NCPA - National Center for Policy Analysis


July 8, 2008

Last week the Associated Press reported on a study that revealed four out of five workers are not saving enough for retirement and women are at a significant disadvantage in this area.  The study, done by Hewitt Associates, showed that while both men and women contribute to retirement plans, women have an 8 percent greater shortfall in savings. 

The reason why women are at a disadvantage for saving for retirement is because our tax and labor laws make it that way, , says Terry Neese, a distinguished fellow with the National Center for Policy Analysis (NCPA).


  • Women work part-time at a much higher rate than men, which gives them flexibility to raise children and care for their families' needs, but also makes them less likely to qualify for employer-provided insurance.
  • When this happens, they are forced to purchase their own health insurance outside the workplace, which our tax laws discourage through much higher tax burdens.
  • Women are also more likely to switch jobs than men because of care-giving responsibilities, which lead to either a complete loss of benefits or, at the least, a significant decrease of benefits.

There are several solutions to fix this problem so that women can save for retirement, just as easily as men, says Neese:

  • Update tax and labor laws so that they are applicable to today's working people.
  • Allow part-time workers to accept lower wages in exchange for health care benefits.
  • Create a level playing field under the tax law so that people that purchase health insurance on their own obtain just as much tax relief as people who get health insurance through their employer.
  • Create portable health and retirement benefits, so that people are not penalized when they switch jobs.

Source: Terry Neese, "Why Do Women Have Less Retirement Security?" National Center for Policy Analysis, July 3, 2008; and "Women Saving Less Than Men For Retirement,", July 1, 2008.

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