Women Have More Years of Retirement to Fund

By Eileen Ambrose, The Baltimore Sun

August 31, 2008

Women worry more about retirement than men.

They fret more about inflation eroding their purchasing power. They agonize more over declining health and the rising cost of medical care. They stew more about outliving their money.

In fact, according to a recent survey by The Hartford and MIT AgeLab, men's anxiety level was higher on only one retirement issue: Men are more concerned about being bored in retirement.

But women have good reason to worry.
Women tend to earn less than men and are more likely to quit work to care of children or elderly parents. That means their retirement benefits are smaller. Yet, women on average live longer than men and have more years of retirement to fund.

"To me, it's encouraging that [women] are aware of and understand their risks. And they are concerned about the right things," said Stephanie Chappell, corporate financial gerontologist with The Hartford, which surveyed nearly 1,200 men and women about their attitudes on retirement.

A little angst can be positive if it spurs people to take action. If a fear of running out of money in old age pushes you to calculate how much you need to save for retirement, so much the better. But don't let anxiety paralyze you so you don't plan for your future. Sure, women have more hurdles to overcome, but they're not insurmountable. And the earlier people tackle them, the better.

Here are some issues that affect women's retirement, according to surveys by The Hartford and the Society of Actuaries:

Women spend an average of 32 years in the workforce, compared with 44 years for men. 

A 65-year-old woman can expect to live to 85, or three years longer than a man. At 65, she has a 49 percent chance of reaching 89 and a 23 percent chance of hitting 95.

Singles fare worse than married couples who can pool resources. Among those 65 and older, 28 percent of single women and 23 percent of single men are poor or near the poverty level. That compares with 8 percent of their married peers. A wife's income, though, on average will drop by half when a husband dies, but her expenses will fall only 20 percent.

Women tend to marry older men, increasing the chances of outliving a husband. Many women are widowed for 15 years or more.

The surveys interviewed people 45 and older. You'd like to think younger women, aware of retirement through 401(k)s on the job, are taking a more assertive role with their finances.

That doesn't appear to be the case, said Alicia Munnell, director for the Center for Retirement Research at Boston College. 

According to government figures, the ratio of assets to income from 1983 to 2001 has stayed much the same for all age groups. That means today's younger workers aren't saving more than their 1980s counterparts, even though they will likely live longer, pay more for health care and are less likely to have the traditional pensions of earlier generations.

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