From now until 2030, 30.4 million Americans are expected to turn 65. Women entering retirement face more financial risks, research finds.
Women, part of the wave of baby boomers reaching ‘peak 65,' are more likely to struggle in retirement, research findsWomen who are entering retirement now face more financial risks, new research finds.
And women — who make up 52% of those"peak 65" boomers — are more likely to struggle in retirement compared with their male peers, according to a"There is a very persistent disparity between the assets of men and the assets of women," said economist Robert Shapiro, study co-author and former undersecretary of commerce for economic affairs, during a Thursday morning presentation. Feeling out of the loop? We'll catch you up on the Chicago news you need to know. Sign up for the weeklyA majority of those baby boomers are not financially prepared for retirement, according to the research. As income from employer pensions has largely diminished or disappeared, individuals who enter retirement age are now more dependent on personal savings and Social Security.People who are Black, Hispanic, or without college degrees are also at higher risk for financial insecurity in this later stage of life, according to the report's findings. On the flip side, the peak boomers who are best poised to financially handle the retirement phase of life are men, white people and those with college degrees, the study said. Individuals in those categories are more likely to have multiple types of retirement accounts and larger balances, according to the research.Yet, while the median savings is $269,000 for men, it is just $185,000 for women. Here's a look at more coverage in CNBC's Women & Wealth special report, where we explore ways women can increase income, save and make the most of opportunities.How to prepare for the ‘survivor’s penalty’ before a spouse passesThat includes defined contribution plans like 401 plans, individual retirement accounts, investments outside of retirement accounts, savings accounts and home equity. "This shouldn't be surprising in the sense that there are persistent disparities in earned income between men and women, and savings comes out of earned income," Shapiro said.For example, the study said there is a disparity of about 33% between the median Social Security benefit for retired peak boomer men. Men get about $28,400, while women $21,400, according to the study. While boomers of both genders are equally likely to own annuities, the average initial payout is $15,700 for men compared with $13,700 for women, according to the results. By 2030, an estimated 48,400 peak baby boomers will qualify for Supplemental Security Income, federal benefits for individuals who are 65 and over, disabled or blind and who have little or no income or resources. That is anticipated to include 69% of women versus just 31% of men. To help women become better prepared for retirement, it's necessary to address the root causes, explained Caroline Feeney, executive vice president and CEO of U.S. businesses at Prudential Financial.Additionally, women live on average six years longer than men, which means they need more savings. Because women on average often have a lower risk tolerance, that typically translates to lower returns on the money they do have set aside. Moreover, because two-thirds of all caregivers are women, that often requires them to sacrifice income they could otherwise earn for that time. "You pull all of that together, of course it makes it far more difficult for women to be able to be in a position to live a secure financial retirement," Feeney said. While employers can help address those root causes, the financial industry also needs to make expert guidance more appealing to women, she said. "There are no silly questions, they should rely on the financial experts," Feeney said."Unfortunately, we've made this a little bit complicated sometimes in terms of our solutions and products."
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