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88–948 2014

S. HRG. 113–363 

WOMEN’S RETIREMENT SECURITY 

HEARING 

BEFORE THE

JOINT ECONOMIC COMMITTEE 

CONGRESS OF THE UNITED STATES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

MAY 21, 2014 

Printed for the use of the Joint Economic Committee 

( 
(II) 

JOINT ECONOMIC COMMITTEE 

[Created pursuant to Sec. 5(a) of Public Law 304, 79th Congress] 

HOUSE OF REPRESENTATIVES 

KEVIN BRADY, Texas, Chairman 

JOHN CAMPBELL, California 

SEAN P. DUFFY, Wisconsin 

JUSTIN AMASH, Michigan 

ERIK PAULSEN, Minnesota 

RICHARD L. HANNA, New York 

CAROLYN B. MALONEY, New York 

LORETTA SANCHEZ, California 

ELIJAH E. CUMMINGS, Maryland 

JOHN DELANEY, Maryland 

SENATE 

AMY KLOBUCHAR, Minnesota, Vice Chair 

ROBERT P. CASEY, JR., Pennsylvania 

BERNARD SANDERS, Vermont 

CHRISTOPHER MURPHY, Connecticut 

MARTIN HEINRICH, New Mexico 

MARK L. PRYOR, Arkansas 

DAN COATS, Indiana 

MIKE LEE, Utah 

ROGER F. WICKER, Mississippi 

PAT TOOMEY, Pennsylvania 

ROBERT P. O’QUINN, Executive Director 

NILES GODES, Democratic Staff Director 
(III) 

C O N T E N T S 

OPENING STATEMENTS OF MEMBERS

Hon. Amy Klobuchar, Vice Chair, a U.S. Senator from Minnesota ..................... 1 

Hon. Richard L. Hanna, a U.S. Representative from New York ......................... 4 

WITNESSES

Dr. Debra Whitman, Executive Vice President, Policy, Strategy and International Affairs, AARP, Washington, DC .......................................................... 5 

Dr. Brigitte Madrian, Aetna Professor of Public Policy and Corporate Management, Harvard Kennedy School, Cambridge, MA ............................................. 7 

Ms. Cindy Hounsell, President, Women’s Institute for a Secure Retirement, 

Washington, DC ................................................................................................... 9 

Ms. Rachel Greszler, Senior Policy Analyst, Economics and Entitlements, 

Center for Data Analysis, The Heritage Foundation, Washington, DC .......... 11 

SUBMISSIONS FOR THE RECORD

Prepared statement of Hon. Richard L. Hanna .................................................... 28 

Prepared statement of Dr. Debra Whitman .......................................................... 29 

Prepared statement of Dr. Brigitte Madrian ......................................................... 41 

Prepared statement of Ms. Cindy Hounsell ........................................................... 46 

Prepared statement of Ms. Rachel Greszler .......................................................... 55 

(1) 

WOMEN’S RETIREMENT SECURITY 

WEDNESDAY, MAY 21, 2014 

CONGRESS OF THE UNITED STATES, JOINT ECONOMIC COMMITTEE, Washington, DC. 

The committee met, pursuant to call, at 10:03 a.m. in Room 216 

of the Hart Senate Office Building, the Honorable Amy Klobuchar, 

Vice Chair, presiding. 

Representatives present: Paulsen, Hanna, Carolyn B. 

Maloney, Delaney, and Jenkins. 

Senators Present: Klobuchar. 

Staff present: Hank Butler, Gail Cohen, Connie Foster, Niles 

Godes, Colleen Healy, Robert O’Quinn, and Steve Robinson. 

OPENING STATEMENT OF HON. AMY KLOBUCHAR, VICE 

CHAIR, A U.S. SENATOR FROM MINNESOTA 

Vice Chair Klobuchar. All right, we are going to begin the 

hearing. I want to thank everyone for coming. We have a full house 

today, and I want to thank many of the visitors that we have. I 

know the AARP volunteers are on the Hill today, and we also have 

State staff who are joining us for the hearing. Thank you, as well 

as many other visitors. 

I want to specifically mention our Minnesota AARP people, Will 

Phillips, who is the new AARP Minnesota State Director, as well 

as Jim Scheibel, who is a former Mayor of St. Paul. So I want to 

thank them for being here. I am going to meet with them later on 

today, and I’m looking forward to it. 

I also want to thank Congressman Hanna, who is our chair on 

the House side today. I know Representative Brady had another 

commitment, and I really appreciate that he allowed us to go forward with this hearing, and Representative Hanna is here. And I 

also want to thank Ms. Jenkins, who is a visitor, a Congressional 

Visitor from the State of Kansas. So we are excited to have her, 

as well. 

The role of women has changed dramatically, as we all know, 

over the past few decades. And much of the credit goes to women 

who have come before us and created opportunities, broken down 

barriers, and paved the way for generations to come. 

Even with this progress, we know that there is still more work 

to do and we need to ensure that women have access to opportunities and are able to plan, save, and increase their economic and financial security as they approach retirement. 

I would first like to introduce our distinguished group of witnesses here. We have Dr. Debra Whitman. She is Executive Vice 
2 

President, Policy, Strategy and International Affairs at AARP. Her 

career has been dedicated to solving problems affecting economic 

and health security issues related to the aging population. 

Dr. Brigitte Madrian is the Aetna Professor of Public Policy and 

Corporate Management at the Harvard Kennedy School. Her research concentrates on behavioral economics and household finance, with a focus on household savings and investment behavior. 

We also have with us Ms. Cindy Hounsell—do you say ‘‘Hounsell’’? 

Ms. Hounsell. Houn-sell. 

Vice Chair Klobuchar. Ms. Hounsell is President of the Women’s Institute for a Secure Retirement, which works to improve the 

opportunities for women to secure retirement income. She has 

served as a delegate for the last two White House Conferences on 

Aging, and the White House Social Security Conference. 

Ms. Rachel Greszler is a Senior Policy Analyst, Economics and 

Entitlements, at The Heritage Foundation’s Center for Data Analysis. Before joining Heritage, she was Senior Economist at the 

Joint Economic Committee from 2006 to 2013. We always like 

when our alumns do well. Congratulations. 

As I have mentioned in my opening, we have seen real progress 

in the last 50 years in reducing the poverty rate among older 

Americans. Poverty among older men and women has fallen significantly since the mid-1960s when Medicare and Medicaid were created. 

In 1966, nearly a quarter of men 65 and over, and almost onethird of women 65 and older, lived in poverty. By 2012, the poverty 

rates for these same groups has fallen to 6.6 percent of men, and 

11 percent of women. 

While there has been significant progress for both men and 

women, women still face, as you can see, a significantly higher poverty rate in their retirement. The poverty rate for women 75 and 

older is twice that of men 75 and older. I don’t think most people 

would guess that or realize it, but it is a fact. 

A major source of the progress on poverty, as you all know, has 

been Social Security. In 2012, Social Security alone lifted more 

than 15 million elderly Americans out of poverty. Without Social 

Security, the poverty rate for women 65 years or older would climb 

to 48.6 percent. 

In the coming years, we will be facing new demographic challenges. The Census Bureau says that between 2005 and 2030, the 

project that between those years the number of Americans age 65 

and older will have doubled that. 

(A cellphone sounds.) 

Vice Chair Klobuchar. That was his siren call for the doubling 

of the population. 

[Laughter.] 

Representative Delaney. Sorry. 

Vice Chair Klobuchar. Between 65 and older. I no longer call 

it a ‘‘silver tsunami.’’ I know that has some bad connotations, so 

we will call it a ‘‘silver sensation’’—how’s that? 

[Laughter.] 

We will put a positive spin on it. We are so glad that we have 

so many seniors that are doing better and living longer, but as we 
3 

know with this rapidly growing population we need to ensure that 

both men and women can retire in peace and that most of our focus 

today is on how we close this gap for women and strengthen their 

retirement security. 

In April I released a report highlighting how women’s lower 

wages not only affect their current financial security but also affect 

their retirement security. Women who work full-time earn about 80 

cents for every $1 that men earn. Much of this disparity is due to 

differences in education and occupation, but even after accounting 

for those and other factors women still make less than men. 

