Jennifer Brown“Baby boomer women ­– the first generation to approach retirement age under these conditions – find themselves in the workforce well into retirement age and facing poverty rates close to 12 per cent.” – Jennifer Erin Brown


A recent report from the National Institute on Retirement Security (NIRS) concludes that the main pillar of retirement security in the United States, Social Security, is broken and that women bear the brunt of the inadequate system.
Co-authored by Jennifer Erin Brown, manager of research at the institute, the study, Shortchanged in Retirement: Continuing Challenges to Women’s Financial Future, finds that without an occupational pension and personal savings, Social Security alone isn’t enough to provide adequate retirement income, and the problem is particular onerous for women.
“Baby boomer women ­– the first generation to approach retirement age under these conditions – find themselves in the workforce well into retirement age and facing poverty rates close to 12 per cent,” she writes.
The study’s other authors are Diane Oakley, executive director of NIRS; economist Joelle Sadd-Lessler; and Nari Rhee, the institute’s former manager of research. Decades of changes to the traditional three-legged stool of retirement – government pensions, workplace pensions, and personal savings – have led many to rely solely on Social Security, which often results in retirees “not being able to make ends meet.”
The retirement situation in the United States mirrors that in other countries, including Canada, where the declining coverage rate of workplace pensions, particularly of the defined benefit model, has led to what many experts are calling a retirement crisis that will result in social and economic uncertainty for seniors and communities that rely on pension dollars.
A number of studies, including this one from the Boston Consulting Group, shows the economic and social value of adequate retirement income. Retirees with a reliable stream of lifetime income remain consumers, contributing to the economy, especially local economies. They are also less likely to be a draw on government programs like the Guaranteed Income Supplement (GIS).
The NIRS’ report examines the challenges the retirement system, as it’s currently constituted, present for women nearing the traditional retirement age. It looks at the participation rate of women in occupational pensions, income sources for women 65 and older, and also discusses possible solutions “that reduces women’s vulnerability to financial hardship as they age.”

Key findings include:

  • More older women are in the workforce, going from 53 per cent in 2000, to 59 per cent in 2015, for women aged 55 to 64. It suggests women may be working longer to make up for any investment loss that occurred with the Great Recession.
  • Research also shows that more women, on average, work for employers that offer a retirement plan, but there is a “gap in eligibility that limits women’s participation in these plans.”
  • Women have 26 per cent less income than men, even though average household incomes have increased. Divorced, separated and widowed women are particularly vulnerable to retirement insecurity, with the majority of women over 70 relying on Social Security for most of their income.

“Women are 80 per cent more likely than men to be impoverished at age 65 and older, while women between the ages of 75 to 79 are three times more likely than men to be living in poverty,” writes Brown.
Income inequality plays a large role in determining how much retirement income a woman will have, continues Brown. Women, despite legislation to address the concern, still make less, on average, than men, and that directly equates to how much retirement income they will have.
The gap is also dramatically higher for African American women and Latinos, the study reveals.
“Even for well educated workers the gap starts early, as the American Association of University Women found that women college graduates – as early as one year after graduating from college – earned 82 per cent of what male graduates earned” and the gap grows over time: between the ages of 20 and 24, women earn about 10 per cent less than men. For women between the ages of 55 to 64, the gap grows to 23 per cent.
The gap in retirement income does not discriminate against age groups, with women having “less retirement wealth than men.” That income gap also surfaces in pensions, with men receiving defined benefit income earning $17,856 in median income, and women getting $12,000 – or 33 per cent less. A similar “gender gap” can be found in DC plans.
“This is troubling because women need more retirement assets as they will likely live longer than men.”
With the decline in the coverage of occupational pensions, both men and women are compelled to become more reliant on their own financial abilities, she continues. That, however, is also a problem for women as research shows them to be more risk adverse than men.
“Even though women have positive views regarding saving, their lower incomes make them more apprehensive when it comes to investing, as the risk of loss is harder to tolerate.”
The report spells out the challenges for women in retirement, and also offers solutions, including beefing up Social Security benefits for women, automatically enrolling women in occupational retirement plans, and launching state-run retirement plans for workers without workplace coverage – of the type being enacted in California: the California Secure Retirement Saving Program.
“Retirement security challenges lay ahead for every woman. Women want help from policymakers because they cannot reach a secure retirement alone.”

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