Better options for work and retirement: some suggestions for improving economic security mechanisms for old age

After identifying the income security system as a tripod structure symbolizing the efforts of the individual, the employer, and the government, the first section of this chapter suggested that economic security is a broader concept than income security, since a person is concerned not only with the acquisition of income and assets but also with the retention and disposal of them. Factors such as health care expenditures, housing and living arrangements, service delivery, and support networks affect income and asset retention. Both acquisition and retention of income and assets, furthermore, are influenced by macroeconomic policies. This section also discussed the possibility that the role of the individual in providing economic security may be underestimated. In the second section, the heterogeneity of older persons was demonstrated in terms of both income sources and the relative importance of these sources to persons in different income classes. Social Security declines in importance as income level rises, whereas assets and employment as sources of income increase with income levels. Occupational pensions are of minimal importance to persons in the lowest-income class. Though more important to persons in the higher-income classes, occupational pensions as a proportion to their total income lie between 10% and 20% for these groups. By definition, public assistance is important only to the lowest-income class. During the last two decades, the relative importance of these income sources has changed, as pointed out in the third section, which also speculated on their future roles. The fourth section proposed possible ways of improving the five income security mechanisms: to provide more child-care credit for women under Social Security, to strengthen portability under private pension plans, to make IRAs more accessible and more meaningful for retirement purposes, to enhance the role of employment for adults, and to raise SSI so as to eliminate poverty. The chapter concluded by emphasizing that, without accessible and adequately financed health care, few persons will feel economically secure with the incomes they have.