The pay gap is even greater for older workers. Lower lifetime 

earnings translate to less money for retirement. Annual median income for women 65 and over is about $11,000 less for men in the 

same age group—again, average, median income, annual, is about 

$11,000 less for women than it is for men. 

Retirement experts often talk about the three-legged stool: Social 

Security, employer retirement plans such as corporate or government pensions, and savings, personal savings such as IRAs. 

Women rely more on Social Security for their retirement income 

than men, but their benefits—because of the reasons I just discussed with their salaries—are lower than men. The average weekly Social Security benefit for female retirees is 78 percent of what 

it is for male retirees. 

Women are also less likely to receive income from a traditional 

pension plan, and when they do their pension check is smaller. 

Women’s median income from company or union pensions is 53 percent of men’s median income from those sources. 

Lower earnings also affect the ability of women to contribute to 

retirement plans such as 401K, 403B, or Employee Stock Ownership Plans, or IRAs. In addition, because women live longer and 

are more likely to be single in retirement, they cannot rely on a 

spouse’s income to supplement their own. 

In 2013, only 45 percent of women age 65 and over were married, 

compared to 71 percent of men—okay, that’s the most interesting 

statistic of all. Preparing for a secure retirement is even more challenging because many women of the Baby Boomer Generation are 

also members of the so-called ‘‘Sandwich Generation,’’ one I was in 

for quite awhile where you have young kids and at the same time 

you have aging parents. 

Because of these care-giving responsibilities, women have 12 

fewer years in the paid workforce over their lifetimes, leading to 

lost wages, lower Social Security, and private pension losses as a 

result of their care-giving responsibilities. 

In addition to lost wages, family care-givers end up paying about 

$5,500 per year in out-of-pocket costs. To help support families who 

care for aging family members, I introduced the Americans Giving 

Care To Elders Act, or the AGE Act, with Senator Barbara Mikulski a few years back. And, while we are waiting for Congress to 

move on the issue of long-term care, I still think of it as the elephant in the room. As we grapple with our continuing debates 

about health care and the need to continue our work in that area, 

we cannot neglect this issue of long-term care. 

We should also strengthen Social Security, including raising the 

cap on taxable income. In my mind, currently all income above 
4 

$117,000 is exempt from the Social Security Payroll Tax. Gradually 

raising this threshold, along with other reasonable reforms, could 

help ensure the solvency of Social Security but not impact current 

beneficiaries. 

We cannot concentrate solely on lifting women’s income as they 

retire or are near retirement. We also need to ensure that women’s 

earnings throughout their lives lay the groundwork for a secure retirement. 

I am going to turn this over to Congressman Hanna and just end 

by saying that we have made extraordinary progress in reducing 

poverty, but the reality and the focus of this hearing today is that 

women remain less financially secure—much less—than men in 

their retirement years. 

Today’s hearing can help us to uncover new ways to address this 

challenge. 

Congressman Hanna. 

Representative Hanna. Thank you. 

OPENING STATEMENT OF HON. RICHARD L. HANNA, A U.S. 

REPRESENTATIVE FROM NEW YORK 

Experience shows a strong economy is the foundation of a secure 

economy. Workers with good jobs and adequate savings are better 

prepared to enjoy their retirement years. Women tend to live 

longer than men so a strong and vibrant economy is even more 

critical to providing them with a secure retirement. 

Unfortunately, our sluggish economy and aging population 

threaten our Nation’s future retirement security. 

As Chairman Brady has observed, America has fallen into a 

‘‘growth gap.’’ Our economy is growing at half the rate of previous 

recoveries. That means we are falling further behind in terms of 

jobs and income relative to where we need to be. 

Fewer jobs and less income mean Americans will be less prepared for retirement. Older workers who lose their jobs often retire 

before they are ready. That means lower Social Security benefits 

and less retirement savings. Spreading fewer resources over more 

years results in a less secure retirement. 

Our Nation’s population is getting older. As the youngest Baby 

Boomers enter the retirement years, we will undergo a dramatic 

demographic shift. The ratio of workers to retirees will shift from 

roughly three-to-one to only two-to-one. 

This demographic shift will undermine the pay-as-you-go financing of Social Security and Medicare programs. As a result, neither 

program will be able to meet its promised benefits and obligations. 

Our continuing growth gap and looming entitlement crisis will adversely affect every American, but especially and particularly 

women and older women. 

Regrettably, women typically have lower lifetime earnings. However, have longer life expectancies than men. Women are also less 

likely to be covered by an employer pension program. As a result, 

they are at grater risk of falling into poverty during their retirement years. 

To improve the retirement security of women, we must understand the nature and extent of the problem. 
5 

As we focus on the topic of today’s hearing, we must not lose 

sight of the fact that a growing economy creates more jobs, higher 

wages, and greater retirement security for both men and women. 

Economic growth alone cannot provide a secure retirement or 

prevent the insolvency of our entitlement programs, but without 

more growth our task will be much, much harder. 

We have a distinguished panel with us today, including a former 

member of the Joint Economic Committee, Rachel Greszler. I look 

forward to hearing each of our witness’s testimony, and I hope we 

gain important insights into this very critical and timely subject. 

Thank you. 

[The prepared statement of Representative Hanna appears in the 

Submissions for the Record on page 28.] 

Vice Chair Klobuchar. Thank you very much, Congressman 

Hanna. 

Dr. Whitman. 

STATEMENT OF DR. DEBRA WHITMAN, EXECUTIVE VICE 

PRESIDENT, POLICY, STRATEGY AND INTERNATIONAL AFFAIRS, AARP, WASHINGTON, DC 

Dr. Whitman. Thank you so much, and good morning. 

On behalf of AARP’s 37 million members and all Americans age 

50 and over, I would like to thank Vice Chair Klobuchar for inviting me to testify, and for convening, along with Representative 

Hanna and the other members of the Joint Economic Committee, 

this important hearing on women’s retirement security. 

I would also like to recognize and thank the AARP leaders and 

volunteers from our state offices who are here today on Capitol Hill 

to visit their Members of Congress. 

The dream of a financially secure retirement is often much harder to attain for women than it is for men. And if you think about 

the reality of most women’s lives, the reasons are fairly straightforward. Women on average live almost three years longer than 

men, so they have more years of retirement to pay for, yet they 

typically reach their later years with less income and savings than 

men. 

Older women are more likely than men to end up alone. They are 

more likely to need long-term services and supports, and they often 

face greater health care costs. For all of these reasons, older 

women are more likely than men to live under the shadow of financial stress. 

They have greater risk than men of outlasting their savings, and 

they are far more likely than men to end up in poverty. In fact, 

in 2012 almost 17 percent of women 65 and older were poor compared to 12 percent of men, according to the Census Bureau’s Supplemental Poverty Measure, which takes into account out-of-pocket 

health care spending. 

Before going further, it is important to make it clear that financial security among older women varies widely. Older African 

American and Hispanic women have poverty rates that are more 

than double that of older White women. Single older women are up 

to five times more likely to be poor than married older women. And 

as Vice Chair Klobuchar said, poverty rates also vary significantly 

by age. 
6 

We know that disparities can take many forms. For example, 

women who lack education or belong to economically disadvantaged 

racial or ethnic groups have much shorter life expectancies than 

educated White women. And despite women’s advances in the 

workplace, a great many still face obstacles to their financial wellbeing in old age. 

Because of care-giving responsibilities, both for their children 

and older family members, women are more likely than men to 

work part-time, to spend time outside the labor force, to pass up 

promotions, and to shorten their careers. 

We also know that women are more likely to work in jobs and 

industries that tend to offer lower pay and benefits. Yet, increases 

in longevity and rising health care costs are actually worsening the 

outlook for many older women. 

For these and other reasons, improving women’s retirement security requires a multi-pronged strategy. And I will use the rest of 

my time to highlight key solutions. 

First of all, we need to keep Social Security strong. Currently, 

women’s Social Security retirement benefits are 20 percent lower 

on average than men’s, and women are more likely to depend on 

them for the majority of their income. Its protections, including 

guaranteed benefits and cost-of-living adjustments, are critical for 

women. 

We urge more employers to offer retirement savings plans. 

