The Female Face of Foreclosure

This past Friday, the National Council of Women's Organizations sponsored a Congressional briefing focused on The Impact of Subprime Lending on Women.

Our own Ramsey Alwin, Director of the National Elder Economic Security Initiative, was a featured speaker at the briefing and here is an excerpt from the valuable information she shared:

Housing plays a unique role in the life of older Americans. It not only serves as shelter, but also provides a sense of comfort and security. Housing provides wealth to the approximately 80% of Americans 65+ who own their own homes. For many seniors, especially low-income seniors, the home is their sole asset and source of wealth. As the purchasing power of retirement benefits, such as Social Security, is eroded by the rising cost of basic goods and services, such an asset becomes critical in assuring economic security later in life. Given the current economic downturn, the phrase “asset rich and cash poor” is an increasingly accurate descriptor of aging communities nationwide, particularly among those who own their own homes. Regardless of an elder’s financial status, housing figures prominently in a resident’s quality of life, and it can influence a person’s physical independence and ability to participate in community life. Housing is a basic building block of a livable community in which an elder can age in place with dignity.

The subprime mortgage crisis and the subsequent foreclosure flurry have crushed the bedrock of economic security for elders – homeownership.

Lifetime financial security and homeownership is a cornerstone of the American dream: if you work hard and follow the rules, you will be able to retire to your own home without financial worries. Yet, women who do just that continue to find themselves more likely to age into poverty than men. This is especially so for women of color. The cumulative effects of pay inequity, occupational segregation in low-wage jobs, and work place policies that do not honor or acknowledge caregiving responsibilities find older women with fewer resources upon retirement. This latest subprime crisis only further compounds this injustice.

For more information, Please view the fact sheet: Older Women and the Impact of Housing Status on Economic Security

Comments please: Has the economic well-being of older women in your family or in your community suffered because of the mortgage crisis?

Out With The Old, In With The New

Introduction of Measuring American Poverty Act - “Long Overdue”
Current Federal Poverty Level Deeply Flawed

Wider Opportunities for Women applauds Subcommittee Chairman Jim McDermott for his draft legislation to revise the 55-year-old federal poverty line unveiled on Thursday, July 17th at a hearing before the Income Security Subcommittee of the House Ways and Means Committee .

The proposal goes a long way toward addressing the deep flaws in the current measure in use since 1964.

In addition, WOW is most pleased with the proposal’s authorization of a new study by the National Academy of Sciences to determine a definition of a “decent living standard threshold,” or “the amount of annual income that would allow an individual to live beyond deprivation at a safe and decent, but modest, standard of income.” (Sec. 1150C) Anticipating that this would be a measure of genuine income adequacy rather than the deprivation measured by the new poverty line, it holds great potential for use by individuals, program administrators and policy-makers. We hope it does not get overlooked in the rightful attention that will be given to revising the poverty measure.

Underpinning Chairman McDermott’s proposed Modern Poverty Measure is the National Academy of Science’s 1995 report on measuring poverty, which properly addressed many of the flawed assumptions and methodology of the current poverty level. In applying these recommendations to a Modern Poverty Measure (MPM), we recommend that final legislation:
ADD bullets to the items found below:

· Include the cost of health care, child care and transportation as part of the threshold for the reference family rather than as a subtraction from income. While not universal, such expenses are critical and often determinate of financial viability for working families.

· Make the MPM as geographically specific as possible, considering variation, as the NAS report stated, “…to the maximum extent possible.” While housing has a disproportionate impact on family income needs, and housing markets vary significantly across the country, the Self-Sufficiency Standard demonstrates that it is possible to identify non-housing expenses and data sources such as through child care market rate surveys mandated by TANF.

· Account for critical demographic differences reflected in age. Those 65 or older do not have the same work-related expense as working age Americans, and their economic well-being is greatly affected by their housing and health status. The discussion draft’s “medical risk index” will address this but outside the framework of a threshold for a decent income.

· Establish a commission to review annual findings that informs the public how many Americans are living at or below the new poverty measure and the proposed “decent standard of living.” The Commission should make recommendations on how to close the income gap for those whose income does not equal the “decent standard living.” The information should be analyzed for individual cohorts of age, gender and race.

To read the statement in its entirety please visit the following link: http://www.wowonline.org/ourprograms/fess/documents/PressStatement_Poverty_July2008.pdf

Double Whammy!

Today we have TWO exciting topics for discussion - the release of the Wisconsin Elder Economic Security Standard Index and the Aspen Institute's "Security 'Plus' Annuities " Plan.

First, Wider Opportunities for Women in partnership with the Wisconsin Women's Network is proud to announce the successful release of the Wisconsin EESI.

