1	“The Female Factor” Why women face greater retirement risk and what can be done to help beyond employer-based retirement programs By Cindy Hounsell and Pat Humphlett Co-released by WISER (Women’s Institute for a Secure Retirement) and ASR (Americans for a Secure Retirement)
2	High Retirement Risk Facing the Nation 77 million baby boomers are moving closer to retirement age. Increased life expectancy combined with the decline in traditional retirement programs could create a significant retirement security problem for these retirees. Never before in history have so many individuals had the difficult challenge to support themselves financially for decades after retirement. With a majority of individuals not participating in employer-based pensions, and Social Security today only covering approximately 42% of earnings, millions of Americans are at risk of a drastic reduction in their standard of living in retirement. Most Americans know that they must save for retirement, but give very little thought to how they might make those savings last the expected 20-30 years beyond age 65.
3	Women Face Especially High Retirement Risk Several factors, including longevity and socio-economic issues, play into the financial challenges women will face in retirement. Women live longer than men and therefore have to prepare for a longer retirement. Women are also much more likely to spend some of their retirement years alone due to widowhood or divorce. Women have less income than men to stretch over a longer number of years in retirement. Women are less likely to receive benefits from employer-based retirement plans due to fewer years in the work force.
4	Study’s Key Findings Women Earn Less Wages, Accumulate Less Benefits Than Men Over a lifetime, a typical college educated woman earns approximately $523,000 less than her male counterpart. Consequently women have difficulty accumulating sufficient resources to last their long lifespan. Current Income Levels Show Risks Ahead for Baby Boomer Women In 2003, the median income of women aged 65-74 was $12,143 compared to $23,161 for men. Women Save Less, Receive Less Retirement Income In 2002, women aged 65 and older had a median asset income of only $1,028 a year. Women Need Additional Assets to Last a Lifetime, Annuities Can Help Most women live 20-30 years in retirement. By taking the risk and guesswork out of saving, annuities can help women ensure a regular stream of income to augment Social Security and other savings they may have.
5	Retirement Risks for Older Women I. Life Expectancy Women in general live longer than men, and life expectancies are increasing. The number of women over age 85 is expected to double or even triple over the next 40 years in the United States. Women who are 65 years old today (at retirement age) have an additional life expectancy of almost 20 years, throughout which their retirement income must last.
6	Retirement Risks for Older Women
7	Retirement Risks for Older Women III. Income Disparity and Work Patterns During their work years, women on average earn less and have fewer full-time years in the workforce than men. On average, women earn 76 cents for every dollar earned by men. Women’s earning and work patterns lead to lower savings and retirement income, ultimately resulting in a greater risk of poverty in old age. In 2003, women working full-time earned a median salary of $30,724, compared to $40,668 for men.
8	Retirement Risks for Older Women Poverty in Old Age • Women aged 65 and older have a median income of $11,845 compared to $20,363 for older men, only about 58 percent of what men receive.
9	Limitations on Retirement Income Women have weaker safety nets As a result of women's lower earnings and unique work patterns, women typically have smaller Social Security income, less income from employer-based retirement plans, and fewer personal savings. As women spend their savings in old age, benefits become thinner and thinner, as shown in the diagram below.
10	How Annuitization Fits In
11	How Annuities Work Lifetime annuities are financial products that guarantee a fixed stream of income for life. Annuity payments last for as long as the beneficiary and they never decline. Annuities protect against investment risk through insurance against a drop in returns, which results in a guaranteed income each month.
12	Conclusion Women are unique when it comes to retirement—The many risks that are highlighted throughout this study make it clear that women must plan differently from men in order to secure their retirement. Women’s unique circumstances, call for unique policy—Policy makers should aim to incentivize secure retirement planning through the use of retirement vehicles such as annuities. Why should policymakers care about annuitization? To help women achieve lifelong financial security – to live independently and healthy in retirement (i.e. maintain a decent standard of living) To limit the future fiscal pressures that will be placed upon federal, state and local means-tested programs at a time when they’ll already be under significant financial stress.
13	About The Authors Cindy Hounsell, J.D.—Executive Director of the Women’s Institute for a Secure Retirement (WISER) Ms. Hounsell has served as a delegate to several White House Conferences and Summits, testified before Congress and written several columns and papers on women’s retirement issues. She is co-author of What Every Woman Needs to Know About Money and Retirement: A Simple Guide, a booklet that appeared in Good Housekeeping magazine and Attaché magazine. Pat Humphlett, J.D.—an attorney experienced in assisting women with pensions, divorce, and retirement problems. A consultant for WISER, she has co-authored several booklets including Seven Life Defining Decisions and Making Your Money Last for a Lifetime.
14	“The Female Factor” Why women face greater retirement risk and what can be done to help beyond employer-based retirement programs By Cindy Hounsell and Pat Humphlett Co-released by WISER (Women’s Institute for a Secure Retirement) and ASR (Americans for a Secure Retirement)