Secondly, women dramatically reduce their Social Security benefit because of Social Security’s “high 35” system for determining benefits, because of having fewer years of paid work. Your Social Security benefit is calculated with a formula which uses your highest 35 years of earnings. Those who take years out for child care and elder care are more likely to have $0 years factored in. Even those who have a 35 year work record may have fewer years at their career peak, and be including more of their early career, low-wage entry-level salaries compared to people in similar fields who didn’t take time out.
"As a nation we depend on family caregivers, and the least we can do is help make sure that the men and women who perform this service are protected in retirement."
For many families, the most cost effective—or only—option is for someone to take off from work to care for their parent. According to AARP’s public policy institute, family caregivers provide nearly half of a trillion dollars in care each year. Though they are generally not paid, they are working, and they are providing a service both to their families and the country as a whole.
Therefore, we should find a way to prevent this critically important caregiving role from diminishing the retirement security of caregivers. Americans overwhelmingly support the idea of a Social Security caregiver credit (click here to read more about it). The caregiver credit proposals in Congress (notably those from Senator Chris Murphy and Representative Nita Lowey) include giving credit for months out of the work force, based on a formula as if the person had earned a wage (generally a percent of the average wage). There are also bills emerging this year that would do the same, but only for parental caregiving for children, which is good, but not good enough. This would certainly not replace earnings credit an average or high wage worker would have achieved back in the work force, but it can at least prevent those $0 years from slashing benefits in a “high 35” formula.
B’nai B’rith International is very pleased to see these bills as part of the conversation in Congress, even though 2016 might not be the most productive legislative year, given all attention being focused on elections. As a nation we depend on family caregivers, and the least we can do is help make sure that the men and women who perform this service are protected in retirement.
Photos via Flickr (1) (2)
Rachel Goldberg, Ph.D has been the B’nai B’rith International director of health and aging policy since 2003 and the deputy director of the B’nai B’rith International Senior Services since 2007. Before joining B'nai B'rith International, she taught politics and government at the University of Puget Sound and Georgetown University. To view some of her additional content, Click Here.