What would you do if you had to choose between family and work? You’d obviously go with your family, right? Well, that’s what many women chose last year.
Alexander Dummer/Unsplash | With women quitting the workforce last year to take care of their families, they might just miss out on Social Security benefits
In 2020 when the virus caused global lockdowns, self-isolations, travel bans, and millions of deaths, several women left work to take care of their families. But that choice did them more harm than good.
It increased the pay gap between childless women and mothers and posed a risk to their retirement security. But as they say, when God closes a door, he opens a window. This time, that window is in the form of the “Caregiver’s Credit” program.
According to Boston College’s Center for Retirement Research, the introduction of caregivers credit in Social Security programs can provide more financial support to mothers. It can make their retirement life much easier than before.
Wondering how? Allow us to answer that question!
First, let’s understand how Social Security assists women today
Most childless women earn a monthly salary of $3,850, whereas mothers get paid around $1,409 per month, almost 37% less than childless women. If you add in the benefits of Social Security, this pay gap reduces a bit further. Non-mothers receive a monthly benefit of $1,301 every month, while women with children get up to $785 per month, 60% of what childless women receive.
The Social Security program is designed in such a way that it offers more assistance to less-earning workers, making them more independent. In the case of married women, it becomes even more lenient, giving them one-half of their spouse’s benefits. Isn’t it amazing, earning without even leaving the house?
How caregiver’s credit can open new doors for women?
Despite the advantages provided by the Social Security program, it doesn’t match up to people’s expectations. One major reason behind this is some of its policies. The fact that most married women have to wait for ten years to claim spousal benefits is completely unjustified. Nowadays, with increasing divorce rates, fewer marriages cross that ten-year mark. If you think logically, a married woman has responsibilities from the very first day, so why not give her assistance a bit faster?
Matt Rutledge, a researcher at the Center for Retirement, says if the Social Security program works in the same manner, there’s no way women’s situation can change in the future.
He notes that childless women have an option to invest in 401(k) investment, but with a family to look after, women with children don’t get that opportunity. Rutledge suggested offering Caregivers Credit to such women. He says if we remove the time women take off from work due to family affairs from benefit calculation, we could give them more financial aid than what’s being given currently.
FYI, a bill on the same topic has been proposed in the US parliament. If it actually comes to order, it could help many women, don’t you think?
