Retirement: The Other Economic Gender Gap

Signs of Progress

Despite these disturbing statistics, there are signs that things are getting better. According to the NIRS study:

  • Women are working longer. Labor force participation among women ages 55 to 64 hit 61% in 2010, up from 53% in 2000. That should be a plus over time, as women build greater Social Security credits, savings, and pension benefits.
  • The retirement plan coverage gap has narrowed. Forty-six percent of women participated in a workplace retirement plan in 2012–the same rate as men. As recently as 1998, there was a five percentage point gap, with just 41% of women participating. And Vanguard reports significantly higher deferral rates for women than men among participants in workplace plans that it administers.
  • Social Security claiming ages are rising. The Center for Retirement Research at Boston College has reported that average retirement ages (for men and women) have risen about two years over the past 25 years. And in 2010, 11% more women were waiting to claim Social Security at their full retirement age than in 1985; 9% were claiming at age 70 or higher. That’s good news, especially for middle- and lower-income women: In households with incomes less than $80,000, older women depend on Social Security benefits for a majority of their income, the NIRS reported.
  • “Women are doing everything people are telling them to do,” says Diane Oakley, executive director of the NIRS. “They are staying in the workforce longer, and working for employers who offer retirement plans at greater rates.”

The data on accumulation of savings offers a mixed picture of progress.

Unmarried men are more likely than unmarried women to report having saved for retirement, and 44% of unmarried women have less than $1,000 saved, according to the Employee Benefit Research Institute (see chart).

gender gap chart

But Vanguard reports that women with incomes below $100,000 actually are saving more than men–despite their lower incomes. For instance, women earning $30,000 to $50,000 have average account balances that are 18% higher than their male counterparts, and median balances that are 50% higher.

Policy Changes

Eliminating the gender pay gap would be a game changer in improving retirement prospects of women. The Obama administration and Congressional Democrats have tried to push federal law and policies in this direction, but policymakers also should consider a range of sensible Social Security reforms that would address the gender gap. These include beefing up Social Security survivor benefits, providing benefit credits for caregivers, and providing a bump in benefits beyond age 85.

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  1. I’m glad you’ve addressed this topic. I wrote about this issue on my blog on age discrimination about a year ago –

    The fact that no one at the Social Security Administration and in Congress is doing anything about this terrible inequity facing older women is typical. Age discrimination in America is tolerated, sanctioned and ignored..

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