Retiring comfortably in the U.S. for those in the middle class rests on three foundations: Social Security, savings for retirement, and a pension. Poverty in old age is becoming an increasingly larger problem. Shortchanged in Retirement: Continuing Challenges to Women’s Financial Future, a new analysis published in March by the National Institute on Retirement Security, finds that these foundations have eroded over the years, especially for women, who are experiencing greater rates of poverty than ever before. Social Security does not provide enough to make ends meet, employee-sponsored pensions are not as available as they once were, and personal savings are insufficient to live on for the full length of retirement.
This analysis on senior poverty says that women are 80 percent more likely than men to be impoverished at age 65 and older; they have significantly less income in retirement than men. The authors based their report on an analysis of the 2012 Survey of Income and Program Participation (SIPP) data provided by the United States Census.
Some of the key findings regarding age and poverty include:
- Women are staying in the workforce longer to presumably make up for low retirement savings.
- Only 46% of women work for an employer who offered a defined contribution (DC) only retirement plan, and the values of their DC accounts compared to men were one third less.
- Divorcees, widows, and women over 70 rely on Social Security benefits for most of their income.
- Women between the ages of 75 and 79 are three times more likely than men to be living in poverty in old age.
Elderly Poverty Statistics
Poverty among the elderly is an issue that is not getting better, and statistics back up this claim. Rising health care and living expenses make it increasingly difficult for older adults, particularly women, to make ends meet, and the majority of them struggle to do so. Below are some statistics about elderly poverty:
- Over 25 million Americans aged 60 and over are experiencing economic insecurity and live below the federal poverty level (FPL), which is set at having an annual income less than $29,425.
- The average Social Security recipient receives $433 per month.
- Older women receive approximately $4,000 less per year than men do because of lower earnings throughout their working lives.
- After meeting essential monthly expenses, a third of senior adult households have no money left or go into debt.
Sources for Today’s Article:
“Economic Security for Seniors Facts,” National Council on Aging web site; https://www.ncoa.org/news/resources-for-reporters/get-the-facts/economic-security-facts/, last accessed July 11, 2016.
Jennifer Erin Brown, MS et al, “Shortchanged in Retirement Continuing Challenges to Women’s Financial Future,” March 2016; http://www.nirsonline.org/storage/nirs/documents/Shortchanged/final_shortchanged_retirement_report_2016.pdf.