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Why Retired Women Live on Less

Why Retired Women Live on Less

Unfortunately one group of individuals consistently has more difficulties planning for and surviving retirement than any other – women.  For many women, the gender gap of money earned throughout their working life haunts them well into their retirement years.

In fact, women are almost twice as likely as men to live below the poverty line during retirement, with single and minority women struggling the most. Women earn -- and save -- less over their lifetimes than men, leaving them with a smaller nest egg. And because they tend to live longer, that savings has to last longer, too.

On average, women 65 years and older rely on a median income of around $16,000 a year -- roughly $11,000 less than men of the same age, according to a Congressional analysis of Census data. And many elderly women rely exclusively on Social Security benefits.

Also, female workers make up about two-thirds of all part-time employees. And the majority of those jobs don't come with employer-sponsored retirement benefits which make it harder to save for retirement at all, let alone to accumulate a nest egg large enough to last decades.

Another factor in saving for retirement is that according to the AARP Public Policy Institute on average, women work 12 years less than men do over the course of their careers.  Why are women not working? - Women are more likely to take time off work to raise kids or to care for a sick spouse or aging parents.  As Social Security benefits are based on a worker's top 35 years of earnings, time out of the workforce can result in a smaller benefit throughout retirement.

How do women build a better retirement plan? Consider the following:

-         Invest more and begin investing earlier.

-         Take advantage of employer matching contributions.

-         Make the most of automatic features like automatic enrollment and auto escalation.

-         Avoid taking loans from retirement savings.

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