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The Influence of Gender on Retirement Savings
Diane OakleyExecutive DirectorNational Institute on Retirement Security (NIRS)Washington, D.C.
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Discussion on Gender and Retirement
• Views on Retirement • “Shortchanged” Findings• Women in Workplace • Coverage Gaps• Status of Older Women in
Retirement • Policy Options
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Women’s Views on Retirement in 2000 EBRI Retirement Confidence Survey
• 87% of women believed that do not save enough money to live comfortably in retirement.
• 2/3 expected to work in retirement.• Major Source of Income—Only 25% of women
expected Social Security; 44% their money saved in retirement plans; and 41% employer-provided benefits.
Source: EBRI Women’s Retirement Confidence Survey, 2001 EBRI Notes, Vol. 22, No. 2 :
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Pension and Retirement Security 20159 Out of 10 Women Agree—
America Faces a Retirement Crisis
• 8 out of 10 women agree—Workers cannot save enough on their own to guarantee a secure retirement.
• Plans: 1/2 of plan to seek full or part-time work in retirement; 2/3rds could save up to 4% more and cut spending now.
• Social Security is a major source of income for most women 65 and older.
Source: Oakley and Kenneally, 2015, “Pensions and Retirement Security 2015,” NIRS
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Key Findings on U.S. Women in the Workplace and Retirement Security
Women are Working Longer
• Workforce participation of women (55-64) up by 12% between 2000 and 2015.
• Face an eligibility gap—Even though 63% of women worked for employers offered that retirement plans.
• Women offered only DC plans—Shrank from 49% in 2009 to 46% in 2012.
• Women have a different approach to retirement investing.
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Key Findings on Household Income for Women Age 65 and Over
Women Have 26% Less Income
• Overall, women are 80% more likely to be impoverished than men. Poverty rates increase with age, change in marital status, and across ethnic backgrounds.
• DB pension income helps older women who had worked in healthcare, education, and public administration. Social Security is an important source of household income.
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More Women Are Working As They Approach Retirement
Labor force participation among women aged 55 to 64 climbed from 53% in 2000, to 59% in 2015.
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63% of Women Work for Employers That Offer Retirement Plans, But Only
85% Were Eligible For The Plan
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The 3% Eligibility Gap Between Men and Women Lowers Women’s Retirement Plan Participation
In 2012, 9% of women were not eligible for their employers’ retirement plans, while just 6% of men were not eligible.
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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The Number of Employers Offering Women Defined Contribution Only Plans
Fell to 46%
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Women and Retirement Investing
• Vanguard DC account values: Median for women is $22,212 compared to $33,001and Average of $75,771 for women and $115,835 for men.
• Barber and Odean found that female investors had better rates of return than male investors.
• Women hold more balanced portfolios than men and invested more age appropriately. (Vanguard and Fidelity)
• Women contributed 6.9% of salary to DC accounts while men contributed 6.8% in 2015, down from 7.3% in 2006.
Source: Vanguard, How America Saves 2016; Fidelity Investments, What Women Investors Are Doing Right, 2015, and Barber and Oden, “ Boys Will Be Boys: Gender, Overconfidence, and Common Stock Investment,” 2001, The Quarterly Journal of Economic.
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Women Have 26% Less Household Income than Men 65 and Over
Typical household income for men age 65 and over was $48,280 and for women age 65 and over it was $35,810.
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Sources of Household Income For Women and Men, by Income Level
Wages supply the largest share of income for households with $80,000 or more of income.
Social Security Income is the most important source of income for households with $60,000 or less of income.
DB pension income plays an important role for older middle income households.
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Sources of Household Income Shift as Women and Men Grow Older
Men’s 25% higher income advantage widens to a 44% income advantage for men 80 and older.
Social Security provides a greater share of income with age, while wage income declines with age.
DB pension income accounts for about 1/5 of income for most men and women across the age groups.
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Sources of Income By Ethnicity: Latina Women Face Largest Gap
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All Women Have Lower Incomes then Men by Marital Status; Single Women
Challenged to Meet Basic Expenses
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Women Are 80% More Likely To Live in Poverty Than Men
Women aged 75-79 are three times as likely to live in poverty, compared to men.
Women who are widowed have a poverty rate more than twice that widowers.
Rates of poverty among Black and Latina women greatly exceed those of Black and Latino men.
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Women Helped in DB Pensions from Spousal Benefit Protections Under
Retirement Equity Act Percent of Older Americans (60+) with DB Pension
Income, 1998, 2003, 2006 and 2010
32%28%
52% 52%48%
43%
34% 34%
0%10%20%30%40%50%60%
1998 2003 2006 2010Own DB Pension Own or Spouse's DB Pension
Source: NIRS, “Pension Factor, 2012.
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Health, Education, Public Administration and Professional Women Have Higher
Incomes in Retirement
Source: NIRS Shortchanged in Retirement: Continuing Challenges to Women’s Retirement Future, 2016
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Women Have Lower Rates of Poverty in the Education, Public Administration,
Health, and Professional FieldsThe poverty rates in the education and public administration industries are 4% and 5%.
Women in health services and professional/ administration have poverty rates of 7% and 6%.
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Policy Considerations: Improving Women’s Financial Future
• Strengthen Social Security benefits for women.
• Increase retirement plan coverage through Auto-IRAs.
• Expand utilization of the Saver’s Credit. • State-sponsored savings plans.
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• Increase DC plan eligibility for part-time workers.
• Provide spousal protections for DC accounts.
• Keep DB pensions—Volatility and new designs.
Policy Considerations: Improving Women’s Financial Future
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Key Takeaways
• Social Security is an important source of retirement income to older households.
• Women Longevity, Work History, Savings and Marital Status pose challenges.
• DB pensions help women as worker and spouses • New public policy options can expand retirement
savings to more women (and men).
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Thank you!
Questions?
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