American women may think they’re good at penny-pinching, but it turns out that they’ll need to save even more if they want to feel secure in retirement.
Women, especially widows and those age 80 and over, depend on Social Security benefits more than men, the latest U.S. government study on women in retirement shows, but they’re also doing a better job of contributing to their employer-sponsored retirement plans.
In 2010, 16% of women age 65 and over depended solely on Social Security for income compared with 12% of men, according to the U.S. Government Accountability Office’s July 25 report to the Senate’s Special Committee on Aging. At the same time, the share of household income women received from earnings increased over the period, but it was consistently lower than for men.
Worse, women’s median income was approximately 25% lower than men’s over the last decade, and the poverty rate for women in this age group was nearly two times higher than men’s in 2010.
“Moreover, divorce and widowhood had more pronounced effects for women than for men,” the GAO reported. “For example, women’s household income, on average, fell by 41% with divorce, almost twice the size of the decline that men experienced. For widowhood, women’s household income fell by 37% — while men’s declined by only 22%.”
A Bright Spot: 401(k)s
But a bright spot in the report is the finding that working women’s participation in employer-sponsored retirement plans such as 401(k)s has improved relative to men.