Retirement planning for women and men

Men Live 79% as Many Years in Retirement as Women, because women live longer (81.2 years versus 76.4 years), according to statistics from the United States Department of Health and Human Services. Living longer and needing more money for the extra years for health care, medical expenses and long-term care needs creates serious problems for women

The OECD (Organisation for Economic Co-operation and Development), a group made up of 35 mostly highly-developed market economies keeps data on this. The OECD average in 2014 was 17.6 years of retirement for men and 22.3 years of retirement for women.

Here are the figures for six particular OECD countries of interest.

Country	U. S. A	Canada	U.K.	Australia	France
Men’s Year	17.1	18.8	18.8	18.8	23
Women’s Years	20.7	23.7	22.7	23.7	27.2
Percentage	83%	79%	83%	79%	85%

Note that this does not count people who leave the labor market before the age of 40, including many mothers with young children. The OECD thus cautions that their figures under-estimate how many years of retirement women have:

This indicator does not, therefore, capture the labour market behaviour of all women of working age, which leads to an under-estimation of the expected duration of retirement for women. The magnitude of this effect varies across countries.

The OECD data set also includes four major non-OECD countries, where the gender gap in years of retirement is much bigger.

Interestingly, simply calculating years of retirement using retirement age and life expectancy by country from Wikipedia actually yields substantially larger gender gaps in these non-OECD countries. This method tells us that Russian men get not 65% but a mere 24% of Russian women’s retirement years. The reason for the discrepancy between the OECD and this method is unclear.  the OECD’s has a more sophisticated method of calculation and just note the difference here at the end.

Living longer in retirement may be a good thing if one has saved enough money, but women don’t save as much as men.  A Wells Fargo survey of over 1,000 Millennials ages 22 to 35 found that the majority of women (61 percent) said their finances were “stretched too thin to save for retirement.” In fact, about 54 percent of women said they were living from paycheck to paycheck. Those saving for retirement are only putting aside an average of 5.7 percent of their salary, as compared with 7.3 percent for their male counterparts.

As a result, women were 80 percent more likely than men to be impoverished at age 65 and older, while women age 75 to 79 were three times more likely to fall below the poverty level than men the same age.

To understand why, consider this: Working women, on average, earn less than their male counterparts, Wage gaps among women who hold full-time jobs, are shocking. White, non-Hispanic women are paid 80% of men’s, according to the Economic Policy Institute, a non-profit, nonpartisan group. African-American women are paid, on average, 66.8% – and Latinas just 61.5% – for every dollar earned by white, non-Hispanic men. This means that women have less money to save for retirement.

For older women, the good news in terms of financial well-being is that a large fraction of women are working in full-time jobs past their 60s and even into their 70s, according to a study, “Women Working Longer: Facts and Some Explanations,” by Claudia Goldin and Lawrence F. Katz, Harvard University economists. In fact, the United States Bureau of Labor Statistics projects that by the end of this decade, about 20 percent of women over 65 will be in the labor force.