American women are facing a much bigger retirement crisis than men. They are likely to earn less during their working lives, and then to live longer after they retire. And if they take on extra unpaid responsibilities instead of paid work, such as looking after children, elderly parents, or — most financially devastating of all — a sick or disabled spouse, the problem gets even bigger.

So reveals a recent study from the National Institute for Retirement Security, a think tank.

And it raises the issue of what people can do about it—both as individuals, taking responsibility for their own retirements, and together through public policy.

“Older women receive approximately 80 percent of the retirement income that older men receive,” report researchers Tyler Bond, Joelle Saad-Lessler and Christian Weller.

The 20% gap between men and women’s average retirement income, says the NIRS, is about the same as the ‘gender pay gap’ during working years.

The gap really gets worse in later retirement, as more women become widows, they note.

“Women experience a steep decline in income past 80,” they write. “Women age 80 and older are much more likely to be widows… Health care costs and long-term care costs in retirement are challenging for most people, but can be more so for women, who bear these costs for longer and may have already spent down assets if their spouse predeceases them.”

This isn’t new. “Women with husbands who are 2.5 years older should expect to be the sole breadwinner of their households for over a decade,” says Diane Garnick at TIAA.

Sandra Gilpatrick, a financial planner in Boston who specializes in helping female clients, says many women are caught in a vicious circle. “Women are still the primary care givers to both their older parents and to young children,” she says. “Trying to balance a job with care giving obligations is a losing workforce proposition.”

If women work fewer hours, they earn less money and miss out on promotions. They also have less money available to sock into their 401(k) or equivalent. Oh, and if they earn less money over their careers they’ll also get a smaller Social Security check, she adds.

Labor economists note the gender pay gap has multiple causes, such as career and life choices, in addition to direct sexual discrimination. Regardless, it’s there and the effects on retirement can be severe.

Women earn less than men, on average, during their careers. Women who take time out to raise children lose years of working credits toward Social Security and possibly other pension plans. And women who work part time, such as while raising children or after children go to school, may be ineligible for participation in a company’s 401(k) plan or equivalent. Women are nearly twice as likely as men to be working part time, the NIRS researchers point out.

All of this adds up.

In total, the researchers argue, 27% of American women over 65 are poor or “near poor,” compared with 20% of American men.

On the other hand, say researchers, women who get and stay married, and those who have children young or not at all, are far less likely to face a retirement crisis than their peers.

So too, are those who choose public-sector careers, such as teaching, that come with solid final salary pension plans (though the funding issues in many of those plans may raise concerns for the future).

“Women in a first marriage, especially one in which both spouses work and both spouses save, have the best retirement outcomes,” says the NIRS. “Married older Americans, both men and women, fare better in retirement than any group of non-married older Americans, whether divorced, widowed or never-married.”

Just 13% of married women over 65 are poor or “near poor,” they report.

The figure among divorcées over 65? Try 35%.

(Meanwhile the rates of poverty, and near poverty, for the over 65s who’ve never married are more than 40%. And that’s true for men as well as women.)

But what is to be done?

There are clear public policy measures that would be likely to help, such as eliminating unfair pay disparities, and providing more taxpayer support for child care costs so more young mothers could go back to work earlier. Public policy measures that helped the retirement crisis across the board would benefit both sexes.

More companies offering paternity leave is another social or public policy change that could move the dial, notes Gilpatrick. “What I would love to see happen is men taking paternity leave! Having more men take advantage of their workplace paternity benefit will help ease the burden on working women.”

But while we are waiting for these things to happen, there are practical things individuals, particularly individual women, can do right now to help their situation, advisers point out.

Gilpatrick highlights two: Spousal IRAs for stay at home moms, and long-term care insurance.

A spousal IRA is simple. It lets you sock away up to $6,000 a year in pretax money for your retirement, even if you’re not working but your spouse is.

Long-term care insurance, notes Gilpatrick, is especially important for women.

“Most long term care needs are at the end of life,” she says. “So who will be there to help if you outlive your spouse? Also, being a caregiver takes both an emotional and physical toll. Wives who may be expected to care for their husbands can see their own health rapidly devolve. I worry most about women who are a decade plus younger than their husbands without long term care planning.”

Meanwhile, if women face a bigger retirement challenge than men they need to invest at least as aggressively for long-term accumulation, if not more so. Instead, the reverse is true.

A remarkable study by Mass Mutual, the insurance company, a few years back found that women overall admitted they were less confident about making financial plans and less confident about handling investments. The gender gaps were simply amazing. For example, women who had college degrees still felt less confident about investing their retirement savings than guys who had dropped out of high school. Men with degrees were twice as likely to feel comfortable handling their retirement investments as women with degrees.

Women are also much more likely to be worried about stock market volatility and investment “risks,” the study found. The overall result was that, basically, women tended to be underinvested in stocks by a wide margin. Men were 26% more likely to invest their savings for growth. TIAA found similar results. Men were more likely to invest in stocks and mutual funds. Women typically held more cash.

This—like the roots of the gender pay gap—is another hot academic topic. Are women more likely to be risk-averse due to nature or nurture? You can find studies arguing either way. But, once again, it doesn’t really matter when it comes to retirement planning.

Holding cash or bonds isn’t going to get most people to their retirement goals. Avoiding the stock market because you don’t understand volatility is just leaving money on the table, regardless of your sex or anything else. The investment returns from so-called “risky” or volatile assets, such as stocks and real-estate investment trusts, beat the alternative into a cocked hat over any reasonable stretch of time.

The gap is so big that even if you bought a global stock index at the worst moments in the past 20 years—just before the crashes of 2000-3 and 2007-9—and held on, you would be better off today than if you would held your money in short-term, “safe” bonds. Even the worst long-term returns from stocks beat “safe” investments.

Ironically, studies have also found that women tend to make better investors than men over time because they are less prone to overconfidence, and they are less likely to trade needlessly.

An intriguing experiment found that one of the fastest ways to improve the investing performance of men and women was to get them to participate in a stock trading game for a few weeks. Researchers found that by the end women were more confident, and men were less overconfident. Both ended up better off.

“What I do see from my professional experience is when women can receive financial education about concepts like inflation eating away at low risk assets and learn about risk assets in an appropriate long term allocation, they are more willing to take on the diversified portfolio,” says Gilpatrick. “I like to educate my clients, as it helps to give them a good level of comfort and confidence to invest in a diversified portfolio. As women live longer, it is even more important for them to take on risk assets to strive to achieve returns to help make their longer life expectancy.”

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