Roughly one-in-two workers cannot set aside savings for retirement 

from their paycheck, so improving coverage is critical. That is why 

we support the Automatic IRA legislation which would provide an 

easy and low-cost way for workers to build nest eggs through payroll deduction. 

AARP also supports state efforts to offer work-and-save plans to 

private-sector employees who do not have access to retirement 

plans in their workplace. We also urge employers to adopt automatic enrollment in retirement savings plans, as well as automatic 

escalation of contributions. And workers should have the option of 

receiving their retirement benefits as lifetime income, which would 

help protect women from out-living their savings. 

Enhancing tax incentives to encourage more people to save for 

retirement is another key to the solution. This is especially true for 

low- and moderate-income workers, and an improved and strengthened savers credit is one way to achieve this goal. Working longer, 

for those who still can, can also improve their retirement security. 

We encourage employers to adopt policies such as flexible schedules 

that help older workers stay on the job. 

We support adequate funding of training and retraining programs to help older workers stay competitive. And, importantly, 

AARP supports bipartisan legislation to restore long-established 

protections against age discrimination in the workplace. 

As Representative Hanna said in his opening statement, economic growth is an important factor for retirement security. 

Women and men, for that matter, should have peace of mind about 

their financial security as they age. That is why AARP believes it 

is time for a national conversation on retirement security to consider responsible ways to achieve this goal for all Americans. 

Thank you. 
7 

[The prepared statement of Dr. Debra Whitman appears in the 

Submissions for the Record on page 29.] 

Vice Chair Klobuchar. Thank you. 

Dr. Madrian. 

STATEMENT OF DR. BRIGITTE MADRIAN, AETNA PROFESSOR 

OF PUBLIC POLICY AND CORPORATE MANAGEMENT, HARVARD KENNEDY SCHOOL, CAMBRIDGE, MA 

Dr. Madrian. Thank you for the opportunity to speak to you 

today and share my thoughts on how we can strengthen America’s 

retirement savings system. 

In examining the retirement security of women in the U.S., there 

is both good news and bad news. Saving for retirement and then 

managing one’s assets in retirement is one of the largest, if not the 

largest, financial task that any household will undertake. 

Yet, evidence on the financial capabilities of the U.S. population 

show that we as a nation are woefully unprepared for this task, 

and that women fare worse than men. 

Women have significantly lower scores than men on a simple 

five-question test designed to test knowledge of basic financial concepts such as inflation, compound interest, and the value of diversification. This is true for both married and single women. Interestingly, women are not much more likely to give incorrect answers 

than men; instead, they are much more likely to answer ‘‘I don’t 

know.’’ 

Women are also substantially more likely than men to report 

that it would be difficult for them to come up with $2,000 to meet 

an unexpected expense within the next 30 days—44 percent for 

women versus 34 percent for men. Women are also more likely 

than men to report difficulty paying bills than men—57 percent for 

women versus 47 percent for men. 

But as women approach retirement, some of this gap narrows. 

There is some evidence to suggest that married women become 

more financially literate as they age in response to the likelihood 

that they will outlive their husbands and need to assume sole management of the household finances. 

Planning for retirement is not an activity engaged in by the majority of either women or men. On the retirement planning front, 

there are no substantive differences by gender, with 43 percent of 

both men and women having planned for retirement—although a 

slightly higher fraction of men than women actually report having 

some retirement savings: 63 percent for men versus 58 percent for 

women. 

The fraction of the population working for an employer that 

sponsors a retirement plan is actually relatively similar for men 

and women, about half, according to a 2012 report by the Employee 

Benefit Research Institute. 

The fraction participating in an employer-sponsored savings plan 

is also similar for men and women. This latter finding is corroborated by a recent Vanguard report, ‘‘How America Saves: 2013’’ 

which shows that differences in savings plan participation rates by 

gender are not sizeable when comparing all men and all women eligible to participate. 
8 

In some years, women have a slightly higher participation rate 

than men, and in others men have a slightly higher participation 

rate than women. 

This apparent parity, however, fails to account for the fact that 

women earn less than men and that savings plan participation 

tends to increase with income. 

Conditional on income, women actually have substantially higher 

savings plan participation rates than men at all levels of income 

except for those earning more than $100,000 annually, where the 

participation rates are roughly equal. 

Similarly, women and men have roughly equal contribution rates 

overall, but conditional on the income women’s contribution rates 

exceed those of men at all income levels. Women, however, are less 

likely to make the maximum possible contribution, or to make 

catch-up contributions to their plan if they are eligible. 

Women and men are equally likely to have taken a loan out 

against their savings plan balances, with about 20 percent having 

an outstanding loan. Although the average loan balance is lower in 

dollar terms for women than for men, loan value as a fraction of 

total assets is similar. 

This largely reflects the fact that women have lower balances 

against which to borrow. Because women have lower pay than men 

on average—a point that has already been noted several times— 

and also shorter job tenure, women tend to have account balances 

that are roughly one-third lower than their male counterparts. 

In employer-sponsored savings plans, the asset allocation of 

women and men is fairly similar. Women, however, report having 

less tolerance for risk, and there are some notable differences in 

the investing behavior of women and men outside the domain of 

employer-sponsored savings plans. 

In outside investment accounts, women are less likely than men 

to put their money in high-risk investments. But they are more patient and are less likely to trade in and out of stocks to time the 

market or in response to an investment doing worse than expected. 

Taking on less risk can reduce expected portfolio returns, but 

trading less implies lower trading costs and a lower likelihood of 

mistiming the market. 

My biggest concern for women is what happens in retirement. 

Women have longer life expectancies than men, and married 

women tend to be several years younger than their husbands, so 

the average married woman reaching retirement can expect to 

spend several years as a widow, and the average single woman 

reaching retirement will spend all of her retirement years that 

way. 

In the shift away from defined benefit and towards defined contribution retirement plans, the financial security of women in retirement will depend very much on how the wealth accumulated for 

retirement is managed. 

With a traditional defined benefit pension, the default payout for 

a married couple is a joint and survivor annuity. Anything else requires the affirmative consent of the spouse. But defined contribution assets are largely not annuitized in retirement, leaving women 

vulnerable if the assets are not managed to last for their longer life 

expectancies. 
9 

The implications of the shift from a defined benefit to a defined 

contribution retirement system on the wellbeing of older workers 

has not received sufficient attention in either academic or policy 

circles. 

In conclusion, most of the problems with the retirement savings 

system in the U.S. are not unique to women. The problems of access to employer-sponsored savings plans are real for both men and 

women. 

On some measures, women do better than men: conditional on 

having access to a plan, they are more likely to participate and 

they contribute more. 

But on other measures, women do worse. They have lower account balances, largely driven by lower levels of tenure, and lower 

pay than their male counterparts—which represent more fundamental problems with the labor market. The biggest concern is the 

longevity risk that women will face in retirement. They have longer 

life expectancies than men, yet have saved less for themselves. 

[The prepared statement of Dr. Brigitte Madrian appears in the 

Submissions for the Record on page 41.] 

Vice Chair Klobuchar. Thank you so much. 

Ms. Hounsell. 

STATEMENT OF MS. CINDY HOUNSELL, PRESIDENT, WOMEN’S 

INSTITUTE FOR A SECURE RETIREMENT, WASHINGTON, DC 

Ms. Hounsell. Good morning, Vice Chair Klobuchar and Representative Hanna, and Representative Delaney. 

I appreciate the opportunity to appear before you to discuss women’s retirement security. I am President of the Women’s Institute 

for A Secure Retirement. WISER is a nonprofit organization. Our 

primary mission is financial education/capability—providing 

women with the crucial skills and information they need to avoid 

poverty in retirement. 

WISER operates the National Resource Center on Women and 

Retirement Planning under a cooperative agreement with the Administration on Aging. The Center’s goal is to help low- and moderate-income women make the best decisions they can with the assets and income that they have. 

Retirement decisions are complicated and getting it wrong means 

a stronger likelihood of poverty in old age, and a stronger reliance 

on government programs. 

Women are at greater risk, as we have heard, but I would like 

to add one more statistic to this. And that is, that women need 

more retirement savings and assets, yet they have less. Studies 

have projected that women on average need to replace nearly 130 

percent of their final pay at retirement due to their life expectancy. 

