For Many Older Women, Retirement Is a Luxury They Can't Afford

For millions of older American women, the wage gap holds a "double whammy": Low earnings over a lifetime of fulfilling essentially traditional roles lead to real or threatened poverty in retirement.

Forty percent of US women over the age of 65 live near or below the poverty line, more than triple the percentage of older men. And although women need more retirement income than men do because they live on average eight years longer, they have less. Poverty is especially pronounced among long-widowed or divorced women.

Take the case of Beth Hamilton, who works in a home for physically and mentally impaired adults. Ms. Hamilton is no slouch. From assembly lines to ironing for pay, she has labored steadily since her teenage years.

At one point, in the 1970s, the newly divorced mother of four held down three jobs to support her family: By day she worked in a plastics factory, at night she cleaned offices and homes, and on weekends she bused tables.

Today, she has little to show for her decades of work. She lives in a two-bedroom trailer in rural Exeter, R.I. Although she'd like to retire next year, she can't.

For many women like Hamilton, the road to financial insecurity begins in younger years. They came to the work place late or interrupted their careers to care for children and elderly parents. They lacked skills and experience, then found work in female-dominated occupations that paid less.

As a result, the wage gap for older women is far greater than for their younger peers. And across the board, the lower, more erratic lifetime income of many women adds up to severely reduced retirement benefits:

* The pension gap. Women are less likely than men to receive any pension because they more often work part time or in industries where pension coverage is low or unavailable. Their average stay at a job is also only 3.8 years, compared with 5.1 years for men.

Therefore, only 32 percent of women over age 65 have pensions, compared with 55 percent of men. And women's pensions average half as much as men's.

* Savings. In 1994, unmarried women 65 and older collected a median of only $860 a year in income from their assets, versus $1,249 for unmarried older men and $2,039 for older married couples.

* Social Security. Women's Social Security benefits are lower than men's because on average, women earn less and spend 11.5 years out of the work force caring for children and relatives. In 1996, the average retired woman's benefits were $7,452, compared with $9,357 for men.

Women's groups oppose many proposals to reform Social Security, arguing that they would further tax older women by reducing benefits and raising the retirement age. Moreover, privatizing accounts would hurt women, who are more risk-averse than men and tend to earn less on investments, they say.

For women like Hamilton, these factors often mean a choice between retirement and economic survival. With an estimated pension of $600 a month, a Social Security check of $530, limited medical insurance, and less than a year's income saved, Hamilton doesn't dare retire at age 62 as she had hoped.

Experts differ over whether future generations of older women are likely to do better than Hamilton and her peers. Although today's younger women have greater education, experience, and career continuity, it is uncertain whether they will preserve these gains throughout their working lives to achieve higher earnings and benefits.

Moreover, younger women today are more likely to be divorced or separated, putting them at greater risk for poverty in the future.

Advocates say new policies are needed to bolster financial security for older women, for example by granting dependent-care credits that would allow them to earn Social Security for years they leave the work force to care for their families. Other efforts include programs to improve women's financial-planning skills.