If you think gender inequality ends at the workplace, you’re wrong. The financial disparity between men and women extends into retirement.
According to CNN Money, women are nearly twice as likely as men to live below the poverty line during retirement. In fact, women 65 years and older have a median income of about $16,000 a year, while their male counterparts get about $27,600. Single and minority women tend to struggle the most, CNN Money said.
There are a number of reasons that women have less money in the “golden years” of retirement. According to Reuters:
“Women have lower lifetime income based on less time in the workforce,” says David Littell, who directs a program focused on retirement income at the American College in Bryn Mawr, Pa. “As a result, they have less in savings, lower Social Security benefits – and they live longer than men. Those things don’t go well together.”
CNN Money provided some detail on the factors that impact women’s nest eggs in retirement.
- Lower lifetime earnings. On average, a full-time working woman earns just 77 cents to every dollar a man is paid, CNN Money said. This disparity in income impacts a woman’s ability to save for retirement, as well as the amount of Social Security benefits she is able to earn. Females also make up about two-thirds of all part-time employees – jobs that rarely come with workplace retirement plans.
- Less time in the workforce. The AARP Public Policy Institute says that over the course of their careers, women work about 12 years less than their male counterparts. This is often because women take some time off work to raise children or care for an aging family member.
- Outdated Social Security system. The Social Security system was initially designed to provide support for married couples — generally a man who brought home the bacon and a nonworking wife who was entitled to Social Security spousal benefits at retirement age. Fewer women get that benefit now, and their own Social Security payments based on their work history are lower.
For ideas on how women can take control and plan for retirement, check out this video by Money Talks News money expert Stacy Johnson.
Does it surprise you that women are twice as likely to retire in poverty than men? Share your thoughts below or on our Facebook page.