Study gives reason why women are unprepared for retirement

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.