Celebrating Women’s History Month
March is Women’s History Month—a time to celebrate the exceptional women in our lives and around the country.
In honor of this month, I wanted to talk specifically about some challenges that women face in retirement.
To better understand how women prepare for and live in retirement, the National Council on Aging conducted a survey in 2022 of Americans ages 50 and older and found that women reported retiring, on average, at age 64.
According to the Office of Personnel Management (OPM), in 2022, 45% of the immediate optional retirements were women and the average age at retirement was 63.3. Half of retired women expect to live 21 or more years in retirement, which is consistent with data from the Labor Department.
But what challenges do women face in retirement? And how do those challenges differ from their male counterparts?
According to a recent study,¹ these are the top 5 retirement challenges for women.
5 Retirement Challenges for Women
1. Women live longer than men.
Life expectancy for a woman aged 65 is another 21 years. That is three years more than for a man of the same age. Life expectancy at age 65 for Hispanic women is 23 years and for African American women it is 20 years.
Living longer means greater financial risks such as inflation, outliving assets, death of a spouse, and unexpected health costs. Women need more resources to cover their longer retirement and prevent falling into poverty.
2. Women earn less than men during working years.
On average, women earn 21% less than men. Among African American and Latina women, the percentages are higher—40% and 45% less, respectively.
3. Women receive significantly lower retirement benefits than men.
The median income for women age 65+ was $19,180, compared to men of the same age, whose median income was $32,654.
4. Women have fewer years of earned income.
Women spend nine more years out of the paid workforce than men, on average. Women typically care for children and/or elderly parents.
5. Women are more likely to work part-time jobs.
Women are nine times as likely as men to work part-time in order to provide caregiving. Part-time workers are less likely to have access to benefits such as health insurance or retirement contributions.
This leaves women with less disposable income, which often leaves less for retirement savings. All these factors contribute to and can exacerbate women’s struggle as they prepare for and live in retirement.
Women’s Financial Concerns for Retirement
Women—both those living in retirement or preparing for retirement—also have a number of financial concerns.²
- Nearly nine in 10 (89%) report being very or somewhat concerned with the increasing cost of health care.
- Three-quarters (75%) are very or somewhat concerned about being able to afford long-term care for themselves or a partner/spouse.
- More than seven in 10 (71%) of retired women are very or somewhat concerned about caregiving needs they may have, which is significantly more than the concerns reported by retired men (59%).
- More than half (56%) of retired women are concerned that they will not have enough money to live comfortably in retirement.
As you can see, the majority are concerned about the increasing cost of health care, being able to afford long-term care, caregiving needs they may have, and outliving savings and assets.²
While both men and women have similar concerns for retirement, women face a series of obstacles that make achieving financial security in retirement more challenging.
I urge all federal employees to make a plan now and start saving early for retirement. Saving early is especially important for women since they face more financial challenges than men.
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Sources:
¹Top 5 Retirement Challenges for Women, Women’s Institute for a Secure Retirement (WISER)
²Women Living in and Preparing for Retirement, National Council on Aging, March 2022
