“Essentially, older women are paying for more years of retirement with less money,” she said. “We also find that married women are better off in terms of retirement savings as compared to single women. But marriage presents its own retirement challenges given that the structure of Social Security works against dual-earner couples."
Divorce presents another complex set of issues relating to retirement preparedness. The timing of divorce seems to matter, as does the division of assets following a divorce, the report found.
Among other key findings from the report:
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Men with savings in a defined contribution plan far surpass the earnings trajectory of women with savings in a DC plan, and men also earn significantly more than women without DC savings.
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Women experience a steep decline in income after age 80, when they are much more likely to be widows, which creates added income deficits.
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As advisors know, there are stark differences in the sources of income for women in the top and bottom income categories; women with less than $20,000 of income in retirement are much more dependent on Social Security income, while women with income above $80,000 receive more from earnings and property income.
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Women remain much more likely to provide caregiving than men, especially spousal caregiving. Policy makers, advisors and women themselves need to be aware of the negative impact it has on women’s preparedness.
"Caregiving is a financial and retirement risk that falls most heavily on women, and they often cannot recover," says report co-author Christian Weller, a professor at the University of Massachusetts.
"Over time, caregiving can substantially erode a woman's earnings and savings, further weakening their retirement security. And even when men are caregivers, they can better handle the risks because they typically start from a wealthier position than women," Weller said.
The analysis was developed using data from the “2014 Survey of Income and Program Participation,” a household-based survey featuring a nationally representative sample interviewed over multiple years.