The higher risk of not having sufficient money in her retirement is real
Women are more vulnerable to financial insecurity because they typically live longer, have more breaks in their employment and earn less.
Making the right financial decisions is therefore crucial for all women, from Social Security to the rest of their retirement planning.
Technically speaking, Social Security is gender-neutral. However, a combination of several factors creates different levels of retirement security for women and men. Here are some of the main reasons that a woman has a higher risk of not having sufficient money in her retirement years:
Women have less time in the workforce due to pregnancy, childcare or family care responsibilities, resulting in lower Social Security benefits than men.
According to the most recent data from the Department of Labor, women are more likely than men to be out of the workforce or to have breaks in employment. In fact, 74% of women between 25 and 54 were in the workforce, compared with 89% of men.
The gap widens in the 55-to-65 age group.
Despite the wage gap shrinking over the past few decades, women still earn less than men, generally speaking.
In fact, according to the most recent data from the Social Security Administration:
A woman at 65 is expected to live 2.2 years longer than her male counterpart. Further, according to a study by the Center for Retirement Research at Boston College, the odds women need nursing home care is higher, and they spend more time in care than men.
During retirement, women are more likely to be single, widowed or divorced. Since most women have older spouses, they are likely to end up widowed without the financial assistance their husbands may have provided.
Consider this sobering statistic: While the poverty rate of a married couple over 65 is only 4.2%, the poverty rate of a post-65 single woman is 20.3%.
It sounds obvious, but women can develop a more secure future and worry less about running out of money during their retirement years by becoming much more involved in and owning their overall financial planning.
Making the right financial planning decisions and the right Social Security choices are two of the most important actions a woman can make for her retirement.