The Great Recession has proven especially troublesome to baby boomers, many of whom have depleted their retirement accounts and, unlike previous generations, are unsure they will be able to live comfortably into their Golden Years. The AARP Policy Institute recently released a research report that examined the recession’s affect on Boomers. According to the study, more than half of Boomers surveyed felt less financially secure in 2010 than they did in 2007.
The report also showed baby boomer women—those born between 1946 and 1964—are particularly more concerned with finances than men of same age. According to the study, 60 percent of boomer women are unsure if they will afford to live comfortably during retirement compared to 51 percent of boomer men.
“Concern overall characterizes the boomer population,” says Sara Rix, senior strategy adviser at the AARP Public Policy Institute. “But women feel more financially insecure and concerned.”
The study included 4,000 interviews, and respondents were asked questions about their debt levels, savings, ability to maintain comfortable lifestyle after retirement, ability to afford health care, ability to pay for nursing care and facilities and retirement income’s ability to keep pace with inflation. Women expressed more concern than men on every topic.
In fact, 48 percent of female boomers answered they were uncomfortable with their current debt level, compared to only 41 percent of men. Likewise, 60 percent of women boomers were unsure they could afford to retire comfortably, while only 51 percent of men lacked confidence in the matter.
“During the recession, many women were married to men who lost good jobs,” Rix said. “A sizable number of households exhausted their savings, opted for early Social Security benefits, or tapped into their retirement plans and other savings. What surprises me is that men weren’t more anxious” about their future.”
Why are women more concerned than men? The study found a variety of factors in play. According to a Government Accountability office report released in July, women were less apt to participate or have access to company-sponsored retirement plans than men. Although in recent years more women have had access to the programs, they often made less money than men and could not afford to contribute to the plans.
Women’s Social Security income is also often less than that paid to men. Many women start careers later in life, work part time while raising families or enter and exit the workforce as they have children—all resulting in lower lifetime wages.
Longer life expectancy also plays into women’s financial fears. As they often live longer than men, women have to think about supporting themselves financially for a longer period of time. Likewise, if a woman is widowed her household income falls by an average of 37 percent, compared to a male’s 22-percent decrease in the same situation. In fact, in 2010, the poverty rate for women aged 65 and older was twice the rate for men of the same age.
“Women feel less secure because they are,” said Rix. “They’re more likely to end up alone in old age.”
Women’s increased anxiety should not be interpreted as men being carefree in the area of retirement finance. Overall, 55 percent of baby boomers answered they were not confident they had enough money to retire comfortably, with the ratio increasing to 65 percent when examining those who weathered a period of unemployment.
Baby boomers surveyed took a particularly dismal view of their circumstance when compared to their parents or grandparents. In fact, 48 percent of respondents felt their retirement would consist of a somewhat or much worse standard of living than their parents’. Likewise, 51 percent stated their retirement would be less secure than their parents’ retirement. Regardless the question, overall boomer women were still about 30 percent more likely to indicate a high level of financial concern than their male counterparts.