Many women also have uneven work histories due to time out of 

the workforce for family care-giving. The financial issues of family 

care-giving can jeopardize the long-term retirement security of 

women, and that will be the focus of the rest of what I am going 

to talk about. 

Women remain the Nation’s primary care-givers, whether caring 

for children or older family members. As care-givers, women are at 

an even greater risk of experiencing financial setbacks. 
10 

When a two-income couple has a family, it still remain largely 

the mother’s responsibility to take care of the children. In the majority of cases where a family elder requires care, it is women who 

provide it. Nearly 66 million people provide elder care in this country, and 61 percent of them are women. 

Nearly 5.5 million women who provide such care have children 

under 16. The Pew Research Center did a profile of the sandwich 

generation, finding that of the adults who provide care and are also 

providing financial support to an aging parent and supporting a 

child, nearly a third were just able to meet their basic expenses; 

while 11 percent were not able to meet their basic expenses. 

Research indicates also that care-givers lose nearly $304,000 in 

wages, lost pensions, and reduced Social Security benefits. Caregivers pay an estimated $5,500 in out-of-pocket costs each year for 

the person to whom they provide this care. Many of these caregivers either stop saving for their own retirement or dip into their 

retirement savings. 

Another aspect of this is grandfamilies where grandparents who 

are near retirement are raising grandchildren. Almost 20 percent 

of the 2.5 million grandparents who provide this type of care live 

in poverty. 

When women take time out of the workforce to care for their 

children or their elder family member, their future Social Security 

benefits take a hit. For each year a woman, or a man for that purpose, does not work for pay the Social Security Administration includes a zero into the benefit calculation. According to SSA and 

about 20 other researchers that I spoke to this past week, that 

number still holds up. 

Vice Chair Klobuchar. I am glad you prepared for this. 

Ms. Hounsell. New studies are coming out from everywhere, it 

seems. Adding up all of these factors, women are worried about 

their financial security in retirement and savings, and they are 

really worried. Almost every survey shows that it is at the top of 

their fears. 

And the end results of the whole of women’s unique challenges 

is that when they hit their retirement years, they have 25 percent 

less retirement income. And as you have heard from everyone, it 

seems, twice the poverty rate of men. And that poverty rate jumps 

for single women and for single African American and Hispanic 

women. 

So the question people are always asking me is: Men have all 

these challenges; why women? The main reason we need to stay focused on women are the shear volume of the numbers. 

At age 65, there are over 6 million more women than men, and 

the expected growth in the population of the oldest old is expected 

to grow. Recently the National Institute on Aging redefined this 

age group, ‘‘85-plus’’ and they changed it to ‘‘Ages 90 and Older.’’ 

Estimates indicate these numbers will greatly increase as the 

Boomer population reaches very old age. By 2050, the number of 

nonagenarians will make up more than 10 percent of the population. The oldest-old population is mainly made up of women who 

live alone—24 men for 100 women. 
11 

So in the interest of time, I will just talk very quickly about four 

solutions that I think would actually help change the landscape. 

And that is: 

Shoring up Social Security, doing what we need to do to make 

the program secure for everyone. 

The private retirement system, especially because of the economy, we need to extend all those opportunities for people to save 

to part-time and temporary workers, of which there are many more 

people working in that manner. 

Then there is the role of lifetime income products like immediate 

annuities and longevity insurance. And these are little understood, 

but they actually could play an important role in providing future 

retirement security for women. 

And then care-giver credits. It is one of those things that has 

been talked about for decades. Study after study has looked at how 

the credit would work. And I think maybe its time has come. We 

certainly have the population that would be interested in such a 

policy option. 

And finally, I would just like to say that while there are endless 

discussions about a correct solution, millions of Americans are just 

trying to achieve financial stability and protect their future. 

Thank you. 

[The prepared statement of Ms. Cindy Hounsell appears in the 

Submissions for the Record on page 46.] 

Vice Chair Klobuchar. Thank you very much. 

Ms. Greszler. 

STATEMENT OF RACHEL GRESZLER, SENIOR POLICY ANALYST, ECONOMICS AND ENTITLEMENTS, CENTER FOR DATA 

ANALYSIS, THE HERITAGE FOUNDATION, WASHINGTON, DC 

Ms. Greszler. Thank you for the opportunity to come here today 

and testify. 

I would like to start by just saying that the views I express are 

my own and do not necessarily represent those of the Heritage 

Foundation. 

I would like to focus my remarks on three considerations: 

First, the challenges that younger women will face are likely to 

be different than those of current women retirees. Women have 

made substantial gains in education, income, and employment that 

will make them more secure in retirement; but younger generations will have to grapple with unsustainable entitlement problems, the massive federal debt, and a decline in marriage, all of 

which will create new challenges. Policies aimed at improving 

women’s retirement security must take these changes into account. 

Second, policymakers should focus on reforming Social Security 

and enabling greater personal savings to help improve women’s retirement security. 

And third, most importantly, a strong economy is the foundation 

for retirement security for men and women alike. Without a job 

and rising income, individuals cannot adequately save for retirement. In this area, the government can do more by doing less. 

Among the challenges that women face in retirement is longer 

life expectancies, and historically they have earned less and worked 
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less than men, and have also not had as much access to participation in employer-sponsored retirement plans. 

Fortunately, women have made substantial gains in these areas. 

Women now earn more college and graduate degrees than men. 

Their incomes are rising compared to men, and they have equal access to and participation in employment-sponsored retirement 

plans. 

While these gains will make women more secure in retirement, 

the daunting fiscal outlook will bring unique challenges. Defined 

benefit pensions are dwindling, and Social Security is massively 

underfunded. 

Social Security must be reformed, beginning with common-sense 

proposals to preserve its solvency such as indexing the retirement 

age to life expectancy, and implementing the more accurate 

changed CPI. 

Additionally, Social Security spousal benefit should be replaced 

with an earnings credit for parents who take time out of the labor 

force to raise children, and also a payroll tax credit for parents who 

continue to work while raising children. 

One of Social Security’s shortfalls is that it fails to keep some 

people out of poverty while providing the largest benefits to the 

wealthiest retirees. A flat benefit above the poverty level, and 

phased out for higher income earners, would improve Social Security retirement and would also minimize the resources extracted 

from the private sector. 

And finally, Social Security should end its practice of penalizing 

individuals who work longer. Both the earnings test and payroll 

tax contributions for those who work beyond the normal retirement 

age should be eliminated. 

In addition to Social Security reform, there are a number of ways 

the government can help enable greater personal savings. About 75 

million employees, many of whom are self-employed and work for 

small businesses, do not have access to an employer-sponsored retirement plan. And among those who do have access, about 15 percent choose not to save. 

The Automatic IRA proposal would increase access and enrollment in retirement savings plans. Under the Automatic IRA, employers would gain access to low or no-cost retirement plans, and 

automatic enrollment of their employees would increase participation. 

This leaves the most important consideration for retirement security: a strong and growing economy. Regardless of age or gender, 

a strong and growing economy is fundamental to a secure retirement. It may seem obvious, but a study by the Center for Retirement Security found that the biggest determinant of retirement 

savings was employment. 

More than one-half of low-income older individuals surveyed 

were not employed. Without a job, it is nearly impossible to save 

for retirement. 

Today’s employment market is weak. Although the unemployment rate has declined, much of that has been caused by workers 

dropping out of the labor force. While labor force participation is 

already near a 35-year low, policies such as the Affordable Care 
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Act are projected to reduce employment by about 2.5 million in 

2024. 

Lower employment means less retirement security. Sound fiscal 

and economic policies can spur job creation. Budgetary discipline 

would reduce fears of future tax hikes, encourage employers and 

entrepreneurs to expand operations, and repeal or reform of harmful regulations would reduce employers’ cost of hiring workers. 

In conclusion, it is important that policymakers consider proposals that will help both current and future generations of women 

retirees. This includes Social Security reform, as well as increasing 

personal savings. 

But the single greatest thing the government can do to improve 

both men’s and women’s retirement security is to foster a strong 

and growing economy. 

Thank you. 

[The prepared statement of Ms. Rachel Greszler appears in the 

Submissions for the Record on page 55.] 

