We know that women earn 79 cents for every dollar men earn. A new report from the Institute on Retirement Security reveals that in retirement the gap in income widens. And, over time, the retirement income gap only worsens for women. As a result, women are much more likely to suffer financially in retirement than men.
Older women live on just three-quarters of the retirement income of men. As a result, they are 80 percent more likely to be impoverished than men. And, by the time women are 80, the income gap widens, with their median income just 70 percent that of men, $26,470 to $38,040.
Women receive one third less in retirement income from a pension, $12,000, than men, $17,856. And, they save 34 percent less in their 401(k) type retirement plans, $24,446, than men, $36,875. Because they have a longer life expectancy than men, they are at greater risk of depleting all their retirement savings.
On average, women receive lower Social Security benefits than men. Yet, for women with annual incomes under $80,000, Social Security is a key source of income. Without Social Security, almost half of all older women would be living in poverty. Social Security represents the majority of income for single, widowed and divorced women over 70.
Almost two out of three older adults living in poverty are women.
What do we do about it? The authors suggest increasing Social Security benefits for women. (There was no increase in Social Security benefits in 2016. The U.S. offers stingy Social Security benefits as compared to other countries. To be sure, there is strong support for Social Security across a broad swath of Americans. And, here, you can watch Robert Reich explain that we can afford to expand Social Security.)
The authors also recommend auto-IRAs to increase retirement plan coverage, expanding use of the Saver’s Credit and state-sponsored savings plans, which could help make up for the fact that 68 million working people do not have access to a retirement plan through their jobs. (Teresa Ghilarducci argues for a Guaranteed Retirement Account, a federally managed savings plan.)
- Senator Warren has introduced a bill that would increase Social Security benefits in 2016.
- And, here are three ways the government could help promote retirement security.