Apr 07 2014 -
Lower lifetime earnings significantly impact women’s savings, pensions and Social Security benefits: Women age 65 and older collect $11,000 less in annual median income than men
WASHINGTON, D.C. – U.S. Senator Amy Klobuchar, Vice Chair of the U.S. Congress Joint Economic Committee, today released a new report examining recent trends in women’s wages and retirement savings, showing that lower lifetime earnings often translate into lower retirement security for women. According to Klobuchar’s report, the annual median income for women age 65 and older from all sources—including pensions, private savings and Social Security benefits—is roughly $11,000 less than it is for men. Klobuchar released the report in advance of Equal Pay Day, which is on Tuesday April 8th and will highlight the continuing need for fair pay policies in the workplace.
“This report clearly shows that lower wages impact women not just during their working years, but straight through retirement,” Senator Klobuchar said. “Passing the Paycheck Fairness Act and other policies to help close the pay gap are important for women and their families, but they’re also critical to ensuring the strength of our entire economy.”
Women who work full time earn between 77 and 82 cents for every dollar men earn. At a time when two-thirds of American families rely all or in part on the mother’s income, this wage discrepancy has far-reaching implications. For women themselves, the consequences are often felt in retirement, in the form of lower Social Security payments, pension incomes and personal savings:
• Women receive lower Social Security benefits, which are based on a worker’s earnings over the course of their career. The average monthly Social Security check for female retirees is 78 percent of what it is for male retirees.
• Women’s median income from company or union pensions is 53 percent of men’s median income from those sources. Women also receive smaller pension checks from their federal, state and local government pension plans.
• Lower earnings affect the amount that women can save as a part of their defined contribution retirement plans, such as a 401(k), 403(b) or employee stock ownership plan.
The findings in Klobuchar’s report are especially troubling because women often need greater resources to support themselves in retirement. In addition to living longer than men, women typically spend more on medical care and are more likely to enter a nursing home.
Klobuchar’s report looks at potential policy solutions for helping more women gain financial security in their working years and beyond, including passing the Paycheck Fairness Act. Two-thirds of family caregivers are women, and the report also calls for policies to support women with caregiving responsibilities. Klobuchar has introduced legislation, the Americans Giving Care to Elders Act, to help ease the financial strain on caregivers.