Vice Chair Klobuchar. Thank you, very much. 

Thanks to all of you. I am going to turn over my first round here 

to Congressman Delaney, and then we will go to Congressman 

Hanna. And then I will ask questions. 

Representative Delaney. Thank you, Vice Chair Klobuchar, 

and thank you for organizing this hearing. This is an incredibly important topic, and I think it is really important to shine a spotlight 

on this topic because I think what has happened to women—we are 

thinking about this in the context of retirement, but it is really just 

kind of a manifestation of the injustices that women have dealt 

with their whole professional careers, and the additional burdens 

that women have had to bear in our society which in my opinion 

has been inequitable as it relates to women. 

And now they are bearing an additional burden in retirement. So 

we have a series of, in my opinion, unfair and inequitable burdens 

that women have borne, and now we just have another example of 

it in retirement. 

And I worry that it is still going on. 

Ms. Greszler, you spoke about how more women are graduating 

from college and have advanced degrees than men, and I think last 

year it was 54 percent of college graduates were women and 58 

percent of advanced degree graduates were women. 

Yet, when you look at what is happening in corporate America 

when men and women are up for promotions to the level of vice 

president or manager, only 25 percent of those promotions go to 

women. And when they are up for promotions to the C Suite—in 

other words, the most senior executives of a company—only 13 percent of those promotions are going to women. 

So it seems to me this inequitable behavior continues and persists, despite many of the gains that we talk about. What is your 

view as to why, despite the fact that—more than half of the graduates are women, and probably more than half of the new hires at 

companies are women, why do you think we are seeing such talent 

drain among women in the senior ranks? Which to me is a tragedy 

for our society because to not have half the population represented 

in the most senior policymaking positions in corporate America— 

forget about the fact that it is bad for women, which it is; it is bad 
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for society—particularly in my own view, and this is just my own 

personal view, if you look at the skills men and women generally 

speaking have, the skills that women have in my opinion: better 

judgment, a better spirit of cooperation, and quite frankly better 

cognitive abilities—I have four daughters so I may be biased on 

this—I think society is losing a lot there. 

So why do you think it is continuing to happen? 

Ms. Greszler. I think one of the first factors is that if you look 

at what women are earning more college and graduate degrees in, 

a lot of those degrees are not in the highest paying fields of science, 

technology, engineering, and mathematics. So that plays a certain 

role. 

As far as the promotions within the workplace, I think we need 

to encourage women to not take themselves out of the running. 

Perhaps they think they are going to have a family soon, and they 

don’t know what that is going to look like, and so they kind of step 

back and do not promote themselves as they would. Also, women 

are less likely to ask for a pay increase and a promotion. And so 

we need to encourage women, and we do not want to make them 

believe these statistics of oh, you are just going to earn less than 

men so just take yourself out of the running, or do not push for 

that. That should not be a given. 

You know, we should be encouraging that. And one policy I 

would like to caution against, particularly as a working mom with 

four young kids, is the Paycheck Fairness Act. I just fear that this 

would reduce opportunities for women, instead of enabling them. 

We can celebrate the gains that women have made over the past 

decades. They now have greater access to flexibilities and accommodations in the workplace, and I just think that policies like this 

could create one-size-fits-all jobs that match one-size-fits-all pay 

scales. 

Representative Delaney. I appreciate your comments. I think 

we need those policies, quite frankly, based on some of the statistics. 

But switching to the other panelists for a second, so we have 

talked about things to do. And they are, I would call them, policies 

that I think will benefit both women and men in retirement, right? 

Strengthening our important safety net programs, social insurance 

programs like Social Security, encouraging more personal retirement. And then we have the whole portfolio of things around workplace fairness and equality, which I touched on, which is worthy of 

its own discussion, in my opinion, but staying with retirement for 

a second, what are the specific things—laser-like focused things we 

can do to help women specifically with this retirement situation, 

which again the statistics are really tragic and in my opinion very 

unfair. What can we do to help women’s issues in this narrow area 

of retirement security, specifically for women, as opposed to things 

that help both men and women. 

Dr. Whitman. 

Dr. Whitman. Women, as we know, are the primary care-givers 

of both children and older adults, and the number of older adults 

needing care is going to grow exponentially as the population ages. 

So it is really important that employers have flexible work schedules and; other accommodations that allow women to stay attached 
15 

to the labor force. Because if a woman quits her job to care for a 

loved one, often she loses hundreds of thousands of dollars in retirement security for her own future. 

So we need to buck that up. We also need to help women and 

men remain in the labor force longer, if they are physically able to 

do so. And that includes ways to end age discrimination, ways to 

help people maintain their skills and training, and ways to help 

the long-term unemployed who are most likely to be older workers. 

All of those can have a really big impact on retirement security for 

women. 

Representative Delaney. So it sounds like this care-giver policy to bolster and support care-givers really will help women materially. Thank you. 

I don’t know, am I out of time? 

Vice Chair Klobuchar. If you want to ask another question—— 

Representative Delaney. Well I think Ms. Hounsell, did you 

have a comment? 

Ms. Hounsell. I was just going to say that I think the population that I was talking about, what they are going to need, and 

other countries are considering this, is maybe a benefit when you 

reach that oldest old age, 85 or 90, that that will keep the worst 

from happening. 

Representative Delaney. So just kind of a top-off benefit 

maybe for the people who hit that. Because they are exceeding any 

probably modeled expectations for their savings, et cetera, kind of 

like a way out of the money insurance plan. 

Ms. Hounsell. Right. 

Representative Delaney. Dr. Madrian. 

Dr. Madrian. I think another policy that would be worth looking 

into is thinking about ways to promote the annuitization of defined 

contribution assets. 

Representative Delaney. Right. 

Dr. Madrian. A traditional pension gives you a monthly paycheck every year until you die—— 

Representative Delaney. Right. 

Dr. Madrian [continuing]. But traditional pensions are increasingly only available to workers in the public sector. And everyone 

else is left with a defined contribution 401K-like pension plan; 

where annuitization is not typically a built-in feature of such plans. 

Representative Delaney. Right. 

Dr. Madrian. And women would really benefit from this for two 

reasons. Number one, longer life expectancy, and number two is: 

As individuals get older, half of them are going to start having diminished—diminished mental capabilities to manage their own assets—— 

Representative Delaney. Right. 

Dr. Madrian [continuing]. And those are the people who end up 

being victims of financial fraud. And annuitization can help solve 

both of those problems at the same time. 

Representative Delaney. So supporting care-givers, some kind 

of secondary program that maybe kicks in when someone has 

reached a particularly kind of elderly phase, and then this swap 

concept of defined contribution programs where they could be 
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swapped more freely and transparently to annuity programs. Those 

are all three very good ideas. Thank you. 

Vice Chair Klobuchar. Thank you, very much. Congressman 

Hanna. 

Representative Hanna. Thank you. My goodness, what an important subject. I am struck by a number of comments, and I really 

appreciate the opportunity to hear a little bit of back-and-forth. 

Ms. Greszler, to Ms. Whitman, you talked about Social Security 

to flat means-tested benefits. I am curious how you and your organization feel about that, Dr. Whitman? 

Dr. Whitman. Thank you for the question, Representative 

Hanna. Obviously AARP feels very strongly that we need to put Social Security on solid footing for the future so that people can depend on it—not only for the current generation, but also for future 

generations. 

So getting it financially healthy is really, really important. And 

I think there are a variety of ways to do that. 

Representative Hanna. But to the specific point of Ms. 

Greszler, in terms of means testing? 

Dr. Whitman. We have concerns in that everybody pays in at 

different rates, and we want to maintain at least some link between the contributions that people pay over time and the benefits 

that they receive. 

Representative Hanna. Even though the means testing would 

ultimately make it more secure, I suppose, for everyone? 

Ms. Greszler. The way in which I would support a means-tested 

benefit is through elimination of the payroll tax, with comprehensive tax reform, so it would no longer be a contributory system. 

I think this would bring us closer to Social Security’s original intent of protecting seniors against poverty in old age. As it is, it is 

providing pretty substantial benefits to a lot of people who do not 

need them at all and, you know, extracting more taxes over 

everybody’s lifetime in order to do that. 

