BOSTON (CBS) – In April of this year, Congresswoman Carolyn Maloney, who is member of the U.S. Congress Joint Economic Committee (JEC), released a new report, The Devastating Long-Term Effects of the Gender Pay Gap— And How Women Can Begin to Address Them.
According to the Congresswoman, “Lower pay throughout their working lives means that women contribute less to retirement plans, receive lower pensions and lower Social Security benefits. The result is that women have substantially less income than men in retirement and are much more likely to live in poverty as they grow older.”
Among the key findings of the report:
* A woman working full time, year-round earns $10,800 less per year than a man, based on median annual earnings. This disparity can total nearly $500,000 over the course of a career.
* The lower lifetime earnings hit women particularly hard in retirement. Retirement income for women ages 65 and older ($17,400) is 44% less than the median income for men in the same age group ($31,200). Women 75 years and older are almost twice as likely to live in poverty as men.
I work at my local food pantry and many more elderly women come thru the door than men needing assistance. From my limited survey about 5 to 1. I get to see every week the devastating effect first hand on the gender pay gap.
Women often don’t stay in jobs long enough to be eligible for a pension. Currently 33% of female workers have pensions compared to 55% of men.
And when women are working they often put off participating in their employer’s retirement plan because of the immediate needs of their family. Divorce and early widowhood also play into this lack of retirement savings. Average age of widowhood is 56 and the divorce rate is still 50%.
A woman needs to ask for equal pay and she needs to plan for more years in retirement and that means saving more for retirement. A comfortable retirement should be the number one goal and one should have on blinders when it comes to reaching that goal.
Certainly Social Security will be there for many women if they or their spouses have paid into the system, but Social Security was never meant to be your sole source of income in retirement. And with the average benefit for women currently around $1,200 a month that is barely enough to exist on.
Women outlive men usually by six years on average, they are in and out of the job market raising children or caring for elders. Over 15% of middle aged women are sandwiched between those very jobs right now caring for children or grandchildren and elderly relatives. And many are helping to support adult children.
One more thing: The Massachusetts State Treasurer’s Office will facilitate a Women’s Economic Empowerment Series in two pilot cities this fall, Quincy and Newton. Check with their office for more information on how to sign up.