A recent report from National Institute on Retirement shows shocking results regarding women in retirement. The report that women in retirement are 80% more likely than men to be impoverished.
The reasons are obvious, throughout a women’s working life their income is lower, less is contributed to Social Security for retirement and women live longer than men.
The study found that at all age groups women have substantially less income in retirement than men. For women age 65 and older, the data indicate that their typical income is 25% lower than men.
As men and women age, men’s income advantage widens to 44% by age 80 and older. Consequently, women were 80 percent more likely than men to be impoverished at age 65 and older, while women age 75 to 79 were three times more likely to fall below the poverty level as compared to men.
These findings are contained in a new report, Shortchanged in Retirement, The Continuing Challenges to Women’s Financial Future.
Key points in the report showed:
- Widowed women are twice as likely to be living in poverty than their male counterparts.
- White and black women are almost twice as likely to be living in poverty than their male counterparts during retirement.
- The median value in women’s Defined Contribution (pension) retirement accounts was one-third less than that of men.
- Women who are widowed, divorced, and over age 70 rely on Social Security benefits for a majority of their income.
- Black women rely largely on Social Security, while women of other ethnic groups also rely on wages to a large extent.
The report suggested several recommendations to help change the balance for women in retirement:
- Strengthening Social Security benefits for women.
- Increasing retirement plan coverage through auto enrollment in individual retirement accounts (auto-IRA).
- Expanding utilization of the Saver’s Credit.
- Increased development of state-sponsored savings plans.
- Increasing defined contribution plan eligibility for part-time workers.
- Providing spousal protections in defined contribution accounts.
- Expanding defined benefit pension plans.
Women face a more difficult time saving for and earning retirement than men.