CNN Money reports more women than men will find themselves living in poverty after retirement. In fact, experts suggest women are twice as likely as men to live below the poverty line. Single women and minorities will experience the greatest inequality.
How severe is the problem for retirement? According to a Congressional analysis of Census data, many older women will live strictly off their Social Security benefits in retirement. This means on average a sixty-five year old woman’s median income may be as low as $16,000 a year, which is roughly $11,000 less than men of the same age.
Why do elderly women have less money than men for retirement?
It’s not a grand conspiracy, but there are a variety of factors working against the average woman. In general, not only do women make less money over their working careers, they also save less. Combine those factors with an increased life expectancy and it’s not surprising they have less income after the age of sixty-five.
But what can we do to combat limited income for older women in retirement? One issue is the woman’s income while they are working. Women earn just 77 cents for every dollar a man earns, making it more difficult for them to save for retirement. Many working women also are not working full-time jobs or working for employees who offer employer-sponsored retirement benefits.
Why are women making less money? While there is some debate about the pay gap in earnings for men and women, many of the discussions fail to consider some of the main factors. First, many women take time off to rear their families. Women also enter into jobs which are not as lucrative as those commonly performed by men. Other women simply work fewer years over the course of their careers for a variety of reasons such as to care for a spouse or aging parent.
Working less can have a substantial impact on the amount of money earned through Social Security. Social Security benefits are based on a worker’s top 35 years of earnings, and if a woman leaves the workforce her benefit will be substantially reduced. This can mean that over her life-time she will earn thousands of dollars less than many men.
Women face higher medical costs as they live longer
Another issue is the cost of living for women who live past 65 years of age. Many women who are over the age of 65 are not married. In fact, according to Census data, 45% of women 65 years and older were married in 2013, compared to 71% of men. Because of this, women will have to support themselves and pay for higher living costs associated with living on their own. Women will also have substantially higher medical bills.
So even if the income for women is adjusted to be more equitable to a man’s income, several factors discussed above, such as life-expectancy, will not be changed and the issues will not be resolved. In fact, one expert noted, “Even if we move more towards 100% pay equity, there are still going to be issues.”
Latest posts by Beth (see all)
- Chapter 7 bankruptcy and why it could be a mistake - April 30, 2017
- Chapter 11 bankruptcy What do I need to know? - April 24, 2017
- Chapter 13 what if I cannot make my debt payments? - April 19, 2017