by Kristina Gupta, Policy Fellow
National Women’s Law Center
The pay gap between men and women can have serious repercussions for women as they age. In 2006, women working full-time, year-round earned on average about 77 percent of what full-time, year-round male workers earned.
The consequences for women of lower lifetime earnings can be severe in later life. In part because of lower earnings, women save less in private pension plans like IRAs and 401(k)s. In 2006, women age 65 and older on average received less than half of what men in the same age group received, on average, in pension income ($3,033 vs. $7,474). In addition, women accumulate fewer assets before retirement. Women also receive less in Social Security, on average, because Social Security income is based on lifetime earnings. Finally, the wage gap continues into later life – women who work past retirement age earn significantly less than men who work past retirement age.
As a result of all of these factors, women are less likely than men to have sufficient income in later life. Women age 65 and older are more likely to be poor than elderly men. In 2006, 11.5 percent of elderly women were poor, compared to 6.6 percent of elderly men. And poverty rates are worse for elderly women of color and elderly women living alone.
Ending pay discrimination and mandating equal pay for equal work could go a long way toward ensuring that older women have sufficient income to avoid poverty. Which is one reason why I support the Lilly Ledbetter Fair Pay Act, and why all women who plan to retire someday should too.
For some great resources about women and retirement, check out the Women’s Institute for a Secure Retirement (WISER).
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