On average, women in the United States face a larger retirement savings gap than men and experience higher poverty rates at older ages, according to a newly released federal report requested by U.S. Sen. Susan Collins (R-ME).
“As the chairman of the Senate Aging Committee, ensuring that more people are better prepared for retirement is one of my top priorities,” Sen. Collins said last week. “Improving women’s retirement security is a significant public policy challenge that requires us to work together to find common ground.”
Sen. Collins requested the Government Accountability Office (GAO) report along with U.S. Sen. Bob Casey (D-PA), ranking member of the Aging Committee. Overall, the report found that there is an estimated $7.1 trillion gap between what Americans are projected to have saved for retirement and what they will actually need.
“We held 14 focus groups with women retirees across the United States to get their perspectives on financial security. Every group was concerned about rising healthcare costs and each group discussed how a lack of personal finance education had a negative effect on their retirement security,” according to the GAO report. “Women in all groups also equated financial security in retirement with being able to maintain their independence.”
Women in all of the focus groups described some level of anxiety about their retirement security and identified several barriers to achieving retirement security, including divorce, widowhood, pay inequality, and caregiving responsibilities, according to the GAO report, which also found that women are more likely than men to take time away from work to raise children or care for a child or spouse. All have implications for retirement savings, including Social Security benefits, pensions, and defined contribution plan savings, the participants said.
The GAO report also found that the women participating in its focus groups cited a lack of personal financial education about savings, investing, enrolling in Medicare, and claiming Social Security as hindrances to their retirement security.
“Many shared ideas about personal finance education including the view that it should be incorporated into school curriculum starting in kindergarten and continuing through college, and should be available through all phases of life,” according to the report.
“After spending years in the workforce and caring for loved ones, women should be able to enter retirement with the confidence that they will be able to live comfortably and maintain their independence as they age,” said Sen. Collins.