Women and retirement
by May 7, 2009 11:23 am 51 views
Women are at higher risk for financial insecurity in retirement than men, according to a new report from the National Institute on Retirement Security.
The report — “Shattering the Retirement Glass Ceiling: Women Need a Three-Legged Stool” — suggests the risk can be minimized by having a combination of a traditional pension, supplemental 401(k)-type individual savings and Social Security.
Key findings of the report include:
• Women need to accumulate more retirement assets than men because they often to live longer. But, acquiring enough assets is more difficult because women still have lower wages and less access to retirement plans during their working years as compared to men.
• Defined benefit (DB) pension plans provide benefits and protections that are especially important for women – spousal protections and a lifetime income stream that cannot be outlived.
• Supplemental defined contribution (DC) savings plans like 401(k) accounts offer portability of assets, which is an important tool for women who may move in and out of the workforce more so than men.
• Attaining the “three-legged retirement stool” – Social Security, a traditional DB pension, and supplemental DC savings – offers the greatest opportunity for women to achieve security in retirement.
• A woman with a salary of $50,000 must save $1,000 more per year than her male counterpart to achieve equitable retirement income because of her longer life expectancy.
• Women are more likely to live above the poverty line in retirement when they have income from pensions. But, just 23.3% of women have their own pension as compared to 42.0% of men.
“The data reveals that the retirement gender gap is alive and strong,” Ilana Boivie, NIRS policy analyst and author of the research brief, noted in the statement. “Women still earn less, have less to save, and are less likely to have workplace retirement plans. Our research indicates that women can shatter that retirement glass ceiling with a boost from a three-legged retirement security stool.”