Working Women Fare Better in Retirement

Marriage is no longer necessary (but still helpful) for a secure retirement.

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Elderly women are nearly twice as likely to be poor as elderly men, and the risk of poverty increases as women age. Not only do women earn less money over their lifetime and work more frequently interrupted careers than men, but they also live longer, which means that they need to finance additional years of retirement.

Employment, health, and marital status are the critical factors that influence whether older women will become or stay poor during their retirement years, according to AARP. Divorce, widowhood, or never having married typically reduce women's retirement nest egg.

But a new research report put out by AARP found that baby boomers and younger generations of women who rely on their own earnings and retirement plans rather than a spouse's will fare better in retirement than the current crop of elderly women. The report, by Sunhwa Lee and Lois Shaw of the Institute for Women's Policy Research, says:

Retirement income for younger generations of women will more likely be based on their own employment and earnings, not their spouses'. While marriage for older women has been crucial in protecting themselves against poverty, marriage is not likely to play an important role for younger women who have very different marital histories—high rates of divorce, re-marriage or never being married.

Younger women are more likely to have continuous work experience compared to the older generation in this study, most of whom left work when their children were young but returned to work as their children grew older. With a continuous work record, younger women are likely to have higher income from Social Security and pensions.

Of course, younger people are also less likely than their elders to have defined-benefit pension plans that guarantee income for life.

You can find some retirement tips for women here and ideas on how couples can boost their retirement income here.