The Wisconsin Index is a measure of the living expenses for older adults in the community for housing, health care, food, transportation and minor miscellaneous costs. It is calibrated to address the specific costs of an older person’s real life circumstances, rather than the antiquated "federal poverty level," which is based solely on an average older adult’s food costs. The Wisconsin Index offers precise and geographically-specific information on an older adult’s costs based on her particular household size, housing tenure and health. This latest launch brings the National EESI to a total of five states – MA, CA, PA, IL and WI.

To get a better idea of the impact the Elder Economic Security Initiative is going to have on Wisconsin, visit any or all of the following links and stay tuned:

>WI EESI Webpage
>WI EESI Fact Sheet
>Video News Report: WisconsinEye
>News Story: Wisconsin Radio News Network
>News Story: Milwaukee Journal-Sentinel
>News Story: ABC - WISN News

Now, on to the Aspen Institute Security "Plus" Annuities Plan...

Here are some key features and concepts of the Security Plus Plan:

[] The Security “Plus” Plan is designed to jump-start a market for life annuities for younger workers. It would provide America’s retirees with an opportunity to buy an extra layer of secure income on top of Social Security through a simple and convenient government-facilitated program.

[] Security “Plus” annuities use the federal government as an intermediary to market and distribute annuities, provide supportive administrative services and select annuity providers. This keeps the private sector in its customary role as an underwriter of group annuities and prices annuities at current market rates but without premium taxes or advisor fees.

[] Security “Plus” annuity payments are automatically added to monthly Social Security checks.

[] Security “Plus” annuities minimize the risk that retirees will outlive or lose their savings. If just 10 percent buy a Security “Plus” annuity, that means 200,000-400,000 Americans each year will increase their financial security in retirement.

For more information about the Aspen Institute's innovative retirement savings concept, please read the following report: http://www.wowonline.org/pdf/AspenInstituteSavingsproposal_2.pdf

Comments Please: Do you think the Aspen Security Plus Plan could make retirement saving easier or more reliable?

No Shelter from Foreclosure

As some of you may know, the Associated Press recently reported that former television star Ed McMahon may lose his Los Angeles home to foreclosure. While this economic downturn may just now begin to be felt by wealthy Americans, the majority of us have been at its mercy for quite some time.

Older Americans have been particularly vulnerable in this foreclosure wave having to surrender their last asset as the costs of medical coverage, home upkeep, and other goods and services continue to eclipse their retirement incomes. As WOW Executive Director, Joan Kuriansky stated in Thursday's press release "The news reports of the foreclosure proceedings on Ed McMahon's home in Los Angeles begs the question, 'If Mr. McMahon, with all his status and resources, is in this situation, what are the prospects for ordinary men and women living on fixed incomes?'"

WOW's Elder Economic Security Initiative™ in partnership with the Gerontology Institute at the University of Massachusetts Boston, has created the Elder Economic Security Standard Index™ in order to help policymakers, service providers and others construct realistic and effective policies and programs to help older Americans secure the income necessary to live independently and well.

The Index is a realistic measure of what it costs to live in the US today, with the data calculated on a county by county basis. In Los Angeles County, where Mr. McMahon lives, it takes $30,591 for a single senior just to meet housing and other minimum basic expenses when they are still carrying a mortgage. If they have paid off their mortgage, they still need $16,355 per year to meet basic expenses. Figures like these help to put things into perspective when taking into consideration that the vast majority of older Americans have only a small fraction of the economic resources of Mr. McMahon. For example, The average Social Security payment of $12,540 is not enough to live on, and yet, one out of three seniors in California rely exclusively on Social Security to cover their basic costs.

To find out what it takes for seniors to make ends meet in your area, please visit the EESI website: http://www.wowonline.org/ourprograms/eesi/

Comments Please: Have you noticed older neighbors in your community losing their homes to forclosure?

Medicare Part D Could Be Helping More

Recently the U.S. Government Accountability Office has been looking more closely at the financial and health challenges faced by older Americans. As you know, many Americans who are no longer able to participate in the workforce often find themselves lacking resources. As a result, the GAO has decided to take yet another look at LIS - the Medicare Part D Low Income Subsidy and its effectiveness. This is particularly significant because as the National Elder Economic Security Index illustrates, LIS is a valuable support program that can help older Americans reach economic security.

The Centers for Medicare & Medicaid Services and the Congressional Budget Office have estimated, respectively, that about 2.6 million to over 4 million individuals who may qualify for the Medicare prescription drug low-income subsidy are not receiving it. Various barriers, such as reluctance to disclose personal financial information or lack of knowledge of the subsidy, may prevent potentially eligible Medicare beneficiaries from applying for the subsidy.

To view the highlights of the report, go to http://www.gao.gov/highlights/d08812thigh.pdf .

