Female retirees face additional challenges

Wage gap during working years gives women fewer opportunities to save

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.

“Unfortunately, women have less income rather than more when it comes to retirement,” Matsui said.

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.

Women in nearly every occupation face a wage gap, according to Matsui. Women in the United States, who work full time, year round are typically paid only 80 cents for every dollar paid to their male counterparts, according to the National Women’s Law Center.

Starting out at a lower wage often is hard to overcome, especially when raises or pay in a new job ends up being based on previous salary histories.

Matsui noted that women find it harder to save for retirement several reasons. They tend to earn less than

men. They’re more likely to be lowwage workers. They’re more likely to leave paid work to be caregivers. They’re more economically affected by divorce.

And they’re more likely to work part time or for small employers, and may not be able to participate in a 401(k) plan as a result.

Some experts note that some women may be held back because they aren’t comfortable demanding a raise; others may be unwilling to apply for promotions for jobs that would conflict with raising children.

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

Women often can face a wealth gap, in part, because of family or life expectations set for women – ranging from parenting to care-giving duties for elders.

Two-thirds of care provided to older adults is done by women, whether involving a parent, grandparent, parentin-law or other family member or friend, according to a Merrill LynchAge Wave study.

Leaving a job or cutting back on hours to take care of young children or older adults can lead to lost benefits and promotions, in addition to extra out-of-pocket costs. The average caregiver spends $7,000 a year on their care recipient.

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.

As for good news, more women are going to college and may have access to better paying jobs than their mothers or grandmothers.

However, women are juggling more student loan debt and then are likely to face the gender pay gap.