Of course, any generalization is just that. Some women earn at least as much or more as their husbands through their working lives and are able to participate to the fullest degree in every retirement savings opportunity that is put before them.
Others, however, are not so fortunate. The US Department of Labor reports that:
- Of the 61 million wage-earning and salaried women in the US between the ages of 21 and 64, only about 46% participate in a retirement plan in any given year -- much lower than the participation rate for men.
- Women are more likely than men to work in part-time jobs, and part-timers are less often eligible to participate in workplace retirement plans.
- Women are more likely to interrupt their careers to care for their families, giving them less time to participate in workplace retirement plans and less income to apply to future Social Security benefits.
Given that the average woman who retires at age 65 is likely to live 19 more years -- about three years longer than the average man -- the outlines of the challenge become clear.
What Can Women Do?
No one would suggest that a woman or a man should ignore family responsibilities to work a few more years to put away extra retirement benefits. Living a good and giving life is prerequisite to building a rewarding retirement.
Paying attention to a few key points, though, can improve benefits without major sacrifices in other areas:
- Contribute: Contribute to whatever retirement plan is made available to you. You get a tax break for doing it, and many employers match the first few dollars you put in. Make sure you contribute enough to get at least the maximum match, or you're throwing free money away.
- Vesting. Many employer-sponsored retirement programs, such as 401(k)s, require workers to remain on the job for a certain number of years before they fully own their employers' matching funds. Think twice or thrice if you're tempted to leave a job before the vesting period is over.
- Spousal entitlements. Even if you are divorced, you may be entitled to Social Security benefits based on your ex-spouse's income. Many pension plans, including Social Security, provide benefits for surviving spouses. Contact the company's personnel office or your local Social Security office to find out what your rights are.
