Sunday, January 15, 2006

retirement living patterns, women's

Because women live longer than men and normally marry men older than themselves, the majority of women spend part of their lives as widows, and many spend part of their last years living by themselves. Three quarters of men over age 65 are married, but over half of women in that age group are widowed. At age 75 close to 70 percent of women are widows, while close to 70 percent of men are still married. In terms of living alone, from age 65-74 about 35 percent of women dwell solo compared to 15 percent of men, and at 75 more than half of women do so compared to less than one quarter of men. Women's life patterns have changed dramatically since the 1950s when motherhood and homemaking were still the norm. Because women in past times spent comparatively little time in the paid work force, many of them in the current older generation have experienced financial disadvantages in late life-without pensions of their own and reduced benefits from their spouse's pension after his death.
Greater participation by women in the paid work force has brought some improvement in recent years, but the statistics still show that women over age 65 have a median income of less than $7,000 compared to $12,000 for men. This is true in spite of a relatively greater increase in the average income for older women, up 87 percent since 1962 compared to 72 percent for men. Factors that have contributed to the improvement of the financial circumstances of older women have included Congressional reform of the Social Security Act and, in 1984, the adoption of the Retirement Equity Act. The original Social Security Act was designed for families and provided benefits for wives alone at age 64. Benefits were later extended to divorced former wives, and a special minimum benefit was introduced for long-term, low-wage workers-a category that fitted many women.
The Retirement Equity Act also included a section designed to counter the too-frequent practice where husbands took a full pension benefit during their lifetimes rather than taking a reduced benefit that would have continued payments to their wives after their death. Under the Retirement Equity Act men in government or private industry pension programs must secure the consent, written and witnessed, of their wives to any decision to bypass pension income options that provide income to a surviving wife on the death of the husband.
Today, 70 percent of women between age 25 and 54-the period of life when employment is most typical-participate in the paid workforce, and this figure is expected to rise to 80 percent by the year 2000. Because of this, women's late-life financial circumstances should improve-most women are now building up their own independent Social Security and private pension plans. In general, women today need to think seriously about re-entering the paid workforce if they discontinue their employment to raise families during part of their lives. Their probable status as widows also suggests that they need to plan for a period of active and independent living during their senior years.
Gardner, M. "Now Retirement Is a Women's Issue, Too," in Aging, Goldstein, E. C., ed. Vol. 2, Art. 14. Boca Raton, Fl.: Social Issues Resource Series, Inc., 1981.
Schulz, J. H. The Economics of Aging, 4th ed. Dover, Mass.: Auburn House Publishing Company, 1988.

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