USA TODAY International Edition
Depressing truth about women and retirement planning
To combat risks, save early and aggressively
Any woman who isn’t investing money in a 401(k) plan – or maybe only sets aside a tiny amount – needs to realize that the retirement game is stacked against her.
“Women are more at risk in their older years for economic insecurity,” said Amy Matsui, director of income security and senior counsel for the National Women’s Law Center in Washington, D.C.
Here are some thoughts to motivate everyone from their 20s to 60s to stick to New Year’s resolutions and save far more aggressively in 2019:
There’s a gender gap in retirement.
The wage gap that women experience in their working years morphs into a gender retirement gap.
Based on today’s wage gap, a woman who worked full time, year round would typically lose $406,760 over a 40-year career, according to a report by the National Women’s Law Center. The example assumes a constant wage gap of $10,169 each year.
To make up that lost money, a woman who fits this example would have to work nearly 10 years longer than her male counterpart.
Taking home less money, of course, means a woman has less discretionary income to set aside toward savings. A smaller nest egg ultimately would threaten economic security later in life.
Long lifespans mean bigger bills.
After a couple reaches age 64, twothirds of the women will outlive their husbands by almost 12 years, according to a 2016 study by TIAA.
The expenses associated with living alone are dramatically higher than when two people are able to share household chores and expenses. Matsui noted that women also may be more reliant on their spouse’s retirement benefits.
Women age 63 on average end up with only two-thirds of the retirement savings and benefits that men do.
Women face higher health care expenses.
Women age 63 and up are projected to spend 30 percent more on health care in retirement than men, according to a study by HealthView Services. Women may be more likely to suffer through chronic illnesses and may be less likely to benefit from a spouse who serves as a caretaker.
Men and women have different life journeys.
Mothers also experience a “mommy penalty,” a pay gap that is three times that of non-mothers because of lost income and missed opportunities for promotions caused by breaks from the workforce, the Merrill Lynch-Age Wage study noted.