Women, Retirement, and Poverty

Poverty does not treat men and women equally, especially in old age. Per a report from the nonprofit research center The National Institute on Retirement Security, at the age of 65 and older, women are 80 percent more likely to live in poverty than men. If they are age 75 to 79, they are three times more likely to live in poverty and will face the greatest hardship as they become older and frailer.

Fifty percent of women report that Social Security is their biggest source of income at retirement vs 38 percent of men. Women are also 14 percent less likely to receive a retirement pension. Even if they have had jobs that included a 401 (k), many have had to cash them out during times of unemployment to pay daily living expenses.

Many women over the age of 65 did not save for retirement; either because it didn't occur to them when they were younger, or because they worked in positions that did not pay well leaving very little left after covering expenses. This applies to most of the 2.6 million women ages 65 and over who are living at or below the poverty line per Joan Entmacher, vice president for family economic security at the National Women's Law Center.

There are many reasons for the discrepancy between men and women when it comes to retirement security. One of the key factors is that women earn less than men during their working years. Over a 40-year career, the pay gap between men and women adds up to an average of $430,480, according to the Census Bureau.

Other contributing factors include:

• Women who raise children and care for sick and elderly family members, often take what savings and income they do have and spend it on things besides their own retirement security.
• Single parenthood and divorce. Single and divorced mothers take a job because they need to and may never achieve the "big career" with advancement and high wages.
• Women live longer than men, so they have to stretch lower earnings/benefits over a longer life span.
• Women are more likely to take on the role of caregiver, which increases the likelihood they will end up working part-time jobs, often for lower wages, and without benefits such as pensions, sick leave, and health care.
• Many stay-at-home mothers have not had the opportunity to obtain higher education which would lead to higher income/benefits.

Joan Entmacher, vice president for family economic security at the National Women’s Law Center, says “the solution to the retirement (funding) crisis starts with the earnings and wage gap.” Although that gap narrowed between the 1970's and 1990's, it stopped shrinking in 2001. Women earn about 76 cents to 79 cents on the dollar, compared with men. Employers need to do their part and take steps to equalize pay between their female and male employees. If they are doing the same job, and have the same experience and skills, they should make the same wage.

Women need to demand better pay, make a plan and save to ensure a better standard of living in retirement. They can no longer put their future financial stability last on the list; to continue to do so will guarantee a life of poverty in retirement.