Social Security Dreams & Safety NetsTuesday, June 21, 2005
Great article on the front page of yesterday’s New York Times about how Social Security is currently a lifeline for 2/3 of all Americans, and why women in particular would be hurt by the President’s privatization plan. Nearly 1/3 of all Americans receiving Social Security are single women. Many were divorced late in life and left with little or no savings. Due to child rearing responsibilities, they did not have the luxury of a regular attachment to the workforce like most men. The current Social Security program made allowances for this fact. A divorced spouse was allowed to collect a portion of her former husband’s Social Security, without any negative impact on the man.
However, if Social Security funds are diverted to “private accounts”, will the divorced single woman get a part of her former husbands “private account”? Will the husband have anything left for himself after the divorce lawyers? Does anyone really want to risk being in poverty in their old age? Prior to Social Security, almost 40% of the elderly in the United States lived in poverty.
One of the persons profiled in the article is a former millionaire whose business failed and was hit by medical bills for his wife before she died.. He now lives largely on his monthly Social Security check. What if the stock market crashes just before you are forced to retire? Would you deplete your “private account” to prolong your wife’s life? These things happen every day. Thats why we have Social Security Insurance.