Women and a Secure Retirement: Two Steps Forward, One Step Back

Despite the social and economic gains made by American women in the last three decades, their move toward a secure retirement has resembled a long, slow dance—two steps forward, one step back.

Today's working women enjoy unprecedented opportunities for job growth and advancement. But the gender-related issues they face, particularly the cultural expectation of women as caregivers, could jeopardize their future.

"Today women are much more committed to work, they’re better educated and they earn more. But a disproportionate number of women take time off when the family needs a caregiver, and that carries over into retirement to their detriment," says Heidi Hartmann, president of the Institute for Women's Policy, a research group in Washington.

Intermittent employment patterns, lower earnings than men, and jobs that often don't provide employer-sponsored retirement plans place women at risk for living in poverty in their later years. Nearly one-third of single women 65-plus are classified as poor. Thirty percent of unmarried women 65 and older live solely on Social Security.

And more than one-third of the nation's women can expect to live to at least age 90, meaning their retirement income has to stretch farther.

"The reality of women's lives makes it almost impossible for them to save adequately for retirement," says Laurie Young, executive director of the Older Women's League, a nonprofit group in Arlington, Va. "I get lots of requests for help from women, but it's not because they're doing anything wrong. The system is really stacked against them."

Despite the odds, women are making headway. They're in the labor force today in record numbers—59 percent of women in 2005, up from 44 percent in 1970. They also have higher salaries, more child-care options and better access to retirement systems, such as IRAs and 401(k) plans.

But for stay-at-home mothers, there's little opportunity to save for retirement. Bills introduced in March by Sen. Sam Brownback, R-Kan. (S 816), and Rep. Lee Terry, R-Neb. (HR 1421), could change that. The Parents' Tax Relief Act would allow nonworking mothers to earn Social Security work credits for years caring for children under 7 years old.

Many women's advocacy leaders support the measure. Congress must act to help shore up retirement security for women, says Cindy Hounsell, executive director of the nonprofit Women's Institute for a Secure Retirement in Washington.

"When you look and see when women become poor, 75 and 85 are when the problems really hit because if they were married, they're likely to be widowed," Hounsell says, adding that a wife's income drops dramatically when her husband dies.

Lynn Rollins, 64, of New York, knows about the financial struggle that follows a spouse's death. Her husband, who handled their finances, died of pancreatic cancer in 1991. Rollins, who stayed home to raise her children for six years and worked part time for another seven, returned to school and now does fundraising.

"Saving for retirement wasn't something I thought about," she says. "I figure out every single day if I have enough ... and I think, OK, how long can I live? I'm not in horrible shape but I'm nervous."