Women continue to earn less money than men, but the gender pay gap extends beyond the workplace. It significantly impacts retirement savings.

It’s a well-documented fact. Through their working lives, women earn less than men.1 While it’s difficult for women who still work, the gender pay gap is a greater problem for retiring senior women.

Some strides have been made in the area of equal pay, but it’s occurring at a snail’s pace. If you examine men and women’s retirement income, you’ll see the impact of the gender pay gap over time. On average, a 65-year-old woman is living on a median retirement income around $16,000 a year. Her male counterpart’s income in retirement is about $27,612 – a difference of “roughly $11,000” annually. Earning and saving less overtime, “women are twice as likely as men to live below the poverty line during retirement.”2

How Did We Get Here?

Since women earn less, their ability to save is also lessened. The result is senior women enter retirement with a much smaller nest egg.

Earnings and years in the workforce determine how Social Security benefits are accrued. Usually, it’s women who take time away from their careers to care for children, aging parents or a sick spouse. These gaps in employment can affect the amount of benefits women receive. Benefits are calculated based on the top 35 years of employment. For women leaving the workforce during years of peak earning potential, it could result in a smaller benefit through retirement.2

The life expectancy for women is around five years longer than men.3 Many senior women find themselves stretching a meager retirement fund to cover the rising costs of living and healthcare.

What Can Be Done?

Since we don’t know what life will deal us, we need to plan ahead. The younger a woman is when she begins saving for retirement the better. This increases the chance that she can maintain a good quality of life on savings that she won’t outlive. Women should meet with a financial advisor and develop a realistic strategy for the future. They should go into the process knowing there may be course corrections along the way. But for the woman who is pro-active, retirement can be secure and peaceful.

Here are some examples of the gender pay gap in four parts of the United States.

A chart showing the gender pay gap in four U.S. states.

1 “Status of Women in the States.” A Project of Institute for Women’s Policy Research. 2016. http://statusofwomendata.org/

2 Melanie Hicken. “Why Many Retired Women Live in Poverty.” CNN Money. May 13, 2014. http://money.cnn.com/2014/05/13/retirement/retirement-women/

3 “USA LifeExpectancy.” http://www.worldlifeexpectancy.com/usa/life-expectancy-female