We could better focus it through a flat poverty-level benefit that 

was the same for everybody. And for seniors who had significant 

non-Social Security income, that benefit would be phased out and 

in return they would pay lower taxes over their lifetime. 

Representative Hanna. Do any of you feel as though we have 

gone through this—we talk about the sandwich generation, but 

there is a huge population who simply did not plan for retirement, 

and the advent of things like 401Ks, and vestiges programs that 

require you to work, in my view, much longer than you should have 

to be a vested person. It seems if you earn that money, you should 

get that money, and it should travel with you and maybe become 

a part of your 401K. 

The idea that people are just now understanding the value of 

saving early, saving even as a child, a youth IRA type of thing 

would be beneficial because of the time value of money which 

Rockefeller so rightly pointed out. 

So that the 130 percent of income that you need to retire with 

that Dr. Madrian, you mentioned, I think you mentioned that, that 

that seems like an impossibility with very low interest rates that 

we see today, coupled with, even though the stock market is doing 

well, you know, we have also seen long periods where it hasn’t. We 
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see underfunded pension programs. We see defined benefit programs with a lot of public employees, but somewhat less historically—although about half—where they are about the same rate as 

they have historically been but somewhat less. 

All of that adds up to a very unprepared population of people, 

knowing that women live longer. This seems to me to be a real crisis, not just something that’s—I know it’s going on every day. I 

know I am blessed I can help with my own family, but so many 

people can’t. 

What do you see with AARP? I am thinking about women in poverty, and what is the percentage of people out there who rely on 

Social Security for up to 90 percent of their income? Do you know 

that? 

Dr. Whitman. I can get it pretty quickly. But you’re right, the 

fact that most people do not have an adequate nest egg means that 

the vast majority, and particularly older women as Dr. Madrian 

mentioned, are much more reliant on Social Security. 

We need to get more people saving. Half the population cannot 

do it in an easy way through payroll deductions, as several on the 

panel have said. That is why we need to look at ways to encourage 

employers to offer retirement plans, be it through Auto IRA or, 

through the many states that are looking at work and save programs. 

But the specific number is, without Social Security benefits almost half of older women would be in poverty. 

Representative Hanna. Half? 

Dr. Whitman. Half. 48.5 percent. 

Representative Hanna. And with Social Security benefits? 

Dr. Whitman. With Social Security benefits, it is down to 17 

percent, I believe. 

Representative Hanna. My time has expired. Thank you. 

Vice Chair Klobuchar. Okay, very good. Representative 

Maloney has joined us. 

Representative Maloney. Thank you so much for focusing on 

this important issue. I had two other hearings at the same time 

with votes, and I look forward to reading your comments in the 

transcript of this important hearing. 

I really want to thank Vice Chair Klobuchar for bringing our attention to this important issue. I find too often women’s issues are 

swept under the carpet, or ignored, or not paid any attention to at 

all, and that is why we have still 77 cents to the dollar in pay inequity, which has been stuck for well over three decades. 

In 2010 when I had the great honor of chairing this Committee, 

I also honed in on some of these issues. And our staff report back 

then underscored the severe gap in retirement savings between 

men and women. 

One thing that I find particularly disturbing, and I would like to 

ask any member of the panel to comment on it, is that all of these 

positions, whether it is 77 cents to the dollar, or your IRA account, 

or your Social Security, all of these financial things for which we 

are underpaid, or not paid as much, ends up in making, at the time 

that report said the largest segment of people living in poverty 

were older women. And I want to know if that is still the case, and 

why? Why do you think that is? 
18 

But furthermore, if you could comment on the 401K plan. In 

2004 the median female worker approached retirement with 

$34,000 less than half of what her male counterpart had. And I am 

glad that the Committee and the Congress continue to examine 

this critical issue and look for ways to help Americans to prepare 

for retirement. 

In my home City, a recent survey by our comptroller found that 

two-thirds of working adults are not enrolled in employer-sponsored retirement plans largely because many employers do not offer 

these plans. And as a result, more than half of more and more 

Americans are approaching retirement age without any savings. 

And as we have seen here today, far, far too many of them are widowed and single women. 

The fact is that women live longer than men. Today a woman 

who reaches 65 can expect to live another 20 years. Yet, for many 

this prospect is a very fearful one, that they will outlive their retirement savings. And as Dr. Whitman in your prepared remarks 

testified, women incur greater health care expenses, and need expensive long-term support and care into older age. And I would just 

like to inject right now, with my colleagues, one of the great things 

about the Affordable Care Act is that women are no longer discriminated or denied insurance because they are pregnant or because they are female. 

So my basic questions are: 

What are the best steps we can take in Congress—and I open it 

up to everyone on the panel—to encourage employers to offer retirement savings plans so that workers are better prepared when 

they leave the workforce? 

And also, how would President Obama’s IRA proposal help 

women prepare for retirement, particularly those with low wage 

and part-time jobs? 

And also, if you could comment on the contributing factors that 

make women the poorest, single, older women, the poorest members of our society? What a statement that is, a very disturbing 

statement to me. 

In any event, I want to thank you all for being here, for your testimony, and for focusing some of your life’s work on helping other 

women. As Madeleine Albright used to say, there’s a very special 

place in hell for women who do not help other women, and I am 

very pleased that our Vice Chairwoman is one of the leading 

women in the United States in making sure that these issues are 

front—— 

Vice Chair Klobuchar. And not in hell right now. 

[Laughter.] 

But thank you. 

Representative Maloney. Thank you for focusing on this. I 

think it is important, and I yield back and look forward to your answers. 

Dr. Madrian. So I can speak to one of your questions, which 

was how the 401K system, or the private retirement savings system, impacts women. 

I think the answer there is that the system itself is pretty neutral. Women and men are facing the same barriers to access, and 

conditional having access, women actually are more likely to save. 
19 

The biggest problem is, their pay is lower than men. So even if 

they are more likely to participate and contribute more, it is not 

enough to compensate for the fact that they are actually being paid 

less than men. 

And then those lower assets have to stretch out over a longer period of time in retirement. So it is not surprising that if you are 

taking less money and it has to last longer, that women are then 

more likely to end up in poverty. 

Representative Maloney. And then this lower pay also translates itself into lower Social Security payments, and also the issue 

of should women who stay at home get some type of compensation 

in their Social Security for the work that they are doing for the 

overall family. 

I think another dynamic that is very important is that so many 

women are working, and that so many families—spouses, males 

and their children—are dependent on the income of the wife, or the 

spouse in this particular case. And that is another dynamic that is 

taking place in our society and impacting families overall. 

So thank you so much. Yes, Dr. Whitman. 

Dr. Whitman. I don’t know if women helping women, or working 

on women’s issues gets us to Heaven, but I appreciate your earlier 

comment. 

[Laughter.] 

I think the main problem with the retirement savings system can 

be summarized this way: Half of the population does not have the 

ability to save from every paycheck. Roughly half the population 

has no financial incentives through the tax system to save, and 

therefore roughly half the population when they reach close to retirement age has almost nothing saved. 

And I think we really need to look at ways to enable more people 

to save through their workplace, provide more people incentives to 

save either through employer matches or, through adding to our 

tax code, refundable savers’ credit. All of these can really help people as they age, because as we know, the defined contribution system is one of the predominant ways that people have assets that 

they can live on in retirement. 

Ms. Hounsell. I wanted to just say something about all the 

women that work part-time, because twice as many women as men 

work part-time, and they also do not have access to savings even 

if they work someplace where there is a retirement account. 

Representative Maloney. Thank you. 

Vice Chair Klobuchar. All right. Well thank you. 

I want to start where Representative Maloney ended and where 

you were just seizing on this about the issue of the retirement accounts and what we can do. 

And I know you, Dr. Madrian, have done a lot of work in that 

area as well. So why don’t we just start there. You have done a lot 

of research on this. Let’s start with a business setting where they 

actually have 401K plans or something like that. Does anyone 

know how many, what percentage of women have access to that? 

Dr. Madrian. So it is about half of the workforce overall, women 

and men, are in jobs that have a pension plan. 

Vice Chair Klobuchar. So what can we do to make it easier for 

them to save, and get them to do it? Because sometimes I have had 
20 

some younger employees that kind of pride themselves for not putting money away in it, and we keep trying to tell them they should. 

