Study gives reason why women are unprepared for retirement

It might be stating the obvious, but experts maintain women are less financially secure for retirement than men. They're likely to live longer, save less and generate less income. But analysts say there are specific steps women can take to sufficiently prepare for retirement - at least financially.

"Data reveals that the retirement gender gap is alive and strong," said Ilana Boivie, NIRS policy analyst and author of "Shattering the Retirement Glass Ceiling: Women Need a Three-Legged Stool," a new research brief released by the National Institute on Retirement Security.

"Our research indicates that women can shatter that retirement glass ceiling with a boost from a three-legged retirement security stool," Boivie continued. "And given that the global economic crisis has drastically eroded retirement readiness, it's all the more urgent that a policy framework is put in place to give all women a shot at achieving retirement security with a pension, 401(k)-type supplemental savings accounts, and Social Security."

Here's what the research indicates:

  • 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.

Research finds that 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. Yet according to a 2007 study, full-time female workers in made just 76.2 percent of their male counterparts' wages - that means less money for savings.

The study also indicates that women are more likely to live above the poverty line in retirement when they have income from pensions. But, just 23.3 percent of women have their own pension as compared to 42 percent of men. Among women dependent on their husband's retirement plan, those whose husbands have a DB plan may be better off than women whose husbands have only a DC plan, because DB plans have special protections for spouses.

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