New report lays out how the gender pay gap becomes a retirement wealth gap

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New research outlines a range of factors that help explain why women face such an uphill climb in funding their retirement.

The report from the National Institute on Retirement Security found that median household income for women aged 65 and older was just 83% of median household income for men in 2016.

The disparity is not because of differences in retirement participation rates when working. The gap stems most notably from women’s lower earnings throughout their working lives. The ‘strong effect’ of caregivingOne finding from the report – which analyzed data from the Census Bureau’s Survey of Income and Program Participation from before the coronavirus pandemic – was a strong negative economic effect from the fact that women typically take on the lion’s share of caregiving responsibilities.

Other factors, like divorce and health"Divorce is essentially a heavy penalty on women's economic security," says Weller, pointing to how “it becomes much harder for the divorced woman to regain their earnings." Another factor is health. While women tend to live longer they also “often struggle with more health issues in their 60s and thereby have to leave the labor market sooner than men,” says Weller.

 

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