NCPA - National Center for Policy Analysis

Mothers' Retirement Dilemma

May 14, 2003

Many mothers do not have adequate retirement resources, warns NCPA Senior Fellow Celeste Colgan, including personal savings, employer-sponsored retirement plans and Social Security benefits.

Some 70 percent of mothers of school-age children work; but compared to childless women and married men, working mothers have meager means to build retirement income.

One reason is that they are in and out of the workforce.

  • During childbearing and child-rearing years, women are three times likelier to be out of the work force than men, and as a result mothers have less job tenure than do men of the same age.
  • That means they do not have long-term participation in their employers' retirement plans; furthermore, when they change jobs they are more likely than men to cash out of their 401(k) -- mainly for children's education and family emergencies.
  • By comparison, single, full-time working women who live alone earn 28 cents more per hour than do their male counterparts; they are also rewarded by public and employer-sponsored retirement systems that favor steady, long-term employment.

The lower earnings of mothers and the five-year longer average lifespan of women are reasons why 70 percent of seniors living in poverty are women.

Even after working full-time after their children are gone, mothers often have dismal returns for the payroll taxes they contribute. That is because few women, and almost no mothers, worked when Social Security was designed 60 years ago.

Today, if workers had access to private retirement accounts within Social Security, mothers' contributions could continue to grow with capital markets when they are out of the work force. And if they could continue to contribute to tax-sheltered savings plans at the same rate as while working, mothers would not be punished for taking time for their children.

Source: Celeste Colgan (NCPA senior fellow), "Mother's economic trade-off," Washington Times, May 11, 2003.


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