Add to the challenges facing women in retirement are the rising costs of health care, as well as other deeply-rooted economic factors, says Next Avenue in the article “What Could Help Women Facing financial Challenges for Retirement.” This issue is top-of-mind for many with a focus from the Senate and the EBRI pushing this public policy matter into the spotlight.
The barriers for women to accumulate wealth are very real. At the Senate hearing, Linda Stone, a WISER member (Women’s Institute for a Secure Retirement) presented some hard facts: there are 5.7 million more women than men at age 65 and of those who are over 85, 67% are female. One out of two women alive right now will live until age 90. However, many people over age 85, and especially women, end up living in poverty or in near poverty even if they were never poor throughout their lives.
The longer lifespan of most women comes with a resulting need for more income. Women traditionally have nine years with zero earnings usually because they are rearing children or caring for elderly parents. Women’s careers also average 29 years compared to 39 years for men.
The gender mortality difference and the tendency for women to marry older men leads to them outliving their partners and be more likely to live alone. This increases their chances of descending into poverty. Couples’ finances are also often exhausted by caring for the husband’s medical needs.
How can women be helped to achieve financial security in retirement?
- Study ways to offer retirement protection to women who spend significant time as caregivers, including considering providing Social Security credits for those years.
- Encourage employers to offer retirement plans.
- Allow part-time and temporary workers to participate in employer-sponsored retirement plans.
A briefing presented by the EBRI looked into the reasons why women tend to save less than men. The program referenced a blog post from Kimberly Blanton, of the Boston College Center for Retirement Research, which noted that “if the difference between paychecks for men and women is a gap then the difference in wealth can be described as a chasm.”
The median net worth for women age 45 to 65 adjusted for inflation has actually declined in recent years. Older women of color have seen the largest decline in their net worth. The study was conducted by the University of Pennsylvania’s School of Social Work and the nonprofit Asset Funders Network.
The takeaway: there is a strong need for more public policy initiatives to help women save more for retirement.
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Reference: Next Avenue (February 12, 2019) “What Could Help Women Facing financial Challenges for Retirement”