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Should men and women receive different monthly benefits because women live longer than men?

Polemic Paper 2018 8 Pages

Business economics - Economic Policy

Excerpt

Contents

Introduction

Financial Status of Women and Men
Programs with Unequal Benefits to Men and Women

Rationale for Equal Monthly Benefits

Conclusion

References

Introduction

In the past two decades, social security issues have been raising concern among the US population. Consequently, pension plans have changed remarkably to influence retirement benefits, especially with regard to gender. Ordinarily, employment patterns of men and women differ in several aspects. First of all, more men are in conventional employment compared to women. This implies that, men’s income is higher than that of women. In regard to saving money for retirement, men exhibit consistent saving plan, whereas women experience challenges in saving some income for their retirement. On the other hand, women have high social and health needs compared to men, especially in old age when they rely solely on monthly retirement benefits. It has been found out that some gender related inequalities subject women to financial consequences during their working life and even after retirement. However, the recent changes in the US pension plan from the traditional system to 401k plans seem to have placed women at the gaining end. In addition, policy changes in other retirement aspects such as access to healthcare and social care. For instance, the current healthcare reforms, precisely the Affordable Care Act has brought enormous benefits to women compared to men. Another aspect, which seems to influence compensation of retirees, is the life expectancy issue. It is obvious that, women experience long life expectancy than men. Despite all these inequalities between men and women, monthly benefits are provided equally, and this appears to be a significant bias in the compensation plan. This is the reason why the question, ‘Should men and women receive different monthly benefits because women live longer than men?’ requires a comprehensive answer. Therefore, this research paper will attempt to answer the question.

Financial Status of Women and Men

In the recent financial reports, it seems evident that men and women exhibit diverse differences in their financial status. This is probably the principal reason as to why the old-age phrase, which holds that men are from Mars and women from Venus reveals its significance in the world of finance. Ordinarily, men are believed to be smart financial savers compared to women, although they experience similar retirement crisis. The only significant difference in their retirement crisis is that, women live longer than men, so this implies that women are exposed to retirement crisis for a prolonged period compared to men who have a short life expectancy.

From a financial perspective, the fact that women live longer than men implies an increased financial burden during retirement, but not necessarily extra spending in one’s life. In practice, women face enormous challenges in their old age because they have an increased risk of outliving their assets (Kaplan, 2012). The aspect that women tends to save less for their retirement compared to men who save adequately for their retirement means that financial status of men and women are quite different after retirement, especially with regard to their life expectancy. This is, probably the principal reason as to why federal laws apply unisex actuarial tables for compensations to ensure that women do not outlive their assets because they are expected to live a little longer than men of the same age. However, women continue to experience retirement crisis, and this is evidenced by the large population of women in nursing homes. Ordinarily, more women seek for care at nursing homes than men, and this is attributable to their life expectancy which influences financial status.

Despite the difference brought about by life expectancy, there are other issues, which influence the financial status variations between the two genders. First of all, women have been found to be saving less for their retirement than men (Nye, 2008). This is attributable to inequalities in the current employment system in which men receive high compensation than women for the same job. Kaplan (2012) reports “Some studies indicate women in the US earn 5% less for the same job and 23% less – on average – since they hold lower paying jobs. Further, women are more prone to interrupted jobs and careers since they are the primary caregivers for small children and the elderly” (par. 3). This implies that, women waste a lot of working hours on family roles, and yet they are paid less than men for the same job. As a result, their saving for retirement remains lower than that one of men. From a social perspective, women are not to blame for low saving trends because their financial status matches their contributions to social security agencies.

However, it is worth noting that financial literacy gender differences play significant roles in financial preparedness between men and women. Recent financial studies reveal that men exhibit more financial preparedness than women. This is, probably the reason as to why most women set up little emergency savings compared to men who show advanced financial understanding, especially with regard to emergencies. In addition, women exhibit less confidence in financial decision making compared to men, and this influences their financial planning abilities (Hur, 2013).

Programs with Unequal Benefits to Men and Women

Ideally, women should be saving more money for their retirement than men. This is so because they live longer than men. Consequently, they should receive their monthly benefits in accordance to their retirement savings. Ironically, federal laws enable women to receive more pension than men, especially in regard to their life expectancy, and yet they save less than men.

However, it is emerging that the current pension plans provide financial balances between men and women. There are two principal benefit programs which compensate for gender differences, especially in regard to retirement benefits. These programs are the social security and healthcare insurance which seem to favor men and women, respectively. It is evident that, social security plans favor men than women because their social security benefits are calculated based on the 35 years’ earning period. Financial statistics indicate that men have an increased rate of attaining the required working years because they are not disrupted by family issues. In contrast, most women do not attain the required working years because they do not remain in the workforce for long, owing to family commitments such as caring for children. This implies that, the average monthly benefits from social security funds will be different because they are calculated based on the total savings against the set working period of 35 years. Ordinarily, women have zero-earnings years added to their working period, and this means that their average monthly benefits are lower than that of men who do not have zero-earnings years.

On the other hand, women are favored by the current healthcare laws, especially with regard to health problems, which arise in old age. One of the health issues that will enable women to receive more benefits than men is the mental health cover. The Affordable Care Act extends insurance cover to people with mental health issues. Coincidentally, women have been found to be more affected by this problem than men. Health records indicate that, more women experience anxiety disorder, depression and panic disorder than men. For instance, health records indicate that 23% of women was suffering from anxiety disorder compared to 14% recorded in men (Khazan, 2014). This implies that, retirement crisis experienced by women in the extra live years is partially addressed because healthcare costs are the principal causes of retirement crisis at the old age.

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Details

Pages
8
Year
2018
ISBN (eBook)
9783668739086
File size
494 KB
Language
English
Catalog Number
v429853
Grade
1.6
Tags
should

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Title: Should men and women receive different monthly benefits because women live longer than men?