This quote from the National Organization of Women’s 1998 Declaration of Sentiments is especially relevant to the debate over Social Security. How would women fare under a privatized retirement system? In fact, not only would a system of personal retirement accounts promote women’s “equality” and “empowerment,” but virtually every woman would be significantly better off with personal retirement accounts — whether she is rich or poor, single or divorced, married or widowed.
Currently, a single woman earning $24,000 annually can expect to receive $900 per month in Social Security retirement benefits. If she were allowed to redirect 10 percentage points of her FICA tax into an investment‐based retirement account, she could expect to retire with twice that amount: roughly $1,800 per month. Married women benefit from privatization, too. For example, an average‐income married woman who has taken time out of the workforce could expect to get three times more retirement income than Social Security can provide.
Moreover, a system of personal retirement accounts would end the discrimination against women that pervades Social Security. Under current law, the program takes billions of dollars from working women but gives them nothing in return. The culprit is something called the dual‐entitlement rule, which allows a woman to receive benefits on the basis of her own work record or her husband’s work record — whichever is greater. Because the typical woman earns less and works fewer years than does her husband, her spousal benefits are often larger than the benefits she earned in her own right. Consequently, she receives benefits based on only her husband’s earnings — and no credit or benefits based on the payroll taxes she has paid. A wife who never worked at all can receive exactly the same benefits as a woman who has worked her entire adult life.