Retirement future bleak for many older women

Several factors lead to financial disadvantages

DALLAS -- Adeline Brown had other plans for retirement.

She never dreamed she'd lose her house and car, be forced to take odd jobs to supplement her Social Security, and stretch her dollars by going to a barbershop instead of a beauty salon.

But once Brown left her accounting clerk's job, her income plummeted to less than $1,000 a month. She quickly exhausted her retirement savings when she paid the bills from a back injury.

``This isn't how my life was supposed to go," she said.

Brown, who is 63 and lives in Oak Cliff, Texas, is one of millions of older women who lives alone and scrambles to make ends meet.

Their median yearly income is $12,080, half of what older men receive.

Long overlooked, they have begun to gain the attention of policy analysts and lawmakers who expect the number of poor older women to swell as 40 million baby boomer women retire.

``Unless there are dramatic policy shifts, boomer women, particularly minority women, will find retirement a never-ending struggle," said Paul Hodge, chairman of Harvard University's Global Generations Policy Institute.

Financially strapped older women are a day-to-day concern for Suzanne Cobb, who runs the money management program at The Senior Source in Dallas, a nonprofit social-service agency.

Most of the older adults who sign up for financial counseling through the Senior Source are women, and most of them depend entirely on their Social Security checks, Cobb said.

Women are more likely than men to spend old age in poverty, in part because many have spent their lives at an economic disadvantage, said Laurie Young, director of the Older Women's League in Washington.

``Women still earn an average of only 76 percent of what men earn," she said. ``That means women have an average of $250,000 less over their working lives to invest in their retirement."

Women also drop out of the workforce for an average of 12 years to care for children or parents. When they do, they forfeit $550,000 in wages over their lifetime, Young said.

As family caregivers, women often take more flexible jobs that come with lower wages and few, if any, benefits. Frequent job changes also make it harder to qualify for pensions.

Women live longer, which makes them especially vulnerable during retirement. They outlive their husbands by an average of six years and, once alone, often have less money to pay the same bills, typically losing a third to a half of their household's Social Security income.

``Most older people live on `fixed' incomes that, except for Social Security, aren't adjusted for inflation," Young said. ``Over 20 years, women's purchasing power can shrink quite a bit."

Cindy Hounsell, executive director of the Women's Institute for a Secure Retirement, warns that most boomer women will run into many of the financial problems their mothers may now have.

``The 20 percent with good-paying jobs won't have any worries, but everyone else will," she said.

Besides building a bigger nest egg, some women have come up with their own ways of improving their finances in retirement.

Cobb at The Senior Source, who's 58, plans to work full time until 68. By delaying her Social Security checks for two years beyond her full retirement age, she estimates she'll receive 16 percent more each month.

``I'm no Rockefeller, but I'm not afraid of the future," she said.

Still, retirement experts agree that women won't be able to improve their fate in old age entirely on their own. They'll need changes in Social Security, employer-sponsored retirement plans, and labor laws.

The most important changes will come in Social Security; 29 percent of unmarried older women depend on it as their only source of income, said Young of the Older Women's League.

``Women shouldn't be penalized for their caregiving when it comes time to figure their Social Security benefits," she said. ``They should be given credit for the unpaid care they've provided."

Social Security also needs to rethink its benefits for divorced women, said Kimberley Strassel, coauthor of the just-published ``Leaving Women Behind: Modern Families, Outdated Laws."

``The number of divorced older women will double as boomers retire," she said.