But anyway, so tell me what we can do. 

Dr. Madrian. We know the answer to that question. The single 

most effective way to get people to save for retirement is through 

automatic enrollment. Automatically enroll them in a savings plan. 

And if they do not want to save, require them to opt out. 

Plans that have automatic enrollment have savings plan participation rates ranging between 80 and 95 percent of employees. 

Vice Chair Klobuchar. Do you know how many plans have 

that automatic enrollment? 

Dr. Madrian. So automatic enrollment has been diffusing rapidly over the last several years among large employers. It is high, 

probably about 60 percent of workers in very large companies are 

at firms that have automatic enrollment. Small employers have 

been less likely to jump on the automatic enrollment bandwagon. 

Vice Chair Klobuchar. Do you think part of that—I mean, I 

am sure part of it is trying to respect employee choice, but is part 

of it then if people do not enroll they do not have to do the matching funds? I am trying to figure out the motivation. 

Dr. Madrian. That is certainly something you hear from some 

employers, yes. 

Vice Chair Klobuchar. And so I know there have been attempts in Congress to make it mandatory-opt-out—is that how you 

call it? 

Dr. Madrian. Yes. 

Vice Chair Klobuchar. Do you think that would be helpful? 

Dr. Madrian. Oh, it would certainly help. I mean you might get 

some political opposition from some quarters—— 

Vice Chair Klobuchar. Oh, really? 

[Laughter.] 

Dr. Madrian [continuing]. But it would help. We would be in 

good company. The UK has recently enacted a pension reform, 

doing this mandatory automatic enrollment. New Zealand has had 

this for several years. So, you know, it is the way other countries 

are going, and I think it is something worth thinking about. 

Vice Chair Klobuchar. Are there other countries besides just 

those two that are doing it? 

Dr. Madrian. Well some have mandatory enrollment, like Singapore or Australia. 

Vice Chair Klobuchar. But we would be looking more at optout. 

Dr. Madrian. I would guess that would be more politically palatable. 

Vice Chair Klobuchar. Right. What other things can we do, 

short of that? 

Dr. Madrian. Well, so I think the next thing is expanding access. So half the workforce is in a firm that offers a savings plan. 

So the real battle line is how do you get the other half of the workforce able to save for retirement, because payroll deduction is the 

single most effective way. 

And most of those workers are either part-time, as Cindy pointed 

out, or they are working for smaller firms that do not offer a sav-
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ings plan. And for smaller firms, a lot of those companies have the 

same challenge as individual retirees. 

Joe’s Pizza—Joe who owns Joe’s Pizza on the corner—you know, 

probably does not have an MBA. He does not have a dedicated 

human resources staff that is trying to figure out optimal benefits 

packages for his employees. He has got all the challenges of the average investor. 

So we need a simple way for employees who are working parttime, or working for small firms that do not have a savings plan, 

to save for retirement, either by having simple plans for those 

firms to offer, or by having an alternative that does not rely on the 

employer-sponsored savings plan, like a MYIRA or an automatic 

enrollment IRA product, or something like that. 

Vice Chair Klobuchar. Um-hmm. Okay. Anyone want to add to 

those ideas? This is the idea of opt-out requirement, and then also 

which would have to be legislatively mandated, I think. And then 

this idea for people who do not have access to find some new vehicles to do that. 

Dr. Whitman. I would also have employers use auto-escalation 

mechanisms, so that maybe they enroll you automatically at a low 

savings level, and then you have the opportunity to save a little bit 

of your income more each year. 

This is what I used to tell my colleagues who would ask me for 

retirement advice. If you can save a piece of every raise you get, 

or take a piece of every cost-of-living increase and add that to your 

retirement savings, your contributions grow over time, and it can 

make a huge difference in your lifetime savings. And some employers are also looking at that, as well. 

Vice Chair Klobuchar. Okay. 

Ms. Greszler. I would just reiterate that automatic IRA because 

it captures both the increased access and the increased enrollment. 

It is something that would be easy for small employers that don’t 

have the time, the education, or the resources necessary to go out 

into the private sector and pick a plan, and pay for all of that. 

It would help those to be able to go there and get these plans. 

All they would have to do is to deduct it from their employee’s pay 

with little to no cost for them. And if they did this through automatic enrollment, you significantly increase participation rates. So 

I think the automatic IRA could go a long way. 

Vice Chair Klobuchar. What do you guys think about that? 

Dr. Whitman. AARP supports the Automatic IRA, as well as 

other state-based programs that are trying to help more people to 

save for retirement. 

Vice Chair Klobuchar. Okay. Anything more? Do you want to 

add anything, Ms. Hounsell? 

Ms. Hounsell. I think the MYIRA is a great proposal. It’s just 

that it’s not expansive enough yet. And if that would be available 

to small business owners, or individuals, that would be a great opportunity for people. 

Vice Chair Klobuchar. Okay, very good. 

Then we are talking about another thing we can do here to shore 

up Social Security. Does someone want to walk into that? Dr. Whitman? 
22 

Dr. Whitman. Absolutely. We believe that we do need to shore 

up Social Security, not just for the current generation of retirees 

but for future generations. 

If we look at the middle class in the future, they are going to 

need Social Security even more than today’s retirees, largely because of the decline in defined benefit pensions and rising health 

care costs. So we absolutely must find a balanced solution to make 

sure that the program exists and is sustainable over the long term. 

Vice Chair Klobuchar. Very good. 

Dr. Madrian. We know how to solve the problems with Social 

Security from an economic standpoint. The biggest problem is the 

political will to do it. 

So the way to restore sustainability to the Social Security system 

are a modest increase in taxes, a modest decrease in benefits—and 

that would be done in such a way that the burden falls most heavily on those who are receiving the highest level of benefits—and increase the retirement age. 

And if we do all of those in small measures, and we do it today, 

then we can do them in small measures. And if we put it off, kick 

the can down the road for 20 years, then we are going to have to 

take much bigger steps and it is going to be much more painful politically and economically. 

Vice Chair Klobuchar. Okay. 

Ms. Hounsell. 

Ms. Hounsell. Ditto. 

Vice Chair Klobuchar. Ditto? Okay. Good. 

Ms. Greszler. 

Ms. Greszler. Within Social Security, I would just say that we 

need to focus any changes. We want to target those who are actually living in poverty. That is what the program was meant to protect against. And so if we are going to consider things like higher 

benefit levels as people age because they tend to have higher needs 

when they are older, it is not really the fact that they are older 

which makes them more susceptible to poverty; there are plenty of 

older people who are 90 years old and may be very wealthy. We 

need to be targeting the income level. That is what they need income for. And so I would caution against anything that says we are 

going to have a different measure of inflation, or something like 

that, for people once they hit 80 or 85 or 90. We need to target income so that Social Security can truly protect against poverty. 

Vice Chair Klobuchar. Another thing we talked about was 

care-givers. We have gone through now Social Security. I think 

there is general agreement that we—probably disagreement on how 

to do it, but that we need to make it as strong as possible. But we 

have got to make it easier for people to get access to retirement 

plans on their own. 

But also if they are in the workplace, to maybe require them, or 

try to get them to do it, make it easier for them, we will put it that 

way. 

And then the other thing we have talked about is this particular 

strain on women for the most part, women who are care-givers to 

their kids and to their aging parents, and this whole long-term care 

issue. 
23 

Any ideas there? And do you think Congress should start looking 

at this more seriously? Dr. Whitman? 

Dr. Whitman. Yes, please. This is a critical issue, especially for 

women. And I think you are right. It interacts greatly with their 

ability to save and to have a secure retirement. 

If they have to take time out of the workforce and go into parttime work or, tap their IRAs in order to pay to take care of a loved 

one, that puts their own financial security at risk. 

And right now we have very little support for people who need 

long-term services and supports, other than through the Medicaid 

program. While there are some states—and Minnesota is a shining 

example in this country of a state that is using its long-term services and support to deliver good quality care—we absolutely need 

to do more to help people finance long-term care costs that can be 

in the hundreds of thousands of dollars. 

Vice Chair Klobuchar. Very good. Anyone else want to add 

anything more to that? 

