Women workers are less likely than men to have enough money to retire comfortably because they generally live longer than men and earn less on the job, according to a new report. It will take a three-pronged approach to help women have a secure retirement, the report says: traditional pensions, supplemental 401(k)-type savings and Social Security.
“Shattering the Retirement Glass Ceiling: Women Need a Three-Legged Stool,” released this month by the non-profit research group National Institute on Retirement Security (NIRS), found that because of her longer life expectancy, a woman with an annual income of $50,000 would need to save $1,000 more toward retirement every year than her male counterpart to have an equal retirement experience. Yet, more than 45 years after the Equal Pay Act was signed, women in the United States still earn only 78 cents for every dollar men earn—even with similar education, skills and experience—and African American and Hispanic women earn even less. The wage difference makes saving money more difficult for many women.
Working women also have limited access to retirement plans through their employers. Men are nearly twice as likely as women to have retirement income from defined benefit plans. Click here to read the report.
“The retirement gender gap is alive and strong,” said Ilana Boivie , an NIRS policy analyst and author of the report.
Women still earn less, have less to save, and are less likely to have workplace retirement plans. And given that the global economic crisis has drastically eroded retirement readiness, it’s all the more urgent that a policy framework is put in place to give all women a shot at achieving retirement security.
One sure way to overcome the retirement gap is through union membership. A recent study by the Center for Economic and Policy Research (CEPR) found that for the years 2004-2007, union women were much more likely to have health insurance (75.4 percent) and a pension (75.8 percent) than women workers who were not in unions (50.9 percent for health insurance, 43 percent for pensions).
The NIRS research also shows:
* Defined-benefit pension plans, which guarantee a specific pension payment each month, provide benefits and protections that are especially important for women, such as spousal protections and lifetime income.
* Women are more likely to live above the poverty line in retirement when they have income from pensions. But just 23.3 percent of women have their own pension, compared with 42 percent of men. Among women dependent upon their husbands’ retirement plans, those whose husbands have a defined-benefit plan may be better off because those plans have special protections for surviving spouses.
Under the Obama administration, progress already has been made in moving toward more equal pay for women. President Barack Obama signed the Lilly Ledbetter Fair Pay Act into law on Jan. 29 and established a White House Council on Women and Girls in March. The Council was created to provide a coordinated federal response to the challenges confronted by women and girls and to ensure that all Cabinet agencies consider how their policies and programs impact women and families.