One of the potential solutions Senator Collins raised was fixing two unfair provisions in current law that reduce Maine public employees’ Social Security benefits
Click HERE to read Senator Collins’ opening statement
Washington, D.C. — This morning, U.S. Senator Susan Collins, the Chairman of the Aging Committee, held a hearing titled, “Women and Retirement: Unique Challenges and Opportunities to Pave a Brighter Future.”
According to the non-partisan Center for Retirement Research, there is an estimated $7 trillion gap between what Americans are projected to have saved for retirement and what they are projected to need to maintain their standard of living. On average, women face a larger retirement savings gap than men and experience higher poverty rates at older ages.
Members of the Committee examined the findings from a 2020 Government Accountability Office (GAO) report—requested by Senator Collins—that analyzed the unique hurdles women face as they seek to prepare for and maintain a secure retirement. The hearing also focused on what steps can be taken to address the retirement security challenges women experience.
“The GAO report featured at today’s hearing includes voices of women across the country sharing their stories. The women tell us about their struggles, including navigating rising costs of prescription drugs, housing, and other necessities, and how limited opportunities for financial education contributed to these challenges,” said Senator Collins. “Over the years, this Committee has focused on improving retirement security for older Americans today and for generations to come. Though we have made significant strides, we must continue to work together to address the unique challenges women face when saving for retirement.”
The Committee heard testimony from Comptroller General Gene L. Dodaro, the head of the GAO, who discussed the substantial damage the COVID-19 pandemic has caused to the global economy, stability, and security, likely creating adverse effects on the retirement security of future retirees. Comptroller General Dodaro also provided a summary of the July 2020 GAO report, which includes the views of older women expressed in 14 focus groups and examines data related to financial security of older women.
The GAO has found that women are more likely than men to take time away from work to raise children or care for a child or spouse, which has implications for retirement savings, including Social Security benefits, pensions, and defined contribution plan savings. Women also have higher average life expectancy, resulting in higher expected lifetime health care costs and a greater risk of outliving retirement savings. A woman born in 2020 who reaches age 65 can expect to live two years longer, on average, than a man born in the same year. In all of the focus groups, women described some level of anxiety about their retirement security. Participants identified several barriers to achieving retirement security, including divorce, widowhood, pay inequality, and caregiving responsibilities. In discussing other hindrances to retirement security, they highlighted the importance of financial education, particularly beginning at younger ages.
Senator Collins identified a number of possible solutions to helping to improve retirement security, including fighting scams that rob seniors of their hard-earned savings, increasing availability of employer-sponsored retirement plans and automatic enrollment in 401(k) plans, encouraging individuals to delay claiming Social Security benefits when possible, and improving financial literacy. She also emphasized the need to fix two unfair Social Security provisions, the Government Pension Offset and the Windfall Elimination Provision, which affect public employees in Maine. Senator Collins has consistently sponsored the bipartisan Social Security Fairness Act, which would fully repeal both of these unfair offsets.
“I have heard from women throughout Maine, particularly retired school teachers, who are affected by these laws, such as a 65-year old woman in Jay, Maine who changed careers after 30 years of teaching to pursue a career where she will earn Social Security coverage,” said Senator Collins. “However, she is not able to receive any of her deceased husband’s Social Security benefits due to the Government Pension Offset, and her very own Social Security will also be reduced because of the Windfall Elimination Provision.”
As the women participating in GAO’s focus groups noted, a lack of personal financial education about savings, investing, enrolling in Medicare, and claiming Social Security can hinder retirement security. In 2019, Senator Collins held a hearing on the financial security of seniors in retirement and in 2018 held a hearing on the critical decisions seniors face when they turn 65, including planning to maximize Social Security benefits. Additionally, the 2020 reauthorization of the Older Americans Act, which Senator Collins authored, includes a provision requiring the continued operations of the National Resource Center for Women and Retirement. This center provides basic financial management, retirement planning, and other educational tools that promote women’s financial literacy.