Collins, Casey Unveil New Report on Barriers Women Face to Retirement Security
Click HERE to read the GAO’s report
Washington, D.C.—There is an estimated $7.1 trillion gap between what Americans are projected to have saved for retirement and what they will actually need. On average, women face a larger retirement savings gap than men and experience higher poverty rates at older ages.
To better understand what can be done to improve women’s retirement security, U.S. Senators Susan Collins (R-ME) and Bob Casey (D-PA), the Chairman and Ranking Member of the Aging Committee, requested a report from the Government Accountability Office analyzing the unique hurdles women face as they prepare for retirement. The report, which Senators Collins and Casey released today, includes the views of older women expressed in 14 focus groups and examines data related to financial security of older women.
“As the Chairman of the Senate Aging Committee, ensuring that more people are better prepared for retirement is one of my top priorities,” said Senator Collins. “Improving women’s retirement security is a significant public policy challenge that requires us to work together to find common ground. After spending years in the workforce and caring for loved ones, women should be able to enter retirement with the confidence that they will be able to live comfortably and maintain their independence as they age.”
“All Americans should be able to achieve financial security in retirement,” said Senator Casey. “As today’s report illustrates, too many Americans are struggling to save, and women face substantial additional challenges that make it more difficult to financially prepare for retirement. This report further emphasizes the need to strengthen and protect Social Security and Medicare, secure workers’ pensions and eliminate pay disparities to ensure that all women are able to be economically secure as they age.”
The GAO has found that women are more likely than men to take time away from work to raise children or care for a child or spouse, which has implications for retirement savings, including Social Security benefits, pensions, and defined contribution plan savings. Women also have higher average life expectancy, resulting in higher expected lifetime health care costs and a greater risk of outliving retirement savings. A woman born in 2020 who reaches age 65 can expect to live to age 90 on average, while a man who reaches age 65 can expect to live to age 88 on average.
In all of the focus groups, women described some level of anxiety about their retirement security. Participants identified several barriers to achieving retirement security, including divorce, widowhood, pay inequality, and caregiving responsibilities. In discussing other hindrances to retirement security, they highlighted the lack of personal financial education, indicating that financial education, beginning in kindergarten and continuing through college, would have helped them achieve greater financial security in retirement. According to the survey data, households with older women that lacked a defined benefit pension plan or a retirement account were more likely to report low retirement confidence.
As the women participating in GAO’s focus groups noted, a lack of personal financial education about savings, investing, enrolling in Medicare, and claiming Social Security can hinder retirement security. In 2019, Senators Collins and Casey held a hearing on the financial security of seniors in retirement and in 2018 held a hearing on the critical decisions seniors face when they turn 65. In 2016, the Committee explored ways seniors can maximize Social Security benefits. Additionally, the reauthorization of the Older Americans Act, which Senators Collins and Casey authored, includes a provision requiring the continued operations of the National Resource Center for Women and Retirement. This center provides basic financial management, retirement planning, and other educational tools that promote women’s financial literacy.
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