The income gender gap is well known. But did you know that the economic gap between men and women spills over into retirement? The largest segment of Americans living in poverty is elderly women. The gender gap in retirement income security is appallingly high, for several reasons.

First, women earn about a third less than men make during their working lives; that means they generate smaller contributions to Social Security, pensions and 401(k) accounts. A contributing factor there is care giving; women are far more likely to interrupt their working lives-or retire early-to take care of children or aging parents. That work most often is unpaid, and interrupts employment and earnings.

Perhaps most important, women live longer than men. At age 65, a woman can expect to live an average of 19 more years-three years longer than men. That means whatever she’s saved for retirement must last longer.

The result is a yawning retirement security gap. Here’s how it looks by the numbers.

According to the U.S. Census Bureau, you’re living in poverty if you have less than 100 percent of a “poverty threshold” income figure that varies by age; in 2006, that number for an individual over age 65 was $9,669.

By that definition, 11.5 percent of all women lived in poverty in 2006, compared with 6.6 percent for men. But that’s an overall figure; even bigger differences turn up when you look inside the numbers at race-and at women who are widowed or single.

More than 25 percent of all African-American women live in poverty, and 28 percent of older Hispanic women are poor. And single women over 65 (all races) experience a 19 percent poverty rate.

Keep in mind-that’s women living alone on less than $9,669 a year. The percentages are even higher when women living in “near poverty” are included-those with incomes up to $14,504.

Cindy Hounsell has some ideas about improving this grim situation. She directs the Women’s Institute for a Secure Retirement (WISER), a non-profit group that works to promote financial education and planning among low- and moderate-income women. The group focuses on helping women take financial control over their lives and improve their retirement income security.

When Hounsell counsels women, she always starts with the most basic element of retirement income: Social Security. She advises women to pay close attention to the annual statement all Americans receive each year projecting their future Social Security benefit.

“It’s a day of reckoning,” she says. “If that statement says you’re going to get $1,000 a month, that’s $12,000 a year. If you need $25,000 a year to live, there’s your shortfall-and you need to do something about it.”

Hounsell also says women need to take more time to understand money and family finances. Many also don’t focus on estimating what they’ll really need in retirement-and don’t get information and advice early enough in life to impact their retirement security.

“What happens is that women do so many things with their families-kids, parents, grandparents,” she says. “They’re taking care of a lot of people, and they don’t take the time to sit down and ask, ‘Where am I?’ or ‘What ’s going to happen to me?’ They’re just too exhausted.”

That’s backed up by a recent survey by Transamerica Retirement Services, which showed that 48 percent of women aren’t sure how much money they’ll need to save for retirement-compared with just 24 percent of men. The survey also found women were considerably less knowledgeable than men about most financial products important for retirement security, such as life insurance, annuities, mutual funds and even certificates of deposit.

Hounsell also advises women to pay more attention to the big picture at home, and on the job.

“Pay attention to the benefits you have at work. And don’t wait to get information about them until 20 minutes before you retire. You need that information sooner so that you can make better choices.”

RESOURCES

WISER offers extensive online links to resources in government, non-profits and pension help centers. You’ll also find online resources targeting help to minority and ethnic audiences.

OWL is a grassroots advocacy group focused on women and aging.

Social Security’s website offers a page of information on benefits for women.

VIDEO

Watch an interview with WISER Executive Director Cindy Hounsell on the financial issues women face in retirement.

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3. Recession darkens the retirement outlook for women
4. Workers are retiring earlier than planned
5. Social Security: The compelling case against filing for early benefits

Tags | planning, retirement, saving, women