[US] Retired Women Face Poverty

from The Monterey County Herald

Median annual income half of older men's
By BOB MOOS
The Dallas Morning News

DALLAS - Adeline Brown had other plans for retirement.

She never dreamed she'd lose her house and car, be forced to take odd jobs to supplement her Social Security and stretch her dollars by going to a barbershop instead of a beauty salon.

But once Brown left her accounting clerk's job, her income plummeted to less than $1,000 a month. She quickly exhausted her retirement savings when she paid the bills from a back injury.

"This isn't how my life was supposed to go," she said.

Brown, who is 63 and lives in Oak Cliff, Texas, is one of millions of older women who live alone and scramble to make ends meet. Their median yearly income is $12,080, half of what older men receive.

Long overlooked, these women have begun to gain the attention of policy analysts and lawmakers who expect the number of poor older women to swell as 40 million baby boomer women retire.

"Unless there are dramatic policy shifts, boomer women, particularly minority women, will find retirement a never-ending struggle," said Paul Hodge, chairman of Harvard's Global Generations Policy Institute.

Financially strapped older women are a day-to-day concern for Suzanne Cobb, who runs the money management program at The Senior Source in Dallas, a nonprofit social service agency.

Most of the older adults who sign up for financial counseling through the Senior Source are women, and most of them depend entirely on their Social Security checks, Cobb said.

"Some people come to us with a fistful of credit cards and as much as $50,000 in debt," she said. "In those cases, we try to sit down with their creditors and negotiate reduced payments."

Women are more likely than men to spend old age in poverty, in part because many have spent their lives at an economic disadvantage, said Laurie Young, director of the Older Women's League in Washington.

"Women still earn an average of only 76 percent of what men earn," she said. "That means women have an average of $250,000 less over their working lives to invest in their retirement."

Women also drop out of the work force for an average of 12 years to care for children or parents. When they do, they forfeit $550,000 in wages over their lifetime, Young said.

As family caregivers, women often take more flexible jobs that come with low wages and few, if any, benefits. Frequent job changes also make it harder to qualify for pensions.

Women live longer, which makes them especially vulnerable during retirement. They outlive their husbands by an average of six years and, once alone, often have less money to pay the same bills.

Widows typically lose a third to a half of their household's Social Security income when their spouse dies.

Women who reach 65 can expect to live another 20 years.

"Most older people live on 'fixed' incomes that, except for Social Security, aren't adjusted for inflation," Young said. "Over 20 years, women's purchasing power can shrink quite a bit."

Cindy Hounsell, executive director of the Women's Institute for a Secure Retirement, warns that most boomer women will run into many of the financial problems their mothers have.

"The 20 percent with good-paying jobs won't have any worries, but everyone else will," she said.

Besides building a bigger nest egg, some women have come up with their own ways of improving their finances in retirement.

Cobb at The Senior Source, who's 58, plans to work full time until 68. By delaying her Social Security checks for two years beyond her full retirement age, she estimates she'll receive 16 percent more each month.

"I'm no Rockefeller, but I'm not afraid of the future," she said.

Still, retirement experts agree that women won't be able to improve their fate in old age entirely on their own. They'll need changes in Social Security, employer-sponsored retirement plans and labor laws.

The most important reforms will come in Social Security; 29 percent of unmarried older women depend on it as their only source of income, said Young of the Older Women's League.

"Women shouldn't be penalized for their caregiving when it comes time to figure their Social Security benefits," she said. "They should be given credit for the unpaid care they've provided."

Social Security also needs to rethink its benefits for divorced women, said Kimberley Strassel, co-author of the just-published "Leaving Women Behind: Modern Families, Outdated Laws."

"The number of divorced older women will double as boomers retire," she said.

A marriage must last 10 years before a divorced spouse can claim benefits based on a former spouse. Since most divorces now occur within seven years, that rule is out of date, Strassel said.

Pension laws also should be updated to account for the growth in 401(k) retirement plans, said Alicia Munnell, director of the Center for Retirement Research at Boston College.

The Senate's Special Committee on Aging recently held hearings on how to narrow the gender gap in retirement income and improve women's financial security in old age.