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Women need to prepare for close to twenty years of living expenses once they retire. Currently women represent approximately 60% of all aged Social Security beneficiaries and approximately 72% of beneficiaries age 85 and older.* At the beginning of 2000, women's average monthly retirement benefit was $697. Men's average benefit was $904.
Aspects that Benefit Women
Because Social Security has annual cost-of-living adjustments, you have an inflation-protected benefit for as long as you live—and for women those increases are vital since we generally live longer than men. Plus, Social Security provides dependent benefits to spouses, divorced spouses, elderly widows, and widows with young children.
Factors to Consider
Women spend 11 years out of the workforce caring for others—thereby reducing their projected Social Security benefits. Your retirement plan needs to factor in ways to offset this gap. Be sure to invest in your employer's retirement and pension plans. Elderly women are less likely than elderly men to have significant income from private pensions. Only 30% of women aged 65 or older were receiving their own pensions (either as a retired worker or survivor), compared to 48% of men. Obviously, the lack of pensions is directly related to the time spent out of the workforce, and the absence of employer sponsored benefit programs for small companies and part-time positions.
Reliance on Social Security
For unmarried women—including widows—age 65 and older, Social Security comprises 50% of their total income. In contrast, Social Security benefits comprise only 37% of unmarried elderly men's retirement income and only 34% of elderly couples income. Additionally, 74% of unmarried elderly women depend on Social Security for at least one-half of their income. Women need to get their retirement plans in place so that Social Security benefits are a supplement and not a mainstay.
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