As a Senator representing the oldest state in the nation by median age, one of my highest priorities is to improve retirement security for older Americans today and for generations to come.
Prior to the pandemic, the nonpartisan Center for Retirement Research at Boston College estimated that Americans face a cumulative $7 trillion gap between what they are projected to have saved for retirement and what they are likely to need. The ongoing public health and economic crisis are expected to further increase this staggering gap.
The situation is particularly challenging for women, who often face unique difficulties in preparing for and maintaining a secure retirement. In general, women are more likely than men to take time away from the workforce to raise children or even grandchildren. They are more likely to care for an ill spouse or a parent. Time out of the workforce often results in lower Social Security benefits, smaller pensions, and less in defined contribution plan savings. Women also have a higher average life expectancy than men do, which can translate into higher expected lifetime health care costs and a greater risk of outliving one’s savings.
I recently chaired an Aging Committee hearing that featured a report from the Government Accountability Office I requested on the barriers that women face to retirement security. The report includes the voices of women across the country who shared the struggles they have faced preparing for retirement. During our hearing, we identified a number of possible solutions, including lowering the cost of prescription drugs, protecting Social Security, supporting caregivers, helping Americans save for retirement, and improving financial literacy.
Following my Committee’s first bipartisan investigation into prescription drug price spikes, I wrote new laws to lower the cost of prescription drugs. One of the laws I authored created an expedited new pathway at the FDA that has resulted in the approval of dozens of new generic drugs, which are lower-cost but equally effective.
We can, and must, do more to bring down the cost of medications. That’s why I support the Prescription Drug Pricing Reduction Act of 2020, which is projected to save seniors and individuals with disabilities $72 billion in out-of-pocket costs in the Medicare prescription drug benefit program and reduce premiums by a billion dollars.
Throughout my Senate service, I have worked to preserve and strengthen Social Security, which, supplemented by savings, has made the difference between poverty and a comfortable retirement for millions of Americans. Social Security is a persistent concern for many public employees, however, due to two Social Security provisions: the Government Pension Offset and the Windfall Elimination Provision. In some states like Maine, these provisions unfairly reduce the earned Social Security benefits of public employees, such as teachers. I have consistently sponsored the bipartisan Social Security Fairness Act, which would fully repeal both of these offsets.
We must also address caregiving duties and financial education to support those who take time out of the workforce to care for their families. Thanks to the RAISE Family Caregivers Act I authored, a national strategy is in the works to support family caregivers and improve their financial security. The 2020 Older Americans Act reauthorization I authored ensures the continuation of the National Resource Center for Retirement and Women, which is a hub for financial education.
We should also explore ways to help Americans save more for retirement. Provisions from my bipartisan Retirement Security Act were enacted last year and aim to expand access to employer-provided retirement plans by reducing their cost and complexity, especially for small businesses. This summer, I introduced the bipartisan Military Spouses Retirement Security Act that would help address the concern that military spouses often have to move before they are able to vest in their employer-sponsored retirement plan.
The retirement savings gap is a significant challenge for all Americans. It is clear, however, that women on average face a larger gap than men and experience higher poverty rates in retirement. While we have made progress in improving financial security for older Americans, we must continue to address the unique challenges women face when saving for retirement.