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Why Are Women at Greater Risk of Poverty in Retirement?

Filed under: Retirement, Life Events

According to data from the U.S. Census Bureau, 16 percent of women age 65 and older live in poverty, versus a 9 percent poverty rate for similarly aged male counterparts.1 Also, women generally earn less income in retirement than men. According to a congressional analysis of Census data, female retirees have a median annual income of approximately $16,000. Their male counterparts have a median income of more than $27,000.2

Why do women face such difficult challenges and greater likelihood of poverty in retirement? There’s no singular answer, but rather a variety of factors. Many women interrupt their careers to care for children and other family members, leaving a gap in their earnings and their ability to save.

There’s also the much-publicized wage gap for women. According to analysis from the White House, in 2014 the average full-time working woman earned 79 percent of what the average full-time working man earned.3 Less earnings usually equate to lower retirement account contributions and lower matching contributions from employers.

Additionally, women live longer than men. According to the Social Security Administration, the average 65-year-old man can expect to live to be 84.3 years old. The average 65-year-old woman can expect to live to 86.6.4 That means women need additional savings to fund living expenses, medical costs and even long-term care during those extra years.

Add up all of these factors, plus others, and it’s easy to see how a woman could have less savings available for retirement than her male counterpart. Fortunately, there are steps you can take to overcome these challenges. Below are two tips to consider as you enter retirement:


Understand your Social Security options.

Social Security plays an important role for all retirees. However, for women who have limited savings and are facing a long life expectancy, Social Security becomes an even more critical component. It offers a guaranteed lifetime source of income, no matter how long you live.

Your decisions on when and how to file for benefits are among the most important you will make in retirement. That’s because those choices are permanent. There’s no way to change your benefit selection in the future.

Your choice mainly comes down to when to file. You are first eligible for retirement benefits at age 62. However, the first age you can take benefits without seeing a reduction is sometime between your 66th and 67th birthdays. If you file for benefits before your full retirement age (FRA), you could see a permanent benefit reduction of up to 30 percent, depending on just how early you file.5

You can also delay benefits past your FRA. In fact, it may be wise to do so. Currently, Social Security offers a permanent 8 percent benefit credit for each year you wait past your FRA. The latest you can start benefits is age 70. If your FRA is age 66 and you file at age 70, you could see a total benefit increase of 32 percent, or 8 percent for four years.6

Consider your income needs and your Social Security options carefully. By delaying your benefits, you may be able to increase your guaranteed income and provide more financial security, especially in the later years of retirement.


Consider other forms of guaranteed* income.

While Social Security can be a helpful financial resource in retirement, it may not cover all your needs. That’s especially true if you took time off of work or if you have a limited earnings history. Career earnings and number of working years are two of the biggest factors in determining your benefits.

You may benefit from exploring other ways to create guaranteed* streams of lifetime income. For example, there are several different types of annuities that can be used to convert personal savings into guaranteed income.

Single premium immediate annuities can be used to turn a lump sum into a retirement lifetime income stream based on your age and other factors. Many indexed annuities offer downside protection and also have optional features that offer a guaranteed* lifetime withdrawal rate, regardless of how the annuity performs.

For more information, talk to a financial professional. Contact us at Ambrose Financial & Insurance Services in Walnut Creek, California. We can help you identify your challenges and develop strategies to reach your retirement objectives. Let’s connect soon and start the conversation.


*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.








This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit

CA Insurance License No. 0F95178

16069 – 2016/8/31