Ms. Greszler. I think that we all support child care/care-giver 

credit. I would just also like to say that we do not want to do anything that is going to penalize the women who do take time out of 

the labor force to care for children or for older people from being 

able to come back into the labor force. 

And so as I mentioned before, if you have one-size-fits-all pay 

scales, and one-size-fits-all jobs, women are not going to be able to 

have the flexibility that might let them stay in the labor force 

while caring for somebody else. And then if they do take the time 

out, they are not going to be as likely to be rehired if the employers 

must pay one wage, just depending on what the title of the job is. 

They are going to be less likely to hire women who come in from 

time out of the labor force that men would be in otherwise. 

Vice Chair Klobuchar. Very good. 

Ms. Hounsell. I think the care-giver credit is much more important than the child-care credit. 

Vice Chair Klobuchar. Okay. Right. Good. Well I have some 

follow-ups that I think I will put in writing. 

Vice Chair Klobuchar. Among other things, I have to question 

my classmate from law school who happens to be the FBI Director 

on the Judiciary Committee next. But I want to thank you all for 

coming, and I really think this has been helpful. 

I think usually you have these hearings and the statistics kind 

of roll over you, but I think these statistics are pretty mind boggling in terms of women as they are aging and living longer and 

just how they are going to be able to support themselves. And it 

really is a cry for strengthening Social Security moving forward 

and looking at the long-haul, and then also really trying to get into 

some of these retirement options and how we can strengthen them 

as well. 

I really appreciate the civility of this hearing, and the tone, and 

how you guys clearly have looked at each other’s work, or talked 

ahead of time, which I also appreciate, and know what each other’s 

positions are. That has been very helpful as well. 

Do you want to add anything, Mr. Hanna? 

Representative Hanna. Do you mind if I ask some questions? 

Vice Chair Klobuchar. Oh, not at all. No, no. 
24 

Representative Hanna. I am curious, Dr. Madrian, did you 

look at the current load of college debt? Has anybody considered 

that in terms of our ability to save? You know, the incomes we 

have not seen the growth, with college we have seen enormous 

growth. That is going to affect the dynamic of all of this. 

The other thing I wanted to ask you, Dr. Madrian, is we talk 

about increasing the retirement age. And I was in an industry that, 

you know, at 55 years old in the type of work I was in, heavy construction, at 60, increasing the retirement age is just not a practical thing for so many hundreds of thousands of people in this 

country. How do you manage that, knowing that maybe that is 

something we need to talk thoughtfully about, with all the different 

dynamics of all the different types of employment out there? 

Vice Chair Klobuchar. Before you answer it, I am going to 

turn this over to Congressman Delaney to close this out, but again 

I wanted to thank our witnesses. I have to go to Judiciary, but it 

was a very good hearing and I hope some good legislative ideas will 

come out of it. Thank you. 

Representative Hanna. Thank you for indulging me. 

Dr. Madrian. So to answer the first part of your question, I am 

not aware of any research—and I certainly have not conducted 

any—that tries to make a link between college debt when individuals are entering the workforce and their subsequent retirement 

savings. But I certainly think it stands to reason that if you have 

got to pay a lot of money to pay off your student loan, you are 

going to have less money to contribute to a savings account and to 

accumulate retirement savings. 

And we know that starting early is the best way to save for retirement because of the power of compound—because of the power 

of compound interest. And I just blanked on your second question. 

Representative Hanna. Oh, different—— 

Dr. Madrian. The retirement age, yes. Absolutely. 

Representative Hanna [continuing]. Things people do for a living directly affects your ability to work less or more. 

Dr. Madrian. Yes. 

Representative Hanna. I was in heavy construction. I know 

masons that, and laborers, and carpenters, who at 55 years old 

simply cannot compete in their trade. And they certainly should 

not have to move into some menial labor to survive. It just does 

not seem—— 

Dr. Madrian. The fact of the matter is, to make the system sustainable if you are going to allow people to retire at 55, you are 

going to have to have—— 

Representative Hanna. Well, no. I mean how do you manage 

that within all of that? 

Dr. Madrian. Higher taxes. I think the way you manage it is 

to think of some—to help workers with a transition strategy from 

those jobs, those more physically demanding jobs that they may not 

be able to handle once they get to a certain age. 

Representative Hanna. So the bottom line is, growing our 

economy, getting people better wages, learning to save earlier, 

more, and having a target like you talked about, education, all of 

that, is really something that as a society we need to develop, focus 

on, and understand how critical it has become. 
25 

Dr. Madrian. Those issues are all related, and it would behoove 

us to think of the interconnections. Absolutely. 

Representative Delaney [presiding]. Well I have no further 

questions. I want to join with my colleagues in thanking you all for 

your terrific testimony here today. It was all very interesting and 

very informative. 

There is a fair amount of agreement, obviously, as Congressman 

Hanna said: a renewed focus on retirement, a renewed focus on 

making minor calibrations to some of our most important kind of 

safety net social insurance programs like Social Security; the sooner we do them the better and easier it will be to do. 

A fair amount of emphasis on care-givers. But it is still a great 

reminder to me that a lot of work needs to be done as it relates 

to parity and equality with respect to women in the workforce. Because this issue that we are talking about here, which is so terribly 

important, is in part based on some unique aspects of the fact that 

women in fact live longer than men do, and that makes this issue 

a more acute issue. 

It makes it a more acute issue for everyone who lives long these 

days, but it also reflects, in my opinion, the deep injustice that continues to affect women in the work force, particularly as they bear 

so many burdens in our society. Because, you know, women are my 

heroes because they do so many things in our society that in fact 

men do not do. They care for children more. They care for elderly 

Americans more. And they deserve equal and fair treatment in the 

work force when they pursue their careers. 

So this hearing, again, underscores the importance of that. So I 

just want to thank everyone for being here and for participating in 

this important discussion. And unless Congressman Hanna has 

anything else, we will conclude the hearing. 

(Whereupon, at 11:29 a.m., Wednesday, May 21, 2014, the hearing in the above-entitled matter was adjourned.) 

(27) 

SUBMISSIONS FOR THE RECORD 
28 

PREPARED STATEMENT OF REPRESENTATIVE RICHARD HANNA

Experience shows a strong economy is the foundation of a secure retirement. 

Workers with good jobs and adequate savings are better prepared to enjoy their retirement years. Women tend to live longer than men so a strong and vibrant economy is even more critical to providing them with a secure retirement. 

Unfortunately, our sluggish economy and aging population threaten our nation’s 

future retirement security. 

As Chairman Brady has observed, America has fallen into a ‘‘growth gap.’’ Our 

economy is growing at half the rate of previous recoveries. That means we are falling further behind in terms of jobs and income, relative to where we should expect 

to be. 

Fewer jobs and less income mean Americans will be less prepared for retirement. 

Older workers who lose their job often retire before they are ready. That means 

lower Social Security benefits and less retirement savings. Spreading fewer resources over more years, results in a less secure retirement. 

Our nation’s population is also getting older. As the youngest Baby-Boomers enter 

their retirement years, we will undergo a dramatic demographic shift. The ratio of 

workers to retirees will shift from roughly three-to-one to only two-to-one. 

This demographic shift will undermine the pay-as-you-go financing of Social Security and Medicare. As a result, neither program will be able to pay its promised benefits. 

Our continuing growth gap and looming entitlement crisis will adversely affect 

every American, but especially women. 

Women typically have lower lifetime earnings and longer life expectancies than 

men. Women are also less likely to be covered by an employer pension plan. As a 

result, they are at greater risk of falling into poverty during their retirement years. 

To improve the retirement security of women, we must understand the nature 

and extent of the problem. 

As we focus on the topic of today’s hearing, we must not lose sight of the fact that 

a growing economy creates more jobs, higher wages, and greater retirement security 

for both men and women. 

Economic growth alone cannot provide a secure retirement or prevent the insolvency of our entitlement programs. But without more growth, our task will be that 

much harder. 

We have a distinguished panel of witnesses today, including a former member of 

the Joint Economic Committee staff, Mrs. Rachel Greszler. I look forward to each 

of our witnesses’ testimony and hope we gain important insights than can help us 

address this important issue. 
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