Women 80 Percent More Likely Than Men to Be Impoverished in Retirement

New NIRS Report Details Women’s Financial Security Challenges,
Offers Policy Recommendations to Close Retirement Gender Gap

of Findings at Retirement Policy Conference on
Tuesday, March 1

WASHINGTON–(BUSINESS WIRE)–A new analysis finds that women are far more likely than men to face
financial hardship in retirement. A report released today by the
National Institute on Retirement Security (NIRS)
finds that across all age groups, women have substantially less income
in retirement than men. For women age 65 and older, the data indicate
that their typical income is 25 percent lower than men. As men and women
age, men’s income advantage widens to 44 percent by age 80 and older.
Consequently, women were 80 percent more likely than men to be
impoverished at age 65 and older, while women age 75 to 79 were three
times more likely to fall below the poverty level as compared to their
male counterparts.

These findings are contained in a new report, Shortchanged in
Retirement, The Continuing Challenges to Women’s Financial Future.
report is available here.

A live webcast of the report findings will occur during the NIRS
retirement policy conference, Retirement
, scheduled for March 1, 2016. Watch the conference
proceedings here.
The conference agenda is available here,
which includes opening remarks from Congresswoman Jan
(D-IL) and expert discussions of women’s issues,
retirement investing and behavioral finance.

“It is well documented that the nation faces a retirement savings
crisis, but the pain is particularly severe for women because we need a
bigger retirement nest egg than men thanks to our longer life
expectancy,” said Diane
, NIRS executive director and report co-author. “This new data
is troubling—it shows that a woman’s nest egg is substantially smaller
than a man’s and that we’re not making real headway toward closing the
retirement gender gap.

“The fact that women over 65 are 80 percent more likely than men to fall
into poverty in their retirement years is tragic and should be a call to
action for policymakers,” Oakley said. “Women are financially
disadvantaged because we still earn less than men and we typically take
time out of our careers for caregiving – both of which reduce our
ability to prepare for retirement. As a result, more women are spending
their retirement years working.”

The report finds that in 2010, men received $17,856 in median retirement
income from a pension, whereas women received $12,000—or 33 percent
less. There is also a gender gap in defined contribution or 401(k)-type
retirement account assets. In 2014, the median amount accumulated in
these savings accounts was $36,875 for men and $24,446 for women—or 34
percent less, according to Vanguard.

The key findings of this report are as follows:

  1. Women are 80 percent more likely than men to be impoverished at age
    65 and older, while women between the ages of 75 to 79 are three times
    more likely than men to be living in poverty
    . Widowed women are
    twice as likely to be living in poverty than their male counterparts.
    White and black women are almost twice as likely to be living in
    poverty than their male counterparts during retirement.
  2. Labor force participation among women aged 55 to 64 climbed from 53
    percent in 2000, to 59 percent in 2015, with a peak of 61 percent in
    Women may be working longer in order to make up for lower
    retirement savings over their careers and to offset investment losses
    from the Great Recession.
  3. While women were somewhat more likely than men to work for
    employers that offered retirement plans in 2012, there is a gap in
    eligibility that limits women’s participation in these plans
    Since 2006, this gap has narrowed and now women and men have the same
    overall participation rates. Women’s higher rates of part-time
    employment and shorter job tenure may make it more difficult to meet
    employers’ eligibility requirements for retirement plans compared to
  4. The share of women working for employers that offered only defined
    contribution (DC) retirement plans shrank from 49 percent in 2009 to
    46 percent in 2012
    . The median value in women’s DC retirement
    accounts was one-third less than that of men.
  5. Even though the median household incomes of individuals aged 65 and
    older has increased, women have 26 percent less income than men
    While both women and men have decreased their reliance on Social
    Security since 2009, the proportion of income from defined benefit
    (DB) pensions has remained steady, supplying about one-fifth of income
    for both women and men. Older men and women have increased their
    reliance upon earnings since 2009.
  6. Social Security is an important source of income for older
    households with incomes less than $80,000. Women who are widowed,
    divorced, and over age 70 rely on Social Security benefits for a
    majority of their income
    . Black women rely largely on Social
    Security, while women of other ethnic groups also rely on wages to a
    large extent.
  7. Women in the health care, education, and public administration
    fields, where DB pension plans are more prevalent, have higher incomes
    in retirement and lower rates of poverty than in other industries
    due to their increased participation in DB pension plans.

In addition to spotlighting the gender disparities, the report details
public policy options that can help that reduce women’s vulnerability to
financial hardship as they age. These proposals to strengthen retirement
security for women include:

  1. Strengthening Social Security benefits for women.
  2. Increasing retirement plan coverage through auto enrollment in
    individual retirement accounts (auto-IRA).
  3. Expanding utilization of the Saver’s Credit.
  4. Increased development of state-sponsored savings plans.
  5. Increasing defined contribution plan eligibility for part-time workers.
  6. Providing spousal protections in defined contribution accounts.
  7. Expanding defined benefit pension plans.

This report is based on the authors’ analysis of the 2012 Survey of
Income and Program Participation (SIPP) data from the United States
Census. It examines the distinct challenges posed by the current
retirement system of Social Security, pensions, and savings for
working-age women, retirement-aged women, and retired women. Report
authors include Jennifer Erin Brown, NIRS manager of research; Nari
Rhee, manager of the Retirement Security Program at the Institute for
Research on Labor and Employment/Center for Labor Research and Education
at the University of California at Berkeley; Joelle Saad-Lessler,
recently with the New School for Social Research; and Diane Oakley NIRS
executive director. A grant from BNY Mellon Investment helped make this
report possible.

National Institute on Retirement Security
is a non-profit,
non-partisan organization established to contribute to informed
policymaking by fostering a deep understanding of the value of
retirement security to employees, employers, and the economy as a whole.
Located in Washington, D.C., NIRS’ diverse membership includes financial
services firms, employee benefit plans, trade associations, and other
retirement service providers. More information is available at www.nirsonline.org.
Follow NIRS on Twitter @nirsonline.


National Institute on Retirement Security
Kelly Kenneally,