challenge for working families and older workers struggling to make ends meet. Often every dollar that comes into the household must go back out to meet a basic need. Given the current economic climate, all Americans are very worried about their own financial well-being. As a result, regardless of circumstances, many are finding ways to save despite already tight budgets. According to two government reports released by the Department of Commerce and discussed in a New York Times article, the personal saving rate in the last three months of 2008 rose to its highest level in six years.

Advocates working on behalf of low-income individuals and families recognize that in these tough times, it is even more difficult for people to save enough for retirement, especially with 401k plans and employer supported savings opportunities diminishing. For those barely making ends meet, it might seem unimaginable to save, especially if there’s no goal or standard in place for how much is needed for retirement.

Our standard, the Elder Economic Security Standard Index (Elder Index), created in partnership with the Gerontology Institute at the University of Massachusetts Boston, shows younger workers, baby boomers and recent retirees what exactly is needed where they live to make ends meet. Using this new geographically-based measure of income adequacy, one can then determine what they need to save to live the lifestyle they choose in retirement.

Saving is an important concept, but if not guided by specific and realistic measures of income adequacy in retirement can be frustrating and overwhelming, ultimately, having less of an impact in the long-run.

Friday, February 20, 2009

Is Social Security Really Disappearing?

On Wednesday, I attended the National Academy of Social Insurance briefing, "Social Security, Medicare and the Long-term Budget". Three Social Security experts discussed the important distinction between healthcare and Medicare reform and also described social security as what it is: the most efficient program implemented by the federal government.

Some people get the healthcare system and Social Security confused, and consider them one in the same. In fact, they are two separate systems, one (healthcare) – desperately in need of reform, the other (social security) -- not in crisis.

Currently, estimates show that Social Security has a surplus of $186 billion and this surplus will continue until 2026 when reserves will then be used to pay benefits. Even if nothing changes in terms of policy and regulations the reserves will last until 2041. So, why question the longevity and sustainability of Social Security?

The truth is Americans can afford to support the baby boomers through their retirement in the short term and then some. Social Security should be protected and strengthened and the panelists at the NASI event offered a variety of potential policy solutions. The solvency of Social Security, however, is not today’s more pressing issue. What people should be asking is how can we ensure that elders aren’t living on Social Security payments alone? Today, one in five elders cite Social Security as their sole source of income, and with the average annual Social Security payment of about $11,000 these elders are not making ends meet.

Friday, February 13, 2009

Elders Can't Find Work, Can't Make Ends Meet

This week, I was struck by an article in the Baltimore Sun, “Job Loss Hits Seniors Especially Hard”. The article features a series of stories about elders living through these tough economic times. The truth is, these elders are barely making it and it’s because of no fault of their own. One woman featured represents the growing number of older workers, whose Social Security benefits are not enough to make ends meet, and are unable to find a job in the stagnant workforce. According to the article, in January there were 373,000 elders, age 65+ who were unemployed.

The economic recovery package addresses this issue somewhat by including funds for job training programs for low-income elders and a one-time increase of $250 in Social Security payments. Training is definitely a great place to start because without the correct training elders are not even qualified for the dwindling number of jobs available. Another inclusion in the recovery package is the expansion of the Senior Community Service Employment Program to create 24,000 additional jobs for elders. However, so much more can be done to help our elder community who has already worked long and hard for our current benefit.

For example, reforming the healthcare system so that elders pay less out-of-pocket would save elders a chunk of money to be used for things like paying bills. Healthcare reform is just a subset however, of a larger problem: the inability to accurately measure what monetary amount is necessary for elders to meet their basic needs. Is it really, $10,400 for all elders, regardless of where they live and/or their health status as the Federal Poverty Level states?
The Elder Economic Security Standard™ Index takes into account the geographic location of elders, and their health status in determining what elders need to be economically secure. In order for real change to occur, there must be an accurate standard in place, so that elder’s needs can be accurately met.

Monday, February 9, 2009

State Partner In the News

This past Sunday Bonnie Watkins, Executive Director of our state partner, the Minnesota Women’s Consortium, was featured in the Minneapolis Star Tribune (a leading newspaper in the state) just two days before the Elder Economic Security Initiative data is released in Minnesota.

Bonnie speaks about the stories she hears far too frequently concerning elder women who cannot make ends meet.

"These are the women that did what society told them, nice ladies like my mom," said Watkins. "The status of older women is really the most heartbreaking feminist story to me."

Read the full article here.

Friday, February 6, 2009

Working Families Have A Voice

President Obama and Vice President Biden held a news conference at the White House last Friday announcing the creation of the White House Task Force on Middle Class Working Families. Later, the President signed an executive order, solidifying its existence. This task force has great potential and is charged with helping working families get back on track toward economic security. It’s a brilliant aspiration and is the first of its kind.

Chaired by the Vice President, who was a stalwart in the Senate for working families, this task force is moving quickly with its first town hall meeting scheduled for February 27 in Philadelphia. The topic of the meeting is: “Green Jobs: A Pathway to a Strong Middle Class” and our Executive Director, Joan Kuriansky has been invited to attend.

Today, the Department of Labor released the new unemployment rate of 7.6%, the highest rate since 1992 equaling loss of about 600,000 jobs in the last month. The elder unemployment rate reached an all-time 31-year high of 5.1% last month. When people are not working it usually means they have less income and drift further away from economic security. These staggering statistics make the Task Force on Middle Class Working Families that much more important.

Wider Opportunities for Women is pleased with the creation of the task force in step with our recommendations sent to the President .We especially are looking forward to the second town hall meeting, which will focus on retirement security and address issues advocated for by the Elder Economic Security Initiative. We are anxious to see how the task force operates and what it achieves in moving families toward economic security.