Renewed Focus on the Retirement Security Gender Gap
On July 25, 2012, the United States Senate Special Committee on Aging held a hearing on Enhancing Women’s Retirement Security. The U.S. Government Accounting Office (GAO) prepared a report for this hearing, to investigate why elderly women have historically a greater chance of living in poverty than elderly men.
The report found that several factors contribute to the higher rate of poverty among elderly women, including their tendency to have lower lifetime earnings, take time out of the workforce to care for family members, and outlive their spouses. Nevertheless, the GAO found that over the past decade, women surpassed men in their likelihood of working for an employer that offered a pension plan.
However, the report noted that employers have continued to terminate their defined benefit pension plans in favor of defined contribution plans. In addition, women contributed to their defined contribution plans at lower levels than men, and women’s median income was approximately 25 percent lower than men’s over the last decade. Women, especially widows and those age 80 and over, depended on Social Security benefits for a larger percentage of their income than men.
The Senate hearing discussed policy options for addressing the disparity in retirement security between men and women, including expanding the existing tax incentives to save for retirement, crediting care-giving in the Social Security benefit formula, improving benefits for widowed spouses, and using a cost-of-living index that addresses the impact of inflation on the elderly.
Author: Kristina M. Zinnen
