What Makes Social Security More Important to Women than Men?


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Social Security Facts of Interest to Women

Social Security retirement benefits are gender neutral. In other words, individuals with identical earnings receive identical benefits. However, the demographics of women indicate that Social Security benefits impact women more than men. The following is a Fact Sheet provided by the Social Security Administration (SSA) that details how the demographic characteristics of women compare to the general population.

  • With longer life expectancies than men, elderly women tend to live more years in retirement and have a greater chance of exhausting other sources of income. They benefit from Social Security’s cost-of-living protections because benefits are annually adjusted for inflation.
    • Women reaching age 65 in 2011 are expected to live, on average, an additional 20.7 years compared with 18.7 years for men.
    • Women represent 56 percent of all Social Security beneficiaries age 62 and older and approximately 68 percent of beneficiaries age 85 and older.
  • The Social Security system is progressive in that lower-wage earners receive a higher percentage benefit than higher-wage earners do. The system returns a greater percentage of pre-retirement earnings to a lower-wage worker than to a higher-wage worker. Women who are low-wage workers receive back more benefits in relation to past earnings than do high-wage earners.
    • In 2011, the median earnings of working-age women who worked full-time, year-round were $36,500, compared to $48,000 for men.
  • In 2011, the average annual Social Security income received by women 65 years and older was $12,188, compared to $15,795 for men. Social Security provides dependent benefits to spouses, divorced spouses, elderly widows, and widows with young children.
  • In 2011, for unmarried women – including widows – age 65 and older, Social Security comprises 50 percent of their total income. In contrast, Social Security benefits comprise only 36 percent of unmarried elderly men’s income and only 31 percent of elderly couples’ income.
  • In 2011, 48 percent of all elderly unmarried females receiving Social Security benefits relied on Social Security for 90 percent or more of their income.
  • Elderly women are less likely than elderly men to have significant family income from pensions other than Social Security. In 2010, only 22.6 percent of unmarried women aged 65 or older were receiving their own private pensions (either as a retired worker or survivor), compared to 27.3 percent of unmarried men.
    • Participation in employer-sponsored retirement plans is increasing for women in today’s workforce. In 2011, 55.2 percent of women employed full-time participated in an employer-sponsored public and private sector plan compared to 52.5 percent of men.  Women generally receive lower pension benefits due to their relatively lower earnings.

(See www.socialsecurity.gov/women for more information about women.)

About ksindell

Kathleen Sindell, Ph.D. is the author of numerous academic, popular, and professional finance articles, Web sites, proposals, and books. This includes the bestselling reference book, "Investing Online for Dummies, Eds 1-5" (listed for two consecutive years on the Wall Street Journal's Bestselling Business Book List). Her most recent book "Social Security: Maximize your Benefits" has been listed in Amazon's Top 100 Bestselling Retirement Planning Books. It is important to note that "Social Security: Maximize Your Benefits, 2nd Edition" was just released. Sindell has an in-depth understanding of the financial services industry and has held Series 7, 63, and 65 licenses. Dr. Sindell is regularly tapped as a financial services expert on ABC World News, The Nightly Business Report, and at popular online and print outlets. Kathleen Sindell, Ph.D. is a member of the Board of Directors for the Financial Planning Association, National Capital Area (FPA NCA), is on the Editorial Advisory Panel of the Journal of Financial Planning, and is Co-Chair of the Metro Washington Financial Planning Day. Sindell is a Course Chair II, CFP Program Academic Officer, and adjunct full-professor at the University of Maryland, UMUC, School of Undergraduate Studies. Contact Information: ksindell@kathleensindell.com or 703-299-1700
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