NCPA - National Center for Policy Analysis

Older Divorced Women Are Increasingly At Financial Risk

June 28, 2001

Older women -- both married and divorced -- are staying at their jobs longer to supplement their retirement benefits. But while older married and widowed women often have their husbands' pensions to fall back on, older divorced women do not and experts say they are at greater risk because they lack sufficient funds to retire.

  • Widows greatly outnumbered older divorced women until the late 1990s -- but now for the first time, the divorced outnumber widows.
  • That's because of a surge in divorces that started a generation ago, experts point out.
  • Among the nearly 12 million women in their late 50s and early 60s, some 14.4 percent were divorced as of 1998 -- up from 3.8 percent in 1965 and 9.9 percent in 1990.
  • The proportion of older women who are widows, by contrast, declined from 13.2 percent in 1998 from 21.6 percent in 1965 and 17.2 percent in 1990.

Men over the age of 65 average nearly $30,000 a year in income. That's double the average for women.

The Bush administration's recently enacted tax cut addressed the problem by allowing older people to save more in tax-sheltered retirement accounts. The amount of taxable income that can be deducted and placed in a retirement account is being raised over five years from $10,500 to $15,000 annually. For those 50 and over, the upper limit will reach $20,000.

Source: Louis Uchitelle, "Lacking Pensions, Older Divorced Women Remain at Work," New York Times, June 26, 2001.


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