To learn more about the role Medicare Part D LIS can play in achieving economic security, please visit the Elder Economic Security Initiative website: http://www.wowonline.org/ourprograms/eesi/
Comments Please: Have you or a family member encountered problems with the accessibility of the Medicare Part D LIS Program?

Promoting Individual Retirement Saving

The discourse on individual retirement saving continues to heat up! Recently a series of forums have been held on this topic here in DC. In late April, we had the chance to attend one such forum which was moderated by J. Mark Iwry of the Brookings Institution and Retirement Security Project. Presenters included Teresa Ghilarducci of the New School for Social Research, Gene Sperling of the Center for American Progress, and David C. John of the Heritage Foundation and Retirement Security Project.

To provide some context for the discussion Mr. Iwry opened by making a few statements regarding retirement income. He first insisted that the retirement security problem is largely a health care problem because it accounts for such a large amount of retiree out-of- pocket costs. He followed by insisting that program and policy change needs to target moderate to lower income people and utilize more saving incentives.

Ms. Ghilarducci's points of emphasis were that those currently in their 40s and 50s are likely to be the first generation to experience a significant decrease in living standards in old age. However, EESI data shows that this is not a new problem for women and especially women of color. Her presentation centered a Guaranteed Retirement Accounts (GRAs) proposal. Under the GRAs plan, most employers and workers would be required to contribute. Contributions would be lightly subsidized, returns would be guaranteed, and the investment funds would be managed by the federal government. The GRAs would serve as a supplement to Social Security income.

Mr. Sperling's presentation focused on the idea that we need to "disrupt the system as little as possible" by implementing a portable saving system with a matching tax credit -- the Universal 401(k) Plan with automatic enrollment features.

Mr. John’s proposal focused on individual responsibility and individual savings. He made the case that savings would increase with automatic enrollment (employee participation as the default option). He also encouraged employers and employees to take advantage of existing payroll deduction systems.

While we always support increased dialogue surrounding retirement security, it was clear that this forum’s focus was primarily on those with the means to save. The reality is that few and fewer Americans have the extra resources to do so. A robust discussion on retirement security should include program and policy changes that would positively affect those working so hard each day just to make their basic ends meet, that do not have the extra funds to allocate to savings. With the rising cost of necessities such as food and gas this cohort is only going to balloon. This growing majority needs solutions that acknowledge and honor their years of work and does not penalize them for their self-sufficient manner during their working years. We hope that advocates and policymakers find the Elder Economic Security Initiative useful in informing the various proposals. The difficulties faced by low wage workers and the cumulative disadvantage faced by the majority of women in the workforce are largely left out of the discussion though they are an integral part of the spectrum.

For more information on the forum described above, please visit the following webpage: http://www.aarp.org/research/ppi/policylive.html

Comments Please: We must focus program and policy discussions to building upon current structures in a manner that reasonably recognizes the current economic landscape. Specifically, what kinds of program do you think those who are most vulnerable during their retirement years would benefit from the most, with regard to retirement income adequacy?

EESI Action Alert!

Help Protect Vulnerable Seniors Against Rising Medicare Costs!

Join aging advocates in contacting key Republican senators in eight states about protecting seniors in greatest need against rising Medicare premiums. Since 2000, Medicare premiums have more than doubled. The Senate is now crafting a bill designed to increase payments to Medicare physicians, which will increase beneficiary premiums even further. Unfortunately, programs designed to assist poor seniors with these costs are broken and must be fixed. Please contact key Senators about improving the programs designed to protect low-income Medicare beneficiaries against rising costs. The Senators include: McConnell and Bunning (KY), Sununu (NH), Roberts (KS), Collins and Snowe (ME), Coleman (MN), Stevens (AK), Grassley (IA), and Specter (PA).

If you're from one of these states, please take a moment now to call AND e-mail your senator(s). You can call (866) 622-2184 toll-free to be connected to the Capitol switchboard. Ask for your senator by name and feel free to use the following proposed talking points for calls:

[]Since 2000, Medicare premiums have more than doubled. Proposed Senate increases in Medicare physician payments will cause additional increases in beneficiary premiums and make them even more difficult to afford.

[]Unfortunately, programs designed to assist poor seniors with such rapidly rising costs are broken and must be fixed.

[]The Senate Medicare bill will make things worse unless provisions are included to improve assistance for those who can least afford increasing premiums.

[]The bill should simplify and align Medicare low-income assistance programs, bring outdated asset limits in line with today’s cost of living, and improve outreach and participation for those currently eligible.

[]The Medicare bill should help beneficiaries, not just providers. Helping seniors with incomes below $15,000 is as or more important than helping doctors with incomes over $150,000.