November 1997

Women in Retirment

Today, women are an established presence in the work force. In 1960, 35.5 percent of all women were in the civilian work force. By 1996, that portion had increased to 59.3 percent.

The majority of working women (72 percent in 1996) were concentrated in three industries: services, 35.7 percent of all working women; retail trade, 19.7 percent; and state and local governments, 16.6 percent.

Retirement plan sponsorship rates for these three industries in 1993 were: services, 52.8 percent; retail trade, 43.9 percent; and state and local governments, 90.8 percent.

Overall, an increasing number of working women work for an employer that sponsors a pension plan. The sponsorship rate for working women rose from 52 percent in 1979 to 58 percent in 1993. By contrast, the sponsorship rate for men declined over the same time period from 59 percent to 56 percent.

In addition to a retirement income plan, individuals need to be aware of the need for retiree health insurance, as Medicare does not cover all expenses. An employment-based retiree health plan is a good supplement to Medicare. In 1993, 24.0 percent of working women ages 45 and older had retiree health insurance available throughout their retirement years, compared with 33.0 percent of men.

Women live longer than men do. When planning for retirement, women should keep this fact in mind. At age 65, the average woman is expected to live another 18.9 years; the average man is expected to live another 15.3 years.

Women who do receive retirement benefits receive significantly lower benefits than men. Among women who were ages 65 and older in 1995, 26.4 percent received income from an annuity and/or an employment-based pension plan, with an average pension of $6,684. Among men ages 65 and older in 1995, 46.4 percent received annuity and/or pension income averaging $11,460.

Retired women also receive a lower monthly benefit from Social Security than men do. In 1995, the average monthly Social Security benefit for retired women was $621.20, compared with $810.20 for men.

Women on average earn less in wage and salary compensation than men do, which accounts for at least part of the reason women receive lower benefit payments from Social Security and employment-based pension plans. In 1996, the average weekly earnings for women were $418, compared with $557 for men. A woman's average weekly earnings were 75 percent of a man's in 1996.

Women today are less confident in their overall retirement income prospects. In 1997, 18 percent of women said that they were very confident in their overall retirement income prospects, compared with 32 percent of men.

Fewer women than men expressed confidence in their personal financial preparations in 1997 -- 27 percent of women, compared with 36 percent of men.

When asked to rank the most important source of retirement income, the number one choice for both men and women was "money you put into savings/retirement plan through work," 28 percent for both. The second and third choices for both men and women were employer-funded retirement plan (25 percent of men and 23 percent of women) and own personal savings/investments (24 percent of men and 22 percent of women).

For more information, contact Ken McDonnell, (202) 775-6342, or see EBRI online at
Source: EBRI Databook on Employee Benefits, fourth edition, 1997; and the 1997 Retirement Confidence Survey.