Women More Likely to be Impoverished as Seniors

A new report by the National Institute on Retirement Security finds that women are more likely to be impoverished in old age than men. Overall, a sixty-five year old woman has an eighty percent greater chance of being poor than a man of the same age.

The report notes women have less retirement income across all age groups, with women aged seventy-five to seventy-nine three times more likely to be living below the poverty line than men of the same age. Widowed women are twice as likely to be living in poverty as widowed men. Overall, roughly nine percent of women and five percent of men sixty-five and above live at or below the federal poverty line.

For someone living alone, the federal poverty line is defined as having an annual income of $11,880, which works out to just $990 dollars a month for food, shelter, transportation, medical care and medications. That means as you get older you’ll have increasing trouble making basic expenses long before you get to the “official” poverty line. The report cites many reasons for the discrepancy between genders, most of them at least somewhat familiar.

Increased Longevity

We’re all living longer and, statistically, women live longer than men. That means women are going to need retirement funds for a longer period of time. The situation’s likely to be worse in the years to come as fewer future retirees will be able to look forward to guaranteed income from pensions.  Added to that, current 401(k) plan balances are lower overall for women.

Longer Periods Out of the Paid Workforce

A longer life after retirement means that women are spending more time out of the workforce. Women are also more likely than men to take time off during their working years to bear and raise children, hurting both their lifetime Social Security earnings and the balances in their IRAs and 401(k)s. Women are actually being penalized in their retirement years for staying home to raise children when they’re younger, and/or taking time off to assist relatives who may be sick or infirm.

Wages Still Lag Behind Men

Another ugly fact is that women still get paid less than men for the exact same jobs. Nothing illustrates that quite as well as the recent dustup between Fox and actress Gillian Anderson, who was offered half as much money as co-star David Duchovny to reprise her role in the X-Files TV series. That public incident points out another obstacle women face in retirement, when Social Security uses lifetime income to determine benefit amounts.

The report should make one thing glaringly clear and that is, when it comes to retirement, there’s no one you can count on to support you in retirement other than the younger you. Even if you’re one of the lucky ones who does have a pension, that doesn’t mean you can count on it for the duration of your retirement. In 2012 American Airlines defaulted on its pension obligations and foisted them on the government. Retirees found pension payments frozen and later discovered that when the government takes over a pension plan benefits can be greatly reduced and there are no cost of living adjustments. In 2014, American Airlines made $597 million dollars. The practice is called “pension dumping” for a reason.

The bottom line is whether you’re a man or woman, putting money away for retirement is more critical than ever. It’s important to have a diverse investment portfolio with an age-appropriate mix of stocks, bonds, cash, and high quality liquid hard assets. Retirement will be here before you know it, and the only thing worse than seeing a desperate and impoverished senior is being one.