The Employee Benefit Research Institute has used its retirement security projection model to assess the size of households’ retirement deficit. This is important for both policymakers and citizens, EBRI notes, because the retirement income adequacy of widows and single women has received increasing attention in recent years.
Women, it points out, are likelier to live longer than men, develop costly chronic medical conditions and spend time outside the workplace caring for children and other family members.
The projection model classified households as single female, widow, single male and widower.
EBRI found that the additional savings required to meet basic needs in retirement were higher for widows and single women than for their male counterparts. For married households where the woman dies first, the retirement saving shortfall for the widower was $18,476, compared with $22,783 for households where the man dies first.
The gender disparity was starker for single men and women: $72,883 vs. $37,690.
When the analysis removed households for which no shortfall was projected, the average shortfall was $76,896 for widows and $82,937 for widowers. Single women in the lowest pre-retirement wage quartile had an average savings deficit of $110,412, while for women in the highest quartile, this was just $28,951.
Single men’s lot was much better. For those in the lowest wage quartile, the shortfall was $29,736 and $12,465 for those in the highest quartile.
Besides being more likely to have retirement deficits, single women were also likely to have much bigger deficits than others. Single women were the only group with at least 50% of households having a deficit.
The median retirement savings deficit for single women was $19,900, and a tenth of them had a deficit of at least $222,592.