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Moms, how secure is your retirement ?
By Melody Webb, November 2002
In February of this year, I attended a Women's Bar Association forum where I had heard the motivating speech of Ann Crittenden, an author mobilizing mothers to press Congress for family friendly legislation. (I am happy to now work with her on these issues.) I left the conference inspired to launch what is now SecureMom.com.
SecureMom.com dedicates itself to the retirement issues of people who leave the work force to care for small children, sick loved ones, or the elderly. The problem is simple: Mothers and all primary caregivers need their unpaid work reflected in Social Security retirement benefits. SecureMom.com organizes family caregivers - particularly at-home moms - to press for the creation of Social Security earnings credits to impute to caregivers $16,500 annual income for up to five years for unpaid part time and full time labor in the home caring for family members. This means that $16,500 rather than $0 is averaged into the formula for determining benefit levels. Earnings credit reform would raise the retirement benefit level of at least 8 million citizens - primarily mothers, by an average of $600 per year.
By way of introduction, I admit that I am an attorney. Yes, I am a bit clueless, ambitious, and arrogant to initiate this project. But that's where the lawyer stereotypes end. I am also a dreamer, a public interest entrepreneur, a native and graduate of public schools of D.C., and blessed with two degrees from Harvard University. I have led entrepreneurial direct service and advocacy effforts on behalf of needy D.C. communities.
More importantly, I am a mom who has decided that mothering trumps lawyering, and so I enter my fifth year of tending the garden of two little flower buds with a long way to grow - a 4 year old boy and a 2 year old girl. With the technical support of my British husband, I launched the Secure Mom website.
SecureMom.com is for mothers-millions of whom are at risk for poverty. As at-home moms, we are likely to perform paid work intermittently and for fewer years than the necessary 35 years to receive Social Security benefits adequate to support our needs in old age.
Why worry about retirement now? We all have husbands and a lifestyle that permits us to stay at home at present. I hate to say it, but no one knows what the future might bring on the marital front. Did you know
o You have to be married for at least 10 years to qualify for the Social Security dependent spouse benefit, which is half of your husband's benefit (based on his earnings)
o The years spent earning little or '0' income will drag down the average retirement benefit to which we would otherwise be entitled.
o Full retirement age for most of us is 67, with at least 35 years of work.
o By the year 2030, only four out of ten women will be earning more Social Security benefits based on their own work records than on their spouse's. Depressing!
Example. How much retirement benefit do you receive at various earnings levels ?
20K $901.40
50K $1603.70
90K $2009.90
Example. How much of a benefit can I expect as an at home mom?
Married or Divorced Benefit.
If at retirement (based on 2001 figures) you
o are a qualifying spouse (divorced at least 10 years or still married)
o retired at full retirement age (67 for us)
o chose a benefit based on the work record of your spouse (since your own is lower)
o and
o if your 65 year old husband earned a lifetime average of $30,470 per year, he gets $1,051 monthly; you get - $525.50 monthly
o if your 65 year old husband earned a lifetime average of $80,400 per year, he gets $1,538 monthly; you get - $768 monthly.
Earnings Credit and Benefit
On the other hand, if you earned a lifetime average of $16,500, your monthly benefit based on your own work record is approximately $748
What can we do about this problem? Please visit www.securemom.com and use our easy online 'Mail Congress' form to tell Congress to enact legislation to provide earnings credits to at-home moms and other unpaid caregivers. In addition, we can do some personal financial planning of our own. On, average you will need about 70% of your pre-retirement income to live on in retirement. Please visit the website to review our on-line tips.
We should not jeopardize our financial security in retirement, even if we are staying at home with our children.
Please volunteer with us. We welcome whatever spare hour or two you can give. You could write emails to recruit friends or conduct financial planning seminars for moms in your community. For more information, contact: melodywebb@securemom.com.
Stay tuned for more on this issue from Mocha Mom Melody Webb.
copyright (c) 2002 Melody Webb. All rights reserved.