WASHINGTON, March 15 /PRNewswire/ -- Women advocacy organizations, members of Americans for Secure Retirement (ASR), today told the Senate Special Committee on Aging about the particulary pressing challenges women face to achieving financial security and independence in retirement. The groups urged the Committee, which held a hearing today on women and retirement, to adopt policies that encourage annuitization as a way to help women ensure a steady stream of income for life. "Whether from increased longevity, varied work patterns, less income or lower earnings, women face unique and difficult challenges to achieving a financially secure retirement," said Elisabeth Gehl, director of public policy for Business and Proefssional Women/USA. "When the first wave of the 77 million baby boomers begin to retire over the next few years, the economic challenges many women already face in retirement will become increasingly apparent and the need to address them all the more urgent." Because most women will live 20-30 years in retirement and income from Social Security and pensions are less and less likely to suffice, more has to be done to promote planning and individual savings for women. In 2002, women aged 65 and older had a median income from savings of only $1,028 a year, which amounts to roughly $86 a month, and only 44 percent of working women participate in a pension plan. While Social Security is replacing less of a retiree's pre-retirement income, it is the only source of income for 25 percent of unmarried women. The average Social Security payment for retired women in 2002 was $774 a month compared to $1,006 for men. The organizations urged Senators to support tax incentives encouraging women and all Americans to use lifetime annuities as a way to secure a steady stream of income throughout retirement. "Outside Social Security and pensions, lifetime annuities are the only vehicles that literally provide a "paycheck for life" and can help women ensure a regular source of income to augment Social Security and other savings they may have," said Karen Kerrigan, president of Women Entreprenuers, Inc. "That's why we urge members of this committee to support the Retirement Security for Life Act, and the Flexible Retirement Security Act, which offer a strong tax incentive for Americans to use lifetime annuities." "ASR commends Chairman Smith and all the Senators on this panel for recognizing the scope of the challenges facing women as they plan for retirement, and the importance of examining the full range of potential approaches that can be tapped to improve retirement security for millions of women," Gehl said. Americans for Secure Retirement supports legislation introduced by Aging Committee Chairman Gordon Smith and Senators Conrad (D-ND), Snowe (R-ME) and Clinton (D-NY) called The Retirement Security for Life Act (S. 381) and the Flexible Retirement Security Act of 2005 (S. 1359), which would encourage Americans to invest a portion of their savings in lifetime annuities to secure a guaranteed source of income in retirement. Under these proposals, individuals would not pay federal taxes on one-half of the income generated by lifetime annuities. This would result in approximately $5,000 tax savings for a typical American in the 25 percent tax bracket. The testimony was jointly submitted by Business and Professional Women/ USA, Women Entrepreneurs, Inc., Women in Farm Economics, and Women Impacting Public Policy, members of Americans for Secure Retirement. To view the testimony online or to learn more about ASR, please visit http://www.paycheckforlife.org.
SOURCE Americans for Secure Retirement