In working with clients planning for retirement, are advisors doing enough to help women?
A new study suggests not, finding that women are 80% more likely than men live in poverty at some point in their retirement.
The report, produced by the National Institute on Retirement Security, found that the income disparities between men and women widen later in life. At the age of 65, men hold a 25% average income advantage over women. By the age of 80, income for men is 44% greater than what women make, according to the NIRS analysis.
The latest findings continue what Diane Oakley, the institute's executive director, says is a longstanding disparity in the relative preparedness for retirement among men and women.
"We've actually not made much progress. We still have women feeling we're not able to save enough to get to a retirement in a secure way," Oakley said at a conference announcing the research. "How do we help women move forward, because we seem to have spent the last 15 years kind of treading water. We haven't made that much of an advance."
Indeed, the gender gaps are sharp. Between the ages of 75 and 79, women are three times more likely to fall below the poverty line, according to the report. Women's holdings in defined-contribution retirement plans had a median value one-third lower than men's.
Many factors can help explain the retirement disparity. It has been well documented that women, on average, earn less than their male counterparts for comparable work. Likewise, women are more likely than men to take time away from full-time work for some form of caregiving -- often for children or older relatives. And women have a longer life expectancy than men, increasing the chances that they will outlive their savings.
Experts framed the issue as an education challenge.
Lara Hinz, director of programs at the Women's Institute for a Secure Retirement, described the importance of meeting women in their workplace, touting the success of workshops that employers convene to make a financial professional available to offer counsel on retirement planning.
Hinz encourages employers to develop those types of programs that would be specifically tailored for women.
"Once we get into those workshops, we see that women are thrilled," Hinz said. It's not because "they need special help," but rather because women simply have a different experience in retirement than men.
Still, education can only go so far. The authors of the new report are calling for a variety of policy changes that they say could improve the retirement picture for women, including strengthening Social Security benefits, expanding auto-enrollment in IRAs and developing more state-sponsored retirement savings plans.
President Obama has addressed some of these issues with the advent of MyRa, that is geared for workers who don't have access to a plan through their employer.
Retirement issues have also become a central focus for industry regulators, with the advisor and broker-dealer units of the SEC's exam office working together on a multi-year initiative to improve industry practices in that area.
Lauren Luchi, manager of the retiree program at the America Federation of Teachers, said she is encouraged by signs that those issues are assuming a higher profile in Washington as more officials begin to understand retirement as a pressing economic concern.
"I think people are beginning to really raise the question about Social Security and how to not just keep it and protect it, but now how to expand [it]. And that's one way that we're injecting ourselves into the conversation," Luchi said. "If you want to have a stable economy, you have stable retirement."
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