Even When It Comes to Retirement, Women Can’t Escape Gender Gap

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During retirement, women earn a lot less than men in benefits and retirement savings payments.

This retirement gender gap can be easily recognized in the annual earnings among men and women in retirement. The average woman over age 65 earns only $16,000, almost $11,000 less than a man in the same age bracket.

When taking a closer look at what causes this retirement income disparity, however, it becomes clear that wage inequality in the workplace is only part of the story. Factors such as marital status, child care arrangements and life expectancy can also contribute.

Here are a few factors that can decrease retirement earnings for women:

• Women are stay-at-home caregivers more often than men. In 2013, Census data showed that 5.2 million mothers worked as stay-at-home parents, compared with only 214,000 fathers. Because this work isn’t compensated, women often have lower lifetime earnings, which translate to lower Social Security benefits. On top of that, when women do return to the workforce, they are paid less than men. In 2010, women made only 77 cents for every dollar earned by men, resulting in a loss of about $300,000 over the course of a career. For those who stay at home for a longer period of time, even qualifying for Social Security retirement benefits independently could prove to be challenging, since the Social Security Administration requires a minimum of 10 years of work.

• Benefits depend on marital status. The Social Security Administration began providing spousal benefits in 1939 as a way to give retirement benefits for those who might not independently qualify. Spousal benefits, which are equal to up to 50% of an income-earning spouse’s retirement benefit, can provide financial relief to women whose independent retirement benefits are lower than that. However, certain limitations might make them difficult to get. For instance, in most cases, the marriage needs to have lasted at least 10 years for either person to become eligible for spousal benefits. Women who have very low lifetime earnings but also haven’t been in a marriage lasting that long (whether they are divorced, widowed, unmarried or have a life partner or civil union) aren’t able to claim this critical benefit.

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Source: USA Today | Claire Davidson, NerdWallet