Women face unique challenges in retirement

As Social Security coffers diminish and private and public pension funds are rocked by poor performance and corporate scandals, there have been a great deal of questions as to whether the retiring generation of baby boomers and those that follow them will be able to afford retirement.

However, in the search for a solution to what looks to be an increasingly large problem, one issue has been overlooked: the unique challenges women face in saving for and affording retirement. But a new project funded by the Heinz (ketchup) Family Philanthropies is shedding light on the issue and trying to empower women with the information they need to overcome the retirement savings obstacles they will undoubtedly face.

Heinz Family Philanthropies and The Women's Institute for a Secure Retirement recently released an e-book, entitled "What Women Need to Know About Retirement." This new book provides basic information on retirement savings, Medicare, long-term care and related retirement issues and includes a glossary that explains financial terms and concepts and contact information for government agencies and other sources.

The unique challenges and problems that women face have not been as extensively documented as those of their male counterparts. As a result, women make the trek towards retirement and retire with less information that addresses their specific challenges than others.

And the statistics show why women need that information. The role of women as primary caregivers reduces their income and earning potential over the course of their careers. As a result, upon retirement they receive reduced Social Security and pension benefits.

In addition, because women spend less time overall on the job and earn less, the amount of money they can contribute to a 401(k) or a similar retirement savings accounts is limited. The reduced savings, coupled with the fact that women have longer life expectancies than their spouses impose unique financial hardships for women when they retire.

The Women's Institute for a Secure Retirement compiled the following statistics about women and retirement:

• For 25 percent of unmarried women, the only source of income is Social Security.
• The median income for retired women was almost one-half ($12,080) of that of retired men ($21,102) in 2004.
• Two-thirds of working women earn less than $30,000 a year in jobs without pensions. Nearly half of all women work in low-paying jobs without retirement plans.
• On average, women spend 27 years in the work force while men work almost 40 years. But a woman who reaches 65 is likely to live until 84 or 85, about four years longer than a man.
• According to the Social Security Administration, fewer than 20 percent of women 65 or older received private pension income in 2000, with a median annual income from pension payments of $4,164.

These statistics are truly alarming and should serve as a wake up call to the nearly 40 million women who will retire over the next twenty years. It is clear that more needs to be done to educate and prepare women for the unique challenges they may face during retirement.