NCPA - National Center for Policy Analysis

Single Women in Retirement Peril

April 16, 2004

Only 35 percent of single women are planning for retirement - holding 401(k)s, I.R.A's or other retirement accounts. They are the least prepared, according to the Federal Reserve. Meanwhile, 63 percent of married couples and 42 percent of single men are currently saving for retirement.

The disadvantages women face are the results of many economic and social factors:

  • They work at low-wage or part-time jobs more often than men, and also for small businesses that can not offer the employee benefits that larger corporations can.
  • Work patterns are also a major factor; women are in and out of the labor force to tend to children and then again to care for aging family members.
  • Women are also more likely to work too few hours to qualify for a pension and are less likely to roll over their lump-sum payments when they leave a job.

According to a Federal Reserve report last year, the median net work of households headed by single women in 2001 was $27,850, compared to $140,000 for married couples and $46,990 for single men.

Some 13.4 million women are likely to be single when they retire over the next few decades, says Jack VanDerhei, an economics professor at Temple University. That is more than one-third of the baby boom women, born between 1946 and 1964.

Retirees will be faced with some hard choices: they'll have to accept decreased mobility, move to lower-cost housing, forgo prescription drugs and eat less or more poorly. The only way to truly improve the situation is with policy changes, such as government matching for low-income savers, an increase in benefits for people over 75, or a caretaking credit for those who stopped working to raise children.

Source: Mary Duenwald and Bernard Stamler, "On Their Own, in the Same Boat," The New York Times, April 13, 2004.


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