Erbe: Are female retirees much poorer than men?
I've covered gender differences in financial issues for years. Periodically, studies come out that say women are worse at planning for retirement than men. They outlive men, on average, and tend to put away less for retirement, so they end up poorer.
The studies are pumped out with a frightening degree of regularity by financial institutions and think tanks. But I've started to ask: Is it really true that women are worse off in retirement?
The latest report, prepared by the nonprofit Transamerica Center for Retirement Studies -- funded by Transamerica Life Insurance Co. and its affiliates -- looks at women only. It finds that about a half of female baby boomers have "no retirement strategy," and more than half either expect to work after age 65 or simply do not plan to retire. The gist of the study is that this is terrible and that women need to plan better for retirement.
The Transamerica study also reports that most boomer women are so focused on paying off consumer debt and covering current bills -- for rent, utilities, food, etc. -- that only 29 percent make saving for retirement their top financial priority.
Because this survey was based on interviews with only women, you might logically conclude that men are doing a better job. Are they? According to a 2012 survey of working men and women conducted by the nonprofit Employee Benefit Research Institute (EBRI): "In general, men and women are statistically equally likely to say they are very confident about the financial aspects of retirement. However, men are more likely than women to feel very confident about having enough money to live comfortably throughout their retirement years and having enough money to take care of medical expenses." One difference to note here is the EBRI survey also reports women are more likely to refer to Social Security as an income stream in retirement than men.
I may be a cynic, but I'm much more likely to believe results of a survey released by a nonprofit think tank that isn't trying to sell anything to anyone than I am from a center sponsored by a corporation that's trying to sell product.
From the EBRI survey, I would gather that male retirees are slightly better off financially than females. The fact that men rely more on their own savings than on government programs proves they've done a better job of setting money aside. But the differences are slight, not oceanic.
In reality, most American men and women don't save enough for a comfortable retirement and both should be doing more overall. The ERBI survey notes, "More than half of workers [60 percent] report they and/or their spouses have less than $25,000 in total savings and investments [excluding their home and defined benefit plans] including 30 percent who have less than $1,000." That is downright scary.
Classes on financial planning should be part of a high school curriculum, so young people learn that they need to start saving for retirement as soon as they start working. Girls and boys need to understand that if a household partner goes in and out of the workforce (as many women do when they have children), then they are significantly more likely to be poor in retirement.
More Americans are working beyond the traditional retirement age because they need the money. Some may view that as a negative, but I view it in a positive light. With life expectancies growing, the prospect of retiring at 65 and thereafter doing nothing, or playing a little golf or cards, is not pretty. Getting out and circulating in the real world has its benefits -- but not if that work is scrubbing floors. If it's working as a retail clerk or waitress, for example, versus poverty, then work beyond 65 is not that bad. Unfortunately, poverty strikes in old age in a gender-neutral fashion.
Writer Bonnie Erbe, host of PBS' "To the Contrary," writes this column for Scripps Howard News Service. Email firstname.